There is virtually no market for homes in that price range in Glenwood Springs now. There have been zero sales at that level in 2010. Part of the reason is that there are 1000 homes that have been foreclosed in the area in the past 18 months and they have just started to hit the market as bank REOs. A $625k home now would have been worth $1.1 million a couple years ago. The majority of people that are in homes at the price are seriously underwater. Real Estate taxes in the area were bumped up this year by 50-66% which does not help matters. Also, county appraisals came out late last year and the person that is now sitting on a $625k house is paying taxes on $1.1 million worth of real estate for the next two years.
Unemployment is high and the construction industry has all but disappeared. There was one new home building permit issued in 2009 and one in 2010. Obviously none of the people that were building the hundreds of homes as in the past are employed or own their homes any longer.
Alpine Bank, the largest real estate financier in the area, announced a Q1 loss before taxes of $40 million, in spite of being a TARP/CPP recipient. They have another $2 billion in toxic assets on their books to deal with. This, coupled with the fact that Community Banks cannot make loans any longer (due to FDIC restrictions) means that getting financing is almost impossible. Getting an appraisal is equally difficult.
So, to answer your question, a $625k home will never sell at $625k. People that are asking $625k will end up selling for closer to $400k, and that will take the better part of a year. And that's how things are *today.* Once the REOs really kick in and the strategic defaults escalate that $400k will look like a dream price. And anything over $417k is jumbo territory, and that means that rates are higher and loan requirements are more stringent for a buyer.
Having no economy other than shrinking tourism and services sectors means no relief is in sight. The O&G action in the western part of the county is picking up, but that's not Glenwood Springs, that's Rifle, Silt and Parachute. New Castle is in-between and is suffering from the first spate of REOs to hit the market in the past two weeks. All homes in New Castle dropped $100k in value the moment those REOs went on sale. There is a huge difference between there and Glenwood Springs. A 3/2 in Rifle goes for under $200k. And I'm talking about essentially the same house as the $625k one in question in Glenwood Springs.
I wish you luck, Art. Maybe you can afford to rent your place out for a five years. If not, maybe you can start an Assisted Living business in it and/or to possibly figure out a way to chase the tail of the new cancer wing of the hospital for some kind of more functional use of your home that it is currently. Or you can walk. Trying to work through the Obama HAMP program has turned out to be one of the worst ideas people could ever do. That's why so many people walk in the middle of the process. They end up owing more on their loan than they did before they started the process, and the eviction for non-payment goes down to two weeks (versus at least six months for a strategic default currently.)