Western Home Foreclosures Soar, but Resort Towns Flourish
PARK CITY, Utah, Jan. 25, 2007 — -- Two billion dollars worth of real estate was sold last year in this mountain ski town of 8,500 residents.
"It was a record year," says broker Dena Fleming, and it might not be over. The year 2007 "could be just as strong if not stronger," according to Fleming.
Next door, in the mountain communities of Colorado, the same phenomenon has realtors clicking their ski boots in glee. After all, a multimillion dollar sale nets agents anywhere from 3 to 6 percent of the sales price.
Continued interest in second homes in the pricey Rocky Mountain/Vail corridor has driven values as high as the 14,000-foot peaks. In Eagle County, which includes Vail, values soared nearly 24 percent last year.
Doing his part to keep prices up, Prince Bandar of Saudi Arabia listed his mountain estate in Aspen, Colo., for sale this ski season. Asking price? A cool $135 million!
But real estate is very much a house divided in the great American West. Colorado also has the highest home foreclosure rate in the country.
Nationwide, delinquent mortgage payments and foreclosures are far above year-ago levels. Ballooning interest rates, often the product of adjustable-rate and subprime mortgages, have left many budgets too tight to make payments.
In Weld County alone, in north central Colorado, the mortgages on 198 homes have been foreclosed in the first three weeks of the year. Last year, nearly 2,100 homes were repossessed by banks, and only 1,870 homes were sold.
"My American dream turned into a nightmare," Greeley resident Mike Meadows tells ABC News.
Meadows blames a divorce and a sudden drop of income due to the city laying him off from his job as an auto mechanic. He admits he became overextended when he took out a second trust deed on his adjustable rate mortgage, and then got caught in a financial down draft when adjustable rates began climbing last year. His three-bedroom, two-bath starter home is now in the hands of his lender.
"We didn't have a tragedy like Katrina or a Ford factory closing down here," says realtor Matt Revitte of Pro Realty Inc. "But in 2002 and 2003, thousands bought homes here at little or no money down and then financed their mortgages with 'cheap money,' all the while pulling equity out of their homes while the market appreciated. Now that rates are up and home prices are down, it's a perfect storm for foreclosures."
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