With it being Chinese New Year this week, I couldn’t help but notice all the coverage about 2012, the year of the dragon, being the year of good luck. Fortunately housing economists seem to think so. CoreLogic’s chief economist Mark Fleming said, “The time is right in 2012 for prices to begin growing again and housing affordability will put a floor under any further significant declines.”

Recent data shows housing affordability rising dramatically due to a combination of home price deflation and rock-bottom mortgage rates; plus, both existing-home sales and single-family housing starts are up. And since consumer sentiment posted a six-month high in December, confidence is strengthening in the economy in general.

While it will be some time before home prices completely rebound from their peak, Boulder County included, a step in the right direction is all we need to keep confidence up and spur growth. Time will tell if 2012 becomes housing’s lucky year!

The holidays didn’t seem to have much of an effect on buyers looking for a home this season.  I stayed busy with showings but my buyer clients who don’t need to buy a home immediately are still looking simply because they haven’t found what they want yet.

While buyers are always looking for a great value, most of the homebuyers I’ve been working with lately want a move-in ready home, not necessarily fully remodeled but updated enough to not have a long list of “to dos” come closing.  

The Boulder Area Realtors Association is reporting the lowest inventory in Boulder County in several years. Many sellers are just postponing listing their home, often with the mindset that buyers don’t come out of the woodwork until the spring equinox. If this were true, I wouldn’t be seeing buyers get frustrated that there’s not much on the market meeting their criteria.

If you’ve been on the fence about listing your home, there’s no better time than the present. Call me today at 303-442-5001 if you’re looking for an effective, top-ranked realtor…I may already have a buyer for you!

If you’re in the market for a home that has the benefits of being close to highly-rated Eldorado K-8 school and the pool, yet is located on a quiet street, 3547 Blanca Peak Drive, Superior, CO has so much to offer. For just $329,900, enjoy four bedrooms upstairs including the master suite with 5-piece bath and custom closet system. The unfinished basement offers extra storage, and the laundry is on the main level! What I especially like about this home for the area is the spacious, level backyard and deck. This home has a bright and sunny open floor plan, and with neutral décor throughout it is move-in ready.  

It’s not often that an immaculate, move-in ready home goes on the market with so much square footage for the money. With vaulted ceilings, main level laundry, 5 bedrooms (4 are upstairs), 4 bathrooms, and 2,776 finished square feet, 946 Shavano Peak Drive, Superior, CO is a great buy at $359,900. What’s so nice is that it’s nestled on a quiet street just blocks to both BVSD’s highly-rated Eldorado K-8 school and Superior’s South Pool. The master suite has a 5-piece bath and walk-in closet and the basement has been nicely finished with a 5^th bedroom, ¾ bath and study/rec room. What makes this opportunity even more unique is the assumable FHA loan (save mortgage insurance)!  Call me today at 303-442-5001 to view this home.

1. Have we finally hit bottom? Prices are stabilizing across the country. Though the actual amount of sales is down from peak years this is a step in the right direction.

2. Boomers move to the forefront. With 2010's popular first-time homebuyer tax credit, the median age of buyers dropped. But in 2011, baby boomer purchases far surpassed that of the Gen Y buyers. 

3. FSBO successes continue to decline. A decade ago 24% of all home sales were for sale by owner. Now that number is 10%, and of those FSBO sellers 40% knew the homebuyer. 

4. More buyers are using agents. 89% of homebuyers in 2011 used a realtor (compared to 69% in 2001). Since realtors make the process easier by sifting through the inventory for time-pressed clients, help their buyers navigate through the sales process and legal documents, and help their buyers get a loan, it makes sense that people wouldn't want to undertake such an important life event unassisted. 

5. More cash buyers. Though most buyers had to undergo the process of getting a loan, 13% of 2011 homebuyers paid all cash.

6. More married couples. After a drop in married homebuyers last decade, 2011 saw 64% of homebuyers married (the largest share since 2001).

7. Life changes drive real estate sales. Repeat homebuyers cite the desire for a larger home, a job transfer, or relocating to be closer to family and friends as the primary reason to purchase a home. 

1. Keep it comfortable. Aside from some nice warmer days, most buyers this time of year wear heavier clothing yet won't usually take off their coat when going from home to home. Keep the heat in mid-60s so they don't feel roasted out of your home. The goal is to get them to stay longer in your home and feel comfortable there.

2. Make it bright. With less hours of sunlight now and overall more cloudy days, make sure all the lights in your home are on. Don't overlook burned out bulbs and keep blinds open during the day. No one's first impression should be dark and dreary. 

3. Air it out. Since homes are closed up throughout the winter there's less fresh air circulating. Avoid any unpleasant odors from pets, cooking, trash, etc. by airing out your home periodically. Don't rely on fragrances as those won't get rid of the odors. 

4. Clear the area. Keep the sidewalk, driveway, and walkway snow and ice free as best you can. The easier your home is to access, the better. 

5. Avoid winter clutter. Boots, coats, hats, and gloves all take up a lot of space. Potential buyers will be opening closet doors so avoid stuffing closets to the brim by storing non-winter clothing in under-bed storage bins or somewhere else out of sight. A packed closet looks small no matter how big it really is. Also, keep holiday decorations at bay; they shouldn't hinder people easily moving about your home. 

6. Be flexible with showings. Often, the weekends are the easiest time for buyers to go on showings. You'll ideally want your home shown when it is still light out so be flexible as to when your potential buyer can view your home.

Sure, the holidays are a busy time for people in general. But so is the summer…graduations, weddings, vacations, BBQs, sporting events, back-to-school activities, and more…yet people still carve out time to find a place to live! 

With less homes to view and motivated buyers, you may find you have more showings than you would if you listed your home after the first of the year. Unfortunately some sellers think they'll get "kicked out" of their home in the middle of their holiday celebrations, without factoring in that closing and possession dates are all negotiable. While some buyers would love to be in their new home for the holidays, others just want to finalize their future before year end and will move come January. I've done several deals where both parties agree to a closing date, then the now-previous owner rents the home back from the new owner for a short time. 

Plus, there is nothing like a home decorated for the holidays to help a buyer envision their own family celebrations there!

I understand why potential buyers, whether first-timers or move-up buyers, remain cautious given all the economic headwinds and bad news out there. Economic growth has been slow, the jobless rate too high, and don’t even get me started about the politics in Washington, the euro-zone debt problems and the challenges facing Greece.

But I often urge buyers to examine what I like to call your “personal economy.” That is, if you have a steady job, reasonable credit, and enough savings for a solid down payment, you might want to take a deep breath and think about taking the leap into the housing market while prices and interest rates are so low.

Read what two of the nation’s top business publications, Fortune magazine and The Wall Street Journal, are telling their readers:

“Forget stocks. Don't bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing.”

- “Real estate: It’s time to buy again,” Fortune Magazine article by Shawn Tully.

“Two key measures now suggest it's an excellent time to buy a house, either to live in for the long term or for investment income.”

- “It’s Time to Buy that House,” The Wall Street Journal article by Jack Hough.

Tully in the Fortune piece interviewed Mike Castleman, founder and CEO of Metrostudy, who has spent more than 30 years tracking data on the inventory of new homes in the United States. Each quarter, inspectors go through 45,000 subdivisions from California to Maryland. According to Fortune, inspectors examine 5 million lots and record whether they contain a house under construction or completed.

What has Castleman observed? The glut of new homes that the U.S. had a few years ago at the peak of the market has rapidly disappeared. Instead, he told Tully that he has seen a rapidly declining inventory that could force prices higher. In the 41 cities Metrostudy looked at, there are just 78,000 houses vacant and for sale, or under construction – less than a quarter of the 343,000 units at the height of the market in 2006 and less than the total a decade ago.

"The talking heads who are down on real estate will hate to hear this, but America needs to build a lot more houses,” Fortune quoted Castleman as saying. “And in most markets the price of new homes is fixin' to rise, not fall."

Metrostudy collects figures on the number of homes that are vacant and for sale in each city, and the number of months it takes to sell all them to determine whether individual markets have a surplus or a shortage of homes. "If we had anything like normal levels of buying, those houses would sell in 2½ months," Castleman told Fortune. "We'd see an incredible shortage. And that's where we're heading."

Fortune says that consumers may be confused by conflicting news reports on the housing market, and that could be impacting their confidence in buying a home. On one hand, housing affordability has never been better. But on the other hand, they continue to see housing starts falling and home prices still heading down in some markets.

Tully said economists Robert Shiller and Karl Case, authors of the S&P/Case-Shiller Home Price indices, have different views about where we are in the cycle. While Shiller remains pessimistic, Case is more optimistic that things are starting to turn around, telling Fortune that "the lack of new home building is a huge help that a lot of people are ignoring.”

In its analysis of the housing market, Fortune noted that it’s important to look at the economic fundamentals of home ownership to see where the market is headed. As home prices rose sharply over the past decade, Tully said the magazine warned that a bubble was forming due to the level of new construction and the cost of owning a home compared to renting one.

“Eventually reality set in, and prices plummeted,” Tully said. “Our current view focuses on those same fundamentals — only now they're pointing in the opposite direction,” Fortune noted. “So let's state it simply and forcibly: Housing is back.”

The Fortune article said what will drive the recovery of the housing market is a sharp drop in new home construction, as noted in the Metrostudy research, as well as a big drop in home prices. Home prices have fallen about 30% nationwide since 2006, Fortune said, and more than 50 percent in hardest hit markets. With unusually high affordability levels, the article noted, Americans will start returning to the market.

While no one can predict with certainty the future of home prices and sales volume, it is safe to say that a turnaround will eventually happen. Timing the market is very difficult because you will never know the absolute bottom until prices have started going back up again. My advice is to look closely at your own “personal economy” and talk with a professional Realtor to see if now might be a good time for you to take advantage of low prices and rates, and join others in taking the plunge into buying a home.

Yun says, “Compare the chart below on the 30 year payment growth of the overall consumer price index, rent, food prices, gasoline prices, college tuition, and medical costs, versus the monthly mortgage payment. The rapid increases in college tuition bills may also imply too much demand, perhaps even a bubble in term of students not getting their money’s worth.  A recent spike in college student loans is due primarily to weak job market conditions, but may also be due to ‘over investment’ in education in relation to the cost.”

The slow growth in monthly mortgage rates and how cheap homes are on a per month basis makes a real value proposition for homebuying! Now is the time to buy an investment property, call me today at (303) 442-5001 to discuss your options.

1. People who look for a home during the holidays are more serious buyers!
2. Serious buyers have fewer houses to choose from during the holidays. Less competition means more money for you!
3. Since the supply of listings will dramatically increase in January, there will be less demand for your particular home. Less demand means less money for you!
4. Houses show better when decorated for the holidays!
5. Buyers are more emotional during the holidays, so they are more likely to pay your price!
6. Buyers have more time to look for a home during the holidays than they do during a working week!
7. Some people must buy before the end of the year for tax reasons!
8. January is traditionally the month for employees to begin new jobs. Since transferees cannot wait until spring to buy, your home must be for sale now to capture that market!
9. You can still be on the market, but you have the option to restrict showings during the six or seven days during the holidays!
10. You can sell now for more money and we will provide for a delayed closing or extended occupancy until early next year!
11. By selling now, you may have an opportunity to be a non-contingent buyer during the spring, when many more houses are on the market for less money! This will allow you to sell high and buy low!

Last week the Bureau of Economic Analysis released data indicating GDP rose 2.5% in the third quarter, due largely to consumer spending.  And, the Mortgage Bankers Association reported a 4.9% rise in mortgage applications last week, as both home purchases and refinances increased. Investors helped fuel the rise in activity, a positive sign for the housing market that that group is ready to buy again.

The National Association of Realtors is projecting a 1% rise in sales of resale homes this year and another 4.3% increase in 2012, with the existing-home median price rising – yes, rising – 2.6 percent in 2012.

Other economic indicators are relieving recession fears, and fortunately the “double dip” is looking more like a once-popular news sound bite rather than reality. Of course time will tell how this economy plays out, but when the media start sounding upbeat, that’s a win-win! 

Since interest rates dipped below 4% and home prices are still low, your monthly mortgage rate could easily fall below what you receive in rent even factoring in taxes and maintenance, with room for profit. Zillow has a "rental zestimate" feature which allows you to type in a property address and see what the mortgage would be at today's rates and the rental income (though keep in mind the mortgage payment listed depends on down payment, taxes, etc.). Out of curiosity I typed in my home address only to find the rent to be 143% of the mortgage! Craigslist and The Daily Camera classifieds are also a good indicator of going rents. The fact that investors are buying properties now to rent out (as opposed to "accidental landlords" who are renting out their property instead of selling for a loss) shows that the local rental market is very healthy.

There are obviously factors to consider when deciding to become a landlord or adding to your existing rental portfolio…how long you plan to hold on to the property, if you can have equity tied up for that time, who will manage it, etc. It is not a decision to be taken lightly. I work with all sorts of investors so call me at (303) 442-5001 and I'd be happy to go over options for investment properties and help you crunch the numbers. 

Time magazine reported that 16 percent of all sales contracts failed in July because the buyers could not secure a mortgage, according to figures from the National Association of Realtors. In other words, one out of every seven contracts is going down due to problems that buyers are having getting mortgages. To look at it another way, writer Alison Rogers says, there are tens of thousands of people who are trying to buy homes but can’t because they’re denied a loan.

In her article, Rogers – a Manhattan Realtor and founding editor of the New York Post’s real estate section – concedes that it’s possible that the system is doing its job, and that those denied buyers shouldn’t get loans. “Maybe they’re poor credit risks, or their employment isn’t stable, or they’re trying to overpay for their target properties,” she said. “But I doubt that’s the only thing going on because the percentage of denieds spiked so suddenly, from 4 percent in May to 16 percent in June.”

While July turndowns are steady from June, it does look to Rogers like that quadrupling earlier this summer reflects that, “a credit spigot was shut off very, very suddenly.”

Cash purchasers, on the other hand, haven’t fled the market. Some 29 percent of July sales were all-cash transactions.  NAR reports that “the bulk” of these are investors.  “Those with means, it appears, still believe in housing, perhaps lured by the slump’s relative bargain pricing. (Or they’re fearful of the daily rollercoaster of the global equities markets),” the Time article noted.

Difficulty in securing financing isn’t the only hurdle buyers are facing today. Local Realtors are reporting that surprisingly low appraisals are preventing many sales from going through. Colorado agents aren’t the only ones who are experiencing this issue. The Wall Street Journal, in a recent front-page article, noted Realtors all across the country are running into the same problems.

According to the Journal’s reporters, real estate appraisers, who were criticized by some for being too generous in their property valuations before the housing market fell, may be going overboard in the other direction.

“One of the conclusions from the housing bust: The appraisal system was broken,” the Journal said. “One of the conclusions some have drawn from the struggling recovery since then: The appraisal system is still broken, but in a different way. There is little doubt that home values have depreciated sharply in recent years for the most basic of economic reasons: excess supply of homes on the market and weak demand. But some realtors, home-sellers and economists believe low-ball appraisals also are undermining a housing recovery.”

The Journal said some real estate professionals believe that lenders are pressuring appraisers to come in with lower estimates. Banks also are using less-experienced appraisers, who often don’t appreciate factors that make a home worth more, they say. And valuations are being heavily influenced by distressed sales priced at a discount to the rest of the market.

Lenders are “instructing appraisers to be a little conservative, and that responsibility on the one hand is seen as credit tightening and, on the other, as exacerbating the housing problem,” Columbia Business School economist Chris Mayer told the Journal.  A research paper last year titled “How Much Is That Home Really Worth?” by economist Leonard Nakamura at the Philadelphia Federal Reserve, cited a downward bias in appraisals.

In talking with agents around Colorado, I’ve heard many anecdotes about sales being slowed down, renegotiated or even lost due to appraisal and mortgage financing issues. It does seem to be happening more and more these days.

While it’s important for lenders and appraisers to be cautious and prudent given the problems of the past, they also need to be reasonable in their approach and make sure that the pendulum hasn’t swung too far in the other direction. The recovery of the housing market is too important to throw more hurdles in its path.

With that in mind, our parent company, Realogy Corp., has issued a formal request to President Obama calling for a White House summit on housing to address some of the major hurdles holding back the housing market. Richard Smith, chief executive of Realogy, urged the President and his Administration to seek recommendations from real estate business leaders to help stimulate a sustained housing recovery.

As Smith noted, housing has an enormous impact on our nation’s GDP and given its substantial influence on all aspects of the economy, he believes it warrants special attention from the White House.

The key to the proposed White House summit on housing would be its emphasis on bringing together real estate business leaders to make actionable recommendations designed to stimulate the growth necessary for a sustained recovery in housing, which would have an ensuing positive effect on job creation and the broader U.S. economy.

Frontline business leaders from the residential real estate industry would add a valuable perspective to the process, and the summit would give the Administration the benefit of “unfiltered, real-time market feedback” from residential brokerage operators, real estate franchisors, homebuilders, mortgage lenders and other related industry groups.

In a letter sent to the President last Friday, Smith concluded by saying “your leadership on this issue would bring together the top business minds of the residential real estate industry at a time when practical business experience may very well offer the guidance necessary to stimulate housing, and thus, the U.S. economy.”

I’m proud that Coldwell Banker (through our parent company) is taking a leadership role on finding solutions to get the nation’s real estate market humming again. While there are many challenges facing our economy, much of it begins and ends with housing.

Statistics:

- 50% of for sale by owners sell to a family, friend or relative

- 5.4% will successfully sell their home without the help of an agent

- 1 in 3 use an agent to sell their home

- The only lever a FSBO can pull in this market is the price lever…how do you know when you are at the right price?

It's easy to put your house up for sale. It's tough to get it sold. With the changes in the market, FSBOs are having less and less success on their own.  The average buyer sees 100-150 homes when searching their criteria online, looks at nine homes on average in person, and purchase only one.  Because the odds of getting a buyer into your house are so low, its necessary to make sure your home's first impression online makes the cut.  Blurry or dim pictures, unemotional descriptions, and making it difficult to set up showings are all areas where I see for sale by owners fall short – it is no wonder that hiring a top agent will net the seller more money after all expenses.

Call me, Definitely Dave, at 303-442-5001 so that you too can make the most money on the sale of your home, NET after expenses. 

Obviously supply and demand play a huge factor in determining prices. With Boulder especially having such a low inventory of rentals, monthly rents are going to rise. While there is some inventory being added, such as the Two Nine North development at 30th and Walnut with 238 units, it is not significant enough to drive down rental prices. Historically Boulder has had a tight rental market and until more developers add inventory - which won't happen overnight - rents will continue to go up. 

Interestingly, the National Association of Realtors just released a report that seven out of 10 renters do aspire to be homeowners, saying it is a top priority for their future. Of those surveyed, 72% agreed that buying a home is a good financial decision while almost two-thirds said now is a good time to purchase a home. Since monthly rental payments build someone else's equity, consider the long-term savings homeownership affords. And, your monthly payment could be less than rent!

I'd say one out of every two buyer clients tells me something like this early in the process..."I was looking online and saw a $400,000 house for just $40,000. When can we go see it?" This is usually the part where I ask, "Were you looking on RealtyTrac?" and they answer with a surprised "yes".

While RealtyTrac.com may be good for reporting foreclosure data, the main issue I have with them is that a listed "sales price" is really just a defaulted loan amount or a lien. Most of these homes aren't even for sale! I have spoken with homeowners while helping them keep their homes and it's a shame that as soon as they fall behind on their mortgage there are people driving by their home, scoping out the "deal of a lifetime". It's stressful enough being behind on a mortgage and I'm sure you can imagine the additional stress this adds to the situation. How many of us know someone who has been down on their luck but is working with their lender to set up a plan to keep their home, only to have RealtyTrac mislead the public that they're ready to sell for a rock bottom price? To me this is an ethical issue but they're in the business of making money and charge a monthly membership of up to $49. Ironically, most of this information can be provided by a realtor at no charge. And, a realtor often ends up listing those homes that do become foreclosed because the bank hires them to do so. Using an agent costs you nothing and will end up saving you time and aggravation so it just makes sense to have a realtor on your side.