Steamboat Springs While government leaders expressed concern this week about the continuing pace of new foreclosure filings, a local Realtor, who is among three who list distressed properties for Fannie Mae, said it appears the demand for foreclosed homes is outpacing the supply of them.
“Even though the foreclosures are still entering the books at a rapid clip, the inventory is not building once they hit the market,” said Darrin Fryer, of Prudential Steamboat Realty. “There have been 50 to 55 bank-owned properties listed for about a year now and there are only 43 on the market today.”
Fryer said a group of buyers that includes investors and people looking for their first home is focused on distressed properties to the extent that there recently have been competing offers on some of them.
“This last week has seen multiple offers on four foreclosed properties and there were people disappointed,” Fryer said. “All are now pending or about to go under contract once the bank provides its final blessing from management, which is simply a process at this point.”
Fryer’s colleague at Prudential, Beth Bishop, of the Olson Group, said she and Lisa Olson are having a similar experience.
“Since January, we’ve been working with multiple offers and aggressive (above asking price) offers. It’s a different world for Realtors now with competing offers. And it’s tough for some people who have begun to picture themselves in a home and have to move on to the next one.”
Bishop said there is no doubt that the Steamboat market will have to continue to work through significant numbers of foreclosures in the near future, but the fact that there are often multiple offers on a home with an attractively low price means there is enough demand to continue to absorb the distressed properties.
“We have buyers backed up this spring who want to purchase in certain developments” when a bank-owned property becomes available, Bishop said.
She and Olson monitor properties for which foreclosure notices have been filed so they can inform clients as soon as one that fits their requirements comes on the market.
Also, an increasing number of homeowners are pricing their homes very aggressively outside of a foreclosure process, Olson said, and then turning around and buying another property they see opportunity in — even trading up in some cases.
Up and down
There certainly are investors in the market, Bishop said, but the majority of her clients are people buying homes for their own use. And some banks and owners of foreclosed properties, particularly the Federal National Mortgage Association (Fannie Mae), are only considering buyers who can demonstrate that they will occupy it full time.
The net impact of sold foreclosure is reflected to a degree in research by the Land Title Guarantee Co. office in Steamboat Springs. That research shows that in the preceding 14 months, 205 residential units have sold for less than $300,000, and of those, 83 were priced lower than $200,000.
The declining prices for existing housing inventory here also can be seen indirectly in the fact that year-to-date dollar volume was off 23 percent at the end of February while year-to-date transaction volume was up almost 30 percent.
“There are 108 pending sales at the moment,” Fryer said. “We haven’t had that many in quite awhile.”
In January and February, there were 18 home sales of less than $200,000.
The total number of residential sales through February was 69, with those selling for less than $300,000 accounting for more than half of that total. However, Land Title reports that overall dollar volume in February was off 34.7 percent at $21 million compared with $32 million in February 2010. January volume was off 15.5 percent. The year-to-date volume was $42 million through January.
Fryer observed that a 920-square-foot Whistler Village Townhome sold March 21 for $131,500. The next sale will be lower, he said. A similar unit that saw its price drop to $110,000 this month is under contract.
Fryer said distressed properties are a rarity close at the base of the ski area. One example is a 1,921-square-foot unit in The Highmark, which is under contract from an asking price of $794,000, which equates to $413 per square foot. It first sold to a limited liability company for $1.2 million, or $630 per square foot, in February 2008.
— To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com