We have all seen the values in the current real estate market stabalize in the Fort Collins area. This was in part due to the tax credit for home buyers that brought in more buyers, but was also in part due to a steepling falling REO inventory. REO property is becoming a smaller percentage of the sales not due to the homes naturally turning over in the market but due to a hold major banks and investors have implemented. When our team was dealing heavily in forecloseures/REO property around 1.5-2 years ago we would regularly have 30-50 properties in Fort Collins, Loveland, Windsor or Greeley either listed or in line to be listed. Once banks started to see a spirial down in values, litigation from illigaly foreclosed and just simply being over run they put the brakes on. This brought our inventory down to zero within 1-2 months. Since then the banks have been reluctant to process anything. Due to this delay in process the entire country, not just Northern Colorado, has a back log of vacant/forclosed or homes on the verge ranging from a couple months to over 3 years of REO homes that need to be sold. This does not include the regular inventory of resale homes.

Now from meetings we have had with regional directors it sounds as if the banks are now being pushed buy the government to start to unload these assests. Now what I don't know is how this supply will be freed up. You cannot release all these assests all at once as this would cause another crash in home values which in turn will hurt homw owners all over again. But we do need to get in gear and start to cycle through these properties in order for the market to absorb them and get home values to start climbing again.