Dry Creek Village bids rejected
Officials say Hadyen land auction offers are no reflection on Steamboat's affordability
October 25, 2009
Steamboat Springs — Steamboat Springs city planners and a regional housing official said last week that rock-bottom bids at a Hayden land auction are not a reflection of Steamboat’s real estate market or need for affordable housing.
An Oct. 18 auction of residential lots at the Dry Creek Village subdivision in Hayden saw 43 of the 54 lots in the subdivision’s Phase 1 go up for grabs. But just 12 of the lots received bids, most at a price of about $25,000. The day’s highest bid was $43,000. Sellers Jon Peddie and Jim Woods say they have about $70,000 invested in each of the 54 lots, which average 7,000 square feet in size and feature infrastructure accepted by the town of Hayden including water, sewer and paved roads.
After the auction ended, Peddie and Woods decided not to accept any of the bids.
“All of the low bids – the 25 and 30 (thousand) – we did not accept, and we’re having discussions with those buyers,” Peddie said last week.
The Dry Creek Village site is just south of U.S. Highway 40 between downtown Hayden and Yampa Valley Regional Airport. Sales on 11 lots have closed since 2008, but no sales occurred in the second or third quarters of 2009. The slowing trickle of buyers and the lack of acceptable bids Oct. 18 is occurring just 25 miles west of Steamboat, where city leaders for years have debated how and whether to legislate affordable housing policies.
Peddie thinks lower real estate prices in Hayden provide an option for people seeking affordable housing in the Steamboat Springs area.
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“We firmly believe that the market for entry-level homes is there, we believe it’s in Hayden, and we believe that we’re the solution,” he said about Dry Creek Village. “I guess the question is, ‘What’s affordable?’ Is a single-family house in Hayden that’s $250,000, is that affordable?”
Peddie said he could feasibly accept prices of $40,000 to $45,000 on some of the less valuable lots at Dry Creek Village, and he said a construction loan to build on those lots could add another $200,000 for the buyer. He and Woods are offering “very aggressive financing and some level of seller subordination” to attract homebuilders, he said, to “get some homes going” and thereby increase the value of other Dry Creek Village lots.
Buyers who get in early, Peddie said, could have a shot at a home that would be well below the Steamboat Springs market.
Tom Leeson, Steamboat Springs planning and community development director, said despite the recession and declining market, “there are no single-family homes (in Steamboat) for less than $500,000.” He noted that he was not including condominiums.
“Hayden and Steamboat are two totally different markets,” Leeson said. “They’re different buyers.”
Recalling his own experience after buying his first home – in Orange County, Calif. – Peddie said the commute from Hayden to Steamboat is a reasonable concession for working families trying to purchase their first home.
‘Boat or bust
But many prospective homebuyers are stuck on Steamboat.
Mary Alice Page-Allen, asset and program manager for the Yampa Valley Housing Authority, said she is seeing little interest in homes outside of city limits.
“Most of the folks that I’m working with are focusing on Steamboat,” she said. “What I’m seeing are a lot of folks who are looking to take advantage of the first-time homebuyer tax credit, who are looking at deed-restricted, 80 percent and 120 percent (AMI) deed-restricted units. : I don’t think you can draw a straight line from Hayden and Dry Creek Village to that whole marketplace question.”
Page-Allen said she is working with a variety of young professionals looking for Steamboat homes. The percentages she cited refer to area median income.
Leeson said Steamboat’s biggest housing need is for families earning less than 120 percent AMI, which for a two-income family is $77,400 annually.
Page-Allen said she qualified a buyer in that range last week for a deed-restricted unit at Fox Creek Village on Hilltop Parkway. At least one member of a qualifying household has to work in Routt County, and the household must have total assets of less than $100,000, according to the deed restrictions.
Page-Allen said the unit was on the market for just nine days.
Meanwhile, Peddie said he and Woods have not closed on any additional Dry Creek lots and are negotiating with possible buyers, “trying to get them to what we feel we can sell them for.”
“I think even the buyers acknowledged that the numbers that were thrown at the auction were more an indication of fishing for a distress situation : and that just wasn’t our situation,” Peddie said. “Our situation was an effort to offer a very, very good deal to get people to buy some houses : and get local construction back going.”
Peddie said Hayden is overlooked as a community.
“One of the things that people discount, I think, is the true quality of life in Hayden – it is a very friendly, accommodating, good community to live in,” he said.
Page-Allen said the Housing Authority has no resources at the moment to buy land, but that even if it did, she likely would not look outside of the immediate Steamboat Springs area. She said the Housing Authority works within the boundaries of the Steamboat Springs Rural Fire Protection District, which essentially forms a ring around Steamboat. Its boundaries are about one mile west of Milner, just past Lake Catamount south of town and about halfway to Clark to the north.
“To buy something in Hayden at this point doesn’t make a lot of sense,” Page-Allen said. “Because folks want to live here.”