Thank goodness we’re still a long way off from the Southern California real estate market (literally and figuratively!). There, prices fell 36 percent in April compared to a year earlier as foreclosures accounted for more than half of all sales, according to MDA DataQuick. While prices are down a whopping 51 percent from the peak, the number of sales was up 31 percent. Foreclosed homes accounted for 54 percent of all transactions for April.

Jackson Hole Foreclosure Roundup

Foreclosures in Jackson Hole are thankfully still much more rare with only eight currently scheduled during May and June. A report recently issued by Jackson Hole Title & Escrow shows that six properties have come up for auction since March with no bidders. With no sale at auction, the properties will revert to the lender pending the ninety-day redemption period (more on this in a minute). Another six foreclosure proceedings have been canceled which might indicate the bank and owner worked out a solution, a pending free market sale, or a postponement of the proceedings.

Case in point, a home in Melody that is in the foreclosure process went under contract yesterday. If it closes, this should be a much more positive outcome for both seller and lender than going through the long foreclosure process.

Other homes currently in foreclosure include two town homes in Rafter J, three Racquet Club condominiums, one Teton Village and one Town of Jackson condo, and a second Melody Ranch home. The minimum bid is for a Rafter J townhome for $91,402.09 scheduled for May 28.

To receive a complete list of properties in foreclosure, please email me.

Types of Distressed Property

This challenging economy is forcing all of us in real estate to become familiar with the language of distressed property: short sales, foreclosures, the FDIC, etc. When talking to another local realtor two weeks ago about a potential foreclosure she had listed, it was almost surreal. “I don’t know what’s going on with my listing,” she said. “The bank that holds the mortgage (First Bank of the Tetons) has been seized by the FDIC. Who knows who’s making the decisions.”

This brings to light one big fact, if you are hoping to purchase a distressed property it’s probably best to do so before the foreclosure process has begun. And, if you don’t, be prepared to have lots of patience! Ask your realtor to find out who purchased their home in 2007, the peak of the market, and has their home listed at or below their purchase price. Find out about “motivated sellers”, a phrase becoming more and more common in our Teton MLS.

On the Court House Steps

If you do place the winning bid on a foreclosed property, be prepared to make payment in full on the bid amount by 5:00 p.m. the day of the auction. Traditional financing is not available for this type of purchase since you have to wait through the ninety day period when the delinquent borrower has the right to redeem his or her property. At any time during the ninety day redemption period, the borrower can redeem the property by paying the bid price, any outstanding taxes and liens, plus ten percent interest.

Short Sales

Along with the term “short sale”, we hear that people are “upside down” on their mortgage. A short sale is a sale where the mortgage lender agrees to accept less money than they are owned due to the fact that the sale property is now worth less – and the owner is upside down - than the loan amount. It’s possible, with the use of the county clerk’s public records search, to get a partial picture of which properties might be close to being upside down on their loans. Fortunately this problem is still fairly rare in Jackson Hole, although there are a few highly leveraged properties that might be close.

Where are We?

There seems to be a tentative consensus that we are at or nearing the bottom of the market in Jackson Hole. The number of pending contracts is trending upwards. Lower prices are piquing more buyer interest than we’ve seen for quite a while. This is not to say that the boom times will soon be back. There’s still quite a bit of real estate inventory and a lot of wealth has been destroyed nationally for this to occur. A wide trough followed by a slower recovery may be what we have to look forward to. However, for those with disposable incomes and job security, sooner than later may be the time to take advantage of lower interest rates and high seller motivation to get into the Jackson market.

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