Living Littleton

   High end homes in the Denver/Littleton area are starting to rebound from their record lows.  It’s no secret that the high end home market has been close to dormant over the last couple of years, with the uncertainty in the market coupled with the difficulty in obtaining jumbo loan financing.  The good news is that we are starting to see in increase in this market for homes priced over a million dollars.  In fact, sales in this price range have risen to a level not seen in two years.  Several factors have contributed to this, the most important being the steep discounting some sellers have been forced to do, in order to get their homes sold.  Coupled with a slowly building demand, record low rates, and the beginning of some sanity in the mortgage industry,  buyers are starting to become more active in this price range.

    This increase in the high end market may pull up the average sales prices in the Denver/Littleton market.  If this happens, hopefully buyers won’t be lead to believe all home prices have increased by the announce price increase, if there is one.  As I always stress, these figures are the average prices of all the homes sold, not the percentage increase in prices.

In their continuing quest to cut their losses by cracking down on sloppy underwriting for loans, Fannie Mae has instituted a new policy of ordering a second credit screening right before closing.  This last minute check will be to determine if the borrower has obtained, or even shopped for, additional credit.  It’s not unusual for Littleton and Denver new homeowners to shop for new appliances, new home furnishings, autos, new credit card, etc, however, opening these new lines  has the potential to stop the closing until the lender can do a full research and review on the borrower’s credit. 
Jerry Becker
jbeckerhomes@comcast.net

If you’ve actually taking out a new loan it may be large enough to put you over the top on your qualifying ratios.  This could kill the purchase.  Avoid the temptation to apply for a new credit when you go shopping for those home improvement items until after the home closes.  It’s OK to look, just make sure you don’t apply for credit so you’ll be ready to go when the homes closes.  Your lender can give you more information on this.

A local real estate company recently finished an analysis of which homes are most likely to sell.  As it takes a while for a home to go through the selling process, they limited their study to homes that went on the market from January through September of 2009.  What they found out was the odds of a home selling were dependant on several factors. 
1.  Homes owned by banks (REO) had the best chances.  90% of these listings sold, with the remaining 10% being withdrawn from the market or had the listing expire.
2.  Short sales (SS) were the least likely to sell with only 32% of these listings ever selling.
3.  Regular, non-distressed home listings had only slightly better odds than short sales, with 37% of these selling.

In the various categories, they discovered that the price of a home determined it’s odds of selling.  In the Denver and Littleton market, the least expensive, 10% of all homes sell for $85,000 or less. Non-distressed sellers in this price range had a success rate of 78%.  This is compared to a success rate of just 44% for SS sellers in the same price range.  At the opposite end of the range, the most expensive 10% of  the home sales sold for over $460,000.  This market segment requires a jumbo loan, and they weren’t easy to obtain, or cheap, during this time period.  In this high end, only 16% of the regular listings sold and only 14% of the SS.

For a middle of the pack comparison, let me tell you that in the price range of $210,000 to $315,000 for regular, non-distressed home listings, only 41% of these homes sold.  Now true, this information came from 2009’s market and we’re doing much better in 2010, however, as a seller, one really needs to pay attention to the prices of previous sales.  Over reaching in this market can end up costing you lots of time plus a potential sale.

Jerry Becker
jbeckerhomes@comcast.net

    Vacancy rates in Littleton and Metro Denver continue to show improvement, based on the latest report released by the Colorado Division of Housing.  When considering the rates of single family homes, for-rent condos, and other small properties, the vacancy rate for the first quarter had dropped to a two year low of 3.1 percent.  This is compared to a vacancy rate of 3.9 percent in the first quarter of 2009.  Our highest recent vacancy rate occurred in 2005, when it stood at 9.5 percent.  This was a result of people buying homes like crazy so they wouldn’t be priced out of the market.  Many accomplished this by using some of the creative loan products that were available, at that time, and of course we all know how that worked out.
    For those of you that are regular readers of this blog, you may note that last month I commented on how the vacancy rate stood at 6.5%.  Be sure to note, that it was for apartments, only, while the above data excludes apartments.
Jerry Becker
Jerry Becker and Associates – Metro Brokers
jbeckerhomes@comcast.net

   As I mentioned in an earlier post, weakness in the Euro has caused an inflow of dollars into the bond market, resulting in some of the lowest home loan rates, ever.  Currently, Littleton lenders are quoting rates in the high 4’s for 30 year fixed rate loans.  In spite of these low rates, the number of purchase loans being applied for, is at a 13 year low.  I think much of this is caused by the market taking a breather after the expiration of the Federal Tax Credit.            
    As nice as these low rates are, no one can say how long they will last.  If our economy starts to pick up, as the talking heads all predict, we could see money leaving bonds to buy stocks.  When this happens, expect to see rates rise.
Jerry Becker
jbeckerhomes@comcast.net

For the fifth month in a row Denver Metro home prices, which includes Littleton, have shown an increase in year over year pricing.  There was also a slight increase from February of this year to March of this year.  These statistics came from the latest S&P/Case-Shiller Home Price Index.

The report showed the the average price increase from a year ago was 4.1%.  Once again, I want to stress that these are the averages of all the homes sold in the respective months, and not the increase of 4.1% for each home. 

Since much of the market was driven by the push of first time buyers to take advantage of the expiring tax credit, I suspect the market was weighted to more of the entry home price range.  We may see another increase in April as that was the last month to take advantage of the tax credit.  After that, the experts predict the number of sales will slow, however, we may see more of a mix of higher priced homes because of the fall off from first time buyers.  This may give us a continued increase in year over year prices, however, the total number of home sales may decline.  These experts also expected interest rates to be higher by now, but in fact, they’ve declined.  It’ll be interesting to see how all of this shakes out.            

Another index is a comparison of a market’s present average home values when compared to the year 2000.  Based on that index, Denver and Littleton came in at 125.31.  That means prices were 25.31% higher than they were in 2000.  The average for the top 20 cities was 143.35 in March.

Jerry Becker
Jerry Becker and Associates – Metro Brokers
jbeckerhomes@comcast.net

A spokesman for King Tut expressed his regrets about not being able to visit Littleton this year.  According to the spokesman, the Boy King was looking forward to dining at Opus, having a chocolate fondue at the Melting Pot and if time allowed to end the evening with drinks from Merle’s roof top deck.  Due to time constraints, the Littleton stop over had to be scratched, but he still held out hope that he could make it another time.

The good news is that even though King Tut won’t be appearing in Littleton, you can still catch him in Denver at the Denver Art Museum.  He’ll be arriving soon and plans on hanging around til early 2011.  Unfortunately, in these tough economic times, even the Boy King is running short of funds, so he plans on charging you if you would like to go.  Tickets are for specific days and times with the best deals being during the week.

Go to www.kingtut.org to get more information and purchase your tickets.

Jerry Becker
Jerry Becker and Associates
jbeckerhomes@comcast.net

Back around the first of the year, Littleton mortgage experts predicted a rise in home loan rates after the end of the first quarter.  This was all predicated on the fact that the Federal Reserve was going to quit buying mortgage securities.  The Fed had been buying billions in mortgages to inject liquidity into the loan market to help stimulate the housing market with the hope of getting many of the sliding markets to stabilize.

Well, the Fed did quit buying and rates did start to move up about a quarter point or so, but the good news is that rates have softened.  In fact, they’ve softened so much that they are as low as they have been this year, so you could say rates have gone in the wrong direction.  This all came about because of the weakness in the Euro due to the debt crisis and bail out for Greece.  Investors have started to worry about the value of the Euro so they have switched to buying dollars.  This influx of money, has caused our rates to stay low for the time being.  More money chasing our bonds which cause the price to get bid up.  With bonds, when prices go up, interest rates go down.

If you felt squeezed out of the home buying market because rates went beyond where you felt comfortable, this present situation may give you another chance.  No one knows how long this will last, but it change and go the opposite direction in a short period of time, so take advantage of it now, if you can.

Jerry Becker
jbeckerhomes@comcast.net

 We all have heard reports about how our economy here in Littleton and the rest of Colorado is getting better, and I believe it is, however, we all know that some people are still having a tough time of it.  If you know of someone that could use some help, at this time, you may want to tell them about Angle Food Ministries.  Simply put, Angle Food Ministries is a non-profit, non-denominational organization dedicated food relief and financial support to local communities throughout the US. 

This program started in Georgia in 1994 by helping 34 families and has since grown to cover 44 states.  Angle Food works through local churches to distribute food boxes at a reduced cost to families in need.  They sell medium sized boxes of food for $30 that would have a normal retail price of about $60.  Based on their calculations, one box should feed a family a four for a week, or a single senior citizen about a month.  The food is the same quality as one could purchase at a grocery store and isn’t comprised of seconds, dented cans, or damaged packaging. 

Angle Food also offers expanded box choices of meat, chicken, or pork, plus participants aren’t limited to purchasing just one box.  Additionally, participants aren’t required to adhere to any government programs.  If you know someone that could use a hand, have them contact Angle Food; http://www.anglefoodministries.com.

Jerry Becker
Jerry Becker and Associates
jbeckerhomes@comcast.net

Last year was such a success that Littleton’s Olde Town Market will be back for a second year starting this Saturday, May 8th.  Then every second Saturday of each month through September you can experience it  starting at 10:00 AM and running until 4:00PM.  Walk the streets of down town Littleton and experience the fun of an open air market with antiques, jewelry, artisans, one of a kind pieces, as well as the existing merchants and restaurants.  For more details check out www.oldetownmarket.com.

Jerry Becker
Jerry Becker and Associates – Metro Brokers
jbeckerhomes@comcast.net