Monday, April 3, 2006

Staging a Home
Submitted by Michele Merritt of Designs with Merritt

A Guide for a Quick, Top Dollar sale

When selling your home, there are things that need to be done in preparation for your sale. Our Goal is to:

*Get top dollar for your home
*Sell your home as quickly as possible
*Set your home apart from other homes in both perceived and actual quality

There is a lot of psychology and emotion when buying a home. The goal is to have the buyer drive up and look at your home with interest from the curb.

Once inside, the buyers need to feel comfortable, and able to picture themselves in the home. It must appeal to all of their senses, including their sense of aesthetics. It often does not take much time, money, or effort to improve the look and feel of your home, but it can really pay off. Here are some pointers for sellers:

*Make sure your home is very clean. No one wants to buy someone else’s dirt. If you are not good at cleaning, consider hiring someone to clean, especially before your open house.
If you have carpet, get it cleaned, unless it is in great shape. It is much cheaper than having to replace it. People notice carpet condition.

*Make small repairs that you may have put off. If people notice cracks, and chips, or peeling paint, it makes them think you may not have kept up on the bigger more important repairs and maintenance.
Clear out the clutter! You want your place to seem calm, and spacious. People will write your place off if they don’t feel good in it. Don’t make potential buyers have to imagine how good it could look.
Focus on curb appeal. A buyer will make up at least 25% of their opinion about your home before they walk in the door. What does your yard and porch say about your home?

*White is great for hospital, but it is a cold color. Add some neutral color to your walls if possible. It is the cheapest way to add to the aesthetics of your space, as well as making it cozier and more elegant.
Bathrooms and kitchens are selling features. Clear off counter tops. Have a few accessories on the counters to make it lively and lived in, but never cluttered. Consider replacing outdated hardware, lighting and sinks.

*If your home has too much furniture, find somewhere to store it. The home should look lived in, but never cramped. Buyers will think they won’t have enough room for their own belongings in the space.
Accessorize and depersonalize. Having pictures, plants, vases and lamps helps a home feel warmer. Just avoid going overboard. Take some of your family photos down, so the potential buyers can picture their own family and friends in the space.

*On the day of your open house consider putting some slice and bake cookies in your oven, or cinnamon potpourri, fresh bread, or tomato sauce on the stove. The sense of smell is the strongest and most emotional. Scents like pumpkin pie spice appeal to people and will make them want to stay in the space. Your property will stand out.

This may seem lengthy or daunting, but it is worth your effort in dollar signs, and less aggravation in the selling process. according to www.StagedHomes.com, a leader in home staging services, statistics show an average of a 3% minimum increase in final sales price on homes that had been staged, versus those who had not. On a $300,000 home, that's a $9,000 increase-and well worth the home staging fees.

If you would like help getting your home ready to sell, from landscaping ideas, to picking paint colors, Designs with Merritt is available to help. We specialize in helping people get their homes ready for sale and giving them the advantage in the competitive real estate market.

Email Michele Today: michelemerritt@hotmail.com or see her articles at Barton Real Estate
posted @ 01:38 PM MST [link] [Karma: 3 (+/-)] [3 Comments ]

Saturday, March 11, 2006

How Much are Closing Costs
Joe Wilson
MortgageMax

Approximately $2,200 in closing costs are fixed. This amount includes fees such as: Appraisal, Credit Report, Tax Related Service, Processing, Underwriting, Title Work, Wire Transfer, Closing, and Recording.

Your mortgage broker origination fee is a percent of the loan and varies depending on the loan. The industry average usually ranges from 1%-1.5%

The total costs of your loan can be estimated in the following table:
Loan
Amount
Costs
(% of loan)
> $300,000
1.5% or less
$300,000-$200,000
1.75%-2.0%
< $200,000
2.0-2.5%

Other costs that you may encounter when getting a loan are your Homeowner’s Insurance, Taxes, and Interest costs. These are costs you will pay regardless of the loan you do. Your current lender will refund to you insurance and taxes that they are holding on your behalf after closing.

HOW TO COVER THE COSTS:
Your approach to covering the closing costs of your loan may differ based upon how long you are planning on having the loan.

If you plan to have the loan for less than 3 years, the following is the order in which you should consider covering your closing costs:
1. Increase the interest rate, allowing the bank to pay for some or all of the costs (sometimes known as a no-cost closing).
2. Increase the loan amount to cover the closing costs.
3. Pay the closing costs with cash at the closing.

If you plan to have the loan for more than 3 years, the following is the order in which you should consider covering your closing costs:
1. Pay the closing costs with cash at the closing.
2. Increase the loan amount to cover the closing costs.
3. Increase the interest rate, allowing the bank to pay for some or all of the costs (sometimes known as a no-cost closing).

MortgageMax has a $800 gift certificate to giveaway to the Historic Broadmoor Hotel in Colorado Springs. Click here to enter.
posted @ 04:26 PM MST [link] [Karma: 5 (+/-)] [114 Comments ]

Friday, February 10, 2006

Looking for that vacation home? Maybe a group is better to help you buy
Did you ever think of owning that place in the Vail Valley? Steamboats, Breck? The thought of having one is far more romantic than payng for it. But you could consider buying it with a group.

Buying with friends and family is a good idea right up to the time that things go bad, so if you decide to go this way, protect the others and yourself from each other. This is much easier to do when you ae friends than after things have gone bad.

Create an Agreement Document

One way to get this done is to get it all on paper. Easiest if everyone is an equal owner, harder if you have shares but then even more necessary.

You mus specify
Dates each owner has primary use of the property
Shared costs for each owner whether they use it or not (Mortgage, insurance, furniture)
Shared costs on usage (cleaning service, utilities, etc)
Responsibilities you may share such as improvements, opening or closing it for the season (if it is a seasonal usage type property).
It is easier to set exclusive rights for specific times, or pay for the time uses. Because a ski resort may be more desirable on the Holiday weeks, you may want to assign a value to different months through the year. Someone getting Xma and New Years week may give up all of July to another owner to even it out.
How often you get to use the house may be gauged by how much money you put in.

Be precise in you agreement

You can pay a few thousand dollars for an ownership agreement. Or you can do it yourself. Sometimes a lawyer as a third party can be useful to level the playing field, and no personal issues can easily arise.

You should take into account a monthly amount for repairs, maintenance in the like even if you don't need it now. You can hold that money, similar to an escrow account for taxes and insurance but for costs that are a sa much choice as necessity.

You also want to decide how you move forward on an expense, such as new furniture or retiling the bathroom. Onc esimple rule is set an amount that has to be approved. For example, someone replaces a poted plant that was blown over by the wind for $25, they can make that decision and use the maintenance account. But an appliance over $200 may need approval by vote from everyone.

Not having these specifics can really strain the relationships between owners. Think of every decision that might need to be made, and plan how you will do that on paper. It will make everything much smoother throught the tenure of your ownership.

Don't forget stipulatons about pets.

Renting

Are you going to recoup some of the cost by renting shor term to vacationers? You'll need to decide to rent or not. Only 14% of vacation-home buyers rent their second or vacton home according to the National Association of Realtors. If you are renting, you will want to find furniture that makes sense for clients as well as yourself, and you may want to consider not having anything of your own on the property, unless you ahve a locked off closet or room that is "Owner Only" access.

Check out all the sites for renting to see what a property might expect to bring in. Some places to look:

VRBO.com
rentalo.com
cyberrentals.com
rsvacation.com
gotyourspot.com

There are dozens more that are good and hundreds more that are probably not as effective. Know your makret if you are going to rent. make sure it is worth it. There are risks having strangers in your home. There are also tax consequences to renting you should follow.

Co-owners who rent out their property often form a limited liability company to protect themselves in case of a lawsuit. You can set up an LLC or make a similar arrangement with a lawyer when you draft an ownership agreement. In addition to homeowners insurance for your vacation home, you might also want an umbrella policy to supplement your liability coverage.

Exit strategy

You or your partners may want to get out of the property for many reasons Reasons such as wanting a larger place, a different locale, a catastrophic event such as a death or divorce are just some of the reasons.

Make sure you decide what happens in the case of death of one of the owners. A last will and testament should define exactly what happens to the ownership of the party in question. A buyout provision forl owners who want to leave is necessary, and if not defined , will seriously hamper how much they deserve to be bought out. You can create it with a term limit, so you can review it every few years ot see if it still fits .

Dykes's group, for example, plans to review their agreement every five years. They also have a buyout arrangement under which a partner who wants out and those who stay would get separate home appraisals. The remaining investors would pay the partner who leaves in cash, based on an average of the appraisals.your goals

Without a buyout agreement, you can sue for partition, forcing the property to be sold and the profits divided among the partners. Partition orders usually set a price if partners want to buy out a disgruntled colleague. But partition lawsuits are expensive and rare.

It's less costly and more profitable for partners to decide among themselves when and at what price they want to sell their property. Rather than settle the matter in court, it's generally better for the parties to split the difference between disputed buyout offers or to come up with a figure based on separate appraisals.

posted @ 01:53 PM MST [link] [Karma: 4 (+/-)] [No Comments ]

Sunday, February 5, 2006

I need a place to live. Does anyone have $20MM to lend me?
It happened. A home went up for sale in Denver for an unprecedented $20 million this week, the most expensive home ever in the Denver market.

The House stats:

*23,000 square foot
*Cherry Hills Village
*3 acres
*9 bedrooms
*7 bathrooms

The basement is a mere 5,300 square foot, but at least it is fully finished

Did we mention the 9 fireplaces!

Gene Schneider who reportedly made his money as a Cable Cowboy owns the home.

Plan on paying over $100,000/month if you put down 20% ((a cool $4 million).

Taxes run about $83,000

The HOA is a bargain at $745 per month.
posted @ 03:16 PM MST [link] [Karma: 1 (+/-)] [192 Comments ]

Tuesday, January 31, 2006

National Foreclosures Up in 2005
(January 24, 2006) -- The U.S. residential foreclosure inventory saw gains in each quarter of 2005, according to a new report from RealtyTrac.

Between the first three months and the last three, the number of new foreclosures ramped up 25 percent—with a total of 846,982 homes entering some stage of the process last year. However, RealtyTrac CEO James J. Saccacio stresses that, although seemingly high, the number of properties entering foreclosure actually represents fewer than 1 percent of all American households.

The report identifies Florida as the state with the highest foreclosure rate. Its 121,843 reported foreclosures accounted for more than 14 percent of the nationwide total for 2005, according to RealtyTrac. Florida was followed in foreclosure activity, respectively, by Colorado, Utah, and Texas.

Other states with foreclosure rates ranking among the 10 highest in the country included Indiana and Ohio. Among the states reporting the highest number of new foreclosures, meanwhile, were California, Illinois, New York, and Michigan.

"Over the past few years, we've seen historically low mortgage rates, consistently escalating home prices, and steady, strong employment," Saccacio notes. "This has translated into relatively low levels of foreclosure properties, particularly bank-owned properties. With interest rates rising and an apparent slowing of property valuations in most markets, we'll be watching closely to see if there's a material effect on the number of foreclosures in 2006."

Source: Inman News Features (01/23/06)
posted @ 12:09 PM MST [link] [Karma: 6 (+/-)] [8 Comments ]

Friday, January 27, 2006

Denver Skyline gets a new addition
55-story condo tower joins skyline-transforming rush

By Margaret Jackson
Denver Post Staff Writer
DenverPost.com

A Toronto company on Thursday announced plans to build a 55-story, 200-condominium residential tower in downtown Denver, adding to a frenzy of development proposals that could dramatically alter the city's skyline.

Great Gulf Group said it plans to spend about $165 million on the building east of Larimer Square at 14th and Lawrence streets, near Lower Downtown.

It would be among the city's tallest buildings.

The company on Wednesday purchased the 25,000-square-foot site from Denver-based Westfield Development Co. The sale price was not disclosed.

"I think it's the best location in Denver," said Gary Switzer, Great Gulf's executive vice president. "We're on the border of the central business district where the zoning changes in LoDo. It's the last opportunity to do a tall building and a very dense building without being restricted by the height limits of LoDo."

Some real estate skeptics doubt whether all of the proposed buildings will be built. But one competing developer praised the recent moves.

"I think it's good that we're finally starting to pull the residential base into the downtown core," said Michael Geller, who hopes to build a 31-story condo tower near 14th and Speer Boulevard. "The lack of a residential base is something that's been holding this downtown back. The more people we have downtown, the better chance we have of bringing better-quality retail. I strongly applaud any of those kinds of project that will start to bring people into downtown."

John Huggins, Denver's director of economic development, said he thought there's demand for at least the 1,000 or so downtown residential units now on the drawing board.

"Perhaps some of those proposed projects may change as they move to fruition, but I believe they all will be built in one form or another," he said.

Founded in 1975, Great Gulf developed a 36-story tower in Toronto, as well as a number of single-family subdivisions in Texas and Florida. Its Ashton Woods Homes subsidiary developed The Pinery, a 771-home development in Parker.

The company's proposed Denver tower is a few blocks from the Denver Center for the Performing Arts, across the street from a proposed Four Seasons hotel and condominium complex, and adjacent to the Larimer Square Historic District.

However, the site is not part of the historic district. Its zoning is consistent with the rest of downtown, so the project's height should not be an issue, said Julius Zsako, communications director of community and planning development for Denver.

The Four Seasons, proposed by Hotel Teatro developers Michael Brenneman and Jeff Selby, is expected to be about 50 stories tall and include 140 condominiums atop 20 floors of hotel rooms.

Asked about the plans for a competing residential tower across Arapahoe Street, Brenneman cautioned that Great Gulf needs to be sensitive "when you're backing up to Larimer Square. That's truly one of our gems. It's a very old brick block, and it needs delicate handling."

Also in the works

Other downtown projects announced recently:

A 41-story tower near the Colorado Convention Center from Clayton Lane developer Randy Nichols.

An age-restricted condo tower near the convention center by developer Charlie Woolley.

Osborn Development's 31-story One Lincoln Park.

Geller's 31-story condo tower.
Geller's site was part of a land swap in which Mayor John Hickenlooper's administration gave up the land in exchange for property it needed for the justice complex.

Geller has been seeking a boundary change that would put his property out of the historic district and allow the tower.

Councilwoman Judy Montero has convened a group of stakeholders to work with Geller on plans for the site.

"The tower is still being talked about, but we're also talking about what it would look like if he developed it within the historic district," said Kim Kucera, a Montero aide.

Geller said he also is considering several 55- to 85-foot shorter buildings interspersed over the site.

Units in Great Gulf's tower, designed by Peter Clewes of Toronto-based architectsAlliance, are expected to range from 1,200 to 7,000 square feet, with prices starting around $550,000. The building's amenities will include a doorkeeper, concierge, valet parking and on-site recreational director.

"I think there's a really strong market for those units from people who are living downtown in dated high-rises and on Cheesman Park," said Dee Chirafisi, broker/owner with Kentwood City Properties who is marketing the project for Great Gulf. "Fourteenth and Lawrence has the advantage of location. People who are looking for the high-rise lifestyle generally want to be right in the middle of everything."

"Working on a hunch"

The Denver project is somewhat of a gamble for Great Gulf, which is betting on people selling large houses to relocate downtown.

"We're working on a hunch because of what we've seen in other cities," Switzer said. "They really want to be downtown and close to shopping and have walkability. They don't want to get in their cars."

Whether all the projects will be built is a great debate in real-estate circles.

When plans for another of the proposed towers came to light in December, an official from the Downtown Denver Partnership said then that the flurry of proposed high rises was a testament to the demand for housing but warned not all could be built.

"The feasibility of all of them coming to fruition depends on the assemblage of land, financing options and all the different pieces that have to come together for development. That will probably weed some of them out," said Kate Peterson, housing program manager for the Downtown Denver Partnership.

Staff writer Margaret Jackson can be reached at 303-820-1473 or mjackson@denverpost.com.

posted @ 12:19 PM MST [link] [Karma: 1 (+/-)] [189 Comments ]

Monday, January 23, 2006

Mile High Bankruptcies and Foreclosures
Rocky Mountain News

Sometimes less is best in forecast for economy
January 21, 2006

Rob Reuteman

I do a fair amount of homework each January prior to speaking at the annual Vectra Bank Colorado Economic Forecast Breakfast, which was Thursday. I go over much of our economic coverage for the past year, condense it and regurgitate it. Some of it is worth sharing, such as:

There is reason to be optimistic about Colorado's two worst economic indicators - bankruptcies and foreclosures. In 2003, we led the nation for the rate of increase in bankruptcies. In 2004, we were second, behind New York, with almost 28,000. Last year there were nearly 48,000 bankruptcy filings in Colorado as of late December, a 54 percent increase over the previous year. The final tally for the year is not out yet.

What's good about that? The new federal bankruptcy law went into effect in mid-October. For the first time, it forces people who file to pay back their creditors to some extent. Many people wanted to file before the law went into effect. On Oct. 15, the last filing date before the federal law took effect the following Monday, 3,400 people filed in Denver's bankruptcy court. There were lines around the block, and we ran pictures of them. For the entire month of November, only 130 people filed. In December, the tally appears to be fewer than 400, and that's good news.

With foreclosures, the emerging picture is similar: It's still bad, but the rate at which it's getting worse is slowing down. Last year, there were 14,400 home foreclosures in Colorado. That's the second-worst year ever here and ranks us fifth in the nation. The worst year for foreclosures is still 1988 - more than 17,000 Coloradans lost their homes as the savings and loan industry collapsed.

The silver lining? In 2002, foreclosures posted a 55 percent increase over '01. In 2003, they posted a 44 percent increase over '02. In '04, the increase over 2003 was 31 percent. See the trend here?

Last year's 14,000-plus foreclosures were only 16 percent more than 2004, nearly half the rate of increase from the year before. Patty Silverstein, president of Development Research Partners and another speaker at the Vectra Bank breakfast, predicts 15,000 home foreclosures this year, a 7.1 percent increase over last year. We appear to be getting there, folks.

Speaking of residential real estate, in a better light: The median price of a Denver-area home rose 4.4 percent last year, to $246,600. The appreciation rate in Denver has stayed within a 4 percent to 6 percent range since 2002. That's a far cry from the 15 percent annual appreciation local homeowners enjoyed in 1999 and 2000. But rate of appreciation means we don't need to worry about any real estate bubble bursting here. Look at Phoenix, which Silverstein said had a 55 percent rate of appreciation last year. That cannot sustain itself. She rattled off slightly smaller rates for Tucson, Las Vegas, San Diego and several cities in Florida. Those folks ought to worry. We don't need to. The National Association of Realtors forecasts a 7 percent rate of appreciation for homes along the Front Range for the next two years. A bit worrisome is the current resale inventory in Denver of about 23,600 houses, up 13 percent from 21,000 at the end of 2004. Houses stayed on the market an average of 90 days last year, only five days more than the year before.

The third breakfast speaker was Jeff Thredgold, Vectra Bank's chief economist and a wonderfully entertaining and opinionated speaker - for an economist. A few of his musings are worth passing along:

• The Dow will hit 12,000 this year. It finished down 213.32 to close at 10,667.39 on Friday. Thredgold credits "the quality of U.S. companies, which have gone from downsizing to right-sizing. The growth in corporate earnings has been incredible in the past three years."

He also cites baby boomers. "We've all read about how the 74 million-strong generation is beginning to retire, with one reaching the age of 60 every eight seconds," he said. "They have not saved aggressively for retirement. In the next few years they will begin playing catchup to get to where they need to be."

His final reason: "Fear and greed are still the two main motivating factors for investors. After the stock market tanked five years ago, the aggressive money went into real estate. As the real estate market cools because of rising interest rates and the threat of a bursting bubble, the money will move back into the stock market."

• Energy prices will stabilize over the next few years, Thredgold thinks, with oil settling in somewhere between $48 and $52 a barrel. "It may hit $80 a barrel before we get there, but that's where it will end up," he said. "The Saudis don't want businesses and consumers switching to hybrids or clean-coal technology. The Saudis don't want us to have that conversation."

Business editor Rob Reuteman can be reached at 303-892-5177 or reutemanr@RockyMountainNews.com.

Copyright 2006, Rocky Mountain News.

posted @ 08:46 AM MST [link] [Karma: 0 (+/-)] [9 Comments ]

Wednesday, December 28, 2005

Housing-bubble shield

Article Last Updated: 12/28/2005 06:16 AM

Stable local home market seen as plus. Experts see a crash coming in some places, but the "sluggish" Denver market is viewed as sustainable.
By Margaret Jackson
Denver Post Staff Writer
DenverPost.com

Denver's real estate market continues to be stable in the midst of national talk about a bursting housing bubble, experts say.

The Denver market's growth is slow and sustainable, unlike skyrocketing markets in Phoenix and San Diego that are likely to crash as mortgage rates rise and the economy slows.

According to statistics released Tuesday, the median price of a single-family home in Denver increased 4.4 percent over the past year, to $246,613. The median price for condos increased 1.9 percent to $160,000.

"I think it says the housing market hasn't collapsed, but it's a sluggish market, particularly in terms of prices," said Tucker Hart Adams, a regional economist with U.S. Bank in Denver. "I think the parts of the country that are seeing these double-digit increases are just headed for problems down the road."

Nationally, the housing market is headed for a fifth consecutive yearly record, according to the National Association of Realtors. Existing-home sales are expected to rise 4.7 percent to 7.1 million this year, with the median price for all housing types surging an estimated 12.7 percent to $208,000.

In 2006, existing-home sales are likely to decline 3.7 percent to 6.84 million nationally, according to the association. But the median price is expected to rise 6 percent to $221,400.

Locally, the number of homes sold declined 1.9 percent to 53,005. But experts predict home values will appreciate anywhere from 4 percent to 6 percent next year.

Home prices appreciated between 10 percent and 14 percent each year from 1996 to 2000 before dropping to 2 percent through 2003, said independent real estate analyst Gary Bauer.

Another big concern is the 12.8 percent increase in inventory over last year. At the end of December, there were 23,572 active listings, a number that is expected to rise with interest rates, said Steve McGuire of Re/Max Professionals in Highlands Ranch.

The Federal Reserve recently pushed interest rates up for the 13th time this year, with two more rate hikes expected in January and March in an effort to slow the economy to keep inflation under control.

Analysts are afraid the rate increases will cause a drop in housing demand and prices, resulting in a slowdown in consumer spending.

"When your home price is going up, you feel more wealthy and spend more money," Adams said. "If prices aren't going up, even people who don't plan to sell their houses are just not going to feel as well off. They're going to save more and spend less. That's a negative for the economy in the short term."

Rising interest rates also will result in an increase in foreclosures as people who have opted for nonconventional loans are unable to make the higher payments.

"They don't have a lot of room to see interest rates go up ... or (have) anything in their lives go wrong," Adams said.

Staff writer Margaret Jackson can be reached at 303-820-1473 or mjackson@denverpost.com.

posted @ 02:45 PM MST [link] [Karma: 2 (+/-)] [8 Comments ]

Used home sales reach record $14.9 billion

Rocky Mountain News

URL: http://www.rockymountainnews.com/drmn/real_estate/article/0,1299,DRMN_414_4345766,00.html

Area's average price reaches $281,188, up 5.8 percent for year
By Gargi Chakrabarty, Rocky Mountain News

December 28, 2005

Metro-area home buyers paid a record $14.9 billion for previously owned homes this year, up 4 percent from 2004.
The average price of a home in the Denver area rose 5.8 percent this year to $281,188 - an appreciation rate that is in line with the past three to four years.
Home sales this year easily topped 2004's total of $14.35 billion, although about 1,000 fewer homes were sold. Only 53,005 sales were closed this year, compared with 54,012 a year earlier.
This year's hot spots were Cherry Hills, Greenwood Village, Washington Park, Congress Park and the Denver Tech Center.
"2005 obviously was a strong year," said Steve McGuire, a Realtor with RE/MAX Professionals. "We had a record in terms of sales closed this year. The only thing that worries me is the level of inventory - we are about 13 percent higher than last year."
Inventory is the number of available homes that are unsold, and a higher inventory can lower the value of homes. The reports by independent broker and consultant Gary Bauer, McGuire of RE/MAX Professionals, and Coldwell Banker Colorado show a current inventory of 23,572 homes this year - up 13 percent from 20,891 homes at this time last year.
The reports also show that a home sat on the market 90 days on average before it was sold this year, slightly longer than the 85 days in 2004.
A higher number of sales closed in the $400,000 to $600,000 range as well as in the $1 million and above category. But home sales were significantly lower in the $250,000 to $350,000 range, in part because first-time home buyers, who typically buy in this price range, were hit by rising gasoline prices and home heating costs. Also, they were more affected by mortgage rates that have steadily crept up this year.
"If anything about the Denver market concerns me, it is the lack of appreciation over the past two to four years compared to what other areas like California, Chicago or Florida have," said Chris Mygatt, president of Coldwell Banker Colorado. "But the good news is, Denver is a normal market where home values are appreciating at a modest rate. There is no fear of a real estate bubble here since prices haven't increased dramatically like in some other communities."
The median price of a home, or the middle price with an equal number of homes sold above and below it, rose 4.4 percent to $246,613.
This year's average and median price appreciation rates, although in the 4 percent to 6 percent range that has been the norm since 2002, are a far cry from the 15 percent appreciation rate from 1999 to 2000.
In contrast, California and Florida posted appreciation rates of more than 20 percent this year. Mygatt, however, said Denver could see a healthier appreciation rate next year.
That is because, historically, Denver has moved counter-cyclically to California, and California's real estate market is cooling down.
The National Association of Realtors has forecast that the Front Range will post an average appreciation of 7 percent each year in the next two years, Mygatt said. The NAR forecast is based on the job growth predicted in this region as well as the recent boom in the energy sector.
According to Bauer, the Denver market will continue to perform about the same in 2006, with homes appreciating at a 6 percent clip. Bauer said the inventory level is not a concern because Denver has seen similar or higher levels in the past four to five years.
"Inventory still is within line of the past few years," Bauer said. "I think it will be a nice 2006."

By the numbers

23,572 The inventory of unsold homes on the market in the metro area. That's up 13 percent from last year. A higher inventory can lower the value of homes, according to real estate experts.
7% The amount home prices are expected to appreciate each of the next two years.
90 Average number of days that a home sat on the market this year before it was sold. That's up from 85 days in 2004.
chakrabartyg@RockyMountainNews.com or 303-892-2976
Copyright 2005, Rocky Mountain News. All Rights Reserved.

posted @ 02:43 PM MST [link] [Karma: 3 (+/-)] [143 Comments ]

Tuesday, December 27, 2005

Higher end houses inflation proof?
A real estate investor friend gave me some advice ten years ago, he said, "buy the most espensive real estate you can afford. It has better price stability, will go up faster and sell quicker than the low end stuff". The thinking being: wealthy people never really go broke. Homes of the rich and famous are ALWAYS the homes of the rich and famous. Buy one, and you have a stable investment.

I have to say, although I have never bought a mansion; I have bought to the highest amount commensurate with my ability. And I have never lost money on real estate yet. So maybe he was right. Currently, high end homes are selling well in Denver (and the mountains). So the theory is currently holding true. read more...

Article Last Updated: 12/24/2005 08:42 PM

Wealthy feeling right at home

By Al Lewis
Denver Post Business Columnist
DenverPost.com

If there's a housing bubble about to burst, wealthy homeowners may not see it coming.

In a survey of wealthy Americans by Pittsburgh-based PNC Financial Services Group Inc., 65 percent said they expect to see double-digit increases in the value of their homes over the next five years.

Thirty-one percent said they anticipate an increase of 20 percent or more.

And only 7 percent said they expect to see any decline in the value of their homes.

The survey canvassed 1,500 people with liquid assets of $500,000 or more.

"Many among the wealthy will not believe there is a real-estate slowdown until they see it reflected in their property values," said Nicholas Buss, PNC's real- estate economist.

So far, that's not happening for owners of high-end homes, even as slowly rising interest rates have softened the residential real-estate market overall.

In October, sales of existing homes fell 2.7 percent nationally from the year before - and by 10.2 percent in Denver.

The median price of a home, nationally, is $218,000. In Denver, it's $250,000. But homes priced above $750,000 are still selling quickly, said Edie Marks, a broker of high-end homes in Denver. Homes priced above $1.5 million are selling even faster, she said.

Marks said few of her clients worry about potential risks in the real-estate market.

They are generally buying a big house to reward themselves for career success, such as finally becoming CEO of their company or selling the family business for a lofty price.

"It's not that they need 10,000 square feet," said Marks. "They just enjoy the life style it affords them."

Bruce Alexander, CEO of Vectra Bank Colorado, recently put his high-end home in Cherry Hills Village up for sale. "We were lucky enough to sell it in three days," he said.

Alexander, who describes himself as a conservative banker, said he bought the house 12 years ago and is finally moving up to a more expensive home to accommodate his now-larger family.

As a banker, Alexander says he is often skeptical of the valuation that people - whether wealthy or middle-class - put on their real-estate equity.

"Paper wealth is not necessarily liquid wealth," he said. "In fact, most people take that wealth and just get deeper in debt."

I suspect some people are able to afford expensive homes thanks only to the advent of interest-only loans. These loans are now wildly popular, particularly among borrowers who are speculating in real estate or stretching to buy a home.

Borrowers pay interest on the loans but don't have to pay down the principal until years into the future. Borrowers hope to sell or refinance before the loan comes due. But if they can't, they may be forced to sell their home at a loss or refinance at rates they can barely afford, or be forced into foreclosure.

The Mortgage Bankers Association reports that interest-only home loans accounted for 23 percent of all U.S. mortgages from January through June. That's up from 17 percent during that same period last year.

Marks said most of the high-end buyers she sees do borrow to buy their homes, preferring to invest their money elsewhere. She said many even use interest- only loans, but her clients generally have the assets to pay off the loans if necessary.

Meanwhile, the Federal Reserve Bank is sounding alarms about interest-only loans. Last week, it urged the nation's banks to tighten lending standards on nontraditional loans.

"Agencies are concerned that these practices can present unique risks that institutions must appropriately manage," the Fed said in a statement with other bank regulators Tuesday. "They are also concerned that these products and practices are being offered to a wider spectrum of borrowers."

If more people are buying high-end homes with interest-only loans, that can only mean more risk to the housing market going forward. But why worry?

Said Marks: "Anybody who buys a house is an optimist."

Al Lewis' column appears Sunday, Tuesday and Friday. Respond to Lewis at denverpostbloghouse.com/lewis, 303-820-1967, or alewis@denverpost.com.

posted @ 09:58 AM MST [link] [Karma: 6 (+/-)] [106 Comments ]

Colorado Real Estate Bubble a myth?
Thibodeau has some good points which I have to agree with. Colorado porperty prices have not been skyrocketing like the rest of the country. If the calm rise in prices is inidicative of our purchasing habits, this may bode well in a downturn recognizing that Colorado is well priced, and people here will not panic in a dowtnurn as they did not speculate ridiculously during the upturn..

Article Last Updated: 12/26/2005 02:05 AM

Real estate prof pricks housing-bubble theory CU's Thomas Thibodeau says Colorado's housing prices are based on sound economics. Others point to a high rate of risky mortgages.
By Aldo Svaldi
Denver Post Staff Writer
DenverPost.com

Boulder - Several top economists argue that Colorado's residential real estate market is stretched thin and vulnerable to falling prices. But a University of Colorado professor says they're wrong.

Taking what is an increasingly contrarian position, Thomas Thibodeau, the university's first full-time real estate professor, says Colorado's housing market should remain fairly insulated against big price drops.

"Prices today in Colorado are based on sound economics," he says. "There is no speculative bubble."

Inflation, not speculation, can explain most of the gains in Colorado home prices the past decade, Thibodeau says.

Colorado last enjoyed double-digit gains in sale prices of existing homes in 2000 and 2001. Since then, the state has lagged the rest of the country when it comes to real estate appreciation.

Still, prices are rising locally. And rising construction costs, up about 4.6 percent in the past year, can explain most of those gains, says Thibodeau, who from 1983 through 2004 was on the real estate faculty at the Cox School of Business at Southern Methodist University.

Costs for land, building materials and construction labor are running ahead of overall inflation, he says.

From a longer-term perspective, several trends work in real estate's favor despite rising interest rates, Thibodeau says.

Investors who favored stocks the previous decade are putting a larger share of their net worth into real estate, including second homes and investment properties.

More single people are buying homes.

The state should create 52,100 jobs next year, according to a forecast for 2006 from CU. That job creation will support the housing market.

"That takes care of a lot of vacancies," says Thibodeau, who received a doctorate in economics and a master's degree in statistics from the State University of New York at Stony Brook in 1980.

After completing his doctorate, Thibodeau became a research associate in the Housing Division of the Urban Institute in Washington, D.C.

Some of the state's top economists disagree with Thibodeau's conclusions. While home prices may not be as overstretched, consumers in the state are, they say.

Colorado borrowers are among the most heavy users of interest-only and adjustable- rate mortgages in the country, believers in a real estate bubble say. Those loans are considered higher-risk products that leave borrowers more vulnerable to defaults and foreclosures.

Already, foreclosures in the Denver area are approaching levels last seen during the real estate bust of the late 1980s.

"We have just as many problems," said Tucker Hart Adams, a regional economist with U.S. Bank. "We are just as likely to lose that house."

And despite a huge drop in new people moving to the state and tepid job growth, homebuilders have continued to build, said Bill Kendall of the Center for Business and Economic Forecasting in Denver.

Colorado's nonfarm payrolls remain below the highs reached in the summer of 2001, and net migration to the state has dropped from 68,400 in 2001 to around 27,000 this year.

Despite that, builders added 210,000 homes to the state's housing stock in that period, Kendall said. That can't be explained unless speculative buyers snapped up investment properties and second homes.

Thibodeau acknowledges that home prices could fall in some overheated markets, especially if interest rates rise.

He just doesn't see Colorado in that category.

Thibodeau doesn't see how a state economy creating more than 50,000 jobs can occur at the same time as a housing crash.

When housing markets in Texas and Colorado struggled in the late 1980s, he says, both states were economically weak because of a slumping energy industry.

Staff writer Aldo Svaldi can be reached at 303-820-1410 or asvaldi@denverpost.com.

posted @ 09:50 AM MST [link] [Karma: 2 (+/-)] [188 Comments ]

Monday, December 19, 2005

Real Estate Season is Almost Open
It is that time of the year again. The holidays? No. That’s not what I mean. Real estate transactions spike in the spring and early summer. For both buyers and sellers it is a good time to be in the market. Inventory increases so buyers have a chance to find the home they really want, and buyers increase creating a market where you can get a lot of people to look at your home.

Buyers just have to start looking. There are great sites out there to use to get a jumpstart whether or not you have an agent. One new site is homepages.com. Yes, we are an affiliate, but we had dozens if not hundreds of web sites to become a partner of. Our marketing budget and strategy decided we would choose one site to market our services this year, and we chose this one.

I’d paraphrase, but they are pretty clear in their goal, so here is what it says at the site:

“At HomePages our goal is to give you a complete picture of where you want to live, so you can make the best decision about buying or selling a home. HomePages combines aerial neighborhood views with local home listings and area information such as school locations and test scores, shops and restaurants, crime data, recently-sold-home information, weather, and much more.
Through highly precise "zoomable" aerial imagery, HomePages provides an efficient and effective way to view homes and neighborhoods from the comfort of your own home. What's more, we help put you in touch with experienced, knowledgeable real estate agents in the community who can assist you with your home buying and selling needs.”

This new search engine will probably have a lot of copycats by the end of next year, but today they are in a class by themselves. Check it out at homepages.com
today. Or just click the link on the right side of this page.

As some one who is looking to sell their home, now is the time to get an agent to help you decide on a price and what you can get done between now and February 1 to make your house as marketable and valuable as possible.

A dozen things you can consider that are inexpensive and give you value in selling your home.

1. Empty it out
A home with space is always attractive. Although we tend to fill our house with things we love and can’t do without, that give it a homey feel for us as the occupant. When you are looking for a home, you want space, for your stuff, others people’s stuff is clutter. Get rid of it until you move into your next home. Put it in storage if you can afford it, if not use the attic garage or basement storage to keep it out of the way. A home with great space and one basement room that is packed for storage is more attractive than a cluttered home with an uncluttered storage room.

2. Clean it up
Your basic spring cleaning is in order. Get the windows, door trims, behind the refrigerator, you name it. If you can’t see it without moving it, move it. You potential buyer might.

3. Landscaping
Trimming the lawn edges and trimming bushes and trees add curb appeal immediately. Consider putting in some inexpensive flowers as soon as it starts warming up. The backyard is a magnet for storage of stuff that belongs in the garage or the garbage. Try to look at the objects outside your house as if you are approaching it for the first time. That functional but rusty and mud caked wheel-barrow may not be character, it may be ugly.

4. Interior walls and trim
Paint doesn’t have to be expensive. First of all, white, even off white shades makes rooms look bigger. If you have nicely painted color rooms, you may want to leave those, but if anything needs to be painted, stop by a paint shop; Home Depot or Lowe’s and look at the leftovers and returns bin. There is always white and it is always cheap. Look for the better brands as you will get a nice look at the discount price.

5. Exterior paint
If the whole house needs to be painted, it may cost you. But using the same method for outside paint (buying the leftovers) and just touching up trim can add nice appeal to your home. The first impression is important; take this tip to the bank. Don’t forget the fences in need of painting. If the paint is great, but there is dirt or mold, power wash it.

6. Basic maintenance
Are there slats missing from your wood fence? Get one, make sure it matches and put it n there. Even if it is obviously newer, t is better than the gaping hole. It’ll let a potential buyer know you notice things that need to be fixed and have made some effort to keep you place up to date. If you can paint the whole fence after you repair it will be flawless. Tuck pointing can be costly if you need a whole house redone, but if you just have a small portion of one wall, it is worth it to hire someone if you can do it yourself. Check chimneys, even if they are from a bricked up fireplace and you don’t use them.

7. Open the windows
On nice days, air out the house. We lock in winter and air ca get stagnant. If you store things in a room that can get a bit musty, empty it out, clean it up, throw out anything that may have gotten moldy and reorganize it to look useful.

8. Take an inventory
Look at your house look at the great features. Did you upgrade anything? Make sure you make that clear to your agent. You have two bathrooms, but maybe you have a towel warmer or a steam shower. Are the wood floors in great shape? Are you going to leave anew washer and dryer behind, have a new electrical box with more capacity, a house surge protector, Xeriscape landscaping. Get it on your list of house features. If you had it because you valued it, chances are someone else will find it valuable.

9. Clean the roof and gutters
Make sure the gutters are clean and work properly. Sometimes branches dirt or leaves find places on the roof congregating near chimneys and other outcroppings. Take a walk up there or hire a handy man to clean up.

10. Lights
Make sure every light fixture has a WORKING light bulb in it.

11. Fixtures
Tighten and loose faucets, toilets and the like. Check ceiling fans, lighting fixtures and sconces to insure they are tight and no plaster or holes appear.

12. Floors
Wood floors can be made attractive with little elbow grease and wood floor products that fill scratches and bring back the shine. Products for tiled floors are readily available and pay special attention to old grout that can be cleaned or touched up. Floors can often be made to look new with some TLC.

posted @ 08:02 PM MST [link] [Karma: 0 (+/-)] [8 Comments ]