VAIL – Fewer people in Eagle County started the foreclosure process in 2012 than in 2011. Still, more than 300 people lost their homes last year.
The latest figures from the Eagle County Public Trustees Office shows a significant drop – nearly 28 percent – in initial filings from 2011 to 2012. But there wasn’t a corresponding decrease in foreclosure sales, the final chapter in the process.
What those numbers say about the health of the local real estate market isn’t entirely clear. It can take months – sometimes a year or more – for a foreclosure case to run the gamut from initial filing, so many of the sales in 2012 actually started in 2011. Some, early in the year, could have started with initial filings in 2010.
But Laurie Slaughter, an area broker with Prudential Colorado Properties, said there could be a few reasons for the reduction in filings. The economy has stabilized a bit, a lot of people already have gone through foreclosures and others have decided to pursue “short sales” – that is, selling a home for less than is owed on the mortgage, with the permission of the lender.
While short sales have become more common, Slaughter said it’s still a tricky process to navigate. It’s also time-consuming.
“Most are getting approved, but you hear horror stories,” Slaughter said. “I’ve had some (sales) take up to seven months to get approved. I just had one approved within 30 days, but that’s rare.”
With the drop in property values in the Eagle County’s western valley, Slaughter said most of the transactions she’s handled have been either short sales or sales of bank-owned property.
But depending on the price, those units can move quickly.
Michael Routh is a broker with Keller Wlliams Realty’s Edwards office. He said units selling for $300,000 or less often receive multiple offers. Move up on the price scale, though, and “it’s still a buyer’s market,” Routh said.
But there are buyers out there.
Bob West of Hoffman - West Real Estate said some “distressed” property at the high end of the market has moved recently. And, West said, that part of the market may help the market as a whole.
“The big indicator is the high end,” West said. “Are (those buyers) confident in the market?”
While there were positive signs in the local market in 2012, the brokers interviewed agreed that it’s going to take some time for property values to start a real recovery.
Slaughter said there’s still a good amount of “shadow inventory,” homes that have been reclaimed by lenders, but aren’t yet on the market. Slaughter said she hears frequently from potential buyers who want to know if a particular property has been listed yet.
While home prices are starting to rise in Denver and other metropolitan areas, the Vail Valley has traditionally lagged behind trends in the rest of the country. Routh said the local real estate bubble burst long after the national crash came. The return to health may see a similar lag, he said.
“I’d expect us to be at least 18 months behind,” a national recovery, Routh said.
The shaky state of the economy, locally and nationally, may mean it may also take some time before the number of foreclosure sales falls significantly.
“It could be 2014 before we see a real drop,” Routh said.