In the wake of the financial crisis/ Great Recession that began in 2008, the Crested Butte and Gunnison area saw more than their fair share of foreclosed properties. Like virtually every other area of the country, property values in this area dropped precipitously in a short period of time, leaving many properties “under water”. “Under water” means that the homeowner owes more to the bank (mortgage holder) than the property is currently worth.
For many homeowners in this situation, it made financial sense to stop making payments and let the bank take the property back (known as a stategic foreclosure). For other homeowners, unfortunately, the loss of a job or other financial hardship made the loss of their property something which simply couldn’t be avoided. In a resort/ vacation area like ours, the problems were further aggravated by the number of second homeowners who logically chose to default on their second home loan before their primary one. Sales of foreclosures in Crested Butte and Gunnison peaked in 2011, when more than one third of all sales in the area were purchased from the bank. Thankfully, conditions in the local and national economies have greatly improved, and there are very few bank-owned properties available at this time. Foreclosures are at times also referred to as distressed properties or REO (real estate owned), though the terms aren’t entirely synonymous. Through 11/19/2014, only 21 sales in the area have involved a foreclosure, compared to 110 in 2011. Foreclosed properties are not as deeply discounted as they once were, though deals can still be found for savvy buyers.