Fannie Mae has a program called HomePath, which offers subprime-era terms for buyers: minimal down payments, no appraisals, no mortgage insurance and lower minimum credit scores.

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


John Burns, a housing analyst, is predicting that homeownership will continue to decline in the US, from a peak of 68%, to 62% or lower.

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:

I continue to be frustrated when I read news reports about the housing market. It drives me crazy that people who know nothing about real estate, aren’t in the business, continually write reports that are misleading (in my opinion).

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.

The key to the market’s health is ALWAYS, let me say it again, ALWAYS about volume and transactions. As long as their are willing and able buyers, the market is good and healthy.

The challenges over the last 18 months has been not only the lack of buyers, particularly in the higher price ranges, but also the lack of ABLE buyers. In other words, there are many cases where there are WILLING buyers, but because of the huge lending pull back, these buyers are not able to obtain financing.

As you can see from the graphic below, the Denver market as a whole is showing broad strength in looking at year over year numbers. For some of the southern area markets, such as Centennial, Highlands Ranch, Castle Rock, Parker – the year over year numbers are much more pronounced; meaning that Q1 of 2009 was exceptionally weak, and Q1 2010 was substantially stronger.

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”).

Many of you may have seen the article in Fortune last month saying how Denver had gone from one of the best real estate markets to one of the worst – all in a matter of 10 months.

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.

(for more info, click on the full article on reltor.org)

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.

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.

I can’t say it enough: this is about as good as it is going to get to buy and sell real estate. With prices having taken a beating over the last several years, and interest rates at probably the lowest point for possibly the next 20+ years, you HAVE to ask yourself: Am I living NOW in the home of my dreams? If not, what is holding me back?

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).

September 2009 Listing Inventory - Denver MetroList

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.

I was recently doing my usual door-to-door through a neighborhood with fairly strict covenants. I came up to two neighbors, said hello and introducted myself, and they replied very sternly: “You don’t live here, do you?” A bit taken off guard, I tentatively replied, “No.” She said, “Good! There are these Realtors on the HOA board and I think it is a conflict of interest. What do you think?”

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.