Foreclosures and Bank-Owned Properties in Boulder County

There were conflicting reports this week about the foreclosure activity in Boulder County. The first report that came out was a national report by RealtyTrac stating that the number of foreclosures in our area was DOWN by 20% over the first quarter of last year. A separate set of figures from the Boulder CountyPublic Trustee's office tell a different story, one with a 5% INCREASE in foreclosure activity for the same period. Different metrics used for calculations and a possible seven- to 10-day delay in the collection of information could account for the difference in statistics.

Regardless of the numbers, it is safe to say that most parts of Boulder County have been, by comparison to other parts of the country, lightly hit by the foreclosure glut. That is somewhat of a disappointment for those folks that are trolling around Realtor.com, Trulia and other internet real estate sites looking for bottom of the barrel deals. If you want to pick up a bank-owned property in Boulder County you will need to look at the north end of the county and shop around in Longmont, because that is where approximately 70% of the bank-owned, or REO properties are.

As the data shows, the number of REO properties sold in the 1st quarter of 2009 is down 30% from the same period in 2008, and down almost 14% from the same period in 2007. Prices of bank-owneds in 2009 have crept up only slightly from 2008. I haven't yet studied the statistical correlation between the number of foreclosures and the REO sales in a given period. However, there is usually a lag between the two as after the bank takes ownership of the home often there are things like cleaning, and repairs and improvements necessary to make the home saleable, and the time for these tasks varies from property to property.

Over 60% of those properties were sold at prices below $200,000. This is great news for first-time homebuyers interested in Longmont who want to take advantage of historically low interest rates and bargain home prices. It's also a great time to pick up a rental property if you are interested in investment opportunities.

For those bargain hunters still holding out hope that they can pick up a bank-owned steal in Boulder you had better be able to act fairly quickly. For 1st quarter 2009 there were only six REO sales in the city of Boulder. One property up on Flagstaff Mountain took over 200 days to sell, but for the remaining five properties the average days on market (DOM) was a quick 34 days. For the same period for ALL homes sold in the city of Boulder the average DOM was 139 days - quite a difference! The moral of the story ... be ready to move on a dime if you have any expectations of buying a property of this type in the city of Boulder.

Another way you can increase your odds of obtaining a bank owned home is to find a realtor that actually lists and sells these homes for a banking institution. These realtors get early notification from their bank clients as properties become available and have exclusive access to the bank's inventory before they place properties in the MLS and start marketing them. It's the good old "inside track". Realtors with bank-owned experience also have knowledge of the bank's procedures and can walk you through the sometimes complicated process.

If you would like more information about purchasing a bank-owned property don't hesitate to contact me and I will connect you with a realtor with specific expertise in REOs.

Pam Metzger
Director of Relocation and Business Development

pam@coloradolandmark.com

303-443-3377

Twitter = @pmcolorado

Good News and Bad News ... which do you want first?

Well the media is starting to turn around a little and seems to have discovered that if you print something remotely positive about the economy people might read it! But as always there is good news and bad news. Which do you want first? Let's save the good news for last.

First the bad news ... Boulder and the rest of our area is not feelin' the uptick yet. I just ran the numbers for our MLS for March 2009 compared to March 2008 and here is what I found:

• # of new listings is DOWN 16.4% for single family and 6.5% for attached dwellings - many sellers are still reluctant to test the waters or can't afford to take a loss. This also means that although there are some foreclosures in our area they have not flooded the market at this time.


• Median and average list prices are UP 7-10% for both single family and attached. Sellers still haven't internalized the message that homes are not going to move at 2005-2007 prices anymore!


• # of units sold is DOWN, and in a big way - 32% for both single family and attached. Yikes! Obviously despite the "bubble" we all think we live in here in the Boulder/Denver area we are definitely seeing the effects of depressed consumer confidence.


• Median and average sold prices are DOWN too, although not as bad as they could be - 5.7% and 13.5% for single family respectively, and less than 1% and 7.6% for attached dwellings.


• Total home sales $ volume is DOWN also in a big way - over 41% for single family, and over 37% for attached dwellings, which just validates that fewer units are selling, and for lower prices than last year at this time.

So what does that mean for you as a seller? If you live in Longmont, Loveland/Berthoud, Ft. Collins or Greeley/Weld County then your house might sell quicker than you think. These are the areas with the highest # of units sold in March 2009. It's no coincidence that these are also some of the more affordable communities in our MLS coverage area. Only 35 homes and 52 attached dwellings sold in Boulder last month. Broomfield, Louisville, Lafayette and Superior all report lower units sold as compared to last year.

Okay, these are the facts, and they are indisputable (isn't that a movie line?). I wish we had better numbers to report, but it's not our job to blow sunshine in anyone's face. As real estate professionals we have a responsibility to our clients to provide the facts, meaningful analysis, and make all of this relevant to our clients and their situations.

Now ... here is the GOOD news from a few different news feeds from today (I know you are saying "Finally!"):

Recovery Hopes Begin to Blossom - from CNN Money.com 4/7/09
http://money.cnn.com/2009/04/06/news/economy/recovery/index.htm?section=money_latest
Economists think there are some long- and short-term indicators giving more hope that the economy is closer to a turnaround than previously thought. Pent up demand for goods, slowing job losses, and home price declines will all help to turn around consumer confidence and fuel a recovery.

Signs of a Housing Bottom? - from CNBC.com 4/6/09
http://www.cnbc.com/id/30071303?__source=RSS*blog*&par=RSS
Existing and new home sales increased in February. Sales are headed in the up direction. Blogger/real estate reporter Diana Olick is slightly optimistic!

Signs of Hope and Fear In "Foreclosure Central" - from CNBC.com 4/7/09
http://www.cnbc.com/id/30086754
Signs of hope in the housing market because sales have jumped. The $8000 tax credit being one reason. Prices have stabilized and inventory is down in some markets. Markets that have seen huge foreclosure activity are starting to see more green lawns, meaning less vacant foreclosure properties and people are out in their yards. "That part of it is very encouraging."

So as I said earlier ... Boulder and the rest of our area is not feelin' the uptick ... yet. Key word = YET. It is coming - we see it in our office every day with agents setting showings like crazy on our listings. Consumer confidence is on the rise - maybe everyone just needed to go have a good spring break, and now they are back they are testing the waters.

Hope you had a good spring break! Now get off the fence, and into the yard!

Pam Metzger
Director of Relocation and Business Development
Colorado Landmark, Realtors
pam@coloradolandmark.com
303-302-8839

Understanding Short Sales - A Good Option for Homeowners in Trouble

Most of us in the real estate business (and probably most people in America) didn’t know what the term “short sale” meant 2 years ago. Now it is a topic that appears in our business on a daily basis, and we are all working hard to stay up to date with the latest information to help our clients.


A short sale is an agreement from your lender to accept less than the amount you owe on your mortgage and release the lien on your property so you are able to sell it and move on. The short sale process can take, on average, 4-6 months and requires a lot of patience, but there are steps that can be taken to make the process easier.

If you are a seller and you have fallen behind on your mortgage payments, tell your Realtor right away. As with all real estate transactions, it is important to work with someone who knows and understands the process. Your Colorado Landmark Realtor can give you a checklist of the items that should be completed and submitted to the bank upon listing your home. Once you receive an offer on your property, your Realtor will help you submit it to the lender along with other required documentation to help facilitate the sale as quickly as possible.

By the time they have reached the point of becoming delinquent with their mortgage payments, many sellers are tempted to just walk away from their mortgage and allow the bank to foreclose on their property. There are several reasons why this is a bad idea.

• A foreclosure can negatively impact your credit score by 250 – 300 points, and it will remain on your credit history for up to 10 years.



• A homeowner who has had a foreclosure is ineligible for a Fannie Mae backed mortgage for a period of up to 5 years, and has to disclose a foreclosure in the last 7 years on any loan applications.



• Having a foreclosure on your credit history can make it difficult for you to qualify for any other type of loan, and some employers will even use this information to re-assign or terminate employees.
  

Instead, if you take the time and effort to get your house sold through a short sale, it will most likely impact your credit score by only 50 or so points, and you are able to qualify for a mortgage and purchase another home after only 2 years. Not to mention that you can sell your home and move out of your neighborhood with dignity, and feel as though you did everything you could to protect your family’s future.

If you are a buyer and you are interested in purchasing a property that is being sold as a short sale, you will also need to be patient. It is important to work with a buyers agent who has experience with short sales. New post coming soon: tips for buyers interested in short sale properties!


The short sale process can be stressful and frustrating, but working with an experienced agent will make it much easier for you every step of the way. At Colorado Landmark our real estate sales associates strive to be up to date on the latest real estate trends and market information. Our sales associates regularly pursue continuing education opportunities to reinforce their expertise and knowledge. If you have any questions or are ready to sell your home, please give us a call.




This blog entry written by:


Jennifer Fly, Broker Associate, Colorado Landmark Realtors

303-506-0253 (cell)
jenniferfly@coloradolandmark.com