More homes went under contract in October than at any time in the last 20 years, partially attributable to the $8,000 federal tax credit for first time home buyers due to expire at the end of November. The tax credit extension signed into law that adds move-up buyers ($6,500) and extends income limits to $125,000 for a single person and $225,000 for a married couple, that figure is due to go up between now and June 30, 2010, when it’s scheduled to end.  Buyers will need to have a home under contract by the end of April in order to take advantage of the tax break. For more information about the extension email me at Judith@Buyers-Advantage.net.   

That should be good news for both buyers and sellers.  Buyers in recent months have had to face a decrease in housing inventory as lower priced homes were snapped up by first time home buyers and investors looking to make a profit.  And we’re heading into the real estate slow season for the holidays which won’t begin to pick up till after the first of the year.  But then I expect a steep hike in buyers and lots of sellers putting their homes on the market after a long dry spell.  We’re headed for a balanced market with good possibilities for a growing sellers’ market in the spring and summer months. If you’re planning to buy a home in the near future don’t wait too long or you’ll find yourself on the short end of a rising sellers’ market with prices heading higher.

Denver’s increasingly upbeat economy will likely fuel job growth later in 2010 after a bumpy fall and winter.  Increasing job growth will free up funds for house purchases and remodels, which will further fuel a growing economy.

October data show that lower priced homes under $200,000 are still selling at a higher rate than homes over $200,000.  But lower priced homes are becoming scarce as the market begins to narrow at the lower end due to high demand.  Buyers are making higher offers, and some desirable homes in good neighborhoods are commanding multiple offers.  Absorption rate (the number of months it takes to sell out the current inventory) dropped in October from 5.15 months at the end of September to 4.8 months at the end of October.  When it reaches 4 months it’s a sellers’ market.  Average days on market for October dropped from 96 to 93.  In July, the month with the highest number of sales this year, average days on market was 100. 

Average prices declined 4% from September and 2% from October 2008, while inventory was also down, 18% from a year ago, but just 4.5% from September.  Overall the number of days on market declined 3% from September and 2% from October 2008.  The number of condos/townhomes under contract (pending sales) rose significantly over last year, indicating a lot of activity in the attached dwelling market, while inventory declined showing a tightening market in that sector.  For single family dwellings the number of homes under contract increased 9% from last October, but declined about 6% from September.

The Denver metro area's cost of living makes it an easy choice over higher cost areas like both coasts. According to BankRate it costs 39.5%% less to live in Denver than in the Los Angeles area; 30.0% less than in San Diego; and 23.3% less than Seattle. If you live in the east, it will cost 35.7% less than in Washington, D.C.; 27.1% less than in Boston; 115.1% less than in New York (Manhattan); and 20.2% less than in Philadelphia.

For buyers coming from the south and the midwest, metro Denver could cost more. It costs 6.9% more in Denver than in Atlanta; 12.4% more than in Houston; 8.9% more than in Dallas; 8.5% more than in Dayton, Ohio; 3.7% more than in Rochester, MN, and 8.6% more than in Boise. But living in Denver still costs 11.3% less than in Chicago, 14.9% percent less than in Portland, and a whopping 61.8% less than in St. Francisco. If you’re moving from Florida, it will cost 7% more than in Jacksonville, 3.7% more than in Orlando, but 8.9% less than in Miami.

You'll need to do your due diligence to compare cost of living between your city and Denver at websites like Sperling's Best Places, Bank Rate or CNN/Money.

Having an Exclusive Buyers Agent to find the best buys will shore up your buying ability by representing your best interests - finding the best home at the lowest possible price, and saving you time and hassles. See client references on the Buyers-Advantage.net website. Phone numbers available upon request. Call Judith Clausen now at 303-587-3509 to help you find your next house.
 

Since my last blog entry I've had to take a break to cope with my husband's illness and death in September. It's been a difficult time over the last several months. But I'm ready to begin again. Thanks for the many messages of sympathy and hope.

In this entry I'd like to share with you an email I sent to some clients. You'll see what their needs are and how the market is (or isn't) meeting them.

Dear Jake and Sandra,

I got your email about your house hunt. You need a 2 car garage, 2+ bedrooms, 2+ bathrooms, a patio or small yard, HOA fees under $250, 1000+ square feet, a townhome not a condo, not on a busy street or less than desirable neighborhood, something that will likely hold value, and preferably move-in ready. That's from what you said in your email and what you and Jake have said during your house hunt. That's a tall order!

Here's the statistical data for September.

As you can see, inventory is down from last year this time 17.09% overall, 11.77% for condos (includes townhomes, patio homes, condos). Drop in inventory from June 2009 is 4.5%. Average sold prices are up 4.88% overall and 3.91% for condos. Average days on market is decreasing 1.02% for condos. The market absorption rate is currently 5.15 months, meaning we have a housing supply that will sell out in 5.15 months at the rate houses are now selling. A buyer's market is when you have 7+ months supply, and a seller's market is a 1-4 months supply. The picture is one of housing recovery, meaning it's moving from having been a strong buyer's market to more of a normal market and the direction expected is a slight seller's market in the spring.

The truth is that our market is heading into its holiday/winter hibernation. Inventory is limited. The bad news is that after you look at what I've sent today there are no more to consider. They'll come in by dribs and drabs after this till March when things begin to pick up again.

More data to look at is the average sold price. That includes all foreclosures, bank owned, and normal sale condos. Of what's been sold in the last month approximately 45% are townhomes and patio homes. The rest are condos. In September the average sold price for townhomes/patio homes was $211.420, with a net sold price after seller concessions of $209,169. For condos it was an average of $171,421 and a net sold after seller concessions of $169,454.

So you can see that your desired price is well below average, which will get you a below average townhome in terms of your needs. That's why I was so excited about the three places we saw earlier this week that were in your price range and had most of what you wanted.

Jake, you'd like to look at a few foreclosures or bank owned properties. You'll see a few in the places I've sent from the MLS. That's what's out there in your price range. The problem with foreclosures is what I said to you earlier.

They can take many months and even then often end up unraveling due to bank inaction or a late decision to let the home proceed to auction. Many folks believe that a buying a foreclosure is a good value. Good homes in good locations in good condition but also under the threat of foreclosure often command multiple offers at above the asking price. The remaining foreclosures on the market are usually substandard.

Bank owned properties, where the home has already gone through foreclosure, are a little better but because of the huge number of foreclosures across the country the banks, which more likely than not are large financial institutions throughout the world, are very slow to act, and again, it can take months. These institutions are not set up to deal with investment failures and don't have a smooth mechanism to deal with foreclosures. There are brokers out there who specialize in these REO sales, but I'm not one of them. If you need someone who does I can refer you to a great guy here in the area. Just let me know.

So that's the bottom line about the market in which you're looking for a place to live. If you have any questions, and I'm sure you will have, just ask away. I'll be happy to answer.

My advice is that you look over what I've sent today, decide if you want to see any of them, and then see those plus the three Sandra and I saw earlier this week that are possibilities. I don't mean at all to pressure you, but this is the best time to buy if you want to buy.

Best of luck,

Judith

Obviously they're looking for a townhome. But the market is similar for single-family homes. New statistics will be available for October sales in early November. Stay tuned for more news of what's happening in Denver real estate.

I haven't been able to write in my blog for the last few months. My husband has been having health issues and is currently in a rehab facility, most likely for the next several weeks. I spend a good bit of time with him. My clients over this period of time have been extremely patient and thoughtful and I have very much appreciated it.

I haven't lost touch with what's going on. One of Denver's best agents, Edie Marks, predicted in March that Denver's real estate market had bottomed out, and that it wouldn't be long before it started to recover. Local expert, Gary Bauer, disagreed, saying it was more like 60 days from then which would have put the beginning of recovery in June. We don't have June data yet, but my own experience bears Edie out. Since March I've seen greater buyer interest. Of course, my specialty is helping buyers find a home--I don't work with sellers at all--and buyers are beginning to realize that now is the time to buy.

More later after June figures are available.

The new American Recovery and Reinvestment Act (ARRA) included a new $8,000 first-time homebuyer tax credit for 2009 home purchases. If you've recently purchased a home or are thinking about buying a home you have several different ways you can receive this tax credit -- even if you've already filed your tax return.

Qualifying taxpayers who buy a home between January 1, 2009, and December 1, 2009 can claim up to $8,000 or $4,000 for married individuals filing separately. You can claim the credit either on your 2008 tax returns or 2009 tax return next year. The credit begins to phase out at a modified adjusted gross income of more than $75,000 or $150,000 for joint filers. But if you make less than that you can claim 10% of the purchase price up to the maximum credit.

The filing options to consider are listed below:

• File an extension.  If you haven't yet filed your 2008 return but are buying a home soon, you can request a six-month extension to October 15th. This step would be faster than waiting until next year to claim it on your 2009 tax return. Even with an extension, you could still file electronically, receiving your refund in as few as 10 days with direct deposit.

• File now, amend later.  If you're expecting a sizable refund on your 2008 tax return but you're also considering buying a house in the next few months, you can file your return now and claim the credit later. You would file your 2008 tax forms as usual, then follow up with an amended return later this year to claim the homebuyer credit.

• Amend your 2008 tax return.  If you're buying a home in the near future , but you've already filed your 2008 tax return, you can consider filing an amended tax return. The amended tax return will allow you to claim the homebuyer credit on your 2008 return without waiting until next year to claim it on the 2009 return.

• Claim the credit in 2009 rather than 2008. For some taxpayers, it may make more financial sense to wait and claim the homebuyer credit next year when you file your 2009 tax return rather than claiming it now on the 2008 tax return. This could include people who have less income in 2009 than 2008 because of factors such as a job loss or drop in investment income.

For more information on the new tax credit, see the IRS website.

Though still down considerably from 2008, Denver’s real estate market is picking up. February’s median price for a single family home is up 5.8% from January to $192,000, after the usual seasonal downturn in January. The average price of a single family home is $218,000, up 6% from January. For condos the news isn’t quite as bright. Sales were off 9.5% from January and the average price in February was down 7% to $138,2239, while median price rose 4.2% to $117,725.

Gary Bauer, independent real estate expert in Denver with the Genesis group, is optimistic for the rest of 2009, predicting a good spring market. Though many parts of the rest of the nation is looking at severe real estate price drops, since Denver’s market didn’t go through the highly inflated price bubble experienced elsewhere, Denver is one of the few places in the country where real estate is remarkably stable, particularly when looking at year over year data.

View Channel 9 interview with real estate expert, Gary Bauer .

The recently released Case Shiller Housing Index shows a year over year average price drop of 18.5% nationally. But of the 20 metropolitan areas measured, Denver showed the smallest decline, 4.0%, from 2007 to 2008.

The OFHEO (Federal Housing Finance Agency) report for 2008 shows that Denver's values decreased by only -0.71%, 111th of 292 Metropolitan Statistical Areas (Denver-Aurora). In the fourth quarter of 2008 values actually increased by 0.77%.

Foreclosure filings dropped by 2% in 2008 according to the Colorado Division of Housing. Completed foreclosures dropped 16% from 2007.

Denver's drop in values began in 2001, unlike most U.S. cities where the drop didn't begin until 2003, and then only in cities showing the greatest increase in prices during the early 2000s. Denver's increases took place in the 1990s and prices did not drop steeply from 2001 to late 2008.

More houses went under contract in February than in January by 9.2%, following a trend beginning in December. The mix of single family residences sold under $200,000 in February was 52.4% and over $200,000 was 47.5%. For condos the split was stark, indicating falling prices. Only 18.2% of sold condos were over $200,000 while 81.8% were under $200,000.

For buyers, the time is exceptionally opportune, especially given recent interest rate drops. And for first-time home buyers (buyers who haven’t owned a home for the last three years) an $8,000 federal tax credit should help sweeten the pot. You’ll have to buy before the end of the year though.

Single family homes priced well, in good condition, in good locations were staying on the market fewer days than the average of 107, and were selling in 30 days or less for 99.01% of list price. Homes staying on the market over 90 days sold at 94.87% of list price. If you're a seller you'll want to price your home well and make sure it's in good condition, attractively staged. If you're a buyer and you want to buy a move-in ready home in a good location, be prepared to pay close to list price. My experience over the last month to month and a half shows that premium homes are selling, many with more than one offer, and some even at above list price. Denver’s real estate market isn't uniformly declining, contrary to what you may hear on the news or read on the internet or in the newspaper.

According to the Denver Economic Development Council, the outlook for Denver's economy in 2009 is better than average. Denver's unemployment rate at the end of February was 6.6, considerably better than the national unemployment rate of 8.1%.

The jobs outlook is better, too, for the Denver Metro area. According to the most recent Manpower Employment Outlook Survey for the area issued on March 10th, 10% of employers expect to hire more employees, 13% expect to reduce their work force, 73% hope to maintain their current work force, and 4% are uncertain. Sectors hoping to hire include Information, Financial Activities, Professional and Business Services, and Leisure and Hospitality services. Sectors expecting job losses are manufacturing, leisure-hospitality, and government. Sectors where employers plan to reduce jobs are Construction, Durable Goods Manufacturing, Nondurable Goods Manufacturing, Transportation & Utilities and Education & Health Services. However, the recent American Recovery and Reinvestment Act will add jobs to Colorado’s Construction sector. 59,000 new jobs are expected in Colorado due to the measure.

The Denver metro area's cost of living makes it an easy choice over higher cost areas like both coasts. According to CNN/Money.com it costs 51.1%% less to live in Denver than in San Jose; 43.8% less than in San Diego; 66.6% less than in San Francisco; and 12.9% less than Seattle. If you live in the east, it will cost 37.6% less than in Washington, D.C.; 32.8% less than in Boston; 101.9% less than in New York; 22% less than in Philadelphia.

For buyers coming from the south and the midwest, metro Denver could cost more. It costs 4.9% more in Denver than in Atlanta; 12.8% more than in Houston; 8% more than in Dallas; 8.3% more than in Dayton, Ohio; 5.2% more than in Rochester, MN, and 10% more than in Boise. But living in Denver still costs 10.7% less than in Chicago, 15.1% percent less than in Portland, and a whopping 49.3% less than in Los Angeles.

You'll need to do your due diligence to compare cost of living between your city and Denver at websites like Sperling's Best Places, Bank Rate or CNN/Money.

Having an Exclusive Buyers Agent to find the best buys will shore up your buying ability by representing your best interests - finding the best home at the lowest possible price, and saving you time and hassles. See client references. Phone numbers available upon request. Call Judith Clausen now at 303-587-3509 to help you find your next house.
 

Asbestos Moving out of Colorado Homes
    
Purchasing a home can be filled with excitement and anticipation for homeowners. Regarded as one of the great American traditions, it can also be a time where additional responsibilities are acquired. There are many locations throughout the state of Colorado in which citizens have been exposed to asbestos. Asbestos is found in the ground as a naturally-occurring mineral and pollutant. Left behind by many industrial plants and military bases which are now abandoned, there are still dangers present which pose risks to citizens throughout the state.

Potential Denver, Colorado home buyers or those remodeling homes should be aware that homes built before 1980 may still harbor asbestos materials. This is not to make you alarmed because asbestos exposure is easily prevented by taking simple precautions. Typically found in attic insulation, piping, popcorn ceilings, roof shingles and flooring, many green, healthy options insulation options exist that make the use of asbestos obsolete.

Asbestos fibers are thin and strong, and when inhaled frequently, an individual can develop mesothelioma, a rare but severe lung ailment caused by asbestos exposure. Several mesothelioma treatments are available; however, patient prognosis is usually poor. There are a number of factors that can impact how a person reacts to the disease and how their life span and mesothelioma life expectancy will be affected. These factors include latency period, age of diagnosis and cigarette smoking.

If any asbestos is suspected in the home, the best thing to do is leave it un-disturbed until a home inspector can determine the best course of action. Disturbing asbestos in good condition may cause its fibers to be released into the air. It is important to meet with health or environmental professionals to properly examine your new property. Sometimes, the best action is no action. However, if removal is necessary, it must be performed by a licensed abatement contractor who is trained in handling hazardous substances. Organizations such as the Colorado Department of Public Health and Environment, assists businesses and schools to comply with laws regulating asbestos containing materials.

In Colorado, construction practices are upgrading methods to suit better lighting, heating, cooling systems and environmentally habitable insulation. Green options such as cotton fiber, cellulose and lcynene should be given consideration as replacements to asbestos. Not only will eco-friendly materials provide a healthy atmosphere, it can significantly reduce energy costs.

Current statistics demonstrates that the use of recycled building materials such as cotton fiber insulation can reduce energy use in the home by 25 percent. Alternatives to asbestos allow for you and your family to live in a healthy and safe home, free of health corroding materials.

Denver's housing market is beginning to reflect the deepening economic crisis, but with some bright spots that show continuing buyer activity and potential for 2009.

According to recently released housing reports Denver's market is stronger than elsewhere.  The Case Shiller Housing Index shows a year over year average price drop of 18.5% nationally.  Of the 20 metropolitan areas measured, Denver showed the smallest decline, 4.0%, from 2007 to 2008.

The new OFHEO (Federal Housing Finance Agency) report for 2008 shows that Denver's values decreased by only -0.71%, 111th of 292 Metropolitan Statistical Areas. In the fourth quarter of 2008 values actually increased by 0.77%.

Foreclosure filings dropped by 2% in 2008 according to the Colorado Division of Housing. Completed foreclosures dropped 16% from 2007.

Denver's drop in values began in 2001, unlike most U.S. cities where the drop didn't begin until 2003, and then only in cities showing the greatest increase in prices during the early 2000s. Denver's increases took place in the 1990s and prices did not drop steeply from 2001 to date.

More houses went under contract in January than in December by 16.59%, following a trend beginning in December. But average prices for all residential housing dropped significantly by 5.29% from December. The mix of single family residences sold under $200,000 in January was 56.19% and over $200,000 was 43.81% compared to December where the mix was evenly split. For condos the split was greater. Only 20.9% of sold condos were over $200,000 while 79.1% were under $200,000.

For buyers, the time is still opportune, especially given recent interest rate drops. Interest rates reached 4.875% on February 25th for a $300,000 loan from our preferred lender, Rate One, The Mortgage People. FHA rates were at 5.000% for a $140,000 loan and 5.000% for a $300,000 loan. Credit is still tight, but loans are still possible for buyers with good credit and a 10-20% down payment.

Single family homes priced well, in good condition, in good locations were staying on the market fewer than the average of 99, and were selling in 30 days or less for 98.73% of list price. Homes staying on the market over 90 days sold at 94.46% of list price. If you’re a seller you’ll want to price your home well and make sure it’s in good condition, attractively staged. If you’re a buyer and you want to buy a move-in ready home in a good location, be prepared to pay close to list price. My experience over the last month to month and a half shows that premium homes are selling, many with more than one offer, and some even at above list price. Denver’s real estate market isn’t uniformly declining, contrary to what you may hear on the news or read on the internet or in the newspaper.

According to the Denver Economic Development Council, the outlook for Denver’s economy in 2009 is better than average. Denver’s unemployment rate at the end of 2008 (the latest figures available) was 6.1, considerably better than the national unemployment rate of 7.6%. Jobs outlook is better, too, for the Denver Metro area. According to the Manpower Employment Outlook Survey for the area issued on February 6th, 15% of employers expect to hire more employees, 12% expect to reduce their work force, 70% hope to maintain their current work force, and 3% are uncertain. Sectors hoping to hire include construction, transportation and utilities, information, financial activities, education and health services, and other services. Sectors expecting job losses are manufacturing, leisure-hospitality, and government.

Of course, all this could change given the volatility in the economy, but for now the Denver metro area is plugging along and likely won’t be as hard hit as other metro areas in the country, partly due to Denver’s recession beginning in 2001 which tended to stop the real estate bubble earlier than other metro area. Prices have held relatively steady through the end of 2007, and only in the last two months have prices dropped significantly, which is good news for buyers.

The Pew Research Center cites Denver as THE top place to live! Just what I've always thought. And the recently-released Case Shiller Report shows a loss of value much less than in other cities, just 1.1% less in November than in October 2008 (the report lags by two months), and 4.3% lower than in November 2007.

A question asked by many of my buyers is "If I buy now, what about declining values? Will my home be worth less when it comes time to sell it?" The answer varies depending on how long you stay in your new home.

On average buyers stay in their homes about 5 years before selling according to independent real estate broker, Gary Bauer. (Bauer issues a monthly market report used by the Denver dailies and is widely regarded in Denver real estate circles as a market expert.) In an April 2008 report in the Rocky Mountain News by Rob Reuteman, Bauer is quoted on the issue. He says, "If I bought my home a year ago for $200,000, and I had to sell for $180,000, I'd be upset. If I'm staying in the Denver market I take $180,000 and buy a house that would have cost me $200,000 a year ago. But I'd still have a little feeling that I really didn't do so well. If I were that individual five years ago, my average appreciation would be 39 percent. Would I be concerned about a 10 percent drop in price today? I don't think so. I would have bought it for $130,000 and sold it for $180,000."

Denver's cost of living makes it an easy choice over higher cost areas like both coasts. According to CNN/Money.com it costs 51.1%% less to live in Denver than in San Jose; 43.8% less than in San Diego; 66.6% less than in San Francisco; and 12.9% less than Seattle. If you live in the east, it will cost 37.6% less than in Washington, D.C.; 32.8% less than in Boston; 101.9% less than in New York; 22% less than in Philadelphia.

For buyers coming from the south and the midwest, Denver could cost more. It costs 4.9% more in Denver than in Atlanta; 12.8% more than in Houston; 8% more than in Dallas; 8.3% more than in Dayton, Ohio; 5.2% more than in Rochester, MN, and 10% more than in Boise. But living in Denver still costs 10.7% less than in Chicago, 15.1% percent less than in Portland, and a whopping 49.3% less than in Los Angeles.

You'll need to do your due diligence to compare cost of living between your city and Denver at websites like Sperling's Best Places, Bank Rate or CNN/Money.

Having an Exclusive Buyers Agent to find the best buys will shore up your buying ability by representing your best interests - finding the best home at the lowest possible price, and saving you time and hassles. See client references. Phone numbers available upon request. Call Judith Clausen now at 303-587-3509 to help you find your next house.

If you're thinking about buying in an older neighborhood you may want to know that a sewer line inspection should be part of your high priority inspection items. It won't cost much--compared to what it could cost to repair a broken or damaged sewer line. Count on about $200. An article in the January 6, 2009, Denver Post describes the cost of a surprise visit from the city's inspector, Wastewater Management, which can run into thousands.

If you need a referral to a trustworthy sewer line inspection company, let me know. Could be an inspection will reveal a clean pipe, you never know. But wouldn't you rather know about a sewer line break before you negotiate inspection repairs with the seller rather than after? You know, a penny saved...