Foreclosures and short sales in Summit County

What lies ahead?

There are currently 57 properties for sale that are foreclosures, short sales or bank owned properties.  These distressed properties consistently make up right around 3% of our Summit County inventory.

The majority of properties, 42, are short sales, or the owner has been struggling paying the mortgage and the property is in the foreclosure process, or both.  The remaining 15 are bank owned.

While the number of distressed properties has remained fairly constant, I think the numbers of properties that are going back to the bank has increased slightly. This increase is due to the fact that selling homes is tougher than it used to be, especially when it becomes a short sale.  If it doesn’t sell, eventually the foreclosure sale happens and the bank gets the property.

As September approaches it is interesting to note that 19 properties that began the foreclosure process in 2010 are still in the foreclosure process.  Their homes have not been taken by the bank yet and the owners have not caught up their loan.

Foreclosure Update

It’s been a while since my last post.  It’s not that nothing has been happening with foreclosures in Summit County.  In fact, 214 properties have begun the foreclosure process so far this year. 

In 2008, Summit County had 189 properties enter foreclosure, 300 in 2009 and another 350 started in 2010; an increase every year.  With 214 so far this year, we are on track to see right around 350 again in 2011.

Bank owned Highlands lot

Looking to build a million dollar plus home in Summit County? Here’s a bank owned bargain that could be the right lot for you.  Located in the Highlands, this 2.65 acre lot is in an upscale Breckenridge neighborhood.  The price was just reduced today and it is now only $189,900.  Here are more details about this lot in the Highlands.

This property is listed by Century 21 in Frisco.

A brief overview of foreclosures in Summit County 2010

It seems like foreclosures were more prevalent in the Summit County real estate market in 2010 than ever before. The statistics confirm that while there weren’t that many more properties going into foreclosure, more were actually foreclosed on.

In 2010, the owners of 350 Summit County properties received their Notice of Election and Demand. This notice informs them that the foreclosure process has begun and the clock starts counting down the required number of days until the sale occurs and the property is foreclosed on. That’s a 17% increase over 2009 when 300 properties began the foreclosure process.
Once the foreclosure process begins, it doesn’t mean the property will actually be foreclosed. The owner can find a way to bring their loan current, modify the loan, do a short sale, or pay off the loan to keep the bank from foreclosing. In 2009, 95 properties were foreclosed on and put up for sale on the courthouse steps. That number increased by 77% in 2010 when 168 properties were foreclosed.
So what happens when a property is foreclosed? The property is actually put up for sale on the courthouse steps. The bank will open the bidding, typically with the amount they are owed, but not always. From there, anyone present can bid on the properties. You must be able to pay cash for the property almost immediately, you cannot get a mortgage. Once you purchase the property you can get financing just as you could on any home you own. If no one outbids the bank, after any other leinholders have an opportunity to purchase the property, the bank becomes the property owner. The property goes through the bank’s channels and eventually will come on the market as a bank owned home, also known as an REO.

A bank owned home is typically an easier transaction than a short sale.   A short sales is a property that has not been foreclosed yet so is still owned by the owner.  The bank has an interest in the property, the mortgage, and if it cannot be paid in full when the property is sold, must agree to let the property change hands for less than the amount due.  Sometimes getting the bank to make that decision is a daunting task.  Once the property has been foreclosed and is bank owned, the transaction is again between the Buyer and the Seller – even though the Seller is now the bank, no third party has to agree to any terms allowing the transaction to proceed.

Buying or selling distressed properties can often be a challenge.  Being educated in this unique arena can ease the stress and give you a better chance to get a really good deal.

Summit County residential real estate prices

Current residential inventory levels in Summit County are pretty close to where they were last year at this time but about 14% over 2008 numbers.  Typically high inventory levels keep prices low but it may actually be helping to keep prices up this year.

Because our inventory levels are up, foreclosures and short sales currently make up just over 3% of our market.  If inventory levels were similar to where they were in our boom years, distressed property sales may be having a larger impact on Summit County residential real estate prices. 

Pricing has dropped to 2006 prices in most areas even with minimal foreclosures in the market.  Some areas have seen prices roll back to 2004 and others are still ahead of 2009 sales.  Pricing really varies from town to town, neighborhood to neighborhood, from condo complex to condo complex.

Summit County Foreclosures going strong

It feels like Summit County foreclosures have been picking up this year so I looked at the numbers to see if I was right.  With less than two months to go in 2010,  we have almost matched the number of properties that went into foreclosure in 2009.  The big increase this year is in the number of properties that weren’t cured.  Nearly 50% more properties have already been sold at the foreclosure sales in 2010 than there were in all of 2009 and 70 more properties are scheduled to be sold yet this year.  What these numbers tell me is that the financial troubles people are facing has maintained its pace.  This is reinforced by the unemployment figures hovering around 10% consistently.  Things are not getting substantially better or worse.  However, the financial troubles are deeper than they were last year.  Last year, there were more options for people to stop the foreclosures.  Maybe they could sell the property because they still had equity – falling prices have crushed many Seller’s equity this year.  Maybe they had options to borrow the money to become current – those that have the money to lend may be less willing to lend today.  Maybe they still had hope that things would  get better for them and it was worth the hassles necessary to save their home – many people today have lost hope and are just giving up and walking away.
Most of the properties sold in foreclosure sales went back to the banks and if they haven’t already hit the market, will be appearing in the coming months.  With the slower selling season approaching I am afraid we will begin to see more and more bank owned properties on the market.  The reduced inventory levels that are typical of winter months in Summit County may be our only saving grace for property values in the near future.

If you are still hanging your hat on the hope of an upcoming turn around, go ahead and put that hat on and get used to wearing it again, it could be a while.

Summit County foreclosure sale Oct. 8, 2010

Here’s what’s on the agenda at Summit County’s foreclosure sale.  Keep in mind, in order to purchase a property, you or your agent must be present and you must be able to pay cash for the property within 2 hours of purchase.

101 Three Rivers in Dillon.  This home was purchased for $625,000 in 2008 and was most recently listed for sale for $899,000.  County records show the amount due as just over $269,000.  Of course, late fees, penalties and other charges may have been added since the amount due was given to the county.  If this is the first mortgage and the bank is reasonable in the amount they bid, this could be a great deal for someone!  Do you homework though.

310 N 5th Avenue in Frisco.  This home was purchased in 2007 for $625,000.  The overdue amount forcing this property into foreclosure is under $50,000.  Sounds like a second mortgage perhaps but worth looking into.

445 Davenport Loop in Breckenridge.  The bank bid is already in for this one at $2,020,000.  That’s $224k less than what was owed.  Expect to see this one on the market in the next few months as a bank owned.

106 Roberstson Lane in Quandary.  The bank bid is already in on this one too, $496,531.29.  It was purchased in 2002 for $395,000.  I expect this one to come on the market as a bank owned property too.

105 High Street, #A in Breckenridge.  This one was listed at $360,000 and is currently under contract.  They are trying to get a short sale through.  The bank bid is in at $607,424.19.  I expect the bank will buy this one back, squashing the short sale and will try for a better sale price themselves.

83 Blue Flag in Breckenridge.  Here’s another one worth looking in to.  This home was purchased in 2008 for $1,345,000.  The amount due is only $80,000.  I expect that is a second or third mortgage, not one in first position. 

 Keep in mind that these properties are expected to be in the Summit County foreclosure sale Oct 8, 2010 but it can change minutes before the sale begins.   This information is deemed accurate but has not been verified.  Be sure and do your own due diligence before taking action.

Feel free to contact Meredith Hanson of The Mountain Living Team in Summit County, Colorado for more information on these or any Summit County properties. 

Sign up for our monthly Foreclosure Alert and receive a list of distressed properties currently for sale in Summit County by emailing meredith@mountain-living.com