scroll down for stats and more real estate information

      
Wishing you a Joyous Year FULL of Happiness!

 Sunday March 7, 2010
Five Reason We Believe It's Going to be a Good Spring
A year ago this time, this headline wasn’t imaginable. We were in the throes of one of the worst recessions of our time and the market was at a near standstill.
But what a difference a year makes. Today our market is seeing drastic signs of recovery and we are finally moving in a positive direction. To build on that momentum, I’ve put together my top five reasons why I believe it’s going to be a good spring real estate market. Only time will tell if my theory is correct but until then, let’s take a look at the facts:
1. Tax Credits Are Helping Drive the Entry Level Market – Thanks to the $8,000 first time home buyer tax credit and the $6,500 existing home buyer tax credit, we are seeing some very strong signs of recovery in these two market niches. With the impending expiration set for April 30, we anticipate that the next two months will bring a surge of buyers looking to get in on a home prior to the credit’s expiration. That results in good news for our market and will help to decrease some of the surplus inventory and bring greater demand for those entry level sellers.
2. Interest Rates Remain Low – Even though we have seen interest rates tick up a bit in recent months, rates are still relatively low. When rates are low, it means a buyer has increased purchasing power and ultimately can get more home for less money.
3. Affordability Remains High – Due to the market correction we’ve seen over the last few years, affordability remains quite high. What this means is a larger percentage of individuals are able to purchase a home.
4. Despite Unemployment Figures, Housing Demand Will Eventually Rise – Yes, unemployment figures are high comparative to the earlier part of the decade. In fact, on a national level, the latest counts were approximately 9%, according the United States Bureau of Labor. Here in Colorado we’re running at about a 7.7% unemployment rate. While yes I would agree that the number is concerning, on the flipside it means that 93% of Coloradans are employed. If the economic outlook continues to improve, that’s going to boost the confidence of the 93%. That’s a lot of people who can boost housing demand.
5. Colorado is an Awesome Place to Call Home – It sounds a little trite and yes, I may be a bit biased, but it’s a fact. Colorado offers one of the most diverse and unique living experiences and economies in the country. From our beautiful terrain, our diverse blend of activities and our overall thriving economy, we are fortunate to live in somewhat of a thriving microclimate comparative to the rest of the country. That all adds up to a demand for housing that will help to drive our market towards recovery, possibly sooner than other states.

Let me remind all of us that the current housing is in a place of recovery. Overall what we’re seeing is a tale of two markets. The luxury market is generally seeing increased inventory and price discounting is the norm. Last I checked we had far above a six-month supply of inventory of our luxury homes. In some cases anywhere from 9-12 months+.

However, if you look at our entry level market, things really haven’t slowed down much at all. In fact, in many cases, they’re rising! We’re still seeing lots of interest for well-priced properties in good neighborhoods.

Overall, the state of the housing market in Colorado remains relatively healthy and strong and I believe we have a good Spring ahead.
February is already shaping up to be a better month.
 
==>>Colorado Cities (Appreciation Rate/Rank) Third Quarter 2009
==>>2009 Housing Appreciation By State

NEWS TIP

==>>The estate tax disappears completely in 2010

Starting in 2010, the existing $100,000 income test for converting a traditional IRA to a Roth IRA will no longer apply.  Conversions that occur in 2010 will be able to have half of the taxable converted amount taxed in 2011 and the other half taxed in 2012. http://online.wsj.com/article/SB126004888014078557.html   
 
                      scroll down for stats and more real estate information

Homebuyer Tax Credit Quickly Approaching	Denver Real Estate Report
30-Year Fixed Rate Mortgages Since 1971	2009 Denver Metro Economic Update
2010 Outlook; Interview with Coldwell Banker's President Chris Mygatt	REAL ESTATE STATISTICS
Tax Credit Extension for First-Time Home Buyers and Existing Homeowners	Denver Mountain Real Estate Statistics
Are we heading towards a housing recovery?	Mountain Overview
Denver's Existing Homes Prices Outperform Other Cities	Denver Mountain Monthly Comparison by MLS Area through December 31, 2009
SHORT SALES: The Long and Short of It	updated February 27, 2010
First-Time Home Buyer Tax Credit	Bailey & Pine Colorado
Now May Be the Time to Buy, What Are You Waiting For?	Conifer Colorado
Do Mortgage Rates Affect Purchasing Power?	Golden CO Mountain and Metro
Emergency Economic Stabilization Act 2008	Idaho Springs Colorado
Purchasing Bank Owned Properties	Morrison Colorado
10 Reasons to Consider Buying NOW	North Evergreen
Positive Signs in the Real Estate Market	South Evergreen
Is the Worst Over?
The Facts About Real Estate	Denver/Metro Real Estate Stats
Neighbor's Foreclosure Cost You?	Denver Real Estate Report
Think Locally when Gauging the Market	updated February 27, 2010
Maintaining the Value of Your Home	Denver Colorado
Beware of Reverse Mortgage Scams	Golden Colorado
2008 Home Sales	Lakewood Colorado
Coldwell Banker Achieves Top Ranking	Littleton Colorado
How's the Market?	Morrison Colorado
Ten Predictions for Buyers and Sellers
Selling in a Down Market	Denver's Economic Review
Sub Prime Lender & Appraisals	Denver's Economic Summary November 2009
1031 Exchange Do's and Don'ts	Denver Metro 2009 Economic Overview
Student housing a good investment	Denver's Economic Summary August 2009
Why do I need a title report?	Denver's Economic Summary June 2009
Marketing Statistics	Denver's Economic Summary May 2009
2007 Real Estate Contract Changes	Denver's Economic Summary April 2009
Closing Costs Explained	Denver's Economic Summary March 2009
Skier's Stew	Denver's Economic Summary February 2009
Thank You!	Denver's Economic Summary January 2009
Price Your Home Right	Denver's Economic Summary December 2008
Pricing Decisions	Denver's Economic Summary November 2008
Real Estate Investors	Denver's Economic Summary October 2008
	Denver's Economic Summary September 2008
Coldwell Banker Information	Denver Metro Economic Summary August 2008
Coldwell Banker Client Benefit	Mile High Market Watch March 2008
Coldwell Banker Leaders on the Web
Coldwell Banker Number 1 in Colorado	click here for 2008 Market Stats Vs 2009
Coldwell Banker Television Show
The Power of Television Advertising	2009 Mountain Market Stats
	October 2009
Real Estate Information	September 2009
Prevent Identity Theft	August 2009
Renting vs. Owning	June 2009
26 Reasons to Hire a Realtor	May 2009
History of Mortgage Rates	April 2009
Short Sale Transactions	March 2009
Home Improvements That Can Pay Off	February 2009
Colorado Foreclosure Timeline
Common Ways to Hold Title	2008 Mountain Market Stats
Colorado Property Taxes	October 2008 Mountain Market Stats
Closing Fees at a Glance	September 2008 Mountain Market Stats
Radon Myths	August 2008 Mountain Market Stats
Senior Property Tax Exemption	July 2008 Mountain Market Stats
	June 2008 Mountain Market Stats
Active Inventory vs Sold Listings 2007-2008 (Single Family Residence)	May 2008 Mountain Market Stats
Golden CO, 80401	April 2008 Mountain Market Stats
Evergreen CO, 80439	March 2008 Mountain Market Stats
Conifer CO, 80433	February 2008 Mountain Market Stats
Morrison CO, 80465
Pine CO, 80470	2008 & Earlier Metro Market Stats
Bailey CO, 80421	Denver Metro Real Estate Stats for 2008
Idaho Springs, CO 80452	December 2007 Real Estate Stats
Lakewood, CO  80226  (Near Belmar)	Number of Units Under Contract 2005-2007
Lakewood, CO  80228  (Near Bear Creek Village)
Lakewood, CO  80232  (Near White Fence Farm)
Littleton, CO  80123  (Near Grant Ranch)
Littleton, CO  80125  (Near Roxborough Park)
Littleton, CO  80127  (Near Ken Caryl)
Denver, CO  80211  (Near Highlands)
Denver, CO  80210  (Near Washington Park)
Denver, CO  80206  (Near Cherry Creek)

                   scroll down for stats and more real estate information

Friday, February 19, 2010
Colorado Home Prices Up! Plus, February Is Off to a Great Start!
This week NAR released its fourth quarter 2009 housing stats revealing some solid and very positive results including:
• Home sales posted strong gains in the fourth quarter and prices rose in nearly 45% of U.S. metropolitan areas compared with a year earlier, more evidence of an improving climate in housing.
• Bolstered by low interest rates and a first-time home buyer tax credit, existing-home sales rocketed 27.2% from the fourth quarter of 2008 to a seasonally adjusted annual rate of 6.03
• The national median price of an existing single-family home was $172,900 or 4.1% below the median price in fourth quarter 2008. That was the smallest price decline in more than two years.
• Prices rose in 67 out of 151 metro areas in the fourth quarter compared with a year earlier.
• Sixteen areas had double-digit increases last quarter.
• Some of the positive Colorado markets that saw the biggest gains?

Median home prices of existing single family home by metro area
Not seasonally adjusted; prices in the thousands

Metropolitan Area      2007                2008                2009                % Change

Boulder                     $376.2              $324.7              $335.1              3.2%

Colorado Springs         $217.5              $187.0              $189.8              1.5%

Denver-Aurora           $245.4              $200.8              $223.2              11.2%

In looking at January, the early numbers are in and it seems sales figures overall for January are down from the previous month. Having said that, a decline in sales between December and January is normal for the season. What the January figures show us is the market lost some of the momentum it had built up in the second half of ’09, when home buyers rushed to ensure they could take advantage of a tax credit, ultra-low mortgage rates and lower prices. I anticipate that over the next several weeks those numbers will once again increase as more and more buyers scamper to get in on the market prior to the April 30 first-time home buyer and existing home buyer tax credit expire.

Friday, February 5, 2010
NAR’s Pending Home Sales Report Reveals Tax Credit Is Working
This week the National Association of Realtors released its pending home sales report revealing that contracts signed in December increased 1.0 percent to 96.6 from 95.6 in November and remains 10.9 percent above December 2008 when it was 87.1. December activity was the fifth highest monthly tally in two years.
NAR is chalking much of this surge up to the tax credit as buyers responded to a tax credit that was expiring and then extended and expanded. These swings, they say, are making the underlying trend, which is a broad improvement over year-ago levels.
The fact is there are a lot of first-time home buyers and even some existing homeowners who are vying to take advantage of that credit and that is helping our local market.
One thing I think we will see this year is a much earlier Spring selling market. The spring buying season typically takes off in March and runs through May. But buyers who want to claim this year's tax credit — up to $8,000 for first-time buyers and up to $6,500 for repeat buyers — must have signed purchase contracts by April 30. And they have to complete the deal by June 30. I agree with Coldwell Banker President and CEO Jim Gillespie who said “Sales are going to take off in February and March and really take off in April,” as home buyers try to get under contract by the April 30 date.
It is comforting to see how many consumers are realizing the opportunities to in today’s market—even many investors. There are amazing opportunities and great deals to be had and as buyers come to this realization, it’s exciting to see how it is affecting our market.

Wednesday, February 3, 2010
The time to BUY IS NOW!!!
Rates to Rise after March
TheFed repeated its announcement last week at the conclusion of it meeting that the Fed will conclude the $1.25 Trillion MBS Purchase Program by the end of March.
What does this mean to the market? HIGHER RATES
For the past several months, dating back to Dec 2008 (See Chart Below), the Federal Reserve has been on a buying campaign to keep interest rates low. The success of the program is evidenced below by the chart; rates ended 2009 with the lowest average in history at 5.04%. The next lowest year was 2003 ending at an average of 5.83%. The way this works is the Fed participates in the open market as a buyer of Mortgage Backed Securities (MBS) increasing the demand for the securities which creates a lower rate of return on the security which translates into lower interest rates for new Mortgages being issued. If the demand is decreasing for MBS the interest rates for Mortgage is increasing because the investors will require a higher rate of return to purchase MBS. The recent stabilization of low interest rates was the result of this campaign and when it is eliminated we will most likely see greater swings in interest rates from day to day and week to week, the end result of which will be higher interest rates.

Tax Credit Ending
==>>Homebuyer Tax Credit Quickly Approaching
Buyers must be Under Contract by April 30th, 2010 and Close by June 30th, 2010 to qualify for the First Time Homebuyer Tax Credit and the Repeat Buyer Tax Credit.
This will be here before we know it and with the increase activity in the housing market under $500,000 it may become harder to find the right house for your buyers.
For frequently asked questions visit the website www.federalhousingtaxcredit.com

Sunday, January 24, 2010
FHA 90-Day Seasoning Rule Lifted!
Great News for Denver
Homebuyers & Investors
The Federal government is taking action to speed the housing market recovery by lifting the FHA 90-Day Seasoning Rule with the hopes that it will speed the resale of foreclosed properties. This is great news for Denver homebuyers (especially first-time buyers) and investors, who up until now, have been required to wait at least 90 days after the previous sale date before being able to close with any buyer who has an FHA-backed mortgage.

Originally, the Department of Housing and Urban Development enacted the regulation in an effort to discourage investors who were flipping houses and driving up prices during the housing market boom a few years ago. However, the rule’s unintended effect in today’s market has been to reduce the options of first-time buyers who already are competing for a shrunken supply of homes for sale.

Announced on January 15th, the one-year moratorium on the “anti-flipping” rule will begin on Feb. 1st. Affectively, this will open a new pool of homes to first-time homebuyers. It will also give buyers access to a broader array of recently foreclosed properties. As an added bonus, it is not expected that this will have much effect on home prices, further stabilizing the housing market.

Many investors are thrilled because opening up their business to FHA buyers means they can now sell to anybody. That hasn’t always been the case, and FHA buyers have often been left out of finding affordable homes that are move-in ready. Today, next to FHA buyers, cash buyers make up much of the rest of the active market, and many of them are speculators and investors. This new rule will connect the two groups.

The new guidelines do require that investors who are reselling a home do not profit more than 20 percent above their purchase cost, but those limits are excepted if an independent appraiser confirms that renovations and repairs justify the higher price.

It is expected that the suspension of this 90-day rule will grow the number of transactions in coming months, and that will be good for our nation’s communities, as well as the real estate market in the Denver area. More buyers for investors will motivate investors to buy and renovate more houses, which will serve to move the market forward.

Friday, January 8, 2010
It is a New Year, but is it a new housing market?
We’ve all been reading the conflicting headlines. Some say 2010 will have its challenges. Others say 2010 will be the start of good things to come. But what’s the truth? How can we read through the pessimism and for that matter, the rose colored glasses, to determine what is the truth?

Well, as we all know, only time will truly tell.

* Overall, 2010 will be the year we begin to build a foundation. Many experts are predicting that the recession is nearly complete, if it isn’t already as measured by a decline in negative growth. But the recovery is going to depend on stimulus spending and doing more to facilitate job growth. As Leslie Appleton Young said, “If we don’t create more direct policies to get people back to work, this could go on much long.”

* Let’s start with foreclosures.  We have a lot of work ahead of us and much of that has to do with the state of the overall economy. Unemployment is still high and while I think we’re better, we’re not healed. The latest U.S. Bureau of Unemployment Figures show that unemployment rates were higher in November 2009 than for the same period in 2008 in all 372 metropolitan areas. What happens when people lose their jobs? They typically aren’t able to pay their mortgages. There are also many people out there with adjustable rate mortgages that just haven’t yet adjusted. If the government doesn’t step in and those mortgages adjust, many people will find themselves in a short sale or foreclosure situation. Fortunately the good news is that the government is putting more pressure on the banks to work with homeowners and my hope is that if that, combined with the government’s own work to help homeowners in trouble, I think we’re on a better path with these foreclosures than we were a year ago.
* Interest rates. There are a lot of schools of thoughts with relation to the future of interest rates. I tend to agree with many economists who believe that last year’s record low interest rates, where some were able to secure a 30 year fixed rate mortgage for under 5%, may be a thing of the past. Do I see them taking a surge in 2010? No, probably not. CNBC Reporter Diana Olick wrote, “Unless the government decides to extend its Fannie-Freddie purchase program or do something else to juice the credit markets, mortgage rates will rise steadily, probably leveling off somewhere around six percent” and I tend to agree with that philosophy. Still a good place to be.
* The hottest market? The entry level market is by and large the hottest segment of the housing market right now and in all honesty, probably will continue to be in 2010. But, it was also the first to experience the downturn so it is certainly easy to suspect that it would be the first to recover. What we know about the entry level market is this:
o Homes saw a great deal of depreciation in this market
o This market was most affected by foreclosures and short sales
o Affordability is especially high in this market
o The inventory is low in the entry level market in many areas

I don’t see much of this changing in 2010.

I do see a trickle affect coming from the entry level market into the move-up market. Many homeowners are looking to take advantage of the $6,500 existing homeowner tax credit as well as the opportunity to cash in on a buyer’s market in the entry level and a seller’s market in the move-up region. It really is a perfect storm for this group and I hope more move-up buyers will consider that.

The luxury market is a very different market indeed. It was the last to be affected by the market changes and in all likelihood it will be the last to recover. Having said that, there are some very interesting pockets of success. It really depends on the house, the neighborhood and the overall demand for that market. We’ve seen instances where a million dollar home comes on the market only to be snatched up within a few days. Then, others, just sit. It really comes down to what the market will bear.

In the end, regardless of what the market may or may not be in the coming year, the bottom line is, it may be a really great time to buy. Attractive interest rates. Increased affordability. Tax credits. Higher inventories in some market. In many instances, there hasn’t been a better opportunity to buy in decades. Please don’t lose sight of that. If you are in a position to buy and are considering do so, please do explore your options. I believe 2010 will be a year of building a solid foundation on which to build. Don’t wait until it is too late.

 Denver Post, January 8, 2010  Denver Area Homes Resales Drop 12%

Thursday, December 17, 2009
Happy Holidays and a Look Ahead
The following are excerpts from the Business Week article entitled “A Housing Recovery Could Solidify.”

“Residential real estate prices have increased by about 5%, adjusted for inflation, since the end of the first quarter. As the inventory of existing homes for sale shrinks, a housing recovery could solidify. Sales have increased sharply in some of the hardest-hit states.

In Most of America, Home Prices Creep Up - A Lost Decade
Although home prices have been rising since March, after adjusting for inflation they are only at levels first reached in 2001.

Fewer New-Home Sales
Existing homes now make up about 93% of all sales, vs. a long-term historical average of about 85%.

Signs of Life in the Sunbelt—and Elsewhere
Four states—Nevada, Arizona, Florida, and California—have seen double-digit increases in sales volumes for existing homes since the end of 2008.”

So what does this mean and more importantly, the question of the day from so many of you is, what’s next? While we probably are not out of the woods yet, housing is showing signs of stability, markets are showing signs of rational behavior and everyone is starting to understand the fundamental problems that brought us here. I think the combination of those have us on the right path. Are we going to suddenly see double digit appreciation in 2010? Probably not. But I think we are on a good, sustainable path that should give us some modest growth in the coming year, largely in the most sought after affordable and mid-level markets. In terms of the luxury market, I think only time will tell. It was the last to feel the downturn and in all likelihood it will be the last to recover. Knowing this, it is important to point out that there are always pockets that are the exception. Real estate is local and there are always going to be those sought after neighborhoods, those one-of-a-kind properties, that just demand something different. What I can assure you is that over the next year I’ll be watching the market closely and will keep you abreast of changes as they happen.

Monday, December 7, 2009
A Year in Review and 2010: A Real Estate Forecast
After enduring three years of a declining real estate market, 2009 brought a much needed break for the hard hit real estate sector. Driven largely in part by the economic stimulus that helped the housing market emerge from the recession, it leaves many of us wondering what is next for real estate. Will housing prices rebound? Will the new extended and expanded tax credit be just what the doctor ordered? Will the luxury market recover similarly to the entry level? I recently sat down with Coldwell Banker Residential Brokerage President Chris Mygatt to answer these questions and more as we discussed the 2009 housing market and what we may expect in 2010.

How would you say the housing market faired in 2009? Did it live up to your expectations or falter?

“Although it was a challenging year, I believe that it ended up being a year of stability. It was a year of transition in many of our markets. We bounced along a rough bottom but at the same time, we are really prepared for a modest and consistent improvement. The second half of 2009 was when we finally saw a jumpstart. I think that really stems from consumer confidence. At the end of the day, what drives affordability is confidence. Does a buyer feel confident in his/her employment and finances? If so, then buying a home is typically a good option. Another way that the government is reinforcing the viability of buying a home is by offering the tax credit.“

Do you feel the tax credit was an important factor in the market turnaround?

“Undoubtedly, the tax credit was an important factor in our market’s turnaround. We didn’t really know this for sure until we started looking at the number of closed escrows in September, October and November. The number of properties that went under contract increased as we grew closer to November 30th, the original expiration date for that tax credit. It was a very clear indication that once potential buyers realized they might miss out on the $8,000, tax credit if they did not move quickly, many buyers got off the fence and began to act. The number of property showings was up. The number of properties that were sold was up. Then, we saw the extension of the tax credit and we saw yet another market adjustment. I wouldn’t say that the market has been slowing, but there has been a softening of the frenzy. I think as buyers near the new expiration date of April 30, 2010 that they will once again begin to act.”

Do you think the extended and expanded tax credit will solidify our market recovery?

“Certainly the increased activity that we’ve had in the lower end market has been good; but in and of itself it probably will not create a market-wide recovery. To have a market- wide recovery, we have to be able to engage the move-up buyer. We have to remind the move-up buyer that now may be the best time in our history to step up to the higher priced homes. The new tax credit that provides existing home owners with a $6,500 tax credit is certainly helpful but many buyers need more than just a tax credit. They need to have the courage to step up in today’s market. Those who do, may reap the best benefits. The fact is, you probably have never gotten as much value, thanks to interest rates and given what you’re earning, as you have in today’s market. Six months to a year from now, we probably won’t be able to say the same. We are certainly recognizing that the tax credit is a great thing. But it isn’t compelling enough if a potential buyer isn’t confident in his/her finances or future employment. For those who are confident, the tax credit should serve as a clear and convincing message that now may be a great time to move-up.”

Why is it such a great time to move-up?

“It’s all about the power of leverage. The fact is that in most markets, inventory is very low in the low priced home range. So buyers in that market are often competing against other buyers for the same home making it more of a seller’s market. However, it is a buyer’s market in the mid-level and upper end markets so you truly get the best of both worlds when you choose to move-up.”

There is a lot of talk about the impact of inflation. Do you think people should be concerned about it?

“Certainly people need to be aware that inflation is very likely. The government has devoted a great deal of money to stimulate our economy and in order to strengthen our dollar over time, inflation will be likely. With inflation comes higher interest rates and ultimately less buying power for a home buyer. But it all goes back to maximizing your opportunities now, in today’s market. For those who have made a fortune in their lifetime, they were always looking at the opportunity, today. In order to do so, you must sell where the market segment is strong and buy where the market segment is weak. Today that opportunity resides with the move-up buyer.

“Another important fact to note is how advantageous interest rates are right now. Some buyers are able to qualify for 30-year fixed mortgages at under 5%.”

Do you think we’ve hit bottom?

“I think in many communities we probably have hit bottom. We are seeing statistical evidence of it in the average sale price and in the number of homes sold. Interestingly (and I think this may be contrary to what most people believe), the communities that may have hit bottom are not necessarily those that were hardest hit by foreclosures. The communities that are strongest today are those that are clearly most desirable. When the market gets soft, the people who in previous markets couldn’t afford their first choice market had to settle for their second or third choices. But thanks to the opportunities in today’s market, they are better able to buy into their first choice communities and neighborhoods. It goes back to supply and demand. Those communities that have good schools, good local economies, diverse activities and, overall, are just considered more desirable places to live, are once again driving demand.”

What do you recommend to today’s home buyer?

“Buyers need to understand right now that the market is a little schizophrenic. You know it is probably the time to buy and you also know that the market has been challenged. But you may see that in certain markets, we’ve had lower prices and decreasing numbers of available homes for sale. In that type of area, you might expect to get a lower price than a year ago. But you also need to realize that the market is picking up and that in many markets, we’ve probably hit bottom. For example, if you want to be where the best schools, best hiking trails and best parks are, that will probably be where the best recoveries are likely to occur. To properly ride the wave, you should find the houses where people want to be. The problem is that if you wait a year, you’re probably going to run up against a lot of challenges: increased interest rates, increased buyer demand, and lower available housing inventory. The combination of those factors is what is creating more urgency in the more desirable markets today.”

What do you anticipate for real estate in 2010?

“What we’re going to see in 2010 is probably the more desirable neighborhoods seeing a modest increase in sales price and a decrease in the number of homes on the market. I predict that we are going to see an overall stabilization in the marketplace. We are probably going to see on the whole a slight increase of the average sales price of homes. We’re probably going to see a stabilization of the market. We probably won’t ever return to the sales levels of 2005 and 2006 because so many of those sales were artificially created. Fortunately, I believe that we are now on the right path toward modest, sustainable growth.”

When will the luxury market begin its turnaround?

“We should see a slight turnaround of the luxury housing market in 2010. We believe that it will be the last market to turnaround. It was the last market to experience a turn down and it will probably be the last market to experience an upturn. As business and the economy strengthen, we’ll once again see a more robust luxury market.

“The bottom line is there is a lot to be confident about in relation to the housing market: the tax credit; attractive interest rates; buyer demand in the entry level market; opportunities in the move-up buyer market; and sustainable growth. It all adds up to what we anticipate to be a very productive 2010.”

If you would like more information about the opportunities that are available in today’s housing market, please contact me today.

Thursday, November 19, 2009
Housing Stats and a Little Turkey Trot…Happy Thanksgiving!
Some good news was released this week from Fannie and Freddie: maximum loan limits will remain unchanged for 2010. The Federal Housing Finance Agency announced that the maximum conforming loan limits for mortgages originated in 2010 will remain unchanged from their 2009 numbers. The maximum loan limits for counties across the United States can be found here (116 pages).

The news in the media over the last two weeks has largely been about the potential benefits of the new expanded and extended home buyer tax credit which opens the doors for existing homeowners to take advantage of a $6,500 tax credit. There have certainly been quite a few articles regarding the tax credit over the last two weeks. I did come across an interesting article on Reuters.com which stated, “Up to 400,000 people bought a home for the first time due to the credit, boosting first-time buyers to a record 47 percent of sales over the past year, the National Association of Realtors has said. With the help of the credit, existing home sales will rise 2 percent this year and 13.6 in 2010, the group estimates.”

To say the least, 2009 was a very challenging year in real estate. The good news is that after a very rough 2008 and early 2009, we started to see a positive turn in the housing market as the year wore on, thanks in part to the first-time home buyer stimulus and indications that the economy was starting to improve. So now the big question of the day is, what will 2010 bring?

With the improvement we are seeing on Wall Street and the economic improvements we are seeing on a global scale, things seem to be moving in the right direction, which makes prospective home buyers feel more confident about their future and the home they may choose to buy. So much of our business is affected by consumer confidence.

Also on a positive note, the default notices are actually declining in Colorado.

But I would caution that we probably aren’t out of the woods as it relates to foreclosures. With unemployment figures still frighteningly high, there are still quite a few homeowners out there who are struggling with their payments. And now there is a great deal of evidence that it isn’t just in the entry level arena; it is also hitting the mid-level and luxury market, too.

The big question is when is the “shadow” inventory of already foreclosed homes going to be released, now that the government has lifted the moratoriums on foreclosures. Once we start to move through those properties, we should begin to see a better, more solid grounding for the real estate market.

For real estate, this feels like more of a long “L” shaped recovery than a “U” shape.

The fact is, we live in one of the most desirable regions in the world. Certainly we’ve taken our fair share of hits over the last three years, but our region’s desirability, economic vitality, culture, weather and overall market conditions make it a sought-after place to live. We generally have a much healthier economy. This, I believe will help drive our long, slow, modest recovery.

I am encouraged by the progress we are making in the real estate market. As we track sales activity, we are seeing more encouraging signs. Based on what we’re seeing, we’re estimating that we can expect sales to moderate to a more sustainable pace and we will probably see a modest rise in housing prices. Will it be the double digit appreciation we saw in the earlier part of the decade? Probably not. But this new normal is much more sustainable and a much healthier foundation to build upon. It makes me excited about the future and gives us all hope for a relatively modest and productive 2010.

Saturday, November 7, 2009
The Tax Credit Gets an Extension and an Expansion!
Existing Homeowners: Now’s Your Chance!
I am extremely pleased to share with you an exciting new tax credit, designed for first-time home buyers and existing homeowners.
The new bill calls for an incentive for existing homeowners who have owned their current homes at least five years, making them eligible for tax credits of up to $6,500 when they purchase a new home. First time homebuyers – or anyone who hasn’t owned a home in the last three years – would still get up to $8,000. To qualify, buyers in both groups have to sign a purchase agreement by April 30, 2010 and close by June 30.
The credit is available for the purchase of principal homes costing $800,000 or less, meaning vacation homes are ineligible. The credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.
The credit would be extended an additional year, until June 30, 2011, for members of the military serving outside the United States for at least 90 days.
As an industry, we are certainly pleased about this new tax credit. The key to returning stability to the economy lies within the housing market, and this is a meaningful credit that will create a strong foundation for future growth and make a measurable difference over the next seven months in our economy.
Furthermore, tax credits like this only work by creating the sense of urgency to take advantage of them. This is said to be the last extension of the home buyer tax credit and I urge people – whether you’re a first time home buyer who has always dreamed of having a home of your own or someone who has been gridlocked in the challenges of our move-up market – to take advantage of this opportunity.
Now is the time! If you’d like to learn more, please contact me today.

Friday, October 30, 2009
It’s On The Table!
There’s no question. The government’s first-time homebuyer tax credit has spurred a significant amount of sales this year and its positive impact on the hard-hit housing market warrants an extension. Latest estimates show that some 400,000 additional sales occurred this year due to the first time home buyer tax credit, which is about 8% of all sales this year.

The latest news in the saga, The Senate has reached a compromise on extending and expanding the $8,000 tax credit for first-time home buyers. While its passage remains uncertain, the agreement would extend the existing credit for first-time homebuyers, worth up to $8,000, while offering a new credit of up to $6,500 for some existing homeowners. The reduced credit would be available to all homeowners who have been in their current residence for a consecutive five-year period in the past eight years. Lawmakers in Washington also raised the qualifying income limits to $125,000 for single taxpayers and $250,000 for joint taxpayers, from the current $75,000 and $150,000. Under the Senate compromise, buyers must have sales agreements in hand by April 30, but they will have until June 30 to go to settlement, said the sources. The measure still faces votes in the full Senate and the House.

The U.S. Senate won’t vote until next week at the earliest. As soon as they do we intend to create a piece that will allow you to communicate the news to your clients.
Reports show that Senate action has been delayed by a Republican demand that a vote be allowed on an amendment to end the Treasury Department’s Troubled Asset Relief Program at the end of this year. But lawmakers say they want to prevent home sales from slipping as the economy struggles to recover. And as I mentioned in a previous edition of Weekly Market Watch, that is just what may happen if lawmakers choose to let the tax credit expire.

On the flip side, the Democrats, along with the Obama administration are backing it. “The success of the American economy is closely tied to the success of the housing market; by helping to stabilize the housing market, the homebuyer tax credit has helped to shore up the economy as it begins to recover,” said Baucus, a Montana Democrat. “This would enable an even greater number of potential homebuyers to take the credit.”

Thus far it seems to be doing its job. This week, Business Week reported “The broad improvement in the housing indicators in recent months leaves no doubt that the long-awaited housing recovery is finally under way.” The article went on to report: “Policy alone cannot explain the 24% gain in existing home sales since January, nor the 22% increase in new-home purchases, the 40% rise in single-family housing starts, and the recent upturn in home prices.
The primary driver is historically high affordability. Fixed 30-year mortgage rates are at 5%, a multi-decade low, and prices have plunged a total of 30% since May 2006, based on the Standard & Poor's Case-Shiller Home Price Index. By that price gauge, homes are well undervalued relative to both rents and aftertax income.”

Thursday, October 22, 2009
“U.S. Economic Recovery on Track”
While we await the results of the possible expiration, extension or expansion of the $8,000 first time home buyer tax credit, one thing is for sure, the economy is moving forward in full force—which is driving consumer confidence. Earlier this week, Reuters.com ran a very interesting story on the U.S. economic recovery and the result was very encouraging. Among the story’s highlights:

* “The U.S. economy is firmly poised for a recovery from its deep recession but growth may be moderate and the job market will not revive immediately, senior White House aide Lawrence Summers predicted on Wednesday.”
* “On the economy, Summers said the $787 billion stimulus package and inventory rebuilding by businesses were among the “dominant drivers” lifting the economy.”
* “It will be some time before unemployment starts to decline. Once it declines it will take a long time to return to normal levels, given how elevated it is…The jobless rate is now at a 26-year high of 9.8 percent.”
* “Most private economists think the recession, which began in December 2007, ended in the third quarter. But there is much disagreement about the path to recovery.”
* “Some see above-average growth continuing through next year, arguing that deep recessions are typically followed by powerful recoveries, helped along by pent-up demand as consumers and companies resume spending.”

Obviously this is welcome news for the economy which ultimately benefits the local housing market. What I can tell you is that I am encouraged by the progress we are making in the real estate market. We’re beginning to see more days of progress than days of back stepping. We’re watching sales activity and consumer sentiment and we are expecting over the coming months a moderate to a more sustainable pace and we will probably see a modest rise in housing prices in the coming year. Will it be the double digit appreciation we saw in the earlier part of the decade? Probably not. But this new normal (as we’re calling it) is much more sustainable and a much healthier path to build upon. It makes me excited about the future and gives us all hope for a relatively modest and productive 2010.

Thursday, October 15, 2009
Recent Housing Upturn Sparked By Buyer Leverage
The latest S&P/Case-Shiller home price index reveals home price for 10 major cities rose 3.6 percent between April and July. So does this recent up tick in the housing market mean we are on the cusp of a housing boom?

Probably not, in all likelihood, the recent upturn in the housing market has been sparked by several competing factors:

· The impending expiration of the $8,000 first-time home buyer tax credit
· The recent up tick in the stock market
· Increased consumer confidence
· Continued low interest rates

Essentially, buyers are playing a leverage game. They’re watching the economic indicators and trying to determine the best time (for them) to buy. It seems many are now pulling the trigger which is causing sales figures and prices to go up.

Will it last? It’s tough to say. Right now we’re in a slightly unique position because some of the stimulus packages that the government instituted are working which may be causing a false front for the overall economy. The stock market is up. Consumer confidence is on the rise. The housing market is up. All of those are pointing to some current benefits in the market.
But, the fundamentals themselves haven’t changed. Foreclosures remain a major issue for our economy. And unemployment remains a major challenge. Until those two areas of the economy fully recovery, we may see continued economic volatility.

What I can say is I think the worst of the housing market’s problems are probably behind us. But the road ahead isn’t completely clear. One major factor that stands in our way is the impending expiration of the first time home buyer tax credit. This credit has helped to drive much of our recovery. But right now the debate on Capitol Hill continues and everyone is waiting to learn whether the credit will be extended, expanded or will it simply expire. Many on the opposing side believe it is too costly to finance. But NAR had this to say: “Each home sale pumps an additional $63,000 into the economy through related goods and services, so the benefits of extending and expanding the tax credit far outweigh the costs.”

If the opposing side gets their way and the credit simply expires, NAR had this to say: “All we can say for certain is sales will decline when the tax credit expires because we are not yet on a self-sustaining recovery path. It also raises a risk of a double-dip recession. Extending and expanding the tax credit is the best tool in our arsenal to encourage financially qualified buyers to stimulate the economy and help reduce the budget deficit.”

So there you have it. We’re in a state of flux as we await the results of the credit. As that debate continues, buyers seem to be leveraging today’s market advantages which is creating a welcome relief for our local market. Let’s just hope the leveraging opportunities continue.

Thursday, October 1, 2009
S&P Reports On The State of the Housing Market
One of the founders of what has really become the industry’s (and media’s) bible for real estate statistics and forecasts, S&P Case Shiller, recently participated in a Q&A about the state of the housing market. Robert Shiller, a Yale University economist, discussed the housing market and the implications of lower interest rates. I found it quite conservative yet insightful and in my opinion, on target with what is going on in today’s market.

That is why for this edition of Weekly Market Watch, I am going to provide you with an excerpt from his interview:

Is the slump in U.S. home prices bottoming out?

Shiller: The situation has definitely changed. With our numbers — the S&P/Case Shiller home price index — going up sharply. It looks like a major turnaround. We’ve been watching that for three months now, and we have some concern that it could be an aberration and temporary. But, at this point, it seems to be evident in just about every city in the U.S. That suggests it’s real. But it probably isn’t the beginning of a major boom, just because the economy is in such bad shape. There’s also a chance that it will reverse. It’s still only three months old, so it’s very hard to be sure at this point. The most likely scenario is that it won’t continue at this high rate of increase, but that it will neither go down a lot, nor up a lot.

So the index will move sideways for a while?

Shiller: Yes, for a while, meaning five years.

What are the main factors driving U.S. house prices? What could push them up, or cause another slump?

Shiller: The main factor is the world economic crisis and the efforts of governments around the world to stimulate the economy. Parts of those efforts have been directed at the housing market. In the U.S., there is an 8,000 dollar first-time home buyer’s tax credit which expires at the end of November. That’s a reason for concern, as it comes to an end. Also, the Federal Reserve has a plan to buy $1.25 trillion worth of mortgage-backed securities to support the housing market. They are most of the way through the program and anticipate phasing it out at some time in 2010 - that’s another thing that will go away. We’ve yet to see how the housing market will continue. Part of the problem is that people are buying now rather than later. When later comes, there could be a downturn in the market.

Is there an oversupply of houses in the U.S.?

Shiller: That’s been a problem. The inventory of unsold houses has been high, but has come down a bit. On top of that, there will be more foreclosures, more homes are going to be dumped on the market as people default. Now, that may show down as home prices will start going up again. But I suspect that this isn’t going to happen. Also, banks have more REO, or real estate owned, that they’re holding on to for the time being. But eventually those REOs are going to be dumped on the market. So that’s why it doesn’t look particularly encouraging from a supply consideration.

Turning to interest rates, which are at exceptionally low levels: Is there a risk that this eventually will cause irrational exuberance?

Shiller: There is always a risk of that. Those things are hard to predict. However it seems like the present time is least conducive to bubbles of any time. We’re in what some people call “pretend-and-extend” economy, which means that banks that have commercial loans are often extending those loans and pretending that the property is worth something. That’s because they don’t face reality. This kind of economy isn’t really suited to a beginning of a real bubble. Now, everything could change… It’s surprising how strong the residential, single-family home market looks right now. It makes me think that it’s hard to predict animal spirits.

Monday, August 31, 2009
So Much for a Sleepy Summer
Generally speaking the Colorado real estate market has seen a bit of a bounce this summer with sales increasing in all categories—from the entry level homes and condos to the high-end market.

National figures showed June with an 11% increase in home sales. But, realizing that a majority of the spring home inventory has been introduced, we may start to see a little slowdown in August/September as old inventory is taken off the market and a smaller surge of inventory arrives.

In other words, there is still  much recovery that needs to be taking place. Sellers still need to get a bit more realistic about price and buyers need to recognize a good bargain when they see it.

In general, most homes are on the market longer with discerning buyers waiting for the optimal home at the optimal price. A well-priced, well-presented home can still fetch multiple offers, but it’s got to look appealing to the savvy buyers who are doing their homework. There is no sense in overpricing a listing – a buyer won’t even give a home the time of day if they sense the seller is being unrealistic. Yet at the same time, there seems to be no better time to snatch up bargains in Colorado at all price points. We’re seeing five to 10 percent reductions in properties that are sitting on the market and in many cases the final offers are coming in below those reductions. That’s not to say buyers should throw out ridiculous numbers. Some sellers who don’t have to sell are holding firm, but time is running out for others. So, while it may take longer to get the buyer and seller to agree to terms, deals are happening and with open minds on both sides, we might start to see more positive movement for all.

For cash buyers or those with large (over 25%) down payments, now is a great time to pick up bargains in luxury homes. Sellers are still not giving away property but there are great deals available.

This week the National Association of Realtors released its monthly existing home sales report (http://www.realtor.org/press_room/news_releases/2009/08/strong_uptrend?LID=RONav0021) noting “For the first time in five years, existing-home sales have increased for four months in a row, according to the National Association of Realtors®.”  The report went on to note, “Existing home sales – including single-family, town homes, condominiums and co-ops – rose 7.2 percent to a seasonally adjusted rate of 5.24 million units in July from a level of 4.89 million in June, and are 5.0 percent above the 4.99 million-unit pace in July 2008.  The last time sales rose for four consecutive months was in June 2004, and the last time sales were higher than a year earlier was November 2005.”

Lawrence Yun, NAR chief economist, said he was encouraged. “The housing market has decisively turned for the better. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales,” he said.

Ultimately these are all very positive signs for our market and are a strong sign that we are moving in the right direction towards a housing recovery. Having said that, it’s important to keep things in perspective and not celebrate too soon. We all need to be realistic with our pricing, buyers and sellers.

A few other interesting articles of note for the week:

• Home Prices On An Upswing In The Second Quarter Of 2009 According To The S&P/Case-Shiller Home Price Indices; Case-Shiller
• New Home Sales Blast Past Expectations; CNNMoney.com
• The Housing Market: Has It Turned the Corner?; TIME Magazine
• Mortgage Applications Increase In Latest MBA Weekly Survey; Mortgage Bankers Association
• Home Market Shows Signs of Life as Declines Slow; Bloomberg

Housing Markets Most Likely to Rebound, Denver #1 http://today.msnbc.msn.com/id/26184891/vp/30825142#30825142

Friday, August 21, 2009
Good News On Wall Street Doesn’t (Necessarily) Mean Higher Housing Prices on Main Street
Academically speaking, there is a belief that there is a direct correlation between the housing market and the stock market.  But from an analytical standpoint, although the stock market and the housing market correlate well, there is a variable time lag.  The time lag between housing underperformance and stock market performance can vary widely. The average is 18 months.

What we’re seeing, in some instances, is that some of the upper-tier clients are saying no to potential deals as they think if they wait another four to six months (thanks to the stock market’s recent gains) they may get more for their home. And while I understand the reasoning, I would caution sellers on this strategy. First, what we know is that in a “normal” market (of which this market is anything but), the average lag time between the two is 18 months (not four to six months). It’s also important to point out that we probably aren’t out of the woods as it relates to the volatility in the stock market.  Many analysts are suggesting that our recovery will be “W” shaped rather than “V” so we may be looking at more changes ahead. 

So while I understand the logic, I would caution sellers on this strategy and would ask them to focus less on the stock market and more on the level of supply and demand in their market and in their neighborhoods.  In most markets, the upper-tier price point remains relatively soft so sellers should consider most deals that are presented to them.  That’s not to say buyers should be throwing out unrealistic offers.  The real story here is that across the board we’re starting to see increases in interest and buyer activity so sellers may want to consider taking advantage of that interest…before it’s too late.

For those who are focused on the stock market, my best advice to you is to look at it more as an indicator for the economy as a whole. With the DOW closing Thursday at just over 9,300, it may not be making housing prices go up, but it may mean that the recession is subsiding which is good news for us all.

Thursday, August 13, 2009
They’re Saying The Worst is Behind Us…But Is It Too Soon to Celebrate?
NYtime.com website “Almost exactly two years after it embarked on what was the biggest financial rescue in American history, the Federal Reserve said on Wednesday that the recession is ending and that it would take a step back toward normal policy.”
 http://www.nytimes.com/2009/08/13/business/economy/13fed.html?_r=2&partner=rss&emc=rss&src=igw .

The article goes on to note “Though the central bank stopped well short of declaring victory, policy makers issue their most upbeat assessment in more than a year by saying that the downturn appears to have hit bottom and that consumer spending, financial markets and inventory building by corporations all continued to stabilize.”

Having said that, here is what we tend to be seeing about the market:

•It does appear that the worst of the recession may be behind us.
•In all likelihood, the Fed is going to keep rates relatively low well into next year by continuing to purchase mortgage backed securities and keep the Federal Funds Rate close to zero. It is currently at .25%.
•In terms of conforming loan limits, as of right now, the higher conforming loan limits will end at the end of this year. There is some legislation that is pending to renew the higher loan amount through until November 2010 but as of right now, that is pending. The same holds true for the first-time home buyer tax credit.
Knowing this, what lies ahead? Well I would say it’s positive to know that the worst may be behind us, but in all likelihood there are still challenges ahead. There is still much recovery that needs to take place, so neither sellers nor buyers should be getting too excited with the news. Sellers still need to get a bit more realistic about price and buyers need to recognize a bargain when they see it.

Thursday, August 11, 2009
One Good Week of News Leads to Another
Following last week’s breaking housing news which revealed that based on the Standard & Poor’s/Case-Schiller 20-city index, home prices in May posted their first monthly increase since the summer of 2006.

The news followed reports showing sales of newly built and existing homes rose in June for the third consecutive month. New home construction, though still weak, is the best it has been since the fall.

Well this week the good news continued. The Mortgage Bankers Association (MBA) released its Weekly Mortgage Applications Survey for the week ending July 31, 2009 showcasing an increase in mortgage loan application volume of 4.4 percent from the week earlier. On an adjusted basis, the Index increased 4.1 percent compared with the previous week and 18 percent compared with the same week one year earlier.

The Refinance Index increased 7.2 percent from the previous week. The Index has climbed about 35 percent above its recent low at the end of June. The seasonally adjusted Purchase Index increased 0.9 percent from one week earlier.

Also interesting to note is this week’s release of the National Association of Realtors’ Pending Home Sales Index in which it revealed an increase of 3.6% during the month. That was 6.7% higher than June 2008. It was the fifth straight month of increases, the first time that has happened since July 2003. The jump was much higher than expected with a consensus of industry experts put together by Briefing.com forecasting an increase of just 0.7%.

NAR’s Chief Economist Lawrence Yun had this to say, “Historically low mortgage interest rates, affordable home prices and large selection are encouraging buyers who’ve been on the sidelines.” It seems all of these incentives, much like the Cash for Clunkers program, is finally pushing people off of the fence."

Thursday, August 1, 2009
It was a positive week for our industry. It seemed everywhere you looked, the media was reporting on some sort of positive indicator relating to the real estate market rebound. It seems this week, the answer to the question is much clearer.

For starters, Good Morning America ran a very good interview on Tuesday about the state of the housing market. Liz Ann Sanders, the Chief Investment Strategist for Charles Schwab was interviewed. Essentially what she said was that we are in the process of bottoming out and “you have to go through less bad on your way to good.” As I’ve said in my weekly updates, we’re seeing pockets of significant strength and the housing market is really showing signs of recovery.

Our industry was the first to be hit by the market downturn and if all continues on this path, we will be the first out.  The turnaround won’t be happening overnight. We probably won’t see housing numbers start to appreciate anytime soon. But what we can relish in is Sanders’ conservative viewpoint that “we have to see less bad for a while before we start to see some real positive gains.” What we have right now is the bottoming out of our market. Speculators and investors are competing with first time home buyers. Those individuals are going to continue to gobble up the inventory—both REOs and regular, now much more affordable starter homes. As we see this inventory deteriorate (again, over time), we will continue to see that trickle into our mid-level and upper-end price ranges.

Also interesting to note this week was the Standard & Poor’s/Case-Schiller 20-city index was released and in it, home prices in May posted their first monthly increase since the summer of 2006. Prices rose from April in 13 of the metro areas tracked, notably Cleveland, Dallas, Boston and the Bay Area.

The news followed reports showing sales of newly built and existing homes rose in June for the third consecutive month. New home construction, though still weak, is the best it’s been since the fall.

Although the index is rising nationally and locally, I would caution that this doesn’t necessarily apply to homes across the board. For the most part, the local gains are reflected more in the low-end side of the market, though we are showing signs of improvement in the mid and upper end.

The 20-city home price index rose 0.5 percent from April to a reading of 139.8, but it was still 17.1 percent below the reading of 168.6 in May a year ago. It was the fourth consecutive month that the index indicated prices have turned the corner and are heading back toward positive territory.

Thursday, July 23, 2009
Existing Home Sales Up For Third Straight Month
The Question of the Day: Have We Bottomed Out?
Some are calling it the sign that we have hit bottom and are on our way back up. Others are calling it a blip on the screen. Whatever your take, NAR released Thursday its existing home sales report which showed three key, positive indicators regarding the housing sector:

• For the third consecutive month, existing home sales rose
• Inventory is easing
• Home prices declined less sharply in June

The report noted, “Existing home sales…increased 3.6 percent to a seasonally adjusted annual rate of 4.89 million units in June from a downwardly revised pace of 4.72 million in May, but are 0.2 percent
lower than the 4.9 million-unit level in June 2008.

The report also revealed, “Total housing inventory at the end of June fell 0.7 percent to 3.82 million existing homes available for sale, which represents a 9.4 month supply at the current sales pace, down from a 9.8 month supply in May. Raw inventory totals are 14.9 percent below a year ago.”

The Wall Street Journal reported Thursday a look at 28 major real estate markets and where they are headed. The results http://online.wsj.com/public/resources/documents/retro-HAGERTY.html were interesting for Denver:

• A 19.6% decline in housing inventory (from a year ago)
• We are currently at a 6.1 month supply
• We’ve seen an 8.3% drop in price since the peak

Also interesting to note this week is the fact that Denver was named the No. 1 city where Americans are relocating, according to Forbes.com http://www.forbes.com/2009/03/30/americans-moving-cities-lifestyle-real-estate-relocating.html?partner=email  

Among the highlights of the story:

• Population increased by 2.17% in 2008; it increased 2.09% in 2007
• Denver was the 10th fastest growing metro area in the United States
• Denver is the most popular city in America; people like it for its skiing, culture and vibrant nightlife as well as its business opportunities
• As of January 2009, the metro area’s unemployment rate was 6.5%; that’s high but still two percentage points below the national average of 8.5% for the same month

What all of this leads us to believe is despite some of the challenges we continue to face nationally and globally, the domestic housing market continues to demonstrate signs of recovery. The temporary first-helping people make a decision and is contributing to the overall stimulus impact.

Are we out of the woods yet? It’s tough to say but the signs are encouraging and three months of continued increases in home sales are a positive sign that we may be on the road to recovery.

Thursday, July 16, 2009
Realtor.com Survey Tells A Lot About Today’s Housing Market
Earlier this week, Realtor.com released a survey discussing what is motivating buyers in today’s market. It was an interesting read and I thought I’d share the highlights:

•“Price declines and low interest rates are motivating millions of home buyers to shop for bargains in the most affordable housing market in 28 years, yet at the same time only one in ten of today’s home owners say they have delayed selling their home due to those same market conditions.”
•“Affordability is clearly driving more than two thirds (65.2%) of potential buyers back into today’s housing market. Nearly one of five prospective buyers (19.6%) say foreclosure bargains in their communities would motivate them to purchase a home, the most important reason they’re interested in buying in the near future.”
•“An additional 15.5 percent said they’re motivated to buy soon because they think prices are as low as they will go and another 15.5 percent said they were motivated to buy before interest rates rise. For 14.6 percent of first time home buyers, the Federal $8,000 tax credit is the impetus to purchase a new home in the future.”
•“The survey also found most Americans are not aware of how affordable homes are becoming in today's fast-changing housing market. More than three-quarters (76.4%) of consumers think a median income family can afford only 50 percent or fewer of the homes for sale in their area. However, in reality, a family earning the national median income of $53,182 can afford nearly 75 percent of the current homes for sale on Realtor.com.”
•“In the past year, the Housing Affordability Index maintained by the National Association of Realtors has increased 29 percent overall and 19 percent for first-time homebuyers, and is higher now than at any time in the 28 year history of the index.”
"Value is clearly motivating potential home buyers, and today's new level of affordability is still an under-appreciated reality that needs to be explored," said REALTOR.com President, Errol Samuelson. "The variety and quality of homes currently within reach of the average American family is much greater than most people realize. Making credit available to responsible borrowers and building consumer confidence in the economy are now key factors in restoring vitality to the nation's housing market."

In other interesting news this week, for the second consecutive month, Denver fared the best among 20 U.S. cities reporting drops in home prices, according to Standard & Poor’s/Case home-price index for 20 major cities dropped 18.1 percent in April compared with April 2008.

Denver reported a 4.9 percent decline, better than Dallas and Boston, which were down 5 percent and 7.7 percent, respectively.

"This was the least painful decline in the last six or seven months," said economist Jeff Thredgold of Vectra Bank Colorado. "There is still some additional weakness to come, but most of the pain is behind us."

Also interesting to note, as the Denver Business Journal reported, “Home prices in Denver increased for the second consecutive month and show the lowest year-over-year decline of the 20 cities included in the closely watched S&P/Case-Schiller index.”

Friday, June 26, 2009
Denver Named One of the Best Places to Buy a Home…Now!
Forbes Magazine released this week its “In Depth: Best Cities to Buy a Home” feature in which the magazine highlights cities with the best real estate deals. Click here to access the article: http://www.forbes.com/2009/06/22/cities-deals-home-lifestyle-real-estate-home-buying.html .
Among other large cities, Denver was listed with the magazine noting that “While the majority of the nation’s housing markets are still working toward a bottom, some cities are boasting fundamentals that make them good places to buy a home now.” In addition to Denver, Los Angeles, Boston, Phoenix and San Diego were listed.
To determine which cities feature the best real estate deals, the magazine “looked at three sets of data in the March 2009 RPX Monthly Housing Market Report, distributed by Radar Logic Incorporated, a New York-based derivatives firm. It looks at the market fundamentals in the country’s 25 most populated metropolitan statistical areas (MSAs or metros), geographic entities defined by the U.S. Office of Management and Budget used by federal agencies in collecting, tabulating and publishing federal statistics. First, we examined the number of ZIP codes with 25% of the area's sales to determine those in which activity is most evenly distributed. Next, we examined increase and decrease in price per square footage to determine where market value is the highest. Last, we looked at transaction rates in each city to determine where the housing markets are most active. We scored each city by category, and then combined the scores to determine the final ranking.”

Here’s what the article reported:
 “1. Denver, Colo.
PPSF Increase or Decrease
March 2009 vs. Feb. 2009: 5.7%
Transaction Increase or Decrease
March 2009 vs. March 2008: -8.4%
Percentage of ZIP Codes with 25% of Sales: 25%”

Also this week, the National Association of Realtors released its existing home sales report which noted that existing home sales rose for the second straight month in May, signaling low prices and incentives are attracting buyers.

NAR says existing home sales, including single family homes, condos and coops rose 2.4 percent in May. It was the first back-to-back monthly gain in existing home sales since September 2005.

Sales of existing homes rose for the second straight month in May, signaling low prices and incentives are attracting buyers.  NAR chief economist Lawrence Yun had this to say, “Historically low mortgage rates clearly drew buyers into the market, and housing remains very affordable even with a recent up tick in rates. First time buyers are also being drawn off the sidelines by the $8,000 tax credit which is helping to absorb inventory.”
The numbers could be even better if it weren’t for poor appraisals. While pending sales of existing homes—those with signed contracts but not closed—indicate stronger activity, some contracts are falling through from faulty valuations that keep buyers from getting a loan, said Yun.
Locally we made some great headlines this week, especially with the Denver Business Journal’s story headlined “Home prices in mountain states up 1.3% outpacing nation.”
The article reported, “Housing prices in Colorado and other mountain states rose 1.3 percent in April from the previous month, the biggest increase of any region of the nation, the Federal Housing Finance Agency reported Tuesday.”

Monday, June 12, 2009
Reinvigorating the Housing Market
This week there were some exciting change of events going on with the government regarding a positive development for the real estate industry. Specifically, the Business Roundtable (an association of chief executive officers of leading U.S. corporations)—issued a set of recommendations for the White House and Congress that are aimed at jump starting the housing market in order to stimulate a broader economic recovery.

The Business Roundtable’s recommendations are as follows:

• Keep mortgage interest rates at historically low levels (below 5 percent) for at least one year;
• Expand the current First-Time Homebuyer Tax Credit incentive from the lesser of 10 percent of the purchase price of the home or $8,000 to a higher limit of either 10 percent or $15,000 for all homebuyers, remove the income restrictions and include all primary residence purchases for one full year;
• Conduct a thorough review of current foreclosure mitigation and loan-modification programs in light of rising loan-modification re-default rates;
• Make permanent the current temporary conforming loan limits; and
• Continue to review and strengthen government efforts already underway to review and refine mortgage lending practices.

Targeted, demand-side solutions—such as the ones Business Roundtable is recommending—will provide a critical next step for a housing recovery that will help create jobs and boost the economy as a whole. To obtain a copy of the Business Roundtable press release and its Housing Working Group’s detailed recommendations, click here  http://businessroundtable.org/initiatives/leadership/housing_working_group . To read an article that appeared in today’s online edition of The Wall Street Journal containing an interview about the Business Roundtable’s recommendations and why they are crucial to jumpstarting the housing market, click here http://online.wsj.com/article/SB124460195604101021.html .

Monday, June 8, 2009
Activity In the Entry Level and Mid-Level Markets Continues to Rise…For the Entry Level Buyer, Are Bidding Wars Back?

Now that school is almost out, we’re finding many families are starting to look at homes in anticipation of getting settled prior to next school year. Showing activity, in many markets, has increased considerably.

Sellers are now getting their homes on the market and, in general, seem to be quite knowledgeable regarding staging and pricing. The homes in the entry-level market, for the most part, are moving well if they are in good condition and fairly and competitively priced. Several Agents whose clients’ listings are in the entry level market are reporting that they have had buyers lose out on homes in bidding wars. The competition for well priced homes in good condition is heating up and we are seeing multiple offer situations in most of our first time home buyer markets.

Though we have seen sporadic increases in the upper end market, it is still relatively slow on showings and closings but we do anticipate that that sector will loosen somewhat if the economic news continues to show some stabilization and an upswing.

Friday, May 29, 2009
Memorial Day is Over…Soon-to-be-Summer Selling Season Off to a Good Start

With Memorial Day behind us and the busy summer selling season about to begin, some interesting trends are landing in our laps.

First, NAR this week announced that existing home sales rose in April with strong buyer activity, in, as expected, the lower price ranges. Nationally, existing home sales increased 2.9% to a seasonally adjusted annual rate of 4.68 million units in April from a downwardly revised pace of 4.55 million units in March, but were 3.5 percent below that 4.85 million-unit level in April 2008.

Most of the sales are taking place in lower price ranges but in a positive trend, we are seeing increased activity in the mid-price ranges. This is all a domino effect. A turnaround begins with the lower price range homes and once that sector of the market is stabilized, we begin to see changes in the mid and upper price ranges. The upper end, though we have seen increased activity, still is slow but we fully anticipate that this will change over time, too.

Two local articles of interest this week:

• Denver Business Journal: S&P: Denver existing home prices outperform other cities http://www.bizjournals.com/denver/stories/2009/05/25/daily15.html

• Denver Post: Metro Home Slide Not Off Click http://www.denverpost.com/search/ci_12455302

Thursday, May 21, 2009  NAR Announces Housing Affordability Highest in 18 Years
This is one of the best times to purchase a home in decades.  Well this week the National Association of Realtors underscored that fact with the release that nationwide housing affordability jumped 10 percentage points during the first quarter of 2009 to its highest level since the series began 18 years ago, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI).  The HOI showed that 72.5% of all new and existing homes sold in the first quarter of 2009 were affordable to families earning the national median income of $64,000, up from 62.4% during the previous quarter and up from 53.8% during the first quarter of 2008.

For complete details on the report, click here:  http://www.nahb.org/page.aspx/category/sectionID=135

Tuesday, May 19, 2009  Denver tops on 'Today' show list of cities poised for real-estate rebound
Denver Business Journal - by Mark Harden

Denver was named America's No. 1 city on the verge of recovery from the real-estate slump in a segment Tuesday on NBC's "Today" show.

Real estate expert Barbara Corcoran, a regular guest on the show, said Denver more than any other U.S. city is "clearly on a rebound."

"It's really the perfect real estate success story," she said. "It had one of the highest foreclosure rates in the nation for years running, and now they've cut that foreclosure rate in half and they've turned the corner."

Denver, Corcoran said, has "a vibrant downtown, it has a high employment base, it has educated people, it has youth, [and] it has one of the biggest park systems in the country.

"Everything about Denver is pointing up, up up," she added. "Prices are moving up just now for the first time after seven years."

Rounding out Corcoran's list of cities poised for a real-estate rebound:
2. Raleigh, N.C.
3. Austin, Texas
4. Seattle
5. San Francisco

Corcoran said she included cities on her list on the basis of eight factors:
Job growth potential;
A growing population;
Good weather;
Lots of first-time buyers;
No overbuilding;
vital downtown;
A well educated population; and
Foreclosures earlier than other cities.

Stress Test Reveals There's More Work to be Done  May 8, 2009
Stress Test Reveals There’s More Work to Be Done By the Banks But The Local Real Estate Market Continues to Thrive!

This week the results of the long-awaited Stress Test on the banks were released. What the government hoped to accomplish through this Stress Test was to determine how much more capital the banking sector would need to withstand the recession—much of which was caused by residential mortgages and other consumer loans such as credit cards. The result was that 10 of the nation’s 19 largest banks will need to raise a total of $74.6 billion in capital. The Stress Test revealed that banks like Goldman Sachs and J.P. Morgan seemed to be better positioned than Citigroup and Bank of America.

At this point, according to Kiplinger, “The stronger banks will actively do what they can to return any money borrowed from the government to get out from under restrictions on dividends and executive compensation. Their ability to sell common stock to the public is far better than their weaker counterparts, who may have to privately sell stock to investors or raise capital with so-called mandatory convertible preferred shares.”

According to industry analysts, it seems that until the banks get back on their feet, credit will continue to be tight. That leaves the Federal Reserve responsible for filling in the gaps with its own lending programs aimed at jump-starting lending.

On a brighter note, however, the real estate sector of our economy continues to show some positive signs—a good symbol that the programs that the government has put in place are helping. USA Today reported earlier this week that “More homes for sale are attracting multiple offers as buyers pursue lower-price homes and banks low-ball asking prices to attract competing bids on foreclosures.” It’s exactly what we’ve seen locally.

Here are some links to some interesting, positive news stories from the week:

• USA Today: More homes get multiple offers; downturn may be nearing end (http://www.usatoday.com/money/economy/housing/2009-05-05-foreclosure-home-sales_N.htm?loc=interstitialskip)
• Business Week: Want to Sell Your Home? Lower Your Price http://www.businessweek.com/lifestyle/content/may2009/bw2009055_075566.htm?chan=top+news_top+news+index+-+temp_news+%2B+analysis)     
• RISMedia: Relocation.com Survey Shows Consumers Moving Further Due to Economy (http://rismedia.com/2009-05-05/relocationcom-survey-shows-consumers-moving-further-due-to-economy/)  – This is a good reminder to consumers on why they should choose an Agent who is affiliated with a large, global real estate company that has the breadth and influence to reach the largest pool of buyers.
• NYTimes: Where Home Prices Crashed Early, Signs of a Recovery (http://www.nytimes.com/2009/05/05/business/economy/05turnaround.html?_r=2&hp) 
• Realty Times: Real Estate Outlook: Sales Rising in Some Areas (http://realtytimes.com/rtpages/20090505_realestateoutlook.htm)

Housing Sales Rebound  May 5, 2009
Pending homes sales nationwide rose an unexpected 3.2% in March.  Apparently the low rates and tax credit for first time buyers are creating traction.  In addition, construction spending rose .3%.  Although this was mainly due to government projects it was the first increase in 6 months.  Lastly, Fed Chairman Bernanke suggested in Congressional testimony today, that he expects the economy to turn positive late this year.  However he cautioned growth would remain sluggish for quite some time.

Is the End Near?  April 30, 2009
Mortgage rates continue to average well below 5 percent – 4.7 percent last week on average for 30-year fixed rate loans and 4.5 percent for 15 year loans. Rates like these are a major factor pushing applications.

Nearly 600,000 home buyers have already claimed either the $7,500 tax credit from last year or the $8,000 credit for this year, according to IRS data cited by the National Association of Home Builders.

Also of interest, new home sales have been showing signs of improvement. Last week the Commerce Department reported that March sales were off just 0.6 percent, exceeding analysts’ expectations, after climbing in February.

In other positive trends, interestingly enough, The Wall Street Journal reported this week, “Analysts say: The end (of declines) is near. While new home sales show signs of stabilizing as builders cut back on building and boom-bloated inventories are slowly absorbed, prices of both new and existing homes are still being dragged down by a flood of foreclosures. Still, the experts were optimistic that the federal government's efforts to stem foreclosures eventually will have an effect by the end of this year or early next year; Mark Zandi, chief economist of Moody's www.Economy.com,  even ventured (jokingly) a date when home prices would stop falling—December 15, 2009.”

==>>Prices cut on 1 in 5 homes  April 24, 2009 Denver Post

April 23, 2009
The National Association of Realtors said Thursday that home sales fell 3% in March from February, to an annual rate of 4.57 million, from a downwardly revised pace of 4.71 million units in February. Sales had been expected to fall to an annual pace of 4.7 million units, according to Thomson Reuters. http://www.usatoday.com/money/economy/housing/2009-04-23-existing-home-sales_N.htm?csp=usat.me
_______________________________________________________________________

First Time Home Buyers are Finally Fueling the Come Back!

The share of lower priced home sales have trended up, indicating a return of many first-time buyers. Sales in the upper price ranges remain stalled but there are two reasons for this. First, jumbo loans still are difficult to obtain right now—though that may change in the second and third quarters thanks to the government’s work to restore this—and second, now that first time home buyers are once again entering the market, it will take some time for the domino effect to take shape onto other price ranges.

Another interesting note, the Mortgage Bankers Association this week released its Weekly Mortgage Applications Survey for the week ending April 17. The index showed an increase of 5.3 percent from the previous week and that was a 76.9 percent increase compared with the same week a year ago. Yes, 76.9, that’s not a typo.

Whatever you think about what our government is doing to revive our economy, it seems some of the early work like the first time home buyer tax credit is working. Earlier this week Inman News reported that the preliminary numbers from the IRS suggest 1.4 million taxpayers will claim the federal first-time home buyer tax credit on their 2008 tax returns, meaning the program is likely to meet or exceed the 2 million target set by lawmakers before it ends November 30, 2009.

Finally and I think this is probably most notable, the Wall Street Journal reported this week that prices have fallen back into line with what the typical household can afford to pay in most of the U.S. The report showed that home prices are dubbed “fairly” valued in 202 of the 330 markets studied. That means the average price level is within a band 14% above or below the historical norm. Twenty-one markets are “overvalued” or between 14% and 34% above the norm. And 106 markets are considered “undervalued” or more than 14% below the norm.

Now I know some of you are scratching your heads and saying, how is the drop in property value a positive thing. But the fact is that though the ride was nice in the big real estate boom of the early 2000s, we couldn’t sustain those types of record appreciation levels without eliminating certain consumer niches, including first time home buyers. Now that levels are back within range, the first time home buyers are once again able to reenter the market which is why we are seeing such a strong surge in sales in that level.

It’s just a matter of time before we weed through the remaining banked owned inventory and we should begin to see prices stabilize. Once we see that, the remaining areas of the market should begin to see an upswing, too.

==>>Denver Resists Price Swings  April 5, 2009 Denver Post

April 10, 2009
We awoke Thursday morning to some very positive economic news—Wells Fargo reported a better-than-expected first quarter profit of $3 billion surging the company’s stock by 32% and boosting shares of many other big banks as investors bet that Wells Fargo’s peers may also post results that exceed Wall Street’s estimates. The hope by all involved is that the banking sector is stabilizing. Much of Wells Fargo’s recent success is in part related to the recent increases in mortgage loan applications which could be a strong sign that consumer confidence is on the rise.

Also revealed this week is the fact that new jobless claims fell more than expected. The Labor Department said Thursday that the tally of initial jobless claims fell to a seasonally adjusted 654,000 from a revised 674,000 the previous week. Analysts expected claims to drop to 660,000

This week there were so many positive headlines that, rather than provide you with my ongoing synopsis, I thought I’d give it to you straight from the horse’s mouth. Yes, even the media is now on board with the positive headlines which tells me that the market is definitely changing.

New jobless claims, trade gap fall; retailers see signs of hope; http://www.usatoday.com/money/economy/2009-04-09-jobless-trade_N.htm
Big rally on Wall Street; http://money.cnn.com/2009/04/09/markets/markets_newyork/index.htm?postversion=2009040918
The case for buying a home right now; http://online.wsj.com/article/SB123913901841798375.html
With affordability up, home buyers are returning to the market; http://www.nahb.org/news_details.aspx?sectionID=0&newsID=9000
Outlook on economy is brightening; http://www.nytimes.com/2009/04/07/us/politics/07poll.html?_r=1&scp=23&sq=economy&st=nyt
Real Estate Outlook: Promising Numbers; http://realtytimes.com/rtpages/20090407_realestateoutlook.htm
Denver: 10 Cities Where Americans Are Relocating; http://www.forbes.com/2009/03/30/americans-moving-cities-lifestyle-real-estate-relocating_slide_2.html?thisspeed=25000

March 30, 2009
This week, according to Reuters.com, U.S. mortgage applications jumped as record low interest rates spurred a surge in demand for home refinancing loans. The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, increased 32.2 percent to 1,159.4 for the week ended March 20. Refinancing accounted for 78.5 percent of all applications.

Furthermore, interest rates on mortgages fell after the Federal Reserve last week said it would buy Treasury securities for the first time in more than four decades as well as more than double its planned purchases of mortgage-related securities. www.Reuters.com  reported that “Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 4.63 percent, down 0.26 percentage point from the previous week, reaching a record low….Interest rates were well below year-ago levels of 5.74 percent.”

Meanwhile, according to Realty Times, housing starts took a surprise jump of 22 percent in February over January's depressed levels. Most of the increase was attributable to apartments and condominiums, but single family starts were up by one percentage point, and new home permits were up by 11 percent, after months of sharp declines.

Existing home sales are also seeing some good trends. NAR reported this week that sales activity for single family, town homes, condominiums and co-ops rose 5.1 percent to a seasonally adjusted annual rate of 4.72 million units in February from a pace of 4.49 million units in January.

March 20, 2009
First, CNNMoney.com reported a sudden, unexpected surge in U.S. housing starts. According to the Commerce Department, housing starts rose to a seasonally adjusted annual rate of 583,000 last month, up 22% from a revised 477,000 in January. The big surprise: Economists were expecting starts to decline to 450,000, according to consensus estimates by Briefing.com.

Furthermore, applications for building permits, considered a reliable sign of future construction activity, rose 3% to a seasonally adjusted annual rate of 547,000 last month. The other big surprise: Economists were expecting permits to fall to 500,000.

Also interesting this week, retail sales figures fell much less than expected in February, and surprisingly strong January sales were revised even higher. According to CNNMoney.com, “U.S. store sales showed a smaller-than-expected decline in February after an unexpected surge in January that was bigger than originally reported…The Commerce Department said total retail sales fell 0.1% last month, compared with January’s revised increase of 1.8%. Economists surveyed by Briefing.com had been expecting a decrease of 0.5% for February.”

So, is it safe to call this a trend? Are we out of the woods yet? It’s tough to say. In all honesty, you don’t know whether or not you’ve hit bottom until you’re on your way back up but it seems some of the critical signs are starting to show signs of life which is welcome relief for our wounded economy.

Also in the news this week, the Federal Reserve announced plans to purchase up to $750 billion in mortgage-backed securities and up to $300 billion in longer term Treasury securities. Our representatives at the National Association of Realtors applauded the plans noting “This is great news for American home buyers and homeowners because mortgage interest rates will continue at historic lows.”

What this means for Americans is that a greater number of home buyers will be able to purchase a home and homeowners facing challenges will be able to refinance into better terms. As NAR noted, “We already are experiencing a great improvement in housing affordability due to historically low interest rates and the Fed’s move will push affordability conditions to the best levels in 40 years. In addition, continued low rates will lessen foreclosure pressure and help stabilize home prices sooner, as more Americans buy homes and draw down inventory.”

Along the lines of mortgage relief, the Treasury Department this week launched a new website for consumers seeking information about the Obama Administration’s Making Home Affordable loan modification and refinancing program. The site, www.MakingHomeAffordable.gov, offers features including interactive self-assessment tools that will empower borrowers to determine if they are eligible to participate and calculate the monthly mortgage payment reductions they could stand to realize under the Making Home Affordable program.

March 17, 2009
With real estate’s traditionally busy Spring selling season right around the corner, what do we expect March-June to do for our market this year? Well as much as I’d love to say that we anticipate a sudden, overwhelming surge in sales and that all of our challenges are behind us, I won’t. What I can say is that we are seeing some bright spots thanks to heightened consumer confidence, following the recent legislation passed by the Obama administration. January and much of February had many buyers sitting on the fence as they awaited the results of the Economic Stimulus Package. The lowering of interest rates, induction and improvement of the home buyer tax credit, reduction in preventable foreclosures and reinstatement of the higher loan limits now have some buyers getting off the fence.

For buyers who are out there and are considering buying right now, if you plan to stay in your home for a long period of time, you probably can’t go wrong purchasing today. Though we anticipate moderate home sales in the near term, buyers are ultimately expected to respond to much improved affordability conditions as well as the $8,000 first-time home buyer tax credit and the market will pick up. It’s just a matter of time. And when it does, that pick up will translate into more competition, less inventory and possibly higher home prices, resulting in less purchasing power for you. Consider my advice: waiting may cost you.

What I’ll leave you with this week is a reminder that, for buyers, opportunity is knocking this Spring.  Buyers need to be aware of today’s advantages—attractive interest rates, increased affordability, sizeable inventory, increased loan limits, $8,000 first time home buyer tax credit and motivated sellers.  The stars couldn’t be more perfectly aligned. 

For sellers, pricing is key.  Homes that are priced well (really well) and show well, are selling.  Home that aren’t, sit.  Consider this as you prepare your home for market and please, take my and your Agent’s advice, and don’t test the market.  Price your home well from the beginning to generate the largest pool of potential buyers.

March 3, 2009
First-Time Homebuyer Tax Credit

As you may have heard, significant improvements in the temporary First-Time Homebuyer Tax Credit were signed into law on February 17, 2009 as part of the American Recovery and Reinvestment Act of 2009 to provide a housing stimulus for first-time home purchases that occur between January 1 and December 1, 2009.

This is even better news for first-time homebuyers than the tax credit announced in April 2008 because not only has the tax credit maximum increased from $7,500 to $8,000—but more significantly—it does not need to be repaid unless the individual re-sells the home within three years.

There are several notable points about this federal income tax credit and they are:

• Credit maximum was increased from $7,500 to $8,000. The credit is calculated as 10% of the purchase price. Example: If the purchase price is $70,000, the credit is $7,000.

• Removed the repayment requirement, provided the homebuyer does not resell the home for three years.

• Eligibility remains for first-time homebuyers only. In this case, a first-time homebuyer is defined as an individual who has not owned a primary home at any time during the three years prior to purchase, but who may have done so prior to that time. Although certain income limits do apply, the amount of the credit is the same for all taxpayers, married or single.

• To be eligible for the full tax credit, the homebuyer can have an annual adjusted gross income of no more than $75,000 ($150,000 on a joint return). A homebuyer with an annual adjusted gross income above that level and up to $95,000 ($170,000 on a joint return) is eligible for a reduced tax credit.

• The tax credit can be claimed on one’s individual or joint tax return for the purchase of any single-family home between January 1, 2009 and December 1, 2009. It can be claimed on a 2008 tax return (to be filed by April 15, 2009), an amended 2008 tax return, or a 2009 tax return. Individuals should consult a professional tax advisor for exact tax calculations and timing.

February 28, 2009
Let’s look at the numbers for the Denver market as reported by Metrolist for the first month of 2009.
 
==>>Click here for Denver/Metro Real Estate Report

Total properties closed in January were down 17.3% over last year. Average sales prices continue to decline with a 16.3% decrease in January year-over-year. The million dollar sales continue to see tough times with units closed down more than 51% for January. But, we did see a 19.4% reduction in inventory for the month of January. This brings us to more than seven straight months of 20% decreases, which remains to be a very positive trend. Mortgage rates at historical lows, coupled with record low home prices and the signing of the recent stimulus bill, may position the state of Colorado for real estate recovery in 2009.

February 20, 2009
It was a week full of stories and reports, both from the cynics and proponents of the American Recovery and Reinvestment Act of 2009. The $780 billion package was signed into law on February 17 and truly is the largest, most unprecedented recovery act in history.

The provisions of the bill were changing even up until hours before the House and Senate voted on the bill, but the final provisions were recently posted to NAR’s website. Click here to access the details and learn more about the housing elements that were included: http://www.realtor.org/government_affairs/gapublic/american_recovery_reinvestment_act_home?lid=ronav0019

Also announced this week was Obama’s $75 billion foreclosure prevention plan. The multipronged plan calls for modifying loans for borrowers both at risk or already in default and for allowing those with little or no home equity to refinance into more affordable loans through interest-rate reductions.

Click here to read the details of the prevention plan: http://www.realtor.org/RMODaily.nsf/pages/News200902190

Obama’s administration said Wednesday that this prevention plan will help up to nine million people avoid foreclosure by providing government funds to provide incentives to borrowers, loan servers and mortgage investors to modify loans to affordable monthly payments.

I know many are wondering if this new program will help. Official guidelines of the plan won’t be unveiled until March 4.  In the meantime, I did find this article on CNN.com which may help in educating yourself:
http://money.cnn.com/2009/02/18/real_estate/Obama_foreclosure_plan/index.htm?postversion=2009021911

==>>Bloomberg Reports U.S. Pending Home Resales Rise as Prices, Rates Drop
Bloomberg reports, "More Americans signed contracts to buy previously owned homes in December for the first time in four months, signaling slumping prices may be boosting demand."

February 6, 2009
The coming week will likely be an interesting one in Washington, D.C. as lawmakers make the final decisions on the Economic Stimulus Package.  It will be exciting to see the details unfold and the plan take shape as lawmakers work to quickly restore our ailing economy.Locally, we’re seeing some interesting trends.  As we continue to work through our bank owned properties, it is a welcome sight to finally see banks responding to short sale offers.  Couple that with the fact that with interest rates so low, buyers—especially first time home buyers and some investors—are finally beginning to feel the need to come off the fence and take action.  The hardest hit markets are new construction and the upper end.  Both are nearly at a stand still though as prices begin to stabilize and we finally weed through the bank owned properties (later this year), we should begin to see a domino effect that ultimately benefits all price ranges."