Low foreclosure rate in Summit County highlights strong real estate market | SummitDaily.com
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Low foreclosure rate in Summit County highlights strong real estate market

Timeshare properties remain an ever popular fixture in Breckenridge as pictured Wednesday, Feb. 26.
Liz Copan / ecopan@summitdaily.com

Editor’s note: This story has been updated to correct the spelling of Summit Association of Realtors board President Dana Cottrell and to correct and add data to the graphic.

FRISCO — In a strong real estate market, foreclosures are relatively rare. In 2019, there were 50 foreclosures in Summit County. Of course, there were many more during the Great Recession.

Pete Deininger, team lead of Breck Life Group, said that during the mortgage crisis he was surprised to see how high the foreclosure numbers were in Colorado cities like Denver, Fort Collins, Greeley, Colorado Springs and Pueblo. 

“I’m very grateful for our community that we were not devastated like a lot of other areas were,” Deininger said. “I think we were spared the devastating blow that many communities faced strictly as a result of the affluence of our buyers. About 80% of our buyers are not buying their primary residences but a vacation home.”

Deininger explained that when the housing bubble popped, setting off the mortgage crisis, Summit County homeowners were less affected because there were far more cash buyers and people putting high percentages of cash down on their investments. He added that many properties in Summit County are investment properties and that owners often rent out their homes.

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“One of the things that lenders figured out a long time ago is when something is an investment property … they require a greater percentage down and less loan-to-value,” Deininger said. 

In 2009, there were 86 public trustee deeds issued, meaning the Summit County public trustee was given power of sale after borrowers defaulted on their loans. In 2011, that number skyrocketed to 227 before beginning to drop, coming in at only 14 in 2019.

He said that due to the high amount of cash put down for investment properties, homeowners are less willing to give up their investment. Deininger added that Summit County suffered less than other comparable mountain communities during the recession. 

Even more specific to a resort town is the fact that 62% of the foreclosure actions in Summit County came from timeshares, according to Land Title Guarantee Co. data. These timeshare foreclosures don’t impact the local market the way full ownership foreclosures would, according to Dana Cottrell, board president of the Summit Association of Realtors. 

“With timeshares, it doesn’t impact our general sales market very much,” Cottrell said. “The amount of full ownership isn’t high enough to impact our values at this point. That was a different case back in 2009 and 2010, but now our market is very strong.”

Cottrell noted that timeshares are a “different ball of wax” because they have different requirements than a home would have. Most notable are the annual fees. Deininger explained that these fees often turn out to be higher than the timeshare owner anticipated or high enough that it no longer makes financial sense for the owner. 

“In my experience, when I speak with (a timeshare owner) about why they’re considering selling it, it is most frequently the annual ongoing dues,” Deininger said.

Homeowners are less likely than timeshare owners to default because homes can be 10 to 100 times the value of a timeshare, and the cash down at the time of purchase is significantly higher, Deininger said.

While Summit County is a heavily touristed mountain community, the low number of foreclosures seen in the area reflects an overall strong economy.

“Summit County certainly did see less of a fall as a percentage in price,” Deininger said about the recession. “I think that the vacation rental market certainly contributed to the low numbers of foreclosures.”

Real Estate of the Summit owner and broker Dennis Clauer said that when people see the values of their property going up, they’re less likely to let the property go to foreclosure.

“The recession kind of ended, the values of the stock market really started going up,” Clauer said. “It’s just one other indicator in the economy that things are on the way up.”

Clauer also pointed out that in the fourth quarter of 2019, only 2.8% of Colorado mortgages are “seriously underwater,” or valued significantly lower than the homeowner is paying on their mortgage, an indicator of a strong real estate economy.

“The economy is doing well, and people are feeling good about spending time with their families in vacation resorts around the world,” Clauer said.


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