WESTERN SAN JUANS – While some areas of the region continue to be more sluggish than others, second quarter figures for the real estate economy in San Miguel, Ouray and Montrose counties are showing signs of stabilization despite a consistent stream of new foreclosure filings.
After a dismal start to the year, perhaps the brightest first-half real estate figures come from San Miguel County, where for the first time since the start of the housing crisis there have been both an increase in the number of overall sales and an increase in the dollar volume those sales represent. Brokers say this development indicates not only that buyers are buying, but that prices may have bottomed out.
What may be an even more telling sign that the market has stabilized in San Miguel County: brokers are beginning to see more demand for condominiums in Mountain Village, where high inventory has been overwhelmingly stagnant.
In Montrose County, there are bright spots and not-so-bright spots.
The number of single-family sales increased significantly during the first half of 2012 in comparison to that same period the previous two years. And, while values continue to fall in some sectors of the Montrose County market, median single-family sales across the county have seen a positive trend.
What continues to hold the Montrose County market at bay, it seems, is the continuing influx of new foreclosures. While most of the region has seen steadying numbers this year, the number of foreclosures in Montrose County has jumped significantly so far in 2012.
Foreclosures continue to be a concern in Ouray County as well, although numbers have not increased as dramatically as in Montrose County. In the first half of 2012, the total number single-family homes sold in Ouray County increased, as did the median price of those sales. But foreclosure sales in Ouray County still outnumber traditional sales.
Overall, the market remains a buyers market, brokers say, and despite continuing foreclosures and some areas of weakness, most believe the market is on the mend. Of course, they conclude, that makes this a great time to buy.
‘I Think We Are on the Right Track’
Telluride Consulting’s Judi Kiernan was happy to report that both the number of sales and the dollar volume of sales have increased almost every month during the first half of 2012 in San MIguel County.
At $140.9 million in the total dollar volume of sales by the end of June, the county is up 9 percent in comparison to the dollar volume of the first half of 2011. The increase is especially impressive given that there were actually fewer sales in the first half of 2012 (203) than there were in the first half of 2011 (214).
July numbers suggest that the improvement is continuing. In July alone, Kiernan reports, the number of sales increased to 34 this year from 14 in 2011, for a 143 percent jump. Through July there have been a total of $161.2 million in sales, marking an increase of 11 percent from the first seven months of 2011.
“Year to date, five out of seven months the numbers have been above 2011 levels,” Kiernan said. “We are up in both dollars and the number of sales for five of the past seven months. The fact that we are ahead of last year is huge because we had a dismal start in January this year when there were only $9.6 million in sales, compared to the previous January with $25.3 million.
“We had a lot to make up, and the fact that we are a little more than half way through the year and ahead in dollars and numbers is a tremendous turnaround.”
Prospect Realty broker Todd Creel said that overall, things seem to be on a positive trend in both the Town of Telluride and San Miguel County. For example, properties in Mountain Village are starting to see more demand.
“In Mountain Village, where that market has been pretty sluggish, it seems to be making some very good strides,” Creel said. For example, there have been nine home sales recently and 36 condo sales. There is still a substantial amount of inventory in Mountain Village, but the astute buyers are stepping in and making some pretty good purchases. This is all good news for Mountain Village in general.”
Both Creel and Telluride and Mountain Village Properties broker Mike Wentworth agree that sales within Telluride have seen the most impressive rebound so far.
“Home sales in town have been a very bright spot,” Wentworth said. “It got real slow for a bit and it’s coming back. Right now, over 10 percent of the homes on the market in Telluride are under contract, which is a remarkable statistic in any market.”
And with homes and condos beginning to sell in Mountain Village, Wentworth added that he believes “the worst is behind us. We are working through our inventory but I believe the worst is behind us.”
Peaks Real Estate broker John Burchmore believes that the movement of Mountain Village’s inventory of properties foretell an even better winter.
“So far, there seems to be a demand we haven’t seen in a while, and that’s a good indicator that more buyers are coming into the market,” Burchmore said. “We’ve got a nice start to the year, but Mountain Village condos are good winter sales. The fact that we’ve got them started this summer is a good indicator that we could have a strong winter.”
While sales numbers, at least for the moment, seem to be trending in a positive direction in San Miguel County, the number of foreclosures filed this year remains constant compared to 2011. At the end of June, San Miguel County Treasurer Janice Stout reported, there had been a total of 52 foreclosures filed, which is exactly the same number filed during that same period in 2011, when a total of 100 were filed by the end of the year.
Despite a constant stream of foreclosures, Peaks Real Estate broker Sally Puff Courtney said she’s very optimistic that the market will continue to see an upward trend of activity.
“We have seen activity on vacant land for the first time in four years and we have even seen some pretty good activity in the Ski Ranches,” Courtney said. “I think we will start to see activity with the mesa properties but I think that will be next summer.
“I am very optimistic we will continue to see the kind of activity we’ve have had throughout the summer into the fall. I think we are on the right track.”
‘It’s a Mixed Bag’
While the evidence isn’t as strong in Montrose and Ouray counties, sales numbers compiled by Lynn Vogel at Comparable Sales Research show indications that both counties are beginning to stabilize.
In the first half of 2012, Montrose County has seen a total of 302 single-family sales, which is up from 189 sales during that same time period in 2011, marking a 60 percent increase.
Vogel reports that the median price of those single-family home sales across Montrose County has also increased, moving from $219,000 during the first half of 2011 to $229,000 during the first half of 2012.
The total number of all sales recorded in Montrose County has increased as well, from 321 in the first half of 2011 to 450 the first half of this year, marking a 40 percent increase.
“These numbers are really indicative of some stability,” Vogel said. “Sales are increasing, but we are just kind of in a waiting pattern to see what’s going to happen to see if there is a recognizable trend.”
Foreclosures continue to be filed at a rapid rate in Montrose County. According to Treasurer Rosemary Murphy, there were 157 foreclosures during the first half of the year, a mark that’s well on it way to beating the 2011 total of 286 foreclosures.
While Vogel reports that median prices across Montrose County have increased slightly, Coldwell Banker Bailey & Co. broker Valerie Meyers said she just isn’t seeing that trend and that in most cases she’s seeing a continued decline in home prices.
“It’s busy, but prices are still dropping,” Meyers said. “Certainly the amount of foreclosures are playing a huge role in our prices. Right now, the biggest challenge is that we don’t know how many foreclosures will be coming on the market. We are all in the same boat here, watching and waiting to see what happens.”
It’s because of what he’s seeing in prices continuing to fall that Montrose-Real Estate.com broker Scott Scarborough believes the Montrose County market is still weak, despite the recent influx of sales.
“It’s a mixed bag,” Scarborough said. “Prices are continuing to go down and people are tired of waiting. There are a lot of foreclosures, and people are snapping them up, but I just don’t know” where it is. “When I look at the market here, I think it’s still pretty weak.”
Meyers said she looks to other major Colorado cities as indicators for when Montrose’s real estate market will see improvement.
“If Denver is stabilizing, we typically follow behind by about six to eight months,” Meyers said. “We are watching that right now and it looks like Denver is leveling out. Their prices are not dropping and they are even having their prices increase a bit. If that trend continues there, we should follow.”
For now, though, Meyers adds that this is the time to buy.
“It’s an unprecedented time in real estate,” she said. “If you can buy, you should be buying.”
Much of what’s been said about Montrose County can be said about Ouray County as well. Vogel reports that the first half of 2012 has seen an increase of single-family sales from 28 in 2011 to 33 after the first six months of 2012, marking an 18 percent increase. Median prices of those sales have increased from $225,600 in 2011 to $363,750 in 2012.
Once again, though, brokers just aren’t seeing that trend as they work to price properties to sell.
“I wish it would be a little more robust,” San Juan Realty broker Karen Brooks said. “I am grateful for the amount of sales, which seem to be on par of last year. After the election, hopefully we will see some improvement. I think a lot of people are fence sitting and we no longer see those people that have a sense of urgency to pull the trigger quickly and buy a property they must have. We just don’t have that anymore.”
Foreclosures in Ouray County remain constant. Treasurer Jeannine Casolari reported there were 22 foreclosures filed during the first half of 2012, about half the total number filed in 2011.