GREELEY, COLO. — The phones inside the Weld County public trustee's office ring insistently throughout the day, with questions from harried bank lenders and pleas from residents on the verge of losing their homes.
After relating their particular case, some callers ask the agency, which manages the sale of foreclosed properties for this city on the edge of the Front Range, the same questions: Just how bad is the housing market here? How much worse can it get?
The answers are usually grim.
For nine out of 12 months of 2006, Colorado led the nation in foreclosures -- and this county suffered the worst of it for much of that time, according to research by Irvine-based firm RealtyTrac Inc.
As the nation's housing market falters amid the unraveling of the sub-prime mortgage industry, some real estate experts are looking to Colorado as a portent of what other parts of the country could face in coming months.
Housing oversupply and rising interest rates sank the market in Weld County, where mile after mile of pastel-hued suburban homes with neatly mowed lawns have sprung up in this longtime agricultural and meatpacking center, also the site of the University of Northern Colorado.
Home buyers with risky mortgages found themselves with mounting bills they couldn't afford. Those who were forced to sell couldn't find buyers, leading to thousands of residents defaulting on their loans.
In 2004, Weld County had 1,155 properties foreclosed, according to the public trustee's office. In 2006, there were 2,073.
The workload at the trustee's office has grown so heavy that county trustee Susie Velasquez plans to hire more workers to handle the boom in business.
"This is not the type of growth that any community wants," said Velasquez, whose staff members' desks are covered in piles of foreclosure files. "This is the type of growth you pray never happens to your town."
Residents and city officials are starting to feel the trickle-down effect. Area construction companies and building supply firms have either had layoffs or left town. City officials are adjusting the annual budget's expected revenue for the second year in a row, after it became clear that building permits, construction sales and other related taxes would be generating $2 million less this year.
Although losing $2 million from a $62-million general fund budget isn't catastrophic, the loss "makes us cautious about what happens if things continue this way," said Tim Nash, Greeley's director of finance. "We're looking at delaying construction of new roads, fewer city-sponsored community events, not as many recreational events for the public."
That concern is being shared across the country as Ohio, Indiana and Michigan edged in front of Colorado's lead, reporting higher rates of foreclosure filings in the last quarter of 2006, according to research by the Mortgage Bankers Assn.
Though the state's division of housing says some researchers -- including RealtyTrac -- have overstated the problem, officials acknowledge that foreclosures are a serious problem. And the foreclosure rate in Colorado is not declining, economists say: The problem is simply growing elsewhere.
In the greater Detroit area, where residents face the downward spiral of the domestic auto industry, foreclosures are flooding into auction houses and banking centers. But interest in buying property in Detroit and numerous other Michigan communities is lackluster at best, said Ellen L. Coon, a Pontiac, Mich., attorney who specializes in foreclosure cases.
"There are 10 [houses] for sale in my subdivision alone that have been for sale at least a year," Coon said. "People are abandoning their homes in the middle of the night, leaving the keys on the counter. Investors aren't showing up, because they realize that even if they get an amazing deal on a property, they can't sell it."
Most people agree that just three years ago, Greeley (population 83,400) was one of the hottest real estate markets in the country.
A bedroom community an hour north of Denver and 30 minutes southeast of Fort Collins, Greeley attracted eager home buyers with its numerous parks and cheaper housing prices. The scent from the Swift & Co. meatpacking plant that wafts across town on windy days seemed like a small price to pay.
"We were seeing 3% in new housing stock from 1997 until 2002; then it went up to 4%," said Becky Safarik, Greeley's community development director. "Anything over 4% is difficult to handle. We had too much growth for too long."
Greeley wasn't alone in that surge of new construction, particularly during the late '90s technology industry boom. When the high-tech boom went bust, housing prices in the region stayed high, buoyed by sub-prime loans and other risky programs. The region's economy remained static, while California and other parts of the country rebounded.
So as the real estate market and speculative lending practices began to erode nationwide, places like Weld County were among the first to falter.