WESTERN SLOPE – Home sales for Ouray and Montrose counties are still down from last year, but recent sales are up and conditions favor both buyers and sellers, particularly in Montrose.

Lynn Vogel of Comparable Sales Research said sales of single family homes in Montrose County were down 23.4 percent for the third quarter over last year.

“The city of Montrose, the big driver, was down 26.9 percent compared to last year in single family home sales,” she said.

In Ouray County, sales for the third quarter were down 7.1 percent.

But both anecdotal and hard evidence tell a different story for the last couple of months. Vogel said real estate records for October and November of this year show just one house difference in sales: In 2009, 72 single family homes were sold, compared to 71 sales for the same time last year.

“We’re seeing an up tick in sales nationally, but it hasn’t transferred here yet, although the last month of so have been pretty strong,” she said.

Bankers are also seeing the difference. Lynda Wareham, vice president of mortgage lending at Montrose Bank, said she’s noticed an increase in home sales in recent months.

“Rates are still very, very good, at 4.75 for a 30-year fixed (mortgage),” she said. “I’m sure we are down from last year, but I’m seeing more purchases this month.”

Dee Holman, owner/broker of ReMax Alpine View, is also seeing a difference.

“I think it is a really good time to buy,” he said. “Interest rates are down and the market is kind of making a turn and you can still get a good buy on a house.”

The federal government is offering all kinds of incentives both for first-time buyers and others in the market, he said.

“We are still seeing some loans with zero down payment with the seller paying the closing costs,” he said. Those loans are still the exception, but depends on many factors, he added.

Holman said his the last three months have been the best in sales that he’s seen in two years. Many are by first-time homebuyers taking advantage of tax breaks and low interest rates. Many are also “short sales,” he said, where banks are writing off losses on a home sale.

“Say I own a house and I owe $150,000 and I get an offer of $120,000,” he said. “That’s $30,000 that the bank is writing off and won’t ruin my credit as a foreclosure.”

By taking the loss, banks are keeping people from going into foreclosure, since foreclosed homes are often trashed and money has to be spent to make them market attractive.

The sellers “can come to closing without any money and they’ll take the loss,” he said. “We’ve done a lot of them.”

Dennis Reese, president of Citizens Bank of Ouray, said Ouray County hasn’t seen an increase in home sales yet, but he agreed it’s a good time to buy.

“Prices are down, interests rates are very low, and if someone’s wanting to buy, now is a good time to do it,” he said.

Erin Eddy, managing broker of Ouray Realty Inc., said the Ouray County market still has a ways to go.

“In my opinion, things are still soft and are probably going to take a couple of more years,” he said. “We had 31 total residential and condo sales in the entire year for the entire area, including Ridgway, the city of Ouray and Loghill Mesa.”

According to the Colorado Real Estate Network, Eddy said, there have only been seven residential and condo sales in the city of Ouray for the entire year, but it’s still a buyer’s market.

“What I’m seeing right now, and perceive to be the market, is that if there is a willing buyer and a willing seller, that the price paid for a home is substantially less than the appraised value.”

In Ouray County, “cash in king” in home buying, Eddy said, but the market is getting more normalized.

Home buying is driven by jobs, Eddy said, and work has been hard to find. In a way, Ouray is paralleling Denver, he added.

“Denver is way over-built both in residential and commercial and we mirror that. We’re two to three years behind what the major municipal markets are doing,” he said.

But Vogel, who specializes in real estate market research, said she disagrees.

“I don’t think we’re that far behind Denver,” she said. “I hear through the grapevine that homes are selling pretty well and things are picking up over the last few months.”

Vogel points out many sales to out-of-state buyers, and that homes up to $300,000 are selling the best.

That seems to reflect the observations of the Federal Reserve Board’s “beige report,” released in October and compiled from anecdotal evidence around the country.

The report states, in part: “Most districts reported that housing market conditions improved in recent weeks, primarily from a pickup in sales of low- to middle-priced houses. Contacts reported that sales were boosted by the government's tax credit for first-time homebuyers.”