Most Say it's a Good Time to Buy - Denver Metro Area

Most Say it's a Good Time to Buy

Most Americans believe the housing market has hit the bottom and that it's a good time to buy, in part because many also think rents will rise faster than home prices. Fannie Mae's latest nation housing survey found that 70% of Americans think it's a good time to buy a home, up from 64% in January. By an overwhelming majority - 78% - also believe home prices will either hold steady or increase over the next year, compared to 85% believing the same thing about rental increases. Read full article:
http://realtytimes.com/rtpages/20101104_buy.htm

Five Tips to Increase Your Highlands Ranch Home's Appeal

Looking for a couple ways to give your home more appeal?!?! These are easy and you'll have your neighbors talking!!

Five Tips to Increase Your Home's Appeal - Here are some tips to help get a homes noticed:
1. Change with the seasons. Having out-of-season decor just leaves buyers feeling like the house isn't being well cared for.
2. Make it cozy. One of the easiest ways to make your home cozy is by drawing attention to the fireplace.
3. Crank up the thermostat. This isn't just the rule for open houses, crank it up for showings as well.
4. Shine the natural light. Hold your open house during the high daylight hours.
5. Play soft ambient music. Soft, non-distracting background music can help ease tension.
Learn more about these tips:
http://realtytimes.com/rtpages/20101022_appeal.htm

NOW IS THE TIME - to buy investment property in the Denver Metro area

So if you've ever thought about buying investment property, we have several factors in the market that are indicating that NOW is the time!!!

Take into consideration the following things:

- We are in the cool off period of the market as we head into winter. Not to mention the summer has been less active due to the buyer demand that shifted to the second quarter due to the first time homebuyer tax credit. So what does this mean for you?!? LESS COMPETITION IN THE MARKET PLACE!!

- Sellers and banks are MOTIVATED to sell!! Take advantage of this and let me help you negotiate a rockin' deal!

- The rental vacancy rate is lower than ever before!!!

- Consumer confidence is down. People don't necessarily want to purchase a home right now and may feel that it is safer for them to continue renting.

- People are losing their homes to short sales and foreclosures and need somewhere to live.

If you are with me on all points above, call me and lets discuss your interest in purchasing investment property. Why not make your dollar work harder for you than it is working in your IRA!!

Knowing how to read your good-faith estimate can help you save money on your home loan.

A good-faith estimate is an approximation of the fees and interest rate you'll pay on a home loan.

When you’re shopping for a mortgage loan, it’s sometimes hard to understand the jargon lenders use in the good-faith estimate explaining the costs and fees you’ll pay when taking out a mortgage.

When you apply for a mortgage, the lender has three days to give you a good-faith estimate of the fees and interest rate you’ll pay, as well as other loan terms. Here are five tips for using the new three-page form to your advantage.

When you apply for a mortgage, the lender has three days to give you a good-faith estimate of the fees and interest rate you’ll pay, as well as other loan terms. Here are five tips for using the new three-page form to your advantage.

1. Know which fees can increase and by how much
In the past, lenders provided an estimate of the costs involved in getting your home loan, and if those costs rose by the time you closed on your home, tough luck. The good-faith estimate shows some fees the lender can’t change, like the loan origination fee that you pay to get a certain interest rate (commonly called points) and transfer costs.

The form also lists the charges that can increase by up to 10%, like some title company fees and local government recording fees. The lender must cover any increase over that amount.

Finally, the good-faith estimate lists the fees that can change without any limit, such as daily interest charges.

2. Look for answers to basic loan questions
In the summary section, lenders explain your loan’s terms in simple language. Can your interest rate rise? If so, a lender must spell out how much the rate can jump and what your new payment would be if it does. Can the amount you owe the lender increase, even if you make your payments on time? If it can, a lender must show you the potential increase.

3. Evaluate the “tradeoffs” on a loan
In the new “tradeoff table,” you can ask lenders to provide details on the tradeoffs you can make in choosing among home loans. If you’d like the same loan with lower settlement charges, how will the interest rate change? If you’d like a lower interest rate, how much will your settlement charges increase?

4. Compare apples to apples with the shopping chart
Included on the good-faith estimate is space for you to list all the terms and fees for four different loans, so you can make side-by-side comparisons.

5. Know what’s missing from the good-faith estimate
The new form lacks some key information, such as how much you’ll reimburse the sellers for property taxes they’ve already paid on the home. It also doesn’t tell you the amount of money you’ll have to bring to the closing table. Some lenders have created supplemental forms providing that information. If yours hasn’t, ask for it.


Read more: http://buyandsell.houselogic.com/articles/5-tips-deciphering-your-home-loans-good-faith-estimate/#ixzz0xiOg0pKf

Homeowner Tax Advantages

When you’re evaluating how much home you can afford, make sure you factor in the tax advantages of homeownership.

You can claim some tax deductions if you work from home, but be sure you're entitled to them before taking them.

Owning your home not only allows you to build wealth through appreciation, but it can also reduce the amount of income tax you pay every year.

Here are seven tax benefits for homeowners.

1. Homebuyer tax credits
If you purchase your first home before April 30, 2010, you’re entitled to a tax credit of up to $8,000. If you currently own a home, but sell it to purchase another home before April 30, 2010, you’re eligible for a federal tax credit of up to $6,500.

2. Deductions for loan fees
Typically, you can deduct the “prepaid interest” you paid when you got your mortgage loan. That includes points, loan origination fees, and loan discount fees listed on your settlement statement, even if the seller paid those fees for you. Each time you refinance your home, you can deduct prepaid interest fees.

However, you must meet certain requirements to take the prepaid interest deductions when you purchase or refinance your home. Check with your accountant to be sure you’re following the rules.

3. Property tax deductions
In the year you purchase your home, you’re entitled to deduct the real estate taxes you paid at the closing table. You can continue to deduct the property taxes you pay each year.

4. The mortgage interest deduction
Every year, you can deduct the amount of interest and late charges you pay on your mortgage and home equity loans, though there are limitations. If you’re required to purchase private mortgage insurance (PMI) because you made a downpayment of less than 20% on your home, you can also deduct those premiums as mortgage interest expenses.

5. Home office expenses
If you have a home office you use only for business, you may be eligible to deduct the prorated costs of your mortgage, insurance, and other expenses related to that space. The government scrutinizes home-office deductions closely. Be sure you’re entitled to the deductions before claiming them.

6. The costs of selling your home
In the year you sell your home, you can deduct the costs of selling it, including real estate commissions, title insurance, legal fees, advertising, administrative costs, and inspection fees. You can also deduct decorating or repair costs you incur in the 90 days before you sell your home.

7. The gain on your home
If you lived in your home for at least two of the previous five years before you sell it, the government lets you to take up to $250,000 of profit on the sale of your home tax free. That amount is doubled for married couples. This deduction isn’t available on rental or second homes.

The government also allows you to subtract from your home sale profit any amounts you spend on improvements, such as window replacement, siding, or a kitchen remodel. Those deductions are in addition to the tax credits you can receive in 2010 for making energy-saving upgrades. Money invested for routine maintenance and repairs doesn’t count.

This article includes general information about tax laws and consequences, but is not intended to be relied upon as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice; tax laws vary by jurisdiction.


Read more: http://buyandsell.houselogic.com/articles/7-homeowner-tax-advantages/#ixzz0xiMRZZPN

Denver Market - What is a Short Sale?

WHAT IS A SHORT SALE?
With the market infiltrated with SHORT SALES, it is really important that today's buyers be familiar with what a short sale is. The basic definition is as follows:

A homeowner that is in distress, meaning they have suffered some type of financial hardship that has prevented them from being able to stay current on their mortgage payments. They are in default on their mortgage and they are working with the bank to sell their home "short" of what is owed on the loan. These folks are generally upside down in their home (meaning they have no equity).

Lawmakers consider home tax credit extension

First-time homebuyers looking to land an $8,000 federal income tax credit may have a little more time to close on their purchases if a Senate amendment unveiled Thursday makes it into law. The closing deadline could be pushed back to Sept. 30 under an amendment offered by Senate Majority Leader Harry Reid, D-Nev., Sen. Johnny Isakson, R-Ga., and Sen. Chris Dodd, D-Conn - they want to make sure banks have time to process the transactions, especially short-sales. Read full article:
http://www.usatoday.com/money/economy/housing/2010-06-10-home-tax-credit_N.htm

Home Rentals Hot

Vacancies in rental condos, single-family homes, and other small properties across metro Denver fell to a two-year low of 3.1% during 2010’s first quarter. Vacancy rates for all counties surveyed were: Adams, 3.7%; Arapahoe, 2.6%; Boulder/Broomfield, 2.3%; Denver, 3.0%; Douglas, 0.9%; and Jefferson, 3.9%. The average rent for single-family and similar properties rose to $1,035.56 during the first quarter, rising from 2009’s first quarter rate of $1,004.44. Average rents for all counties were: Adams, $1,099.39; Arapahoe, $1,032.89; Boulder/Broomfield, $1,684.57; Denver, $984.52; Douglas, $1,367.76; and Jefferson, $969.50. Read full article:
http://insiderealestatenews.com/2010/05/home-rentals-hot/

Good Debt vs. Bad Debt

When used intelligently, debt can be of tremendous assistance in building wealth. One of the secrets, therefore, to being smart with your money is to differentiate between good debt and bad debt. Examples of good debt including the following: mortgages, school loans, real estate loans and business loans. Examples of bad credit include the following: credit cards, store credit cards and auto loans. "Good debt is investment debt that creates value; for example, student loans, real estate loans, home mortgages and business loans," says Eric Gelb, CEO of Gateway Financial Advisors and author of "Getting Started in Asset Allocation." Read full article:
http://www.bankrate.com/finance/debt/good-debt-vs-bad-debt-1.aspx

Finally a decent estimate for the Shadow Market.

In today’s Wall Street Journal there is an article (copied below) about the size of the shadow foreclosure market. This economist pegs it at 1.1 million homes. The Denver metro area is about 0.8% of the overall US population, so as a really rough guess, we would have 8,800 of those homes. That’s only a rough guess of course.

We sold 38,100 DSF + 11,600 CND in 2005 (total = 49,700 resale homes, not counting new construction). This declined to 29,100 DSF + 8,230 CND = 37,339 resale units sold in 2009. In the unlikely event the shadow market homes were dumped on MLS tomorrow morning, we could sell what we sold in 2009 AND all of the shadow homes and still be under the sales volume in 2005!

Here’s another, more realistic way to look at it. Most of the shadow homes will likely under the median sales price. That’s $210K for DSF and about $165K for CND. For this least-expensive half of the market, we have 2.3 months of inventory for DSF (six months is normal) and 4.3 MOI for condos. Blended, it’s 2.9 MOI, a pretty strong seller’s market. If you dumped all 8,800 shadow units on the market tomorrow, we’d increase to 8.7 months of inventory. That is a slight buyers market. More likely, the shadow market will be trickled slowly onto the MLS over months, if not years.

Chicken Little might be wrong about the shadow inventory market making the sky fall on our real estate market.

http://online.wsj.com/article/SB10001424052748704388304575202332735443388.html?KEYWORDS=housing+is+a+post-stimulus#

Mistake to Avoid - KNOW YOUR CREDIT

1. Not knowing your credit score

If you're even toying with the idea of buying a home, you must find out exactly what your FICO score is. If you find it is less than ideal, wage a systematic campaign to raise it. Too many borrowers ignore this step and get surprised when they get interest rate quotes.

Once you've pored over your credit history and corrected any errors, your next step is to pay down revolving debt balances to no more than 30% usage. That will help raise your score significantly.

Why does it matter?

The lower your score, the higher your costs of borrowing. Fannie Mae and Freddie Mac, for example, charge higher up-front fees to borrowers with credit scores below 740.

For a buyer with a credit score between 680 and 700, the fee comes to 1.5% of the mortgage principal. On a $200,000 mortgage, that adds up to $3,000. Someone with a 740 score pays nothing.

Lower-score borrowers also get saddled with higher interest rates, about 0.4 percentage point more for the below 700 borrower. That costs an extra $62 a month -- $744 a year -- on a $200,000, 30-year, fixed rate loan.

Denver Leads State in Population Again Yet Again

Denver Leads State In Population Gain Yet Again
Posted by Ken on April 8, 2010

You may have caught this about a week ago when it was announced, but just in case… the US Census Bureau released its last annual July population estimates before the 2010 Census and, once again, Denver led the state in population gain.

From 2006 to 2007, Denver squeaked past Douglas County by a little over 100 people to have the highest numeric population gain in the state for that year, with an increase of about 12,500. Then, from 2007 to 2008, Denver topped second-ranked Arapahoe County by almost 5,000, gaining over 15,500 people that year. The numbers just released for estimated county populations as of July 1, 2009 has Denver gaining over 17,000 for the year, with Adams County in second place at over 11,000. The City and County of Denver’s population has now surpassed the 600,000 mark for the first time ever.

Of course, the point isn’t really the county vs. county aspect of this. At some point in the future, El Paso County (and other counties as well) will pass up Denver County in population given that Denver covers only 155 square miles (a third of which is DIA) and must rely on infill development for growth, while El Paso County, for example, covers 2,130 square miles and is only about 10% urbanized at present. The point is that Denver is growing in a significant way after several decades of decline during the era of peak suburbanization. This tells us we are on the right track. People are voting with their feet (or perhaps, their house keys). Denver does have some undeveloped areas left (e.g. Stapleton, Green Valley Ranch, DIA/Gateway), but clearly the city’s long-term source of population growth is going to occur through infill development and the densification of its Areas of Change (former industrial areas, the greater Downtown area, transit-proximate areas, etc.). This is a good thing. Densification and urban infill is sustainable development at its most simple.
Filed under Economic Growth, Sustainability, Urbanism

American say time is right to buy home

poll - Nearly two-thirds of Americans think the time is right to buy a house, with a majority believing prices will be the same or higher over the next year. In a survey conducted by Fannie Mae, 64% said it is a good time to buy. However, most of the 3,451 polled said that it would be tougher for them to get a loan than it was for their parents.
http://www.msnbc.msn.com/id/36192404/ns/business-real_estate/

The New Face of House Flipping

Nationally, the number of flipped homes rose 19% to 197,784 in 2009, according to RealtyTrac. Flipping has been encouraged by a FHA one-year rule change, which allows FHA borrowers to buy foreclosed homes from owners who have held title for less than 90 days. Many of the today’s flippers are wealthy foreign investors. In many cases, they bid without ever seeing the properties, relying on photos and descriptions via mobile phone.
http://www.realtor.org/RMODaily.nsf/pages/News2010033106

Denver Parade of Homes Returns!!

Parade of Homes to return in August with multi-site format - Denver’s “Parade of Homes” will return Aug. 14 to Sept. 6, featuring a multiple-site format for a second year and a wider-than-usual range of home values, the Home Builders Association of Metro Denver said yesterday. “We’re bringing back the favorite elements of the Parade, but we’re adding more homes for visitors to see throughout the metro area and admission to the Parade will be free,” Clarence Hughes, chairman of the Parade of Homes and a Home Builders Association (HBA) board member, said in a statement.
http://www.bizjournals.com/denver/stories/2010/03/22/daily21.html?s=industry&i=resi_real_estate

Benefits of Home Ownership

With the Home Buyer Tax Credits coming to a close and mortgages remaining low, if you've ever thought about owning your own home - NOW IS THE TIME!!!

Call me at (720) 988-5952 to discuss your options and to put you on a path to home ownership.

Need some convincing yet? Take a peak at the following article that discusses the benefits of Home Ownership.

Let me help your dreams become a reality!

http://realtytimes.com/rtpages/20100322_benefits.htm

Weekly Mortgage Newsletter - courtesy of Tami Pratt

Quiet Week for Mortgage Markets
During a very light week for economic news, the economic data and Treasury auctions contained few surprises and produced little reaction in mortgage markets. Mortgage rates ended the week nearly unchanged.

In early 2009, the Fed embarked on a $1.25 trillion mortgage-backed securities (MBS) purchase program to help keep mortgage rates low and stimulate the economy. The amount purchased varied from week to week, reaching a peak of $33.2 billion in the week of March 25, 2009. The Fed has been gradually reducing the size of its purchases at a pace consistent with a March 31 conclusion of the program, and the most recent weekly purchases have been down to around $10 billion.

As the date nears, the big question is what will happen when the MBS purchase program ends. This program is unprecedented, making the outcome difficult to predict, and forecasts vary widely. Estimates for the impact on mortgage rates from the conclusion of the program vary from an increase of one percent to no change. Those who predict higher mortgage rates point to a basic change in the fundamental supply and demand. The added demand from the Fed was widely credited with moving rates lower, and a decrease in demand would typically push rates higher. However, other economists argue that investors respond only to unexpected news. In this view, since the Fed has telegraphed the end of the program for months, there should be little reaction around March 31. The Fed itself has indicated that they expect a modest increase in mortgage rates due to the end of the program.



Also Notable:
Despite major snowstorms in many regions, February Retail Sales increased
The Labor Dept. announced that the number of job openings in January rose 8%
Oil prices rose above $80 per barrel to the highest level since early January
The Fed purchased $10 billion in agency MBS, with about $24 billion more to go



Average 30 yr fixed rate:
Last week: 0.00%
This week: +0.01%
Stocks (weekly):
Dow: 10,600 +100
NASDAQ: 2,350 +50

Week Ahead

The big story next week will be Tuesday's Fed meeting. No change in the fed funds rate is expected, but any surprises in the Fed's statement could produce a large reaction. The most significant economic data next week will be the monthly inflation reports. The Producer Price Index (PPI) focuses on the increase in prices of "intermediate" goods used by companies to produce finished products and will come out on Wednesday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Thursday. CPI looks at the price change for those finished goods which are sold to consumers. In addition, Industrial Production, an important indicator of economic activity, will be released on Monday. Housing Starts are scheduled for Tuesday. Import Prices, Leading Indicators, and Philly Fed will round out a busy week.

FHA halts 90-day "flip rule" for one year

http://www.denverpost.com/businessheadlines/ci_14346677

The Final Countdown (insert 80's tune here)!

The countdown has begun! There are only 81 days left to execute a contract on your dream home before the $8,000 and $6,500 tax credits are gone.

Selling a home takes time. You'll need to:
Get your current home ready for sale (to get top dollar in this market your home has to shine brighter than the competition),
Receive an offer (average days on market for all MLS areas is 100 days),
Negotiate the offer (can take a day, a week, or more depending on the terms being discussed),
Survive the option period (typically 7 -10 days in which the buyers can back out of the contract for a minimal fee),
Get to the closing table (taking anywhere from 30 - 60+ days depending on the type of loan and a variety of other factors).

Buying a home takes even more time because you'll need to:
Get pre-qualified for a loan,
Determine the area/neighborhood in which you want to live,
Identify your dream home,
Make and negotiate an offer (can take a day, a week, or more depending on the terms being discussed),
Complete the recommended inspections during the option period (typically 7 - 10 days),
Negotiate any repair requests (if the seller is not willing to make the repairs you want or decrease the sales price, you may be back at step #3),
Get to the closing table (taking anywhere from 30 - 60+ days depending on the type of loan and a variety of other factors).
If you've considered buying or selling a home, call me, and let's get you started on your way to owning a new home.

Respectfully,

Brooke Hengst, REALTOR®, CDPE
Your Castle Real Estate
C: 720-988-5952
F: 720-920-9850
brookehengst@yourcastle.org
www.brookehengst.com

- I don't just list your home For Sale, I get it SOLD!

Homes held back? The shadow market knows

Denver-area residential real estate brokers fear a flood of foreclosed homes still held by lenders — the “shadow market” — will be put up for sale in 2010. One national report put metro Denver’s shadow market at nearly 14,000 homes, relatively low compared to cities that have been harder hit by the recession. Some Denver-area residential brokers aren’t even sure there is a shadow market. And some lenders with Denver-area operations, in their defense, contend they put foreclosure homes on the market for sale as fast as they can, largely because of federal regulatory pressure to sell those homes, as well as the cost of holding and maintaining the properties. There are Denver-area real estate brokers that believe the increase they’ve seen this year in broker price opinions (BPOs) signals more bank-owned homes will be listed for sale in the next few quarters.
http://www.bizjournals.com/denver/stories/2010/02/01/story6.html?b=1265000400^2805471&s=industry&i=resi_real_estate

Denver again led metro area in home resales in 2009

Denver again led metro area in home resales in 2009, but sales declined - Denver County continued to have more sales than other metro-area counties of existing single-family homes in 2009. The county had 7,482 closed sales of such homes last year, down from 9,399 the prior year. The largest number of homes sold in Denver County — 2,581 — were in the $100,000-$200,000 price range, followed by 1,580 home sold in the $200,000-$300,000 “move-up” range. “First-time homebuyer closings, via tax-credit assistance, took over the market for the majority of the year,” said Metrolist analyst Gary Bauer in his report. “First-time homebuyer transactions are estimated to be 40-plus percent of all [home sale] closings.” See the full article for data for all metro counties.
http://www.bizjournals.com/denver/stories/2010/01/25/daily27.html?s=industry&i=resi_real_estate

Impact of tighter FHA mortgage rules on home loans debated

Tighter lending requirements for loans insured by the Federal Housing Administration may leave some borrowers unable to get mortgages, but economists are divided on the impact they could have on housing's recovery. The changes, aimed at strengthening the FHA's reserves in the face of rising foreclosures, shouldn't hurt too many borrowers, officials say. "We don't expect this to have a significant impact on the housing market," says FHA Commissioner David Stevens, adding that "the moves are designed to get the reserves back up."
http://www.usatoday.com/money/economy/housing/2010-01-20-fha-home-mortgage-loans_N.htm

Springtime house hunters out early thanks to tax credit

Springtime house hunters out early thanks to tax credit - The springtime spurt in home buying may hit before the snow melts this year as buyers scramble to meet an April 30 tax credit deadline. The spring buying season typically takes off in March and runs through May. "I expect the buying season will be moved up," says Jim Gillespie, CEO of Coldwell Banker. Sales "are going to take off in February and March and really take off in April. ... My concern is that the move-up buyer hasn't thought what they need to do. Their window is really short. They have to coordinate closing dates." The tax credit's impact on 2010 home sales is uncertain. Some economists expect the credit to pull sales that would have occurred later in the year into the first half.
http://www.usatoday.com/money/economy/housing/2010-01-19-spring-home-buyers_N.htm