Living Littleton

    Home loan rates for buyers in Littleton or Denver continue to drop.  FHA rates are about 4.25%, depending on the day you ask.  This is quite a surprise from what the experts were all predicting back at the first of the year.  If you remember, they were saying rates would start to rise in the second quarter because the Fed was going to quit buying home loans.  Most were saying rates could rise 3/4 to 1 % by the end of the year.  That would have us in the high 5’s, but we’re no where near that at the present time.  The Fed did quit buying home loans, however, there has been so much money pouring into Treasuries instead of stocks, that the price of Treasuries has been bid up.  They run counter to interest rates, so when the price of the bond goes up, the interest rate goes down.

    Today’s low rates, coupled with the supply of homes at bargain prices has made this a perfect time to buy a home in Littleton.  If you weren’t able to purchase by the end of April, to take advantage of the Federal Tax Credit, you aren’t left out in the cold.  The low rates will give you a return over what someone had to pay 5 months ago for their home loan, that will make up for the tax credit, over time.  

     Even with this perfect combination of rates and supply, home sales aren’t going through the roof.  I suspect that many wanna be buyers just don’t have the money.  If that’s your case, or you know of someone who’s faced with that issue, you may want to look at the attached loan comparison chart for a $200,000 home purchase, at the end of this post.  It’s the only Zero Down home loan available, outside of VA.  It’s a 30 year fixed rate loan that is always below market and doesn’t require any money down.  In addition to that, there are no closing cost, just pre-paids.  I’ve made reference to this loan in the past, however, I’ve never broke it out so people could see the benefits, when compared to FHA. . The first column is for an FHA loan, where the seller paid 3% towards paying buyer’s closing cost.  The second column is where the seller pays 3% to buy the rate down an additional .75%, to 3.25%.  Since there aren’t any closing cost, the buyer doesn’t need to have that money apply to his cost.  The third column is were the buyer elects to discount the price of the home by 3% and just go with the market rate on the Zero Down loan, which is 4%.

   If this is something you’re interested in, give me a call ASAP.  It takes a little longer to process these loans, as you have to attend a workshop, first, and they’re only held once a month.  I only make this loan available to my clients, so please don’t contact me if you have a relationship with another Realtor.

                                                                                    Loan Comparison

                                                                          Purchase Price $200,000

   Vacancy rates in the Littleton and Denver Metro area continue their downward trend.   In fact, they’re the lowest since 2001, according to the Denver Post.  This low rate is contributed to the fact more people are moving here, coupled with the fact fewer apartments are being built.  To give you an idea of how quickly rates have fallen, they were at 9% in the second quarter of 2009.  We’re also seeing a very healthy rental rate in single family homes from what Realtors were saying at a quarterly real estate trends class, I attended.  With very little apartment construction in the planning stages, along with the continued growth, experts are predicting rates to fall even lower in the coming quarters.  This will ultimately lead to higher rates and pickier land lords.

Jerry Becker
www.jerrybeckerandassoc.com

   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.

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

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

   On a recent Today show, they featured their real estate expert giving her opinion of the top US cities for young professionals.  Metro Denver was number two on her list with a couple of the reasons being Denver had the nation’s most diverse culture and most educated population.  Of course, this would include Littleton.  They also showed examples of housing in each city and what they would cost, however, being a Realtor, I didn’t feel they were representative.  Watch the clip and see what you think.

 http://today.msnbc.msn.com/id/26184891/vp/35643347#35643347

     According to an article that appeared in Thursday’s (January 29th) Rocky Mountain News, Denver was
selected as the place most people would want to live in a poll conducted by the Pew Research Center.  
Denver beat out such well know places as San Francisco, Seattle, San Diego, Tampa, Phoenix, and Orlando.
Denver didn’t come out first in all categories, but when the results were tabulated it ended up being the
number one choice.  One thing that seemed strange was even though Denver is considered a liberal city,
it was the first choice among those that considered themselves Republicans, Independents, or conservative,
while it came out third behind San Diego and San Francisco among Democrats and those that considered
themselves liberal.
    While this report should help to keep Denver out of the depths of the economic troubles being
experienced by the rest of the country, it will bring all of the future problems linked to high growth.
In the short term, this just reinforces the statistics that Denver and Colorado have an increase in migration
which is helping to bring our housing woes to an end.  As a real estate broker, myself and others, are seeing
many signs of this turn around.  It won’t be quick or sudden but it is happening.

In today’s Rocky Mountain News, it was reported that metro Denver’s home sales average prices fell by only 1.1% in November, making it the best performing city in the S&P/Case-Shiller Home Price Index.  In the twelve months ending with November, Denver performed better than all large markets except Dallas, in the report.  According to Case-Shiller, Denver area prices fell by only 4.3% for that preceding 12 month period.  Several things were cites as contributing to Denver’s continued improvement; lack of new home inventory and starts, declining inventory, lack of the huge price run up experienced in other cities, lower jobless rate, and the net increase in population.  While it may sound dumb to celebrating even when the figures show a decline, one has to remember that these figures are comparing average sales prices.  Averages are determined by the mix and in Denver the lower priced tier of homes have been selling like hot cakes.  To be sure, most of these are being snapped up ;by investors, but they are still selling.  The middle ranges are holding their own while the high end has been building inventory because of slow sales.  Combining all these numbers is what gives us the average.  Readers should not be too concerened  about the bottom line number but the mix of sales that gave us that number.   As many buyers are discovering, they have some healthy competition for quality homes in some of their price ranges.