November Real Estate Trends

1. December 2007 by Renae Bombardiere.

We have all heard the news and read the headlines.  The dire predictions do more than grab the attention of the media; they can shake consumer confidence and keep home buyers on the sidelines, pressuring sellers to lower prices – in effect fueling a downward spiral.  But how about some facts? 

“The prognosis is considerably different than the scare scenario forecasters would have us believe,” says Lawrence Yun, National Association of Realtors vice president of research.

Even with the Fed’s rate cut in mid-September, foreclosures will rise in 2008.  But these reset problems remain largely confined to subprime borrowers, who comprise only 9 percent of the market.  Suprime borrowers with a mortgage in foreclosure account for only 5 percent of that.  So the problem is confined to less than 1 percent of borrowers.

The prediction for existing-home sales is down 7 percent, nationwide, at the end of 2007, but that is coming off a five-year boom.  The forecast for the sales level is near what we had in 2002, which was a very good year, and a level that is far closer to normal than what we have been seeing over the past four years.  Specific to the Denver Metro area, there has been a 6.5% increase from 2004 to 2007 YTD, with the average sales price for a single-family home increasing from $272,604 in 2004 to $290,535 in 2007.

The challenge is not so much market conditions, but the psychology behind those conditions.  There continues to be huge pent-up demand, and that demand will grow.  Our national economy added 4.3 million net new jobs in the past two years.  For every two new jobs that are created we historically see one new homebuyer.  Right now we are not seeing those new home buyers because they are sitting on the fence.  Once they look past the headlines, they will see that this is actually a very good time to buy:  Inventories are flush, so there are lots of homes to choose from; prices are moderating; and interest rates remain historically low.  Once the psychology catches up to our real market conditions, that pent-up demand will be released. 

“Nationally, we are forecasting existing-home sales to make a comeback and rise to 6.1 million or 6.2 million units, up from about 6 million in 2006, and prices will also rise about 2 percent,” says Yun.  “Some local markets like Austin and 

Denver will do far better.” 

While we will not see the number of subprime borrowers that we saw during the boom, options for borrowers who cannot qualify for prime loans are still available.  Watch my blog for the BUZZ on this topic.

In conclusion, interest rates remain historically low, foreclosures due to subprime borrowers accounts for only 1% of the market, the Denver Metro area has seen a 6.5% increase in the past four years, and it continues to be a good time to buy – especially in Denver!

Posted in Selling Real Estate, Metro-Area Home News, Buying Real Estate, Uncategorized | 1 Comment »

Tax Reflief for Foreclosures

8. October 2007 by Renae Bombardiere.

Tax Relief for Foreclosures

For anyone facing foreclosure, or who has gone through the process!  Let your Realtor help you through the process!

Many times, after the whole foreclosure is final, homeowners find insult added to injury when they are hit with the tax burden of paying on the amount forgiven by the bank.  Looks like good news in the form of Phantom Tax Relief, before the House and Senate currently.  Read ahead for more information obtained from REALTOR Magazine Online:

Daily Real Estate News  |  October 5, 2007House Votes to Eliminate ‘Phantom Tax’
The U.S. House of Representatives voted on Thursday to get rid of a tax burden for home owners who have had a loan forgiven or foreclosed on their home because they were unable to make their mortgage payments. The Mortgage Cancellation Tax Relief Act, H.R. 3648, passed by a vote of 386 to 27. Similar legislation is making its way through the Senate.

Since the early 1990s, NAR has supported such measures to eliminate the “phantom tax” on financially-strapped home owners.

“Congress made a good decision that will affect many Americans who find themselves in a truly bad situation,” says NAR President Pat V. Combs. “Changing the IRS code is an issue of fundamental fairness. It would relieve a tax burden at a time when an individual or family has experienced a true economic loss arising from the sale or loss of their home. These families are already in financial distress and are most likely unable to pay additional taxes.”

The current tax code requires a lender who forgives debt to provide a Form 1099 to the IRS stating the amount the borrower has been forgiven. This disclosure applies whether it is a short sale, foreclosure, deed in lieu of foreclosure or any similar arrangement that relieves the borrower of the obligation to pay some portion of their debt. If the property is sold at foreclosure or is sold for less than was borrowed, that difference is considered income and is subject to the tax.

H.R. 3648 would ensure that any amount forgiven on mortgage debt secured by a principal residence will not be taxed. The legislation has a provision to safeguard against abuses. That provision is similar to one that already exists for commercial real estate owners and would treat commercial and residential property equally.

“This is not only about the subprime turmoil we are currently experiencing,” Combs says. “This is also about families who have lost their home or a need to sell that home for less than the amount owed on their home mortgage because of job loss, divorce, health issues, a decrease in the value of the home or other unfortunate circumstances. Clearly it is unfair to tax people on phantom income when they most likely have no cash with which to pay the tax.”

Please feel free to call or refer anyone who needs my help in dealing with the possibility of foreclosure. 

Posted in Selling Real Estate, Metro-Area Home News, Buying Real Estate | 1 Comment »

October is Breast Cancer Awareness Month

2. October 2007 by Renae Bombardiere.

The 2007 Susan G. Komen Denver Race for the Cure is this Sunday, October 7, 2007

Komen Denver Race for the Cure offers something for everyone!

With a 5K walk/run, 1-mile family walk, expo area, survivor breakfast, entertainment and closing ceremonies, the Denver Race has something for everyone.  The event, slated for October 7, has expanded and is offering myriad opportunities to get involved.

Do it your way —   Sleep in or Work Out on Race Day!

If you’ve ever wanted to support the Denver Race, but can’t seem to get down to the event, organizers have two ingenious programs that are perfect for you!

Sleep in for the Cure™ allows participants to sleep their way to finding a cure, while Work Out for the Cure appeals to those who want some exercise, but prefer to work out either alone or in a small group setting.

Select any athletic activity you want – take a hike, swim, rollerblade or walk the local trails on Race Day morning. Participate in either of these programs and you’ll get a special T-shirt for your efforts.

There’s even a special Sleep in for the Cure™ contest where the winner is randomly selected to win a fully catered breakfast from Snooze Restaurant, a matching set of recliners from La-Z Boy Furniture Galleries, and a mattress set courtesy of Mattress King!

K-9’s for the Cure NEW addition to Race Weekend is sure to please the dog lover in You! Saturday, October 6th join the Race at City Park for the inaugural K-9’s for the Cure™ event and dog walk.  For $35 ($25 for owner and $10 per pet) you’ll receive a bandana for your pet and K-9’s for the Cure™ T-shirt for you. In addition, when you register you’re automatically registered for Sunday’s Komen Denver Race for the Cure® (October 7th at Pepsi Center) and will receive that T-shirt as well! Remember — join us with your pet on Saturday, October 6 and then leave your pet at home on Sunday, October 7th, and come down to Pepsi Center for the largest Race for the Cure in the country.

For more information visit www.KomenDenver.org

Posted in Breast Cancer Awareness | No Comments »

Rent-to-Own Deals: Smart Questions to Ask

1. October 2007 by Renae Bombardiere.

Many Buyers and Sellers are looking at the possibility of Rent-to-Own or Lease with Option to Purchase scenarios.  We are seeing this in the Denver market.  The article below scratches the surface about questions that arise in this situation.  Please call or respond to this blog with questions or experiences of your own or from your friends, family, or coworkers!

Daily Real Estate News  |  September 24, 2007Rent-to-Own Deals: Smart Questions to Ask
Sellers who can’t unload their properties through a conventional sale are proposing rent-to-own deals more frequently these days.

For sellers, the advantage of rent-to-own is the likelihood that the renter will eventually permanently take the property off their hands. For buyers, rent-to-own can provide the credit-challenged or cash-strapped a route to homeownership.

But for buyers and sellers, there are also many potential drawbacks. If your customers are considering a rent-to-own deal, here are some smart questions they should consider.

For Sellers:

• Who will tend to the property and pay for routine maintenance?
• Who pays for major repairs?
• What are the costs of setting up and managing an escrow account for the portion of rent allotted to the down payment?
• Will you manage the property yourself, or hire an agent?
• What if the renters change their minds? Who keeps the money in the escrow account?
• If the buyers change their minds, what will be required to put the property back on the market?

For Buyers:

• How much of the rent is going to the down payment?
• How locked in are you if change your mind? What will it cost you to get out of the deal?
• How long will it take to accumulate enough of a down payment that you are likely to qualify for a mortgage?
• What happens if you don’t qualify for a mortgage by the specified deadline? Can you continue to rent?
• Who will be responsible for routine maintenance?
• Who will pay for major repairs?
• Do you hope to strengthen your credit rating by paying rent on time? If so, will the owner report your good habits to credit bureaus?

Posted in Selling Real Estate, Buying Real Estate | No Comments »

Denver Metro-area Home Prices Hint at a Turn

29. September 2007 by Renae Bombardiere.

To combat some of the “doom and gloom” that we hear in the national news sources, here is some encouraging information about our region, as seen in the Rocky Mountain News yesterday.  Stay tuned for more Denver Metro-specific information as it becomes available!

Home prices hint at turnS&P report suggests

Denver area may be starting to recover

 By John Rebchook, Rocky Mountain News
September 27, 2007Fresh evidence suggests the Denver-area housing market may be in the early stages of recovery, even as the national housing market faces an even bigger slump. From May to June,

Denver homes showed a 1.3 percent appreciation in value, the second highest of 20 metropolitan areas surveyed, according to the Standard & Poor’s/Case Shiller Home Price Indices.

Charlotte, N.C., gained 1.5 percent. And while Denver home prices dropped by 0.7 percent in July from July 2006, only five metropolitan areas fared better during that period, the survey showed. Overall, a composite of 20 major metropolitan areas experienced a 3.9 percent drop during that one-year period. “We need to see if the trend continues,” said S&P Vice President Maureen Maitland, referring to

Denver. “What you have to do now is to watch for signs of a turnaround before calling anything,”

She said

Denver has been beating the nation as a whole for four consecutive months. From June to July, for example, Denver’s market appreciated by 0.8 percent, with only Detroit doing better at 1.3 percent, and all 20 areas dropping by an average of 0.6 percent.

The report is produced by S&P and

Yale

University economist Robert Shiller. The nation as a whole is “in a bit of a housing crisis, and it is likely to get worse before it gets better,” Maitland added. Adjusting for inflation, housing prices nationwide have soared by 86 percent in the past decade. Some cities, such as New York, Los Angeles and Washington, D.C., saw larger jumps than other places in the country, including

Denver. The Denver-area housing market peaked in February 2001, with a 15 percent year-over-year appreciation, slightly higher than the nation as a whole, Maitland said. “Many other markets across the country continued on an upward swing, and the

Denver growth rate slowed down,” she said. “Now,

Denver seems to be going in an upward direction.”

Economist Michael Kone, principal of Boulder-based Housingmetrics, said there is still “intense pain” for the lower end of the housing market in the

Denver area, with a “huge bump” in foreclosures to come, as subprime mortgages adjust upward.

Colorado is on pace to see more than 37,000 foreclosures filed this year, a 30 percent increase over the record set last year. Colorado and the

Denver area are among the top 10 worst areas in the county for foreclosure rates.

Expensive houses, Kone said, are doing much better in the metro area. Also, as always, there are pockets of strength.

The S&P/Case Shiller report also illustrates that housing is a bargain in the

Denver area compared with many other places, said Mike Foster, director of land acquisitions for Century Communities, a private, suburban builder.

Not long ago, Denver was the most expensive housing market “anywhere in the

U.S. without a beach,” Foster said. But because the Denver-area housing market has been flat for so many years, it will recover faster than other areas that, until recently, saw a huge run-up in prices, he said. “

Denver is a low-risk market,” Foster said. “It will be easier for companies to relocate to our market than to relocate to other markets.”

The top-performing metropolitan area, according to the national study, was Seattle at 6.9 percent, followed by

Charlotte, N.C., at 6 percent. Other cities faring better than Denver included Portland at 3.8 percent; Atlanta at 1.2 percent; and

Dallas at 0.8 percent.

 

Posted in Metro-Area Home News | No Comments »

Investing in Real Estate Denver Colorado

24. August 2007 by Renae Bombardiere.

Have you thought of investing in real estate? There are some decent deals to be found in this market. There are California investors coming here to purchase property! We can’t let them have all the good deals! With a lot of bank owned properties and foreclosures in the marketplace it is a good time to build your financial portfolio. Now just so you know the banks don’t give away homes but even if you can buy 10-15% below market and rent out the property you can build equity for the next 3-5 years. Be sure to check out the mortgage lenders that I work with, under “My Services” above. I have worked with them for several years and they are on top of their game! Give them a call or email them to see how they can help help you.

Posted in Selling Real Estate, Metro-Area Home News, Buying Real Estate | No Comments »

What a great time to buy in Denver!

22. August 2007 by Renae Bombardiere.

What a great time to buy in Denver! With slower appreciation the last 5 years house prices are amazing and the market is very competitive. Prices have been on the decline since the beginning of the year. Only the best condition and best priced are selling. We really see the market turning around in 2007. So why wait to buy, when now is the best time to purchase!

 

Have you thought of investing in real estate? There are some decent deals to be found in this market. There are California investors coming here to purchase property! We can’t let them have all the good deals! With a lot of bank owned properties and foreclosures in the marketplace it is a good time to build your financial portfolio. Now just so you know the banks don’t give away homes but even if you can buy 10-15% below market and rent out the property you can build equity for the next 3-5 years. Be sure to check out the mortgage lenders that I work with, under “My Services” above. I have worked with them for several years and they are on top of their game! Give them a call or email them to see how they can help help you.

Posted in Buying Real Estate | 2 Comments »