In some cases this is a GREAT deal for buyers, sometimes not. Nevertheless buyers should keep an eye out for these types of opportunities, not only as a personal residence but for rental properties too.

To view the full article from the LA Times: click here

I have been saying that I believe the bottom of the market is behind us, at least here in Denver. However, I also don’t see anything pushing prices up, either. The only thing that pushes prices up, besides inflation, is demand. And, according to Burns, demand at least as measured by percentage of the population owning their own home, will likely decrease.

To view the full article:

A recent LA Times article talks about both year over year and month over month data. It is almost always misleading to evaluate the real estate market based on month over month data, especially a broad measure like median sales price.

source: LTGC, Metrolist

In any case, I continue to see progress in the market as a whole. Sure, there are still several problems: financing for condos remains difficult and the upper end of the market is still out of balance in terms of sellers and buyers (more sellers than buyers). However, I am seeing higher end properties begin to sell when the buyer(s) begin to see the value (i.e. “deal”).

I received several calls from clients, all in a panic. I said the article was totally false and misleading, and walked them through why. However, I was much too lazy (and busy) to spend the time to articulate, in written form, why it was incorrect.

Fortunately, John Renchook wrote a great article outlining these facts. Check it out http://insiderealestatenews.com/2010/04/denver-no-5-on-case-shiller/

One of the key errors in the Fortune article was using faulty data. Any time you use data that does NOT come directly from the MLS or Tax Assessor, you are bound to have errors – at least in my opinion. The MLS IS THE MARKET!!! Reporters often don’t understand that. It would be like reporting financial and stock news without checking the NYSE/NASDAQ, etc for the accurate data. Dumb – and misleading.

That is why I never read the news for real estate – it is often wrong! I am out IN THE MARKET EVERY DAY, plus I get updates and statistic summaries through the MLS. Rarely does what I see and experience get reported in the news.

http://www.realtor.org/home_buyers_and_sellers/2009_first_time_home_buyer_tax_credit

The Basics: Extended Home Buyer Tax Credit 2009/2010

Bringing the Dream of Homeownership Within Reach
As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that:

Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.
Here is more information about how the Extended Home Buyer Tax Credit can help prospective home buyers become part of the American dream. If you have specific questions or need additional information, please contact a tax professional or the Internal Revenue Service at 800-829-1040.

Latest news:

Watch: REALTOR® Party Tax Credit Video Contest Winner (Nov. 12)

Home Buyer Tax Credit Has Added Benefits for Armed Services Members, Others (Nov.11)

Tax Credit Extension a Positive Step Toward Real Estate Recovery (Nov.5)

Who Qualifies for the Extended Credit?
First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.

Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.
To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

If you or your client purchased a home between January 1, 2009 and November 6, 2009, please see: 2009 First-Time Home Buyer Tax Credit.

Which Properties Are Eligible?
The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Is Available?
The maximum allowable credit for first-time home buyers is $8,000.

The maximum allowable credit for current homeowners is $6,500.

How is a Buyer’s Credit Amount Determined?
Each home buyer’s tax credit is determined by two additional factors:

The price of the home.
The buyer’s income.
Price

Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Buyer Income

Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.

These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits. If you or your client purchased a home between January 1, 2009 and November 6, 2009, please see 2009 First-Time Home Buyer Tax Credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?
Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

Although some neighborhoods around town have not experienced significant declines in price, the majority have to some degree. Factor into your cost of money (interest rate on your mortgage) and like I said, now is an UNBELIEVABLE time to buy.

If you are a Seller, you have to consider the following: there is not that many homes for sale! In many neighborhoods, such as Willow Creek, Homested – there is a shortage of homes on the market (exception: the upper end of the market – homes >$750k). The listing inventory for the last 2+ years has steadily declined (see chart below).

Regardless of where you fit in these scenarios, it may be in your best interest to take a few moments to re-evaluate your situation.

Well, I personally live in a neighborhood with no covenants – on purpose. So I am a little biased. But nevertheless, I have come across instances where real estate agents put themselves onto HOA boards to server their own agendas.

And I guess that is my point: obviously, someone has to be on the board, and in a perfect world, the community rotates its members through so that everyone contributes, and the more people that serve the more the community is represented.

However, in past experiences I have seen both Realtors and non-Realtors get elected to a HOA board to serve their own personal agenda. So I am not going to lay blame into my fellow Realtors exclusively.

To my knowledge, their is not a specific, legal reason why real estate brokers shouldn’t/can’t serve on their own HOA boards. However, when disputes arise, it seems to me that the Realtor is now caught between two fiduciary duties – the HOA and clients (if they don’t sell homes in the neighborhood than this is a non-issue).

What I have seen is real estate agents get on HOA boards to a) get business; b) push their own agendas and opinions. The result is that members of the community get upset and a backlash ensues. I have seen this on more than one occassion, and in more than one state!

So, who am I to say what is right or wrong, it is definitely a personal opinion, however, you’ll never see me on an HOA board!

p.s. It doesn’t mean I wouldn’t support and assist in my community – it just means I think it is a potential conflict of interest and I can better serve in other ways.

Why?

Let’s use the following example:
Your current house, House A, was worth $300,000 at the peak of the market.
Your “move up” house, House B, was worth $500,000 at the peak of the market.

So, to keep the math easy, let’s now say that the market is down 20%.
– House A is now worth 20% less, or $240,000 (20% of $300,000 is $60,000)
– House B is now worth 20% less, or $400,000 (20% of $500,000 is $100,000)

Here is the point: House A lost $60k, House B lost $100k. The difference between the two is $40,000. You actually SAVE/MAKE $40k by making the move BEFORE the market goes back up. Yes, you are losing $60k on your current house, but you “making” $100k on the new house. Why wait to pay $100,000 more for your new house?

AND, we haven’t looked at interest rates yet, which can make things even more expensive. Stay tuned!

You can’t afford not to buy real estate right now.

I know this sounds like a sales pitch, and technically I am a salesperson, but being “salesy” is not my genetic makeup (that’s my wife – just don’t tell her I said that).

Seriously, there are three very good facts about why it makes sense to buy real estate RIGHT NOW.

First Time Home Buyers – Everyone has heard this right now, but if you are  first time home buyer, or you have not owned a home for less than 3 years, you can get $8,000 back from the IRS.  This is not a loan, this is an ACTUAL cash credit.   Why is this important:  the median sales price for a home in the Denver Metro area this yea is $195,000.  So the IRS is giving you 4% of the purchase price in cash to buy the house.  You only need 3 1/2% for a down payment, so essentially you can be getting a half a point back for buying your own home.  Need I say any more?

The other major factors to buy now are:

It always makes financial sense to MOVE UP in a down market.  So, you want that 3 car garage, or the house with a view, or the extra bed and bath for when you have visitors.  Whatever the reason, I will go through why this mathematically makes sense.

 Interest Rates affect your Purchasing Power, and interest rates are still at historic lows.  Every 1% change in interest rate fluctuation is equal to 10% purchasing power.  If the rates go up 1%, you just lost 10% of your purchasing power.

My next two posts will look into these two items in more detail

As of 7/22/2009 - zip codes 80104,80108,80109

I don’t have a specific explanation, but my overall sense is that the higher priced properties have softened on price, there have been distresses properties in the higher priced ranges that buyers have begun to take advantage of, and possibly a slowing of lower priced distressed properties.