Colorado Foreclosure filings, where are they and what does this mean for values? What is the number one driver of foreclosures?
Many counties in Colorado are now using an online auction program for foreclosure sales which…
If you looked at almost any mainstream media, each predicted a surge in eviction filings and pleaded with Governor Polis to halt any evictions. There were “studies” saying that 450k evictions would take place. Fortunately the “studies” missed the mark by a factor of 75. How many evictions have actually occurred? Why were the studies so off base?
In April, housing advocates said “the money is drying up and that it’s not enough to support current demand. An April 13 study by defense attorneys found about 450,000 Colorado renters are at risk of being evicted in the coming months.”
Fortunately these predictions were not even close to reality. In September when the federal and state moratoriums on evictions lapsed there were 2,498 eviction requests. This equates to a drop of 44% compared to September 2019. If I assume that approximately 2500/ month will continue for the next several months, the total evictions in the next 60 days will be around 5000. This is 70 times lower than the 450,0000 predicted by the Covid 19 defense project which was cited in various news sources including the Denver post, the Colorado Sun, The Washington Post, etc…
The studies primary data point was from the “household pulse survey” administered by the US census Bureau. The Household Pulse Survey is a 20-minute, online survey meant to assess how individuals, families, and communities are being affected by the COVID-19 pandemic. Participants are drawn from randomly selected addresses, and respondents may be asked to complete the survey up to three times to track the effect of the pandemic on households over time. Invited participants will be contacted via email or text message.
To see the accuracy of the data, I looked at the most recent data in Colorado which was week 39 (September) it stated there would be 42,518 evictions and foreclosure in the next 60 days. There is a margin of error of 23k, 55%! A good study should have a margin of error between 4-5% not 55%, you might as well just roll the dice to get better data. It is therefore no surprise that the actual data is nowhere close to these numbers.
Furthermore, the Covid study that was cited by various news sources started with terrible data and then somehow extrapolated this data to a factor of over 10 to get to 450k.
I see all the time outlandish claims that are published by mainstream media sources that couldn’t be farther from reality. Unfortunately, very few dig in to see where the data comes from and the accuracy. In the case of eviction filings coming in 70 times lower than what was predicted, this is no surprise as the original survey had a margin of error of 55% and then additional assumptions were made. This subsequently confirmed that the data would be 100% inaccurate. Not only is it concerning that mainstream media is using this data, but it is even more concerning that policy decisions were based on such faulty data that was produced with taxpayer dollars.
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Written by Glen Weinberg, Owner Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine, The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
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