Fewer deeds of trust being released in Routt County
April 25, 2014
Steamboat Springs — The number of deeds of trust being released is an indicator of activity in the real estate market, and that number is significantly down in the first quarter of 2014 across Colorado, including Routt County.
A deed of trust is a legal document used to secure a loan for real estate. It deeds the property to a public trustee until the loan is repaid.
The deed of trust is released when the loan is repaid, either through completing the term of the mortgage, through the sale of the property or by refinancing.
Fewer deeds of trust being released means fewer of these activities occurring in the market.
In Routt County, 391 deeds of trust were released in the first quarter of 2014 compared with 736 released in the first quarter of 2013, a drop of 47 percent.
A recent study by the Colorado Division of Housing showed that releases of deeds of trust fell 49 percent during the same time period in 21 counties that were surveyed.
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Routt County was not surveyed by the Division of Housing, but releases here have followed the same trend.
The number of releases during the first quarter of 2014 was Routt County's lowest number for the quarter in at least nine years. The next lowest first quarter total was 478 in 2010.
The Division of Housing study adjusted the number of releases for how many housing units each county has and found that Douglas, Summit and Weld counties had the most release activity for their relative size while Delta, Pueblo and Fremont counties had the least.
"Not surprisingly, the counties with the most release activity tend to be counties with either higher median incomes, more job growth or higher-priced real estate," the Division of Housing report states.
When Routt County's releases are indexed in the same way, it falls near the median of the 21 counties studied.
The nationwide decline in mortgage demand has been attributed almost entirely to less refinancing activity, but Routt County’s sales were also behind 2013 through the first two months of 2014.
"I think that there's definitely less refinancing than there was," said Kathryn Pedersen, a loan officer with Fidelity Mortgage in Steamboat.
Pedersen said she typically does more purchases than refinances. Her number of loans for purchases actually was higher during the past quarter than in the first quarter of 2013, but she did see fewer refinances in the first quarter of 2014 than in 2013.
The Division of Housing report compares the number of deeds of trust released each year with mortgage rates.
"From 2011 to 2012, mortgage rates fell in almost every quarter up through the end of 2012, and in response, we saw significant increases in the amount of release activity over time," the report states. "Predictably, as mortgage rates began to rise in late 2012, we began to see declines in release activity as 2013 progressed."
Pedersen said that January and February typically are slow months for mortgages but that the number of pre-qualifications she's seen recently bodes well for housing sales this summer.
Cindy MacGray, of Steamboat Sotheby’s International Realty, also said that the first months of the year were slow.
Whether because of interest rates or a lack of suitable inventory, she said, buyers were slow to pull the trigger.
Business and interest picked up in March, MacGray said, and May and June are looking good for her.
Pricing often is the largest hurdle to deals closing.
"When a seller gets a price right and a buyer is looking, we got multiple offers on stuff," MacGray said.
"There's not a lot of buyers who have to buy this second," she said. "They can look and watch.
"Buyers and sellers are in a little bit of stand off."