Steamboat Springs The real estate year in Routt County proved to be one of opportunity for some and a mixture of heartache and setbacks for others.
Routt County Public Trustee Jeanne Whiddon confirmed that the number of foreclosure filings here crossed into uncharted territory Tuesday afternoon when her office recorded the year’s 300th notice of election and demand, which officially begins the foreclosure process. The previous record was 234, set in 1985 as local and national markets fought their way out of the Savings and Loan Crisis.
In contrast, Bruce Carta, of Land Title Guarantee Co., reported this month that through November, the number of homes sold for $1 million or more had reached 89. And that number has grown in December, with 10 more million-dollar homes sold and five of those selling for more than $2 million.
The counterpart to those attention-getting million-dollar home sales is the growing number of people who are in jeopardy of losing their real estate along with their investment in it. The 300 foreclosures are on principal balances ranging from a low of $21,000 up into the stratosphere of $11 million. But the largest of them all was the $100.48 million foreclosure filed by construction lenders in November against the brand-new One Steamboat Place slopeside condominium building.
One Steamboat Place is completed and welcoming winter guests, and principal developer David Burden vows that he and his investors will remedy the situation. A whole-ownership condo there sold for $3.05 million in early October.
Not all of the 300 property owners who received foreclosure notices this year will lose their real estate — already, 58 have been withdrawn, including one with unpaid loan principal of $8.7 million and another of $9 million. And there will be more.
“It can be months, even years, although that’s rare,” before foreclosed properties go to a sale, Whiddon said. She added that withdrawals are most likely to happen within the first six to eight months.
The lender postpones some foreclosure proceedings; in other cases, the owners file a notice to cure their deficiency. Lenders might work with owners to restructure debt, and in some cases, acquire the deed to the property short of a formal foreclosure. All of those factors make it difficult to report the annual numbers for foreclosure outcomes, Whiddon said, as proceedings often straddle two calendar years.
What few people are aware of is the large sum of money represented by the 300 foreclosures this year. Before one even takes into account the $100.5 million One Steamboat Place foreclosure, the unpaid principal represented by the 300 notices of election and demand is more than $190.8 million.
The 58 notices of election and demand filed this year that were subsequently withdrawn reduce the total amount of unpaid principal by $42.2 million.
Whiddon said her office is processing the One Steamboat Place foreclosure separately with help from the lenders’ legal team because of its size and complexity.
Resetting the entry level
Carta’s research shows that the number of million-dollar-plus sales and the number of sales at $200,000 to $300,000 through November almost were identical — the transactions in the lower bracket numbered 87, and another 62 homes had sold for less than $200,000. At the height of the market in 2006 and 2007, there almost were no housing units available for less than $300,000, a sign that foreclosures have helped new homebuyers enter a market that once was unattainable for them.
Realtor Arlene Zopf, of Steamboat Village Brokers, said she has closed six million-dollar home sales since late fall, including a $2.2 million sale last week in The Sanctuary.
“That’s been very positive,” Zopf said. “Hopefully, it will continue into next year.”
Even millionaires lose their homes to foreclosure; Zopf said three of her recent sales involved distressed properties.
Despite some attention-getting sales throughout the past 11 months, the year’s $457.8 million in volume through November was not on pace to match the lowest recent annual total of $636.9 million, recorded in 2004. Sales here jumped to $829.6 million in 2005 and broke into 10 figures for the first time in 2006 at $1.12 billion.
Although the number of foreclosure filings here is unprecedented, they do not represent the majority of transactions, and Realtor Beth Bishop, of Prudential Steamboat Realty, told the Steamboat Pilot & Today in November that the local market
has been able to absorb those distressed properties. At the time, she counted 36 active listings of residential foreclosures, down from a high of 51. Of the 36, 18 were under contract.
However, foreclosures also are likely to exert downward pressure on property owners who aren’t in such dire circumstances and want to sell. An article in the current issue of Kiplinger’s Personal Finance reports that nationally, 23 percent of homeowners have mortgage values that exceed the value of their property. The article concludes that short sales and foreclosures will continue to push prices downward in 2011.
Prices come back to buyers
Suellyn Godino, of Prudential Steamboat Realty and president of the Steamboat Springs Board of Realtors, said that downward pressure is helping buyers in different price points acquire the property they’ve eyed for years. She said she advised clients to defer purchasing in 2008 and 2009 as the market here dropped.
She recently contacted a longtime client to say it was time to buy.
“You know that Waterstone (condo) you like, but it cost more than a million?” she said she asked the client. “Now it’s $749,000.”
Middle-income buyers again are able to buy, for example, two-bedroom, two-bath condos in the Villas at Walton Creek for $270,000 and $275,000, Godino said.
“It’s not doom and gloom out there, at least on my end,” Godino said. “I’m having the busiest year I’ve ever had.”
Recently, she’s seen opportunistic buyers making large purchases sight unseen. A Texas client recently acted on a 35-acre parcel of land in Canyon Valley Ranch that originally was priced at $296,000 and then dropped to $220,000 and finally $195,000. Her client asked her to offer the owner $95,000 in a cash deal that would close within two weeks, and the seller accepted it.
That purchase price was so unheard of, Godino said, that two appraisers called her to ask what the deal was.
Another buyer, a couple working in the energy industry in Cairo, recently bought a foreclosed three-bedroom luxury condo in the Highmark, sight unseen, for $738,900 from Bank of America. It had sold for $2.1 million in April 2008.
“People are buying, only if it’s a good deal,” she said.
Cam Boyd, broker co-owner at Prudential, said real estate activity here typically drops from August and September levels as the days get shorter in November and December. Although that’s been true again this year, the volume of showings at his brokerage early this winter is well above the same period in 2009.
“We recorded 390 showings in November compared to 262 in November 2009,” Boyd said.
September 2010 logged 589 showings, and October almost matched November with 389.
Of course, showings aren’t contracts, and sales lag contracts by three or four weeks.
Carta’s research reveals that November was the first month in 2010 when dollar volume didn’t surpass 2009 levels. Last month saw just $27.3 million in sales, about 30 percent of November 2009’s $90 million. There were four months in the first half of this year when dollar volume was more than 200 percent of last year’s levels.
The 2010 sales dollar volume coupled with the presence of distressed property owners and the discounted pricing that results signals that Steamboat’s real estate and housing markets still have a hike ahead of them before a recovery officially is proclaimed. But it’s also apparent that distressed properties will continue to make a market here with notable residential sales on the low and high ends.