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The number of unsold homes in the Denver area continues to decline. In October there were 23,120 homes on the market, a 20.1% drop from 2007!  Inventory hasn’t been this low since January 2005, when there was slightly less than 21,000 homes available.

One of the primary reasons for the lessening inventory is the fact that would be home sellers, are not putting their homes on the market given the current conditions.  Many sellers we work with are choosing to be landlords, or just sit tight until the competition from bank owned properties subsides.  Unfortunately, they may have to wait a while.  I predict the REO properties will continue to dominate our landscape for the next 6-9 months.

Another reason for the smaller inventory numbers is that we’ve seen investor money start to pour in.  There has been 3 occassions in the past month where Get Home Denver Team clients, have lost buying opportunities due to bids on properties we identified.  These multiple offer scenarios are a good sign that this market is on the rebound!

There are some really good deals out there, and investors are starting to gobble them up!  We scour the market on a daily basis, and present these deals to our clients.  If you would like to be included on these deals, simply contact us and I’ll make sure you are receiving this info!

This video is very informative and explains the reasons for real estate market corrections. It also gives an historical perspective of where we’ve been, and the inevitable result of any downturn. A big shout-out and Thank You to Ted Mackel and the Homebuysblog from Simi Valley, for finding this gem!

Explaining the market is much easier than Timing the market. Timing is a much harder thing to predict. We believe the Denver Real Estate market is at, or very near the bottom. Read some of our previous articles, or better yet subscribe to our feed. You will then always be on top of the important statistics that will help you make up your own mind.

We always love to hear what you think! What are your predictions for the Denver Market? If you are thinking of a home purchase, or sale, when do you think it will be the right time to pull the trigger? What factors do you look at when making this decision? Etc…..

GOOD NEWS for the Colorado Market… act now before it’s too late

For Colorado as a whole, prices rose by 1.82% in the past year and by 0.32% in the second quarter please see the attached article from the Denver Business Journal for more detail.

As a mortgage professional in the industry I have the opportunity to talk with all parties involved in the transaction- both buyers and sellers and Realtors. The vibe is positive out there. People are feeling good about the inventory going down and the increased number of “SOLD” signs in their neighborhoods.

As rates remain in the low 6’s for a 30 year fixed mortgage it is a wonderful time to take advantage of Real Estate in Denver. Consult your Realtor and your Mortgage Professional on how to buy with 0% down before the down payment assistance programs are no longer available.

Seller funded down payment assistance programs

will be available until September 30, 2008.

YES- we can close the loan this fast!

First-time buyers and people who have not owned a home in the past three years may get a $7,500 tax credit if they purchase a home on or after April 9, 2008 or if they purchase one before July 1, 2009.

Please feel free to contact me with any additional questions you might have.

Happy house hunting.

Rebecca’s Email

photo credit: TW Collins

Once you feel comfortable that you have a mortgage professional who can advise you, here are some secrets for shopping effectively.

First, just like anything else IF IT SEEMS TOO GOOD TO BE TRUE, IT PROBABLY IS. No one has a commodity on rates- interest rates all come from the same places, and if the rate sounds really unbelievable, ask a few more questions. Is there a prepayment penalty? Are there extra fees? What is the length of the lock-in agreement? If fees are discounted, is it built into a higher interest rate?

Second, YOU GET WHAT YOU PAY FOR. If you are looking for the cheapest deal out there, understand the risks, especially with the recent credit crunch you need a TRUE PROFESSIONAL on your side someone who is checking guidelines and is up to speed on the market changes. We have all heard the horror stories from friends and family about missed closing dates, or surprise changes at the last minute on interest rate or fees…usually due to working with discount or internet lenders who may have a serious lack of experience. Remember, the cheapest rate on the wrong strategy can cost you thousands more in the long run.

Third, MAKE CORRECT COMPARISONS. When looking at estimates, there is more to it than just the bottom line. You must compare apples to apples the Lender fees are the only costs that the Lender controls all other fees are third party costs. You may be familiar with the term “junk fees”. All Lenders have a fee to process your loan- simply the cost of doing business. Many Lenders have both a processing fee and a funding fee, typically these fees together do not exceed $1,200. If you see a number of other Lender fees listed I would ask your Mortgage Professional for more information.

A Lender is responsible for quoting the other fees associated with a mortgage loan such as title insurance, hazard insurance, appraisal, days of interest., ect.. Keep in mind since they are third party costs – they are often under-quoted up front by a lender to make their bottom line appear lower. Keep your eyes out for these discrepancies and be sure to ask questions about fees you do not understand.

Lately we have seen hidden discounts fees that are NOT included in the bottom line estimate. This hidden fee will appear in small print typed at the bottom of a good faith estimated “X” discount point to be charged ect… again- if it seems to good to be true it likely is.

Fourth, UNDERSTAND THAT INTEREST RATES AND CLOSING COSTS GO HAND IN HAND. A good way to view loans is either Cost, No Cost or Shared Cost– if you are looking for a no cost loan understand that this comes at the expense of a higher interest rate- there is no free lunch. It all depends on what your goals are.

For instance:

How long will you be in the property?

Are you close to retirement?

Is this your primary residence, 2^nd home or an investment property?

What’s more important to you right now cash on hand or a lower monthly payment?

Do you have any life changing events coming up a baby or kids leaving for college?

Is the seller paying any of your closing costs?

A professional advisor will be able to offer the best advice in terms of the balance between interest rate and closing costs that correctly fits your personal and financial goals.

Sample Analysis:

$250,000 Loan with 1% Origination Fee = $2,500 at 5.875% = $1,478.84 principal & interest payment

$250,000 Loan with 0% Origination Fee = $0 at 6.125% = $1,519.03 principal & interest payment

Difference of $40.19 per month divided by $2,500 = 62.20 months or 5.18 years to recoup my costs

Fifth, UNDERSTAND THAT INTEREST RATES CAN CHANGE DAILY, EVEN HOURLY. This means that if you are comparing Lender’s rates and fees – this is a moving target on an hourly basis. In order to have an accurate comparison – you must get these quotes within less than an hour of each other. Be sure the terms are the same- product and program. You also must know the length of the lock you are looking for, since longer rate locks typically have slightly higher rates.

As this is likely one of the largest financial purchases you will make- be smart, ask questions, and seek the advise of a professional advisor not just some one who will quote you the lowest rate out there.

Decorating your home to fit your lifestyle, and decorating your home to sell are VERY different! You may have displays of treasured collections, items you have picked up on your travels, or family memorabilia. There are two reasons to pack it all away when you put your home on the market. The first is that your display may be so interesting, that buyers pay more attention to it than your home. I did a consultation at a home that had a border of plates depicting different animals displayed along the top of the living room and dining room walls. I could just imagine the buyer’s focus directed at this collection instead of the features of the home. The second reason is for the safety of your possessions. The only way to guarantee that your belongings don’t get broken or stolen, is to pack them away out of sight.

What is a good rule to follow? Less is more! Do you have photos or artwork hung on every wall? This is a good place to start editing. Blank wall space allows the eye to rest, and makes it easier to take in the surroundings. It will also make a space appear larger. Remove anything hung on a wall, when that wall is less than two feet wide. Place artwork on the larger walls only. For tables, shelves, or other surfaces, stick with the “Rule of 3.” Remove all but three items from each table. For example—a coffee table might have a plant, a decorative bowl, and a large book. This rule works for the kitchen counters, or a fireplace mantle, too.

Remember, buyers will open closets and cabinets, and if everything is filled or overflowing, it will appear that your home does not have enough storage. Remove one third of everything in each closet, kitchen and bathroom cabinet or drawer, and pack them up. Is your garage or basement bulging at the seams? Buyers pay attention to these two areas, also. This would be a good time to clean out what you don’t want to move with you. You’ll be surprised at how much room you will have, and buyers will be impressed with the amount of space.

Getting your home ready to sell takes time and hard work, but when your home sells, you will be glad to have some of the packing already done.

In a recent NBC news report, the Light Rail system in Denver, was referred to as the “Poster Child” for our Mass Transit system.

With the high cost of fuel, living near mass transit makes environmental and financial sense!  There are many great communities, and neighborhoods within walking distance to Denver’s light rail system.  The value of these properties will certainly go up as the cost to drive to work increases.  Click here to visit the Denver Regional Transportation District (RTD) site.

If you currently utilize Light Rail, or other Mass Transit, we’d love to have you comment about your experience!

photo credit: amishsteve

There’s no simple answer to how the housing market got into this mess but the bottom line on the credit crunch is you do NOT have to have 720 fico with 20% down to get a loan.

What are Investors (Mortgage Lenders) looking for these days- credit, income and equity. These criteria still hold true, guidelines have tightened up but these are the main areas of concern for all investors.

Credit- what is your credit score? Scores range from 500-800. A credit score of 720 or higher is ideal. Anything over 680 is great. 680-650 is ok. 650 and below would be a perfect fit for FHA. Please look to future posts on the reason why all radio adds you hear now-a-days are all about” the new and improved FHA loans”…

Income- are you self employed (1099) or W2? If you are a self employed borrower all investors are looking for a two year history in the same line of work. If you are a W2 employee you will need a two year history of employment regardless of industry. By the way- Job gaps are acceptable for W2 employees and it is ok to be fresh out of school looking for a job with no history of previous employment.

Equity- are you looking for 100% financing or 80% financing, etc…

Investors determine their products and pricing based upon their layer of risk they are exposed to in the above three areas. There is one remaining category of importance to investors- occupancy. Will the property to be an investment property or do you intend to occupy the property as your primary residence?

We have seen the credit crunch eliminate more aggressive products such as 95% + non owner occupied financing, 103% financing, etc… don’t be fooled by all the press surrounding the mortgage industry. There are still many loans out there for both owner occupied and non owner occupied properties.

Best of luck during your home search, and feel free to contact the Get Home Denver Team with any questions!

When it comes to falling home prices, One Size does not fit all!

The Lowry neighborhood in Southeast Denver has been one of the best performing neighborhoods in the Denver area and has experienced an average 8% gain per year, from 2000-2007.

You can view the full report here.

photo credit: respres

According to The Millionaire Real Estate Investor by self-made millionaire and real estate investor Gary Keller, most successful real estate investors have had to overcome certain beliefs that later proved to be unfounded. Some of these beliefs center around the way they view themselves as investors, and the others are focused on beliefs about investing. By addressing these doubts and fears, and recognizing that they’re unfounded, you’ll eliminate the major barriers to becoming a real estate investor. ·

Personal Myth #1: “I don’t need to be an investor. My job will take care of my personal wealth.” Truth: History indicates that few jobs pay enough to create true financial independence. Financial wealth building depends on another vehicle. ·

Personal Myth #2: “I don’t need or want to be financially wealthy. I’m happy with what I have.” Truth: Financial wealth offers greater opportunity to care for yourself and others, and that is something most everyone wants and needs.·

Personal Myth #3: “I can’t do it.” · Truth: You don’t know what you can or cannot do until you actually try. ·

Investing Myth #1: “Investing is complicated.” · Truth: Investing is as complicated as you make it. ·

Investing Myth #2: “All the best investments require knowledge most people don’t have.”· Truth: Your best investments will always be in areas that you can or already do understand. ·

Investing Myth #3: “Investing is risky. I’ll lose my money.”· Truth: Investing and gambling are not the same thing. Investing, by definition, is not risky. ·

Investing Myth #4: “Successful investors can time the market.” · Truth: Timing isn’t about being in the right place in the right time. It’s about being in the right place all of the time. ·

Investing Myth #5: “All the good investments are taken.” · Truth: Plain and simple, every market, in every time, has its share of good investments.

If you’re interested in investing, but you have doubts about whether or not investing fits in with your current financial program, it’s best to consult with a qualified Real Estate Broker and reputable Mortgage Planner who can assess your financial situation and put you on a plan that targets your goals. As with any financial program, gaining clarity on the facts is always the best place to start.

Denver based Lend Lease Communities is doing a study to see if the solar resources are available to supply power on the 3870 acre planned community southeast of Denver.

Testing should last for 12-24 months and if all is OK, they hope to become the first “large-scale” Colorado community to use solar as a power source. Read the full story here.