Ron Estell’s Blog

I was very late posting this article this month.  So late that I hope to have the February market summary completed in the next 2 weeks.  If you like you can have my articles a week earlier than they are posted by subscribing to my mail list.  Just send an email to subscriptions@RonEstell.com with the words How’s the Market in the subject line.

2009 in Review

Due to the Home Buyer’s Tax Credit and low interest rates November sales rose spectacularly for both single family homes and condos.  December condo sales remained strong while single family weakened.  Overall 2009 sales were 42,070 vs. the 2008 performance of 47,837.  Government Stimulus Extension of the First Time Home Buyer’s Tax credit of $8,000 now includes all contracts written through April 30, 2010. In addition the Buy-up Tax credit for existing homeowners of $6,500 was instituted and will also extend through the end of April.  The First Time Home Buyers credit significantly stimulated sales of homes under $200,000.  We expect the Buy-up tax credit to benefit homes over $200,000.

This year’s challenge will be interest rates.  The federal government bought mortgage backed securities in order to keep interest rates low.  The announcement has been made that the purchase of mortgage backed securities will continue until June of this year.  After that point we expect that market rates will increase.  The difference between  5% and 6% rates on a $250,000 loan would mean that payments would rise from $1,041 to $1,342.  Buyer incentives and historically low interest rates between now and the end of April offer awesome buying opportunities.  Bank owned and short-sale investment opportunities will also be plentiful but, with foreclosure rates declining there may not be the continued downward pressure on prices later in the year. 

For details on the tax credit email or call me with ‘Home Buyer’s Tax Credit’ in the subject line.FHA loan limits, raised last year to stimulate higher-end home sales were set to extend at the end of last year have now been extended. FHA loans remain the choice of most home buyers due to the fact that they are readily available and in most cases offer the best rates available to buyers.

Economic pressures mount in the form of unemployment, rising medical costs, and credit card company’s rate policies.  If you know anyone caught in the pinch of needing to sell but find that their home sale will not cover what they owe, suggest that they give me a call for a free, no pressure consultation.  There are solutions to help those facing hardship.

  Market Heats Up

The number of new contracts written on Condominiums and Townhomes were up more than twice any November since 2005!  This is an amazing statistic.  In part it reflects a strengthening market due to investor activity.  But, the primary reason is the Home Buyer’s Tax Credit. This week the Home Buyer’s Tax credit was extended to include all contracts written between December 1, 2009 and April 30, 2010.  First time home buyers retain the tax credit of up to $8,000.  This will give buyers the breathing room they needed to complete the loans that were in process and to be encouraged to actively stay in the market.  Current home owners can qualify for up to a $6,000 tax credit.  The credit will decrease dollar for dollar income taxes owed.  I’ll send you details if you will email me with ‘Home Buyer’s Tax Credit’ in the subject line or if you call me. Both Single Family (chart 1) and Condo (chart 2) sales and inventory charts are very telling.  Inventories are at record lows and are declining at a greater rate than sales.  Sales of condos and townhomes turned positive for the first time this year.

Interest rates remain around the 4.875% mark.  In stock market futures trading investors are predicting a quarter point increase by mid 2010. FHA loan limits, raised last year to stimulate higher-end home sales are set to end at the end of the year & revert to, lower amounts -hindering the housing recovery process.   The National Association of Realtors is working on your behalf with legislators to extend the higher limits. Contact your representative & support this great benefit.                    

 How’s the Market?

Mortgage rates have risen since last month’s report of 4.75%.  Bond market uncertainty has pushed interest rates towards the 5.6% mark.  Local inventory of unsold homes continues it’s downward trend.  Buyers in some areas are finding it difficult to find the home they want at the price they want.  Sales in the $250,000 and below range are still moving rapidly.  Some banks are discovering that they need to fix up that foreclosure before it can be sold.  Analysts are still predicting that the Denver metro area will be among the first to pull out of the market slump.

 News 2 Use

A bill was introduced to Congress this week that would expand eligibility for the federal tax credit on home purchases.  It also proposes an increase in the credit to $15,000.  Obviously a lot of debate will be expended on the proposal and it likely will not emerge from Congress as proposed.  But, we’ll track this one as potential good news. Did you know that Excel Energy is offering energy audits that have been discounted by 60%?  The audits are conducted by local firms under the watch of Excel Energy.  The audits are customizable with a maximum charge of $125 for an entire audit that includes infrared imagery and blower door tests.  Energy conservation is just as important in the summer as the winter.  I found out that an inefficient freezer in my basement was causing my electric bill to far exceed what it should have been for the number of people in my household.  Call if you would like more info on this program.  Ask about the Governers’ incentive program and others that will contribute to your energy efficiency.  

I’ve been asked if I received my ’Green’ certification.  I did!  If you are looking for answers on environmentally friendly products or energy conservation, let me know.  I’ll be happy to provide you with the information you will need to achieve your environmental goals. I’ve updated my CentennialHomeGuy.com website to include the week’s new HUD listings and Short Sales that have just hit the market.  If you are an investor or just looking for a good deal you will want to take advantage of this information.Also, check out the free home search information available on CentennialHomeGuy.com and RonEstell.com.  Conduct your own Foreclosure search on my site or ask me to set up a search for you.  I’ll be looking forward to your call. 

How’s the Market?

Mortgage rates continue to hold steady at about 4.75%. I honestly don’t see them moving significantly lower. As the selling season ramps up and the market strengthens, there will be more demand for mortgages. Increased demand normally signals higher prices. The trend of falling inventory (fewer homes on the market for buyers to look at) continues.  We count the number of expired listings (homes that have been taken off the market because they didn’t sell) and find historically low levels here also.  Sales will need to pick-up, however before we can declare a seller’s market. 

News 2 Use

Not everyone needs to buy or sell a home.  I try each month to bring you news that is valuable to everyone.  I think that is the least I can do for those of you who read this newsletter every month.  Let me know what you think. Did you know that you could get a federal rebate for purchasing a new home?  Call me for details.  

For those of you considering home purchases that would move you to a more energy efficient home, now is a great time to buy both new and previously owned homes because of today’s rates and prices.  Additionally, buyers that want to upgrade the energy efficiency of their prospective homes can readily obtain improvement loans that will allow them to upgrade before they move in. 

Should Smoke detectors be replaced?

Studies show that untested smoke detectors lose about half of their dependability after a 5 to 7 year period. As a result many experts recommend that smoke detectors be replaced about 8 to 10 years. Read the manufacturers instructions as they usually have recommendations.  Can I clean my smoke detector? Dust can damage your detector’s sensitivity. Most units need to be cleaned at least once a year, just use your vacuum cleaner to clean dust out of unit. Read the manufacturers instructions manual. Tip: There are a significant number of rebates and tax credits available from government and energy providers for homeowners that want to improve the comfort of their homes through energy efficiency.  ..Enough that it could be confusing to determine if an energy improvement you are making qualifies for a plan, or what incentives are being offered.  Don’t miss out on benefits that you should receive as a taxpayer and utility subscriber.  Call me for more info. 

• How’s the Market? Rates have held steady at about 4.75% for the month.  Single family homes on the market, yet unsold (inventory) been reduced 20% since March of last year.  Condominiums inventory is down 16%.  Sellers will find this an attractive situation as the economy builds steam and consumer confidence returns.Sales, however, continue to lag behind last year by 12% for single family homes and nearly 19% for condominiums.  We are seeing more 1st time home buyers in the last few weeks.  This leads us to believe that the $8,000 tax credit will spur sales in the area.  Some buyers are getting their tax credit up front to use as down payments, through a new program offered by CHFA (Colorado Finance and Housing Authority). Visit www.colohfa.org. News 2 Use If you are replacing smoke alarms, this might be a good time to update to a combination smoke/carbon monoxide alarm. Beginning July 1, 2009, the Real Estate Commission will require all sellers of residential property to have a properly installed and operational carbon monoxide alarms near every sleeping area.  Call me for requirements.On May 7th I will receive a new designation from the Green REsource Council.  If you are interested in “green” homeownership, be sure to give me a call.Fannie Mae and Freddie Mac modified nearly 24,000 loans during the fourth quarter of 2008.  See if you qualify.  Click here or go to:http://www.makinghomeaffordable.gov/modification_eligibility.htmlWould you like to learn about innovative home products and projects around the home that yield a high return, important home maintenance tips or receive periodic Project Starter Coupons for special savings at Lowe’s?  If you would, send me an email with “Lowes” in the subject line.

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How does the Stimulus Plan Impact Home Ownership?

 2008 Year-End Wrap-up

Mortgage rates are hovering around 5%.  Home buyer incentives have been implemented and more are expected. This is significant in that at 5% a $300,000 loan principal and interest payment would be $1,610. At 6.5% the loan would have carried a price tag of $1,896 per month.  Over the life of the loan the savings is $99,360*. 

The only thing we can be certain of when it comes to interest rates is that they fluctuate.  Will rates go down further?  I wish I knew.  But, at today’s interest rates you could save more in interest than you might save in sale price.  Remember, last month rates were at 4.75%. 

Mortgage and general economic impacts experienced since October had an impact that reverberated through all aspects of the nation’s business communities. There were 49,789 sales of single family homes and condominiums in 2007.  2008 closed with a total of  41,683 sales for an average of 3,474 sales per month.  Although the pace of sales was off of last year, sales did not collapse. In fact, home inventory levels relative to sales reduced significantly over the course of the year. 

Ending inventory level for 2007 was 24,603 single family homes and condominiums.  We finished 2008 with an average of 19,600, a 25% reduction.This MonthDecember performance was 10.75% better than November and at .47% was slightly better than December 2007. Single family residence sales were 9.77%, better than November and 5.34% better than December 2007.  The big month over month gain went to town homes and condominiums which was 14.87% better than November.  But, they were unfortunately lower than December 2007 by 15%. 

Average days on market declined for both residential components on a month over month basis, but sent a mixed signal when compared to the increase in December to December days on market.

* For illustrative purposes only.  This is not an offer to provide loans. 

What is the Impact You?

November continued the trend of lower inventory levels.  As we expected, sales were lower due to the October financial upheaval.  I remain optimistic for Metro Denver’s recovery, even now.  This month I explain why you shouldn’t wait to move up to a new home. Nationally most markets do not have the positive conditions that exist in our area. Share your thoughts with us at restell.featuredblog.com.  

This Month

Spurred by findings of the PMI Group, a mortgage loan insurance company, Yahoo (Oct ’08) declared Denver to be a balanced market and in the top 7 areas poised for a rebound.  In another article The Denver Business Journal reported that the Urban Land Institute has declared that Denver markets are among the top 10 real estate markets to watch in 2009. Here is more positive news:· Interest rates as of today (12/22/08) are hovering in the mid 4% range, the lowest in over 28 years.· Inventory continues to decline.· Despite an overall negative sales rate in October, large areas of the city are experiencing increased sales in excess of 20% on a year over year basis.  Tempting?  Give me a call.

So What?

The mortgage market is just like the real estate market or the stock market in one compelling way.  They are all cyclical.  Any of them could change direction very quickly. Here is what it means to you:

When interest rates go up, they can have a  greater impact, much more quickly on your ability to purchase than housing prices.

Selling your home today is not difficult.  We sold 2,900 homes last month in the area.  Another 3,600 went under contract.  Let me show you how you can benefit by selling your home and buying your dream home by calling today.

Mortgages are readily available at great rates and some are available with no down payments.