If you are thinking about purchasing a Steamboat condo, remember that there are owners who will carry the financing for qualified buyers.  It’s a win-win for buyers and sellers and a way to avoid the traditional financing methods that remain so troublesome. Please contact us for information on seller financing.

Until then, there is a lot of interest from cash buyers. Cash buyers made up almost half of the Steamboat condo sales in 2010.  Cash buyers paid an average of 85% of list price for Steamboat condos in 2010 while buyers who financed paid an average of 98% of list price.  (There are more reasons other than cash vs. financing for the difference in the list-to-sold price.  Let us know if you are interested in specific developments or price points and we’ll get you details.)

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Here is an abridged version of the Western Mountain Resort Alliance position paper explaining these challenges. The WMRA includes 13 ski areas, all of which are experiencing the same lending issues:

WMRA URGES NAR TO ADDRESS CONDO FINANCING ISSUES

The Western Mountain Resort Alliance (WMRA) is composed of boards of REALTORS® of destination ski resorts in the Mountain West including:  Park City, Utah; Sun Valley and McCall in Idaho; Jackson Hole, Wyoming; Crested Butte, Steamboat Springs, Summit County, Vail, Winter Park and Telluride in Colorado; Tahoe, California; Big Sky, Montana; and Whistler/Blackcombe in British Columbia, Canada. We are committed to the marketing and selling of resort real estate and protecting the benefits our owners of vacation real estate enjoy.

The Issue

Our membership is becoming increasingly concerned about the difficulty of obtaining financing in condominium transactions in our resort areas due to strict Fannie Mae & Freddie Mac condo guidelines. The condo markets in our areas have been particularly hard hit by the housing downturn. The current guidelines have made it almost impossible for condo transactions to be completed, even for buyers with strong credit and healthy down payments.

REALTORS® in our resort areas are seeing:

• A record decrease in sales of condominiums where financing is required by buyers, due to inability to meet GSE requirements. Condo’s are a very large part of resort real estate sales.
• Reaction by HOA’s, who are changing original doc’s to disallow short term rentals completely so that financing can be obtained. This is backfiring, or will, when investment buyers will not seek properties in these HOA’s, because they cannot be rented.
• Conflict between federal agency requirements: Fannie recently denied approval of a condo project solely because the project included a few ADA units as required by the Americans With Disabilities Act. These units were intended for owners with guests who needed ADA compliant property. Fannie denied the project, indicating the ADA units were a “non-incidental business use”. The lending agency was concerned these units would be rented out as a nightly rental.
• First Time Homebuyer Tax Credit and Condo Purchases. Many “locals” are trying to secure the first time homebuyers tax credit and these condos are the only units that fit within their price parameters.
• Few Foreclosures. Our resort markets are holding strong against foreclosures. Loans in resort condo markets perform better than traditional housing loans and resort areas are not seeing more than 2% foreclosure rate. GSE’s are concerned about foreclosure, as it relates to the entire U.S. Housing Market. FHFA needs to differentiate resort condo markets from traditional lending markets.

WMRA has identified these lending issues and requirements to be the nexus of problematic condo financing:

• FNMA and FHLMC/ large bank regulations that:

• Require 70% owner occupancy.
• Do not allow nightly rentals of condos.
• Do not allow front desks.
• Allow underwriters to do a web-based internet search to determine whether project engages in nightly rentals. These searches can include inaccurate or dated information that are not verified.
• Restrict lending for projects that do not have individual gas or electric meters or services.
• Do not allow lending in projects where “lodge” is included in the name.
• Require 40-50% down payment.

• Overlays put on by large banks selling to FNMA and FHLMC.

• Denial: One of the biggest issues is when the denial occurs. It is generally within the week of closing and often 1 day prior to closing. This means that the Seller has taken the condo off the market for 45 days, the buyer is out the cost of an appraisal and an inspection. Also lost is the paperwork, time and energy expended by all parties involved. If the underwriters are going to “google” the property, this should be done at the beginning of the process.

• No Appeals Process. There was recently an issue with a project consisting of 100 units, 5 of which are in a short term rental program. Many of these units are townhomes but registered at the County as Quail Run Condos. This is a project that consists of primary housing for many of the core service and hospitality families needed in our resort. Due to the 5 short term rentals and the fact that they found this on a web page, funding was denied. Again, no appeal on this clearly errant decision.

• Lack of definition as to what can and what cannot qualify. This creates confusion for lenders, REALTORS® and the public at large. We need clear and concise definitions on qualifications.

It’s a self-fulfilling prophecy: The GSE’s don’t want to lend for fear of foreclosure, but if they don’t lend, and sellers in these condos can’t sell their properties, they will foreclose.

The Goal

With the goal of achieving liquidity in our condo markets, WMRA strongly urges NAR to pursue public policy, whether through federal legislation or regulatory changes, that would exempt resort areas nationwide from the current GSE condo guidelines.

In January, Fannie Mae undertook a “Special Approval” designation that exempts established condo projects in Florida to help stabilize the states condo market. We believe resort markets in all areas of the United States should be exempted from rules that prevent sales of condominiums in our area.

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In fact, The Highmark is turning out to be one of the most active properties here in Steamboat.  Several went under contract at the auction.  Keep in mind that only developer units were auctioned off, not the privately owned ones.

In addition to the auction/developer units, a bank-owned penthouse sold this month and a privately owned condo (a short sale) went under contract last week.  Four are currently under contract.

Some of the reasons I think The Highmark at Steamboat has had so much interest are:  they’re beautifully furnished with nice amenities, rent well, and they are a very short walk to the gondola.

The auction company’s heavy national advertising also raised awareness.  When you compare the price of the Highmark with other properties in that range, you can understand why people are buying at The Highmark.

They are new, nicely furnished, and move-in ready.  (Some of the other developments in that price range can be dated.)

The asking price of the condos is fairly firm.  There are 8 units for sale:  5 are developer units selling for the auction price, and 2 are private owners seeking short sales.  (There is also one privately owned condo that is not a short sale but is outrageously priced.)

Here is a link to all the available condos at The Highmark. They range from 2-4 bedrooms.

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This 4 BR Cascades Townhome is a deal–it’s a 4 BR/3BA townhome with a two car garage, all appliances including washer and dryer, and excellent rental potential within walking distance to the Steamboat Ski Area.

The bank wants it sold and has priced it hundreds of thousands of dollars less than other Cascades Townhomes.

(See all the Cascades Townhomes for sale here)

It could use a new coat of paint, and new carpet (or a really good carpet cleaning company).   At $194/SQ FT, this townhome is one of the very best values in Steamboat real estate.

Contact Eliese Pivarnik to schedule an appointment or call 970-846-8284

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See all available Stonewood Townhomes for sale here.

HOA dues are reasonable compared to similar townhomes.

Stonewood Townhomes were once listed at $2,550,000 and are now priced at $1,550,000–a savings of 40%.  The price per square foot at Stonewood Townhomes is less than $400 for brand-new luxury construction.

Developer Kreissig Homes has an excellent reputation for building here in Steamboat Springs.  They’ve been in Steamboat for over 17 years.

The post Stonewood Townhomes Cuts $1 Million Off Prices appeared first on Steamboat Ski Condos.

As the past listing broker for Edgemont residences when it was developer owned, I’m happy to report Edgemont sold out quickly with several owners buying a second condo.

With a great ski in, ski out location, luxurious finishes and solid rentals, Edgemont continues to be a great investment in Steamboat Springs.

See all the Edgemont condos listed for sale on the Steamboat MLS or scroll down for full pricing.

Call 970-846-8284 to schedule a personal tour of Edgemont’s luxury slopeside lifestyle properties.

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Buying a Steamboat condos means becoming a member of a home owners association with unique rules and requirements.

Once you find the Steamboat condo you want, make sure you carefully review all the documents. (As always, it’s always a good idea to have your attorney review these.)

The Colorado Contract to Buy/Sell Real Estate gives Steamboat condominium buyers the right to examine all the documents before purchasing. In fact, Steamboat condo buyers can get out of the purchase contract and have their Earnest Money returned if the HOA documents are not agreeable to the buyer.

Here are some questions Steamboat condo and townhome buyers want to be aware of:

For new construction like One Steamboat Place, Edgemont, Howelson Place, The Olympian, The Victoria and Trailhead Lodge:

•             How many condos does the developer own, and how many have sold?

•             Does the developer still in control the HOA?

•             At what point does the developer turn over the management of the HOA to the homeowners?

•             What is the timeline for amenities like pools?  Is the developer required to put them in, or can they wait…indefinitely?

For all condos in Steamboat Springs (and other resort areas), especially if you are financing:

•             Is this condominium complex considered a condotel by lenders?

•             Are any condos in the development sold as fractional ownership?

•             What about parking?  Is there a deeded space, or is parking space available?

•             Who does the rental management, and do they also run the HOA?  Are they on-site or off?

•             Can you rent the condo nightly?  Long-term?

•             What is the pet policy?

•             Are any of the units bank owned or delinquent in their HOA fees?

Owning a Steamboat Springs condo or townhome is one of the easiest ways to enjoy living full- or part-time in Steamboat.  To avoid any surprises, carefully read the CC&Rs before purchase.

Search all Steamboat properties for sale here.

And for help choosing which Steamboat Springs Condominium or Townhome best suits your lifestyle, please contact us.

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