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August 1, 2012
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Nearly half of Garfield County mortgage holders 'underwater'

GLENWOOD SPRINGS, Colorado - Nearly half of mortgage holders in Garfield County are "underwater," meaning they owe more on their mortgages than their houses are worth, according the website Zillow.com.

Zillow tracks mortgages, home values and the real estate market across the country.

With signs emerging that the national housing market is set to rebound, some local real estate experts were mildly skeptical about the Zillow's estimate that 49 percent of Garfield County mortgages are underwater mortgages.

"I mean, it's a mass appraisal," said Richard Luetke, owner of Action Appraisal Services in New Castle, referring to the Zillow data. "I'd need to see exactly how they do their calculations. That appears to be high, but it could be true."

Zillow officers could not be reached on Tuesday to discuss the website's methodology in reaching its conclusions.

The national slump in housing prices seems to have reached bottom, according to Zillow and other observers. Home values have either leveled off or are on their way back up, these observers believe.

"The United States has hit bottom in housing values and a majority of metro [areas] that the Zillow Real Estate Market Reports cover have also experienced their bottom," the website stated on Tuesday.

In Garfield County, said Bob Rulon, branch manager of Land Title Guarantee in Glenwood Springs, gross sales in terms of dollar amounts rose by about 6 percent in June over sales in May, as did the number of transactions recorded in the county.

A bigger increase is shown in comparing June 2012 transactions to June 2011 transactions, Rulon said.

June's figures for 2012 -$33.2 million in gross sales from 106 transactions - marks a jump of 45 percent in sales and 47 percent in transactions over those in June 2011.

When queried about the percentage of area mortgage holders who remain underwater, Rulon said, "That's very difficult to put your finger on."

The Zillow website features an interactive map of the country with an internal search engine that can pinpoint a certain county, city or ZIP code.

The map display shows how many homeowners in a given jurisdiction owe more on their homes than the homes are worth on today's market.

For Garfield County, that number is an average of 49 percent, according to Zillow.

By comparison, Eagle County is reported as being 30 percent underwater, Mesa County is 41 percent, and Rio Blanco County is 29 percent, according to the website.

The percentages of underwater mortgages vary by ZIP code within the county, according to the "home value index" figures on the website (see table).

"That seems to be a little high, but it wouldn't surprise me," said John Wendt, a broker with the Mason Morse real estate firm, concerning Zillow's estimates.

"Forty to 50 percent of our sales under $500,000 are either short sales or foreclosures," Wendt said. A short sale is when the house is sold for less than the value of mortgages and liens.

Wendt said that rate would seem to back up the Zillow data.

Bob Slade, deputy trustee with the Garfield County Treasurer's office specializing in foreclosure data, said he is aware of the Zillow website but not of how Zillow calculates its data or whether it is accurate.

"For the foreclosures we do, most of them are underwater," he said.

Slade said foreclosures appear to have topped out in 2011. "We're on a pace with where we were in 2010; 2011 was our high point," he said.

He said there were 644 foreclosures in the county in 2010, 701 in 2011, and predicted, "We're on pace to hit 600 this year."

jcolson@postindependent.com


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The Post Independent Updated Aug 1, 2012 12:35AM Published Aug 1, 2012 12:32AM Copyright 2012 The Post Independent. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.