GARFIELD COUNTY — Despite a slowdown in later months, Garfield County reached $1.22 billion in real estate transactions in 2007, once again breaking the record for total dollar volume in one year.

The amount was based on 2,805 transactions, including all types of real estate sales.
The 2007 sales represented an increase of more than $177 million (17 percent) in total dollar volume over 2006, on 51 fewer transactions for the year, according to a monthly report by Land Title Guarantee Co. (LTGC) in Glenwood Springs. This is the first time in at least five years Garfield County has seen an increase in total dollar volume with a declining number of transactions.

The report showed Garfield County with a strong first half in 2007, up nearly 218 transactions over the same time during 2006. But starting in August, with a 20 percent decline in total transactions, each month that followed posted a decline. November posted the largest decline — 31 percent, a drop of 75 transactions — compared to October 2006.

And that may have been one the first signs of a softening market, according to 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 he’s seen recently indicating the valley’s market is declining. Sakson has seen major price reductions on properties during the last part of 2007 and continuing through January, longer market times for sellers and new lending laws making it more difficult for prospective buyers to qualify for a home loan.

These signs 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 in (to a soft market) late and leave a little early.”

But Linda McKinley of Cherry Creek Mortgage in Glenwood Springs said the valley’s market is still strong and will remain so because the demand is still high for the region.

“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 said the valley usually “weathers the storm” better than the rest of the nation. But this time around, with the restructuring of the lending laws as a result of the nation’s subprime mortgage market problems, things will drastically change in the valley.

“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.”

McKinley didn’t dispute that, but she said it won’t affect property values in the valley.
“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 didn’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.”

Contact John Gardner: 384-9114
jgardner@postindependent.com

Post Independent, Glenwood Springs, Colorado CO