Foreclosures and Bank-Owned Properties in Boulder County

There were conflicting reports this week about the foreclosure activity in Boulder County. The first report that came out was a national report by RealtyTrac stating that the number of foreclosures in our area was DOWN by 20% over the first quarter of last year. A separate set of figures from the Boulder CountyPublic Trustee’s office tell a different story, one with a 5% INCREASE in foreclosure activity for the same period. Different metrics used for calculations and a possible seven- to 10-day delay in the collection of information could account for the difference in statistics.

Regardless of the numbers, it is safe to say that most parts of Boulder County have been, by comparison to other parts of the country, lightly hit by the foreclosure glut. That is somewhat of a disappointment for those folks that are trolling around, Trulia and other internet real estate sites looking for bottom of the barrel deals. If you want to pick up a bank-owned property in Boulder County you will need to look at the north end of the county and shop around in Longmont, because that is where approximately 70% of the bank-owned, or REO properties are.

As the data shows, the number of REO properties sold in the 1st quarter of 2009 is down 30% from the same period in 2008, and down almost 14% from the same period in 2007. Prices of bank-owneds in 2009 have crept up only slightly from 2008. I haven’t yet studied the statistical correlation between the number of foreclosures and the REO sales in a given period. However, there is usually a lag between the two as after the bank takes ownership of the home often there are things like cleaning, and repairs and improvements necessary to make the home saleable, and the time for these tasks varies from property to property.

Over 60% of those properties were sold at prices below $200,000. This is great news for first-time homebuyers interested in Longmont who want to take advantage of historically low interest rates and bargain home prices. It’s also a great time to pick up a rental property if you are interested in investment opportunities.

For those bargain hunters still holding out hope that they can pick up a bank-owned steal in Boulder you had better be able to act fairly quickly. For 1st quarter 2009 there were only six REO sales in the city of Boulder. One property up on Flagstaff Mountain took over 200 days to sell, but for the remaining five properties the average days on market (DOM) was a quick 34 days. For the same period for ALL homes sold in the city of Boulder the average DOM was 139 days – quite a difference! The moral of the story … be ready to move on a dime if you have any expectations of buying a property of this type in the city of Boulder.

Another way you can increase your odds of obtaining a bank owned home is to find a realtor that actually lists and sells these homes for a banking institution. These realtors get early notification from their bank clients as properties become available and have exclusive access to the bank’s inventory before they place properties in the MLS and start marketing them. It’s the good old “inside track”. Realtors with bank-owned experience also have knowledge of the bank’s procedures and can walk you through the sometimes complicated process.

If you would like more information about purchasing a bank-owned property don’t hesitate to contact me and I will connect you with a realtor with specific expertise in REOs.

Pam Metzger
Director of Relocation and Business Development
Twitter = @pmcolorado