Sunday, January 21, 2007

A House Divided?





Give him a home in good condition priced below $300,000, and Grand Junction real estate broker Hal Heath claims he can probably sell it within a few hours.

"As soon as I make two phone calls, a sale is done," said Heath, whose greatest fear is selling a home too quickly and not getting a maximum price.

Matt Rivette, a broker with Pro Realty Inc. in Greeley, has the opposite experience.
He throws cold water in the face of home sellers unwilling to accept declining values and an extended stay on the market.

"If you want to sell a house you bought five years ago, chances are that here in Weld County it has less market value than what you paid," Rivette said.

When it comes to real estate, much more than 300 miles separates Greeley and the Front Range from the mountain destinations and Western Slope.

Large swaths of the Front Range from Fort Collins to Pueblo struggled with flat or declining median home values, according to Trulia.com, a San Francisco provider of real estate data and listings.
Home gains in Arapahoe, Boulder, Denver and Douglas counties were positive, but fell far short of covering the commission a seller would need to pay to get out of a home if they hire a real estate agent.

Median home sales prices were down 3 percent in Adams County, 3.4 percent in Larimer County, and 1.1 percent in Jefferson County, according to Trulia.com, which compared sales for September through November with the same period in 2005.

Home prices nationally have been declining as buyers cope with rising interest rates and excess supplies. The median price of existing homes sold in November was 3.1 percent lower than in November 2005, according to the National Association of Realtors.

But, it's a different picture heading west across Colorado.

In mountain resort communities, continued interest from second-home buyers drove double-digit appreciation rates. In Pitkin County, which includes Aspen, values were up 8.2 percent. In Eagle County, which includes Vail, values were up 23.9 percent.

Rising home values in Vail and Aspen have pushed workers and less wealthy residents into surrounding towns. But even bedroom communities such as Basalt and Glenwood Springs on the Western Slope are getting too pricey for some.

An influx of oil and gas workers is driving up real estate values, brokers said.

"There is a steady stream of buyers in different price ranges," said Michael Dunn, a broker with Bray & Co. in Glenwood Springs.

Anything that comes on the market under $300,000 in Gar field County gets snapped up, Dunn said. Even homes worth up to $500,000 move quickly.

Garfield County home sale appreciation was 12.5 percent, comparing the three-month period in 2006 and 2005. Mesa County, home to Grand Junction, saw a 14.2 percent spike.
The big divide in median home sale appreciation rates across the state is due in large part to higher foreclosure rates along the Front Range, according to Boulder-based mortgage banker Lou Barnes.

Anemic price gains contribute to foreclosures, making it harder for homeowners to sell. That, in turn, depresses surrounding home prices. Breaking the cycle is hard, particularly in Weld County, home to Greeley.

Last year, more homes entered foreclosure in Weld County, 2,073, than were sold, 1,870.
The backlog of unsold homes in Weld County is huge. Assuming no other homes were listed for sale, it would take 27 months to clear out the inventory of unsold homes at the current pace of sales, according to data ProRealty has collected.

Once concentrated in Weld, Adams and Arapahoe counties, foreclosures are spreading south and west.

"The guys who work foreclosures tell me that new filings in early January are just racing despite the weather," Barnes said.

Median home sales prices were down 1.1 percent in Jefferson County, west of Denver.
They were down 1.5 percent in El Paso County, home to Colorado Springs. The inventory of unsold homes rose 30 percent last year in El Paso County, according to Stuart Scott, a broker working in Colorado Springs.

Builders had to push hard to find buyers for about 1,000 speculative homes they had built or that were already under construction, said Scott.

Builders have cut back on new construction, Scott said. Permits pulled fell from 400 a month in November 2005 to around 170 in November 2006.

Staff writer Aldo Svaldi can be reached at 303-954-1410 or asvaldi@denverpost.com.

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