Harold Smethills

Harold Smethills, the visionary behind the new water-efficient, sustainable Sterling Ranch community in northwest Douglas County, was selected Industry Leader for Residential Real Estate in the Denver Business Journal’s Power Book 2011 awards.

The DBJ noted that Smethills, who has been building successful companies his entire career, is on a mission to build metro Denver’s largest housing development in years with 12,050 homes.

“We’re basically creating a whole new city and all the services that go with it,” Smethills, managing director of the community that will be home to 31,000 residents in 20 years, told the DBJ.

Smethills and the principals of family-owned Sterling Ranch—Diane Smethills and Jack Hoagland—spent nearly a decade meeting with neighbors, local business groups and public officials before winning approval of the $4.3 billion project from the Douglas County Commissioners in May.

Cut his teeth at Coors

Making the Sterling Ranch community Colorado’s most water-efficient is key for Smethills, a former Adolph Coors senior executive who shaped his water conservation and sustainability thinking under beer patriarch William Coors.

The county commissioners in a unanimous vote approved integrating water conservation into land planning and thereby reducing the county’s historic water requirements by almost half. The Sterling Ranch approach to conservation and land planning is revolutionary.

Smethills said Sterling Ranch never could have made it without the people who contributed to the vision for water efficiency, sustainability and innovative solutions to regional problems.

Smethills credited the state legislature for changing Colorado water law to permit rainwater harvesting, the Colorado Water Conservation Board for naming Sterling Ranch the state’s first rainwater harvesting pilot project, the Denver Botanic Gardens for helping Sterling Ranch demonstrate that water demand can be dramatically reduced, the Douglas County staff for developing water conservation plans with Sterling Ranch, and the many neighbors who testified at public hearings in support of the new community.

“At the end of the day, it took the courage and leadership of the Douglas County Commissioners who stood up for water conservation by unanimously approving Sterling Ranch’s zoning and water appeal,” Smethills said.

Sterling Ranch, between Chatfield and Roxborough state parks, expects to begin construction late next year on the new community, which will promote Colorado’s outdoor lifestyle by preserving 37 percent of the land for open space and creating 30 miles of hiking, biking and horseback-riding trails.

Contact John Rebchook at JRCHOOK@gmail.com

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Harold Smethills is passionate about water conservation at Sterling Ranch in Douglas County.

It’s official.

Today, the Douglas County Board of Commissioners formally approved the $4.4 billion Sterling Ranch development that is expected to create thousands of jobs and generate an economic impact of $425 million annually at build-out. The board on May 11 had initially voted to approve the Sterling Ranch rezoning and water appeal application, following a nine-hour hearing, but only gave its final approval that spelled out all of the necessary agreement details on Tuesday.

It’s an important milestone.

“Today was the final approval and we are thrilled,” Harold Smethills, director of the family owned Sterling Ranch said. “Now, the real work begins. We move from a public process to an economic reality. Now, we have several months of engineering and site planning ahead of us to make sure that this happens. The Douglas County Board of County Commissioners wanted a water-efficient, sustainable community for the 21st century, and that is what they are getting with Sterling Ranch.”

Denver's skyline can be viewed from Sterling Ranch in Douglas County.

The plan has sparked controversy.

Smethills said some critics and opponents are misinformed. An earlier plan to annex the property to Littleton didn’t gain traction, as opposition mounted from people who feared it would be tax city services, would increase congestion, and despite claims by the developer, would end up sucking up water resources, not conserving them.

“Opponent can say what they want,” Smethills said. “The people in the know, the people who studied our proposal  - the county water engineers, the state agencies, the Douglas Planning Commission, and now the Douglas County Board of Commissioners – agree with us. That is why the board unanimously supported it. What is really important is that the first time in Colorado’s history, to the best of our knowledge, water conservation is embedded in a land-use application. That has never been done before in Colorado. It is revolutionary.”

Some opponents said that they could support the 3,400-acre development in northwestern Douglas County, if it was developed into smaller, ranchettes that could be used as horse property. They find that to be preferable to constructing thousands of new homes.

Sterling Ranch is to be developed into a $4.4 billion community that emphasizes conserving water.

Ranchettes the real water hog

“First, there is no market for those type of properties at this time,” Smethills said. “Beyond that, our community will use a fraction of the water that two- to five-acre ranchettes would use. The only way those work is if you put a well and a septic tank on each property. It’s that many more straws sucking the water table dry. That last thing you want is ranchette-style sprawl. Environmentalists have testified that whatever you do, don’t do that. I love horses as much as the next person, but that is a terrible idea. We will have stables on the property for people who want to ride. And we will have 30 miles of trails. The trails the horses use will not be open to bicycles.”

Smethills said that they may be able to break ground as early as 2012, with the first homes being constructed in 2013. “It could take longer than that,” Smethills said. “If it does, that is fine. We’re family owned and in no hurry.” Several home builders said they are eager and ready to go today, if they could. Approval sets in motion a busy stage for the  project, which will create nearly 1,000 construction jobs a year over two decades. Sterling Ranch is expected to generate more than 9,000 permanent jobs at build-out with an economic impact of more than $425 million annually, according to Patty Silverstein, President of Development Research Partners.

Buyers expect to embrace water conservation

Smethills said he expects that anyone who buys at Sterling Ranch will share his passion for water conservation.

“Look, somebody who wants acres of bluegrass, simply won’t buy here. It’s natural selection,” Smethills said. “If people want a little throw rug of grass, they can have it. We’re going to offer some truly beautiful plans for landscaping. It’s not Xeriscape with rocks and cactuses. The generation coming up, the Generation-Y, wants sustainable, smaller homes and clustered living and that’s what we are going to provide. We’re going to have options of gardens with plants that use very little water like you see on the south end of the Denver Botanic Gardens. We will also have edible gardens. And we will have landscaping for people who love to garden and we will have landscaping for people who hate to garden.”

Another view of Sterling Ranch in Douglas County

Smethills said he thinks people drawn to Sterling Ranch will not see as conserving water as a punishment, but something to be embraced.

“It sounds kind of corny, but one thing I learned is that in America, people will do the right thing, once they truly understand it and you do not penalize them for doing the right thing,” Smethills said. “And this is the right thing.”

Highlights of Sterling Ranch include:

• Housing: At build-out in 20 years, Sterling Ranch is expected to be home for 31,000 people living in a variety of homes, including condominiums, traditional single-family, patio homes, and 2 to 5 acre equestrian properties.  The average home price is expected to about $350,000.
• Open Space: 37 percent  of the land will be reserved for open space and parks, with 30 miles of trails for hiking, biking and horse-back riding.
• Town Center: The walkable community, with unique villages surrounded by open space, will feature a Town Center for working, shopping and dining.
• Schools: Sterling Ranch ultimately will be home to five elementary schools, a middle school and high school.
• Sports Village: Home to the Colorado Rush youth soccer program and Slammers baseball.
• Transportation: 80 percent of Sterling Ranch residents will be within walking distance of mass transit options.
• Medical Facility: Centura-Littleton Adventist has signed a letter of intent to build a medical facility in Sterling Ranch.

To see what homes are available for sale in the area, please visit this COhomefinder.com link.

Related Posts:

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This high-tech climate station has been installed in Sterling Ranch in Douglas County.

Take a poll at the end of this blog

Sterling Ranch, a proposed community south of Chatfield Reservoir, with designs to be one of the most water-efficient communities in the country, has the opportunity to take a “giant step” in saving even more water, as the first development in a state pilot program.

The Colorado Water Conservation Board voted unanimously on Wednesday to name the 3,400-acre Sterling Ranch as the state’s first rainwater harvesting pilot project.

Sterling Ranch’s innovative water conservation plan currently calls for using just one-third the water traditionally required in Douglas County—without relying on rainwater collection. With the rainwater pilot designation, Sterling Ranch will develop a new water source to be used for outside irrigation that could result in even more water supply savings.

“We are very excited about this pilot project,” said Geoff Blakeslee, chairman of the Colorado Water Conservation Board, at the board meeting held in Salida.

Rainwater can meet half of demand

Sterling Ranch estimates that at least half of the community’s outdoor irrigation demand can be met by capturing rainwater from storm drainage systems and rooftops in underground storage tanks or retention ponds. After being collected, it can be recycled to water the community’s lawns, gardens and open space.

“This is a giant leap forward for water conservation,” said Harold Smethills, Sterling Ranch managing director. “It combines forward-thinking rainwater harvesting with Sterling Ranch’s vision for innovative water conservation. This has been done effectively in many other states and it’s time to put this water supply to use in Colorado as well.”

Smethills and his family made water conservation a top priority for Sterling Ranch from the start. During a decade of planning, the family grew passionate about the possibility of incorporating rainwater harvesting into their planned water conservation practices. Sterling Ranch was a key supporter of HB 1129, signed by Gov. Ritter in June, 2009, that permits 10 pilot residential developments to use rainwater collection systems.

Smethills said the water board was impressed this was part of Sterling Ranch’s overall water conservation program. “Rain-water harvesting makes a lot of sense as a supplement to an overall water conservation program,” he said. “It does not make economic sense unless you do it without an overall plan. There are a lot less expensive ways to conserve water than rainwater harvesting. But once you go through all the other things like drip irrigation, reducing bluegrass – that is, thinking of bluegrass as a throw carpet instead of a rug – and other things, rain water harvesting makes a lot of sense.”

Still, the impact of harvesting rain water is great, he said.

Rainwater harvesting means fewer dams

“You get three benefits,” Smethills said. “First, it is a very predictable, very reliant water supply. No. 2, it saves you the cost of buying water, building dams, building treatment plans, building miles of pipe and plumbing and all of other things needed. Imagine the impact of not having to build another dam or giant water storage facilities? And the third thing is that it increases the way you protect your rivers and your streams. The very things we do not want in our drinking water are phosphates and nitrates. But these are things that plants absolutely love.”

Under the program, he said they will collect 10 years of data. Long before the next decade, however, expects other proposed communities to be on board, also collecting data. “After the state has all of the data, it can decide where it wants to go from there,” he said.

Water laws complicated

Smethills  said Colorado water law does not currently allow developed properties to harvest rain water, although he said that is common in many cities in other Western and Southwestern states. “Our water belongs to someone else,” he said. “You know, Colorado did very well for thousands of years by harvesting rainwater. But then we had some very bad cases that made for some very bad laws.’

And he said that while creating the program involved “some bare-knuckle brawls,’ behind-the-scenes, once legislators reached consensus on it, it was smooth-sailing for the law and getting Sterling Ranch into the pilot program.

“It was unanimous,” he said. “When have we ever seen a unanimous vote, without any dissent, from Republicans, Democrats, rural and urban lawmakers?’

“Water precious resource”

“Sterling Ranch is an ideal pilot site,” said state Sen. Ted Harvey, one of the bill’s sponsors. “It’s the largest undeveloped parcel in water-challenged Douglas County, and its founders are committed to cutting-edge conservation methods to save Colorado’s most precious resource.”

A 2007 study commissioned by the water conservation board showed that on average in northwest Douglas County just 3 percent of annual rainwater actually reaches a stream. Ninety-seven percent either evaporates or is used by vegetation.

As part of the pilot project, Sterling Ranch’s data collection will measure the potential of rainwater harvesting as a supplemental water supply and will explore how the water supply could be developed without affecting senior water rights.

Sterling Ranch model for future developments

“We hope Sterling Ranch will be a model for future developments in Colorado by pairing rainwater harvesting with outdoor demand management to save more water than traditional conservation methods,” said Smethills. “Rainwater collection is a natural opportunity that fits with our vision and the community’s way of life.”

Sterling Ranch is a proposed community in northwestern Douglas County that will create more than 4,000 permanent jobs at build-out, 1,000 construction jobs annually for 20 years, and a $411 million economic impact at completion. For more information, go to www.sterlingranchcolorado.com.

Littleton annexation washed up

One thing it will not do is re-think the move to annex Sterling Ranch to Littleton. Some Littleon council members feared that the annexation would mean that current Littleton residents to subsidize and strain water and other infrastructure costs, as Sterling Ranch grew.

“I don’t know how water ever became an issue,” he said. “We never asked to be annexed by Littleton. We were asked to present how we could be help Littleton economically. We were specifically told not to bring up water, and just focus on economic issues. We thought there were some things that economically would be mutually beneficial for us and the city of Littleton, such as sharing their sewer treatment plant, while bringing in much needed tax dollars to the city. I see no reason to re-visit annexation to Littleton. We are very happy in Douglas County.’

He said many home builders would like to have lots available by no later than 2012 when demand is expected to be much stronger than today for the type of sustainable housing planned at Sterling Ranch. Indeed, he said demand even exists today, despite the depressed housing market. “We don’t know if we can be ready by 2012, but that is our hope and goal.”

Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.

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Sterling Ranch officials today informed the Littleton City Manager that it has ceased talks regarding the  possibility of annexing the proposed community in the Chatfield Basin to Littleton, questioning the city’s ability to handle the mixed-use development that is expected to have a completed value as high as $4 billion.  Instead,  Sterling Ranch will continue moving forward with its zoning application in Douglas County.

Last week, the Denver Post quoted Littleton Mayor Doug Clark as saying that the developers of Sterling Ranch are “pretty desperate for water or they wouldn’t be doing this.  Anyone looking at this would say is a stupid deal for Littleton.”“It is clear to us that the Mayor and City Council have differing visions about the future of Littleton,” Harold R. Smethills, one of the developers of Sterling Ranch wrote in a letter to Littleton City Manager Jim Woods.

On March 23, Sterling Ranch officials made a presentation to the Littleton City Council, after the city had initiated interest in possibly annexing the development, which over the next 20 years is projected to house 31,700 people. That would about a 77 percent increase from the city’s current population of 41,000, although even without Sterling Ranch, the city is expected to add people over the next two decades.  During the presentation, the Sterling Ranch team highlighted what they saw as benefits to Littleton- thousands of new construction and permanent jobs, as well as millions and dollars in new and recurring revenue to the city, reducing costs to current Littleton citizens.

Not desperate for water

Smethills, one of the principals of Sterling Ranch, denied that they were desperate for water, in today’s letter to City Manager Woods.

“During the presentation we also made it clear that we had no need for and did not plan to take advantage of the Denver Water agreement currently in place with Littleton,” Smethills wrote to Woods.  Smethills said it is their intention to supplement their current renewable water supply by negotiating a separate agreement with Denver Water and the WISE Partnership. (The WISE, Water Infrastructure Supply Efficiency, is a partnership between the three largest water suppliers along the Front Range – Denver Water, Aurora Water, and the South Metro Water Supply Authority.)

Tuesday’s meeting on annexation may be moot

“It’s not much of a surprise,” Kelli Narde, communications director for Littleton, said in response to the letter saying Sterling Ranch is no longer pursuing annexation. “It is scheduled for the council meeting on Tuesday night. They never did take a formal vote on it. That might have been the outcome on Tuesday night.” She said the agenda already had been prepared with Sterling Ranch on it, but she said she’s not sure if it is a moot point in light of today’s letter. “They can deal with that Tuesday,” she said. As far at Smethills’ saying that Sterling Ranch wasn’t coveting Littleton’s water, she said:  ”I would have no comment on that. I wouldn’t know how to respond to that.”

$4 billion economic engine

Instead of the money flowing to Littleton, the $3 billion to $4 billion proposed community is projected to be a huge economic engine for Douglas County, generating thousands of construction and permanent jobs, and millions in revenue to the county, Smethills said. The mixed-use community covers 3,406-acres south of Chatfeld Reservoir. The reservoir would be a geographic barrier between most of Littleton and Sterling Ranch, which also was a negative to at least some city council members.

Can Littleton handle Sterling Ranch?

Smethills questioned whether Littleton could handle a project of the size of the size of Sterling Ranch.

“With this current lack of a cohesive future vision we are concerned about the ability of the city to undertake an economic opportunity of the magnitude presented by our $3-$4 billion project,” Smethills wrote in the letter.

Smethills said that the Sterling Ranch principals are confident that “we have adequate water both to serve our Sterling Ranch future residents and to share water with our neighbors, and we will be a key player in the regional water solution.”

Sterling Ranch is being developed by third-generation Coloradans. In addition to Smethills, the team includes his wife Diane and her brother Jack Hoagland. They are striving to make Sterling Ranch one of the most efficient master-planned communities in the country as far as minimizing water usage. They hope that it will serve as a model for other communities across the country.

Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.

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Jim Yates, chief financial officer for Sterling Ranch, said that some Littleton City Council members had approached them about the annexation. They also have had some initial discussions with some staff members. The council on Tuesday had a study session on the proposed annexation, but did not go into an executive session to discuss the idea while the snowstorm raged that evening.

Revenues greater than expenses

Representatives from Sterling Ranch made a presentation to the council that projected that annexation would ultimately mean that Littleton would provide $22 million in services at build-out, but it would receive $28 million in annual revenues, for a $6 million annual surplus when it is completed.

“From a financial standpoint, I would not say it is a windfall for Littleton, but it is a huge net positive,” Yates said.

What is attractive to Sterling Ranch and its owners is that the annexation would allow it to tap into the state-of-the-art Englewood/Littleton wastewater treatment plant, instead of building one from scratch. That would save them from creating a metro district to issue bonds to raise about $100 million for a new wastewater treatment plant, and then charge a mill levy to residents to pay for it. Instead, tap fees would be paid to Littleton, as residents and businesses move into Sterling Ranch. In other words, they would “pay as they go,” instead of having to float bonds to cover the cost.

“Frankly, it is the more responsible thing for us to do,” Yates said. ‘There is no point in floating the bonds and raising the money to build a new plant, when there is an existing one that vastly under-utilized. They have the capacity to handle much more and us. It would go from being under 50 percent utilized to maybe 65 percent utilized.”

But the costs would be basically the same, so it provides no huge economic advantage to Sterling Ranch, he said.

Not a retail cash cow

He said that some city council members initially have been skeptical, because Sterling Ranch will not have as much retail space as Littleton and the metro are do as a whole, he said.

“That was viewed as a negative by some,” because communities depend so heavily on retail sales taxes to pay for city services.

“Our model is not economically the same as Littleton’s,” Yates said. “We do not have the 55 or 60 square feet of retail space per person, as they do. We will not have a regional mall, for example. The Denver metro area is roughly 50 square feet of retail per person. We will be more like Highlands Ranch, with closer to 25 to 30 square feet per capita,” he said.It’s anticipated at build-out that Sterling Ranch will have 800,000-square-foot of retail, which will create 2,900 jobs.

April meeting scheduled

Yates said the next meeting with the city council is on April 6.

“Hopefully, they will go into executive session, and come out saying they would like to explore and evaluate this further,” Yates said.

He said Sterling Ranch is at kind of a crossroads.

“We are already down the road with working with Douglas County, so this really is the time to determine which direction we will be heading.”

terling Ranch is south of Chatfield Reservoir, west of Hwy. 85 (South Santa Fe Drive) and north and east of the Roxborough community. For more details, visit this link.

Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.

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• WSJ focuses on Sterling Ranch and water
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This home at 3220 Zuni St. in Highland is priced at just over $1 million. It is listed by Dee Chirafisi of Kentwood City Properties.

Almost one out of every four homes sold and closed in the metro area in 2009 took place in Denver. And almost 30 percent of the homes sold above $1 million were in Denver.

An analysis of Metrolist data by independent broker Gary Bauer shows that 10,010 homes closed in the Denver area last year, accounting for 23.8 percent of the 42,027 home sales in the metro area last year. Arapahoe County was No. 2, with 8,230 single-family homes and condo closings last year.

That may not be too surprising.

“Denver usually seems to get the largest percentage of the buyers, except during the time when Douglas County was really growing like gangbusters,” Bauer said. During much of the 1990s, Douglas County was the fastest growing counties in the U.S. and is still one of the fastest. (Indeed, I remember writing a story at the Rocky Mountain News during the ’90s that Highlands Ranch in Douglas County accounted for one of five out of every new and used-homes sold.)

Denver Mayor John Hickenlooper said that given Denver’s size, Denver’s showing last year isn’t startling.

“Denver accounts for 22.2 percent of the metro area’s population,”  Hickenlooper said. “So we are doing a bit above that for home sales, but not much more. Denver is right about where it should be.”

Hickenlooper did say that a Realtor-friend recently mentioned to him that sales activity seems to have picked up recently.

Corey Wadley, a broker and co-owner of Nostalgic Homes in West Highland in northwest Denver, said that a lot of buyers are drawn to certain Denver neighborhoods because they think homes will retain their values more than suburban counterparts.

“In the Highland neighborhood, for example…our prices held stable during this recession,” Wadley said. “I think the biggest factor is homes  being able to hold values. There’s only a finite amount of new stuff in a place like Highland. I think also there is a uniqueness about Denver neighborhoods. You can walk street-by-street and see how the housing stock changed from different eras and from additions, renovations and even some scrape offs.”

Perhaps what was most surprising about Bauer’s report, is that Denver also dominated the $1 million and over price category. The 131 single-family homes and condos that sold and closed last year in Denver accounted for  28 percent of the 471 homes sold in that lofty price range. Arapahoe County, with 95  homes selling at $1 million or more and Douglas County with 67, accounted for 20 percent and 14 percent of that market, despite a number of high-end enclaves.

“That is a bit surprising,” said Chris Mygatt, president of  Coldwell Banker Residential Brokerage Colorado. In the past, he said, the vast majority of homes in that price range were in Arapahoe County,  because of the concentration of  huge homes in Cherry Hills and Greenwood Village.

“What I think what this is showing is a societal change,” Mygatt said. “It speaks to the idea that people who have a significant amount of money who are down-sizing or right-sizing, who are deciding  they do not need a half acre or an acre of land.  It’s never been more fashionable to be frugal.  Let’s face it:  Someone who is buying a million-dollar home is not spending their last million dollars on it. But they don’t want the expense of watering a giant lawn or keeping it clean, even if they can afford it. ”

He said the move to Denver from the suburbs is a trend he sees continuing. Mygatt said there are “too many 6,000-square-foot homes,” in the suburbs, and they will be increasingly difficult to sell.

“The smart developers are now building a very well-designed, very efficient 3,500-square-foot home instead of  a 6,000-square-foot home,” Mygatt said. “And the new homes are very, very green. ”

“That’s great,” about Denver, said Christina de Barros, of RE/MAX Masters. “It is a little surprising given that Arapahoe County has Cherry Hills and Greenwood Village and Douglas County has Castle Pines Village. ” Cherry Hills, for example, had 46 home sales of more than $1 million last year, while Cherry Creek in Denver, had seven, she said. And Boulder County (although not most of the city of Boulder), had a total of 126 home sales above $1 million, for 27 percent of that market, making it Denver’s closet competitor.

Some well-heeled buyers were picking up screaming, high-end deals last year, said Susan C. Mathews, a broker with Fuller Sotheby’s International Realty.

“There were a lot of foreclosures, or more likely short sales, in places like Hilltop and Crestmoor,” Mathews said. “I saw homes that were originally priced at $2.25 million and up selling for $1.4 million or $1.5 million. And that was good. It helped us get some of this inventory off the market.”

She said high-end deals can still be found, but there are not as many as there were in 2009.

“I think consumer confidence is returning,” Mathews said. “People are not as afraid that prices are going to continue to drop if they buy now. I do think we are past the bottom.”

Wadley said that in northwest Denver, homes priced below $450,000 are selling, but it is tougher to move ones above that range.

“But Jenny (Apel,his wife and co-owner of Nostalgic Homes) did sell a William Lang mansion off Lowell (Boulevard) last year for $950,000,” Wadley said. “And I think that when homes that do sell in places like Cherry Hills for above the $1 million mark, they have been heavily discounted from their original asking price.” In fact, he said he thinks a lot of those ultra-expensive suburban homes are being sold at a loss.

Bauer said that one reason Denver dominates the luxury home market, is that empty nesters, who are  at the age and income level who can afford seven-figure homes, would rather live in an urban area than in a suburban community.

“I think part of it is the aging of the population,” Bauer said. “Many people are still working, and want to be closer to where they are working, which is often downtown.  They are down-sizing and their children are grown. For a large percentage of the population, Denver offers a chance to be close to the sporting facilities, theater, and everything else in downtown and LoDo.”

He pointed to Janet Elway as an example.

“With these $1 million-plus homes, people really want something special,” Bauer said. “Janet Elway went from a giant home in Cherry Hills to a Denver home in Belcaro.”

Source: Gary Bauer

Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.

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The good news is that foreclosure filings in Colorado barely rose from 2008 – only a 0.23 percent increase, according to a national report.

The bad news is that Colorado still is ranked No. 10, according to RealtyTrac, based in Irvine, Calif.

The report showed 50,514 total properties in Colorado with some kind of foreclosure action, which equates to 2.37 percent of all housing units in foreclosure. The U.S. average is 2.21 percent.  The report also shows one out of every 42 households in foreclosure, compared with one of every 45 for the U.S. average. Foreclosure activity in Colorado, according to RealtyTrac, rose 28.2 percent from 2007, far below the 120 percent average national increase.

“It’s kind of bizarre that Colorado is still in the top 10,” said Ryan McMaken, noting that the overall rate in Colorado is very close to the national rate. Also, Colorado’s foreclosure activity has been basically flat, while it is still rising in many other parts of the country.

“RealtyTrac combines all of the different kind of foreclosure actions,”McMaken noted, while he separates new filings and homes that actually go to foreclosure sales.

“If you dig deeper, you will find that while our filings are still climbing, the number of sales are going down,” as banks work with borrower to modify loans, he noted. “We do show a net increase in activity, and we probably will continue to do so, as long as the number of filings continue to rise.”

Still, rather than the 10th worst state in the nation as far as foreclosures, he said Colorado is really more in the middle of the pack, he said. That is also affirmed my Mortgage Banker Association numbers, which shows Colorado in the middle of the U.S., as far as delinquent loans.

An earlier report by InsideRealEstateNews.com found that while foreclosure filings in the Denver area rose by 6.4 percent in 2009 from 2008, most of the percentage increases were found in Boulder, Broomfield and Douglas counties, while activity was flat or dropped slightly in Denver and Adams county. (For that report, please visit this blog.)

Nationwide, RealtyTrac  found more than 3.9 million foreclosure actions -  default notices, scheduled foreclosure auctions and bank repossessions — were reported on 2. 8 million properties in the U.S.  in 2009, a 21 percent increase in total properties from 2008 and a 120 percent increase in total properties from 2007.

Four states accounted for more than 50 percent of the nation’s 2009 total, with more than 1.4 million properties receiving foreclosure filings in California, Florida, Arizona and Illinois. And almost half of those – 632,573 – were in California.

“That means that 46 other states split the remaining half,” noted McMaken. He said some people might think that the foreclosure pain was spread fairly evenly among the states, but that is not the case.

“What that means a lot of states are clumped together, and there will be a very small percent separating them,” McMaken said.

Foreclosure filings were reported on 349,519 U.S. properties foreclosure filings  on 349,519 U.S. properties in December, a 14 percent jump from November  and a 15 percent increase from December 2008 — when a similar monthly jump occurred. Despite the increase in December, foreclosure activity in the fourth quarter decreased 7 percent from the third quarter, although it was still up 18 percent from the fourth quarter of 2008.

“As bad as the 2009 numbers are, they probably would have been worse if not for legislative and industry-related delays in processing delinquent loans,” said James J. Saccacio, chief executive officer of RealtyTrac.

“After peaking in July with over 361,000 homes receiving a foreclosure notice, we saw four straight monthly decreases driven primarily by short-term factors: trial loan modifications, state legislation extending the foreclosure process and an overwhelming volume of inventory clogging the foreclosure pipeline. Despite all the delays, foreclosure activity still hit a record high for our report in 2009, capped off by a substantial increase in December. In the long term a massive supply of delinquent loans continues to loom over the housing market, and many of those delinquencies will end up in the foreclosure process in 2010 and beyond as lenders gradually work their way through the backlog.”

Nevada led the nation last year, with more than 10 percent of the homes receiving some type of a foreclosure action in 2009, giving it the dubious distinction of being No. 1 for foreclosures for the third consecutive year.

Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.

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Although the foreclosures last year were the second highest on record – topped only by the 27,122 filings in 2007 in the seven-county area – there were signs of encouragement, as well as a sea change in where the foreclosure activity is gaining speed.

Denver County, for example, which a few years ago was ground-zero for foreclosure activity, showed a slight increase in filings in 2009 from 2008. Foreclosures also fell in 2008 from 2007 in Denver County, when it peaked with 8,240 for filings. Denver was the only county to show a decrease in foreclosures in the fourth quarter from the same period in 2008.

Adams County, with many lower-priced homes, also has been at center-stage for foreclosure activity in recent years, but filing activity was flat in 2009 from 2008, as well as the fourth-quarter of 2009 compared with the last three months of 2008. Overall, foreclosure filings in the fourth quarter from the same period in 2008 were up 32 percent. Some observers  are predicting that another wave of foreclosures could sweep over the Denver area next year.

“Our foreclosure sales are actually down about 20 percent from 2008, and the number of foreclosures being withdrawn are up 17 percent,” said Carol Snyder,  public trustee for Adams County.

“That means more people are staying in their homes and not losing them in foreclosures,” Snyder said. “I think that is a more important than the number of filings.”

She said banks appear much more willing to work with homeowners than they have been in the past.

“I think the banks are learning that it is better to modify loans and keep people in their houses than to add more real estate foreclosures to their portfolios,” Snyder said.

Shannon Peer, director of Housing Counseling, agreed, but is still worried that the state may face more foreclosure filings, which could swamp the state and the system.

He said that the Colorado Foreclosure Hotline (877-601-4673), which Brothers manages, has helped a lot of people learn their options, helping to keep many people out of foreclosure and in their homes.

“But there are indications that a second wave of foreclosure filings building,” Peer said, because of the economy. In addition, another round of  option-ARMs are set to adjust upward in the second half of the year, which could be a calamity for homeowners barley hanging on with their current payments, he said.

He said a “second or third-wave of foreclosure filings,” could offset the drop in foreclosure sales, as well as drop the increase in foreclosure cures and withdrawals.

Meanwhile,  Boulder, Broomfield and Douglas counties have experienced the largest percentage increases in foreclosures, although their overall numbers are still smaller than in Denver, Adams and Arapahoe counties.

“This is the highest number we have ever done. Ever,” said Dianne Bailey, public trustee for Douglas County, where the 2,765 filings in 2009 were almost 27 percent higher than in 2008. Boulder foreclosures rose by more than 38 percent, the biggest increase of the seven area counties.

Bailey was surprised in the surge of foreclosures filings.

“I thought they were going to level off after 2008,” she said. “I guess we thought they just couldn’t go any higher.”

More expensive homes entering the foreclosure process is a trend that counselors saw emerge last year, said  Peer, of  Brothers Redevelopment in Edgewater.

“Over the last year, we have been seeing more homeowners who had higher incomes that we had seen previously,” Peer said. “We’re seeing more home values above $250,000 we had seen in the past. In the past, the under $200,000 price range had been the hard-hit market.  We have seen homes in Evergreen in the $800,000 and $900,000 range, we have seen homes down south in the $600,000 to $650,000 price range. I would say this is a trend that started a good eight months ago. ”

He said it was possible that owners of expensive homes were able to hold out longer than people at the lower-wrung of the economy, but now they, too, are losing their jobs.

One of the challenges they face is that because much of the jumbo-loan money has dried up, it is difficult to find buyers for homes that have mortgages larger than conventional limits of $417,000.

“They are being pinched,” Peer said. “Their are very buyers out there unless they can pay cash. And there aren’t many cash buyers.”

Bobby Burnett, principal of Keller Williams Realty DTC, said that while his regular home sales business was way down last year, his short-sale business was up 50 percent to 60 percent from 2008. A short sale is when a lender takes less than the mortgage amount.

Although the prices were “all across the board,” the biggest increase of distressed properties was for ultra-expensive homes.

“We saw them in Parker, Castle Rocky, a bunch in Boulder,” Burnett said. “The only place that seemed semi-insulated  was Castle Pines Village. I find properties are still selling there.”

Many of the expensive homes are selling for huge discounts, he said.

He tried to sell one home west of Sedalia for $1.1 million, which previously had sold for $1.4 million. Later, the home went into foreclosure and another broker sold it for $750,000.

Perhaps one of the biggest bargains is a 9,000-square-foot home on 11 acres in Elbert County that was appraised at $3 million three years ago.  It’s likely now to sell in a short sale for about $800,000, he said.

“The house looks like a southern mansion in Atlanta,” Burnett said.

Denver City Councilman Rick Garcia, who a couple of years created a Foreclosure Task Force, said that he is not surprised that foreclosure activity is rising faster in the suburbs than in the city.

“As I recall a couple of years ago from data from the Foreclosure Task Force, the average price of a home in foreclosure in Denver was around $124,000, far below the median-price of a home in the city,” Garcia said.

Many of those homes, he said, have been purchased with the help of federal funds or have been “gobbled up” by private investors. They have since been “rehabilitated” and put back into the market, he said.

The first round of foreclosures came from “unscrupulous lenders,” who saddled buyers with high-mortgage rates, Garcia said. Many of those homes in Denver have since worked their way through the system, Garcia said.

He said he thinks many more of those kind of loan, as well as no downpayment loans that were not supported by incomes, were made in suburban subdivisions.

“Denver seems to be bottoming out of the foreclosure circumstances,” Garcia said. “Now, I would say we are seeing more of what I would call “traditional” foreclosures, caused by people losing their jobs.”

Ryan McMaken, spokesman for the Colorado Division of Housing, said that the Denver-area data seems to confirm that more expensive homes in suburban areas are now suffering from growing foreclosures.

“Overall, what I would say is that the Denver-area is fairly flat, while foreclosures are rising elsewhere in Colorado,” McMaken said.

Later this months, McMaken will release a report that will show a record number of foreclosure filings in the state. In 2008, there were just under 40,000 foreclosure filings in all of Colorado, but his data will show more than 45,000 filings in 2009.

There are still a few counties to report to the division, but he expects about 47,000 filings when he receives all of the data. “I’m already at something like 45,400,” he said.

He noted that when the foreclosure crisis began several years ago, “the Denver-area was driving it,” and much of the area outside of the metro area remained impervious.

That is no longer true, as more populous areas along the eastern plains, as well as a number of Western slope communities, are seeing huge percentage increases in foreclosures.

“Of course, there are other economic factors driving the foreclosures in a lot of mid-sized counties outside of the Denver metro area,” he said. For example, a downturn in mining and exploration is hurting the Grand Junction area, while the failure of Greeley-based New Frontier Bank hurt ranchers and farmer.

Sources: Public Trustees

*Adams County removed “repeat” filings, which reduced the total amount by about 100 each year.

Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.

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Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.

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