Widespread distress

Kings Deer, in northern El Paso County and east of Monument, has some of the Pikes Peak region's nicest homes.

Stratmoor Valley, just beyond Colorado Springs' south edge and east of Fort Carson, has some of the area's cheapest housing.

Last year, however, Kings Deer and Stratmoor Valley had something in common: Foreclosures and short sales made up double-digit percentages of all home sales in the two areas, underscoring that the problem of distressed properties crosses geographic and demographic boundaries. Indeed, it extends into nearly every neighborhood of the Pikes Peak region, according to a Gazette analysis of home prices and sales last year in Colorado Springs and El Paso County.

Because of its secluded setting, great views and big homes on large lots, Kings Deer is one of the more desirable places to live in the Pikes Peak region.

In 2008, the median price of homes sold in Kings Deer was $536,380, down 7.9 percent from $582,450 in 2007, according to The Gazette's analysis of Assessor's Office data.

But of 81 home sales last year in Kings Deer, nearly one-quarter were sales that followed the foreclosure process or short sales. When those distressed properties were added to the mix of homes sold there last year, the median sales price dropped to $525,000, nearly 10 percent less than in 2007.

Being an upscale area doesn't make Kings Deer immune to the problems plaguing dozens of other neighborhoods, said Tiffany Lachnidt, a real estate agent with Re/Max Properties in Colorado Springs who specializes in foreclosures and short sales.

Some Kings Deer homeowners probably bought homes with no down payments and loans that covered 100 percent of the purchase price, Lachnidt said. Also, some of those homeowners probably had financial problems and fell behind in mortgage payments, she said. Eventually, their homes fell into foreclosure.

Also, many newly built Kings Deer homes compete with resales, and the area's prices have fallen as a result of the competition, she said. That's good for buyers. But some homeowners who needed to sell in a hurry learned their homes were worth less than what they paid for them, and they couldn't get the price they needed to pay off their 100 percent loans. They wound up in foreclosure or settling for a short sale, Lachnidt said.

Stratmoor Valley's low prices make it a haven for first-time buyers. But some put no money down on homes they probably couldn't afford, or they obtained risky subprime loans that carried higher interest rates, Lachnidt said. Likewise, when homeowners ran into financial trouble - perhaps because of a layoff, divorce or medical problem - they lost their homes, Lachnidt said.

In 2008, more than half of Stratmoor's Valley's 46 home sales - 58.7 percent - were foreclosures or short sales. The median price of homes sold in the area last year was $125,000, down 1.6 percent from 2007. When distressed properties were added, Stratmoor Valley's median price in 2008 plunged to $84,000, a one-third decline from the previous year.

Contact the writer at 636-0228.