Brent Boyer

04-15-2012

A downward trend in foreclosure filings and an uptick in the median home price in Routt County could be signs of stability returning to the local real estate market, but the number of transactions involving bank-owned properties continues to slow turnover in the market. 

Yampa Valley Data Partners’ second quarter economic forecast released last week reported that the median listing price of Routt County properties was up to $487,500 in March, a 6 percent increase compared with March 2011. Although the median price remains 28 percent below October 2008 levels, a decreasing inventory of properties on the market could lead to continued price appreciation, according to Yampa Valley Data Partners. 

Ulrich Salzgeber, a broker associate with Buyer’s Resource of Steamboat, said a decrease in the number of real estate listings is a better indicator of the economy than listing price. And he said demand for Routt County real estate remains strong, but it’s a different kind of demand from what existed a couple of years ago.

“The problem with the demand is it isn’t an urgent demand,” he said. “It’s a, ‘Boy, I better get a good deal’ demand. We definitely have people who want to purchase, but they’re looking for a heck of a bargain.”

As such, many buyers are in no rush to close on a property. 

“I would say a majority of the people walking through our doors are genuinely interested in purchasing, they’re just not on a timeline,” Salzgeber said. “Our counsel to them is always, ‘There’s a balance. Yeah, you want a good deal price-wise, but you also need to take advantage of the current interest rates and financing options.’”

Even with historically low interest rates, it remains a challenge for many prospective buyers to obtain financing for a home purchase, particularly fractional-ownership units and condominiums. As of late last week, the average interest rate on a 30-year fixed mortgage was 3.88 percent, nearly equaling the record low rate of 3.87 percent reached in February. The average rate on a 15-year mortgage dropped to 3.11 percent. 

Potentially helping the local real estate market is the continued decline in the number of properties entering the foreclosure process. 

Sixty-five foreclosure filings were made in the first quarter, putting 2012 on track for 46 fewer foreclosures this year than last. Routt County public trustee Jeanne Whiddon said Friday that the trend has remained true into April. 

“It’s still just coming along at the same pace,” Whiddon said. “We’re probably looking at 20 to 25 a month instead of 30 to 35. I think that’s pretty significant. It just isn’t happening like it did last year, but it’s still pretty steep for Routt County.”

But those foreclosure numbers may hold some false hope. The Associated Press reported this week that although foreclosure activity fell nationally in the first quarter to the lowest level in four years, the number of homes that received first-time foreclosure notices increased for the third consecutive month. 

Salzgeber questioned whether fewer foreclosure listings will have a significant impact on the Routt County real estate market in the near term. 

“Is it an accurate picture of what the market truly is, or are the banks getting a bit wiser?” he asked, suggesting that banks are holding onto distressed properties and not dumping them all onto the market at the same time, thereby diluting their own pricing.

Regardless, Salzgeber said the message to prospective buyers is a good one. 

“We’re on the upswing, and because of the interest rates, it’s a good time to buy,” he said. “You still have sellers that need to sell, and product is being aggressively priced.

“Buyers have an opportunity to: a) make a good investment and b) an investment you can enjoy. Most people can’t have a margarita in their stocks. They can in their condo or townhome.”