Garfield County sets real estate record
Glenwood Springs correspondent
Aspen, CO Colorado
GARFIELD COUNTY ” Despite a slowdown late in the year, Garfield County recorded a record $1.22 billion in real estate transactions in 2007.
The total dollar volume was the result of 2,805 transactions.
Sales in 2007 represented an increase of more than $177 million, or 17 percent, in total dollar volume over 2006, though there were 51 fewer transactions for the year, according to a monthly report by Land Title Guarantee Co. in Glenwood Springs. It was the first time in at least five years that dollar volume was up while the number of transactions were down.
The first half of last year was a strong one for real estate transactions in Garfield County, but starting in August, when transactions dipped 20 percent compared to the same month in 2006, transaction numbers were down each month. November saw the largest decline at 31 percent.
The declining number of sales may be one of the first signs of a softening market, according to area mortgage broker Drew Sakson.
“It’s going to get worse before it gets better,” Sakson said. “It’s going to be a long hard road before it gets better.”
Sakson, of Sakson Mortgage Group in Aspen, cited three signs of a declining real estate market in the Roaring Fork Valley, starting with significant price reductions on properties during the latter part of 2007. Those price drops continued into January.
In addition, Sakson said properties are sitting on the market longer and new lending laws are making it more difficult for prospective buyers to qualify for a home loan.
Those factors lead Sakson to believe that Garfield and Pitkin counties may have a few “tough” years coming in the real estate market.
“It tells me that we’re in a declining market to say the least,” Sakson said. “I think that the market in the valley always follows the rest of the nation. I think we will see what the rest of the nation is going through, but the unique aspect of the valley is that we tend to come (into a soft market) late and leave a little early.”
Pitkin County, which includes Aspen and Snowmass, recorded about $2.51 billion in real estate sales in 2007, down from the record $2.64 billion in 2006. Sales in Pitkin County, too, slowed as the year progressed.
But Linda McKinley of Cherry Creek Mortgage in Glenwood Springs said the valley’s market is strong and will remain so because the demand for real estate in the area is still high.
“Fewer homes are selling, that’s true,” McKinley said. “But I think it goes back to the underwriting of subprime loans. The guidelines really tightened up in July, and when that happens, it reduces the number of borrowers that qualify for loans, and that reduces the number of buyers.”
Sakson conceded the valley usually “weathers the storm” better than the rest of the nation, but with the restructuring of the lending laws as a result of the nation’s subprime mortgage market problems, things may be different this time around.
“The problem is that the laws have changed, it’s not just a change in the market, so it’s very different from other (weak markets),” Sakson said. “And it will affect people’s ability to borrow money.”
What’s happening in the lending market won’t, however, affect area property values, McKinley predicted.
“Borrowers are buyers. If there are no borrowers, then you don’t have buyers,” McKinley said. “But that doesn’t mean that property values have gone down.”
Comparing Garfield County with the rest of the nation is like comparing apples to oranges, according to McKinley.
“There is no ‘one’ housing market,” McKinley said. “There are different areas with different markets. You have to look at a certain area and look at what has happened in the area economically that is affecting the market.”
With the strength of the energy and tourism industries in Garfield County, McKinley said she doesn’t see any reason for the market to soften.
“I would not look at the future as doom and gloom,” she said. “To say that it’s an epidemic that is going to hit here, you really can’t say that.”
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