Colorado Real Estate

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-Shiller index.

Released Tuesday, the index reveals how 20 cities are faring as the economy continues to batter the residential market. The 20-city composite index shows home prices were down 0.6 percent in April, and off by 18.1 percent since April 2008.

On its own, Denver showed a 1.5 percent increase in prices for April — only Dallas, at 1.7 percent, did better — and a 0.1 percent increase in March.

Denver prices fell by 2.7 percent in January and by 1.7 percent in February.

The year-over-year decrease for Denver was 4.9 percent, the best showing off any of the major cities in the index. Dallas, with a drop of 5 percent, was a close second.

Denver Buisness Journal, June 30, 2009

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in April, rose 6.7 percent to 90.3 from a reading of 84.6 in March, and is 3.2 percent above April 2008 when it was 87.5.

Lawrence Yun, NAR chief economist, says buyers are responding to very favorable market conditions.

“Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market,” he says. “Since first-time buyers must finalize their purchase by November 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.”

Geographical Breakdown

Northeast: The Pending Home Sales Index shot up 32.6 percent to 78.9 in April and is 0.8 percent above a year ago.
Midwest: The index rose 9.8 percent to 90.4 and is 11.1 percent above April 2008.
South: The index slipped 0.2 percent to 93 in April but is 3.5 percent higher than a year ago.
West: The index rose 1.8 percent to 94.8 but is 2.9 percent below April 2008.

NAR President Charles McMillan says there are numerous buyer assistance programs around the country.

“Some states are offering bridge loans that allow first-time buyers to use the tax credit for downpayment and closing costs, but there are many other local government and nonprofit programs available to buyers, depending on location,” McMillan says.

Last week, HUD announced that qualifying buyers can use the tax credit for closing costs on FHA loans, to buy down the interest rate or make a larger down payment.

Affordable Housing

NAR’s Housing Affordability Index is in record territory. The affordability index rose to 174.8 in April from an upwardly revised 171.9 in March, which makes it the second-highest monthly reading on record after peaking at 176.9 in January of this year.

The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income.

A median-income family, earning $60,900, could afford a home costing $296,800 in April with a 20 percent down payment, assuming 25 percent of gross income is devoted to mortgage principal and interest.

Affordability conditions for first-time buyers with the same income and small down payments are roughly 80 percent of that amount. The affordable price was well above the median existing single-family home price in April, which was $169,800.

Pending vs. Existing Sales

Yun cautions that the reporting sample for pending home sales is smaller than that of existing-home sales, so it is subject to greater variability.

“In addition, the relationship between contracts on pending home sales and closings on existing-home sales is taking longer than in the past for several reasons,” he says. “Mortgage processing time has increased, it is taking many months to close on those homes requiring short sales with lender approval, and some sales are falling through at the last moment.”

The total number of existing-home sales is expected to improve but with dramatic local market variation in the timing of recovery. “The market has already bottomed in some areas, but this is an unusual housing cycle with some areas improving rapidly while others languish or decline,” Yun says.

Existing-home sales for May will be released June 23. The next Pending Home Sales Index will be on July 1.

Source: NAR (06/02/09)

CARBON MONOXIDE ALARMS 

 Make sure every you as a seller have installed carbon monoxide alarms by July 1st 2009. House Bill 1091 requires installation before a property is offered for sale. Alarms must be located within 15 feet of each bedroom or as required by applicable building codes. This new law coming into effect will require homes currently listed for sale and those coming onto the market to be updated. Buyers be aware of this, this is a Seller responsabilty and it is the Law or it will be July 1st.

For the last several month news media, both local and national, all the latest gurus from the financial world and real estate worlds have given reports on the Denver, Colorado real estate market. As an agent in the trenches this is my report.

The markets have turned the corner. I have seen more buyer and seller activity in the last 45-60 days from this post that the markets are moving. If you are thinking of buying get it done. Sellers are not moving as much on there prices as even 2 months ago…and they don’t have to. The nice homes in good shape and location are selling regardless of the buyers low balling and looking for the deal. If you want a deal go to the foreclosure market but get in line. I have run into homes that have so many offers on them and they are competing for those homes and that it is driving the prices up! Sellers are putting homes on the market priced to sell at market values and if done correctly the homes are selling within a few weeks. This is not unheard of. Appraisers are seeing home prices and inventory moving and speeding up. Lenders are putting refinancing and loan modifications as a second priority due to increased volume of purchase business. The time is beginning to pass that the deals of the century and lifetime interest rate lows are gone. If you are going to buy or sell in this market you better jump on board now, this train has left the station and things are only going to keep moving and speed up. The Denver, Colorado real estate market is moving and is on the upswing, believe or not!

In a recent articel and a Today show segment Denver, Colorado topped the list of cities nationally to rebound. In an article by Mark Harden of the DBJ he made comments from the Today show review.

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;
 A vital downtown;
 A well educated population; and
 Foreclosures earlier than other cities.

$8,000 Tax Credit for First-time Home Buyers

Great news for first-time home buyers in 2009! The stimulus plan that President Obama signed into law contains a new $8,000 tax credit for qualified first-time home buyers. And, unlike the $7,500 tax credit from last year, this credit does NOT have to be repaid to the government, as long as you stay in the home for at least 36 months after the purchase date.

Remember, a tax credit is much more valuable than a tax deduction. A tax credit reduces dollar for dollar the amount of tax you owe. A deduction merely reduces the amount of your income that is taxable. This means the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset.

Who?
First-time buyers or anyone who hasn’t owned a home in the 3 years prior to a purchase of a primary residence may qualify for a tax credit of up to 10% of the purchase price or $8,000, whichever is less. To qualify for the full credit, the buyer’s modified adjusted gross income must be less than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. Partial credit is proportionally reduced for incomes under $95,000 (single) or $170,000 (married). For married taxpayers, the homeownership history of both the home buyer and his/her spouse are taken into account. This means if you or your spouse has owned a principal residence in the last 3 years, neither you nor your spouse qualifies for the credit.

What?
According to the IRS, a primary residence is the one you live in most of the time. It can be a house, houseboat, housetrailer, cooperative apartment, condominium, or other type of residence. If you constructed your main home, you are treated as having purchased it on the date you first occupied it.

When?
The $8,000 tax credit is available for qualifying home purchases made from Jan. 1, 2009, until Dec. 1, 2009. This is not a typo. To receive the credit you must purchase a qualified home before December 1st, 2009 – not the end of the year.

How?
Unfortunately, you can NOT use the credit as a down payment. To receive the credit, you must purchase a qualified home first and then claim it on either your 2008 or 2009 taxes. If you make a qualified purchase after April 15, or after having already filed your 2008 taxes, you and your tax professional can submit an amendment to your return. To claim the credit, use form 5405.

Why?
The current combination of lower home prices and lower interest rates makes for an amazing opportunity to buy real estate. Add to that this $8,000 gift from the government, and renting a home just doesn’t make much sense.

It is clear that the bargains are out there and that the foreclosure rates seem to be flattening. In reports released Friday January home prices drop more than expected – USA Today- – Home prices in January plunged a record 19% from a year ago in 20 U.S. metropolitan areas, signaling continued distress in the housing market, according to a report Tuesday. This means there have has been a lot of downward pressure to get a “good deal” while at the same time banks limit the amount they will loan. Thursdays rally on the Stock market with the easing of policy on the “Mark to Market” valuations should begin to show int he coming months as banks are able to re-evaluate there books and assets and start the money flowing again. 
We are still not out of the woods yet. Pending Home Sales Climb – CNBC - – Pending sales of existing U.S. homes rose modestly in February but the market is still weak in the face of continued declines in home values and a recession, a realty trade group said on Wednesday.  This is a glimmer of hope but be advised even with the money and banks flowing again we still have to watch the jobless numbers along with all of the arm loans out there this year that will reset.

It is a good thing to see these glimmers of hope and sparks or renewed interest, the American consumer is cautiously watching and some are moving. As this begins to unfold the markets will turn and the homes will sell leading us into the next sellers market and growth of Real Estate and both local and national economies.

We have been asking for it, we got it, Thursday March 26 began the latest snow storm that was promised on ly it delivered. Shutting down schools, work and roads the storm has now been going for almost 24 hours. Getting around is a little difficult with the layer of ice on the roads and the cold air that had swept in with it. Wow! just last week it was 74 degrees. We were bouncing around 16-25 degrees yeterday and today we will probably get a high of around 32. The old saying for Colorado “if you don’t like the weather in Colorado, wait 5 minutes” hold very true.