Prices up, sales down -- what gives?

Not surprisingly, sales of existing homes took a dive in July after the expiration of the home buyer tax credit. But home prices continued to rise, if only slightly. The reason is that interest rates for a 30-year fixed mortgage have never been lower, meaning that buyers can afford more expensive homes.

In the Western region, sales fell 25% in July, but the median price rose 3.3%, compared with July of 2009 to $224,800. Statistics for Boulder showed a more sluggish market. Volume of single family home sales in July fell almost 29% compared to July of 2009 and the median home price rose less than 1% to $524,500.

Lawrence Yun, NAR chief economist, said a soft sales pace likely will continue for a few additional months. “Consumers rationally jumped into the market before the deadline for the home buyer tax credit expired. Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September,” he said. “However, given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs.

Interest rates for a 30-year mortgage have never been lower. Last week, Freddie Mac reported the 30-year fixed was down to 4.42 percent. To understand just how significantly low these rates are, look at the orange line on this chart (in the 1980s, rates climbed up into the teens).

Reproduced with the permission of Mortgage-X.com

There's Gold in Them Thar Hills! Great Bargains in the Mountains

If you've been toying with the idea of buying a summer cabin, now is the time. There are great deals to be had in Boulder, Gilpin and Larimer counties, starting at less than $100,000 for a home on a forested acre or a cabin on a creek.

I've been having a great time escaping the summer heat and driving the mountains with my friends/clients who are also gold miners. Their claim is near Gold Hill and we looked at a home near Rollinsville just off Gold Road. So, I've got gold on my mind.

The price of gold may be rising, but the real jackpot in the mountains is real estate. When prices for homes drop below the cost of construction (with the land thrown in for free), it really starts making sense.

Of course, there's risk involved as well. The cost of a new septic system can run in the tens of thousands of dollars. Boulder County is requiring outdated systems to be replaced within one year of any sale. So if the seller won't pay for it, the buyer will have to.

Gilpin County, on the other hand, has some great bargains just minutes away from Nederland, plus their property taxes are much lower.

If you'd like to head to the hills to hunt for some real estate gold, please give me a call at 303-473-2773.

$$$ for Non-Profits: 15% of my commissions donated

During a recession charities get hit twice -- fewer donations and increased needs for things like food banks, shelter and counseling. So, I've committed to donate 15% of my net commissions to charities. And as my client, you can choose your favorite charity, as long as it has 501C3 status.

Rest assured, you will still get 100% of my high-quality service as a home buyer or seller. As you've probably heard, it's a great time to buy real estate. There are some good deals out there and historically low interest rates mean you have more buying power. So, you can "do well" and "do good" at the same time!

Here are some of my favorite local non-profits:
Community Cycles
Voices For Children CASA
Emergency Family Assistance Association
Humane Society of Boulder Valley
The Community Foundation
One Freedom, Inc.


For a fairly complete list of non-profits in the Boulder Valley, go the directory on the Community Foundation's Page:
http://www.commfound.org/cultureofgiving/nonprofits

How's Real Estate Doing? A Flatirons Market Snapshot

"How's the market?" I get asked this question all the time, so I thought I'd share some statistics and insight into my local market -- the neighborhood covered by Flatirons Elementary (where my daughters have attended).

In general, sales are slow, with fewer homes sold than in previous years (34 last year, compared with 89 in 2006). This year got off to a good start, with 16 homes sold in the first four months (see list below), compared with only 10 in the same period of 2009.

As of May 13, there were 54 active listings, of which 6 were under contract -- about a year- to 18-month's worth of inventory.Values are holding relatively steady, with the price per square foot close to what it was in 2007 and up slightly from 2008.

But statistics can be deceptive, especially with a small sample size. If you look at specific homes that have sold several times in the past four years, you will see a slight softening of prices. For example, the home at 874 9th Street sold in 2006 for $613,000 and again last May for $605,000. Another home near 13th and Cascade sold in 2007 for $1,345,000 and is currently listed at $1,275,000 and under contract. With fewer fish in the sea, some home sellers are baiting buyers with lower prices. On the other hand, attractive or unique properties that are priced well can get gobbled up quickly.

Here's what has sold in the first four months of 2010 in the Flatirons market:















If you are interested in buying or selling your home -- in the Flatirons area or anywhere else in Boulder, please feel free to contact me for a custom market report. Call me at 303-473-2773 or email me at Monique@MoniqueCole.com.

FHA loans to get more expensive - April 5 deadline

This came in from a mortgage broker who I have worked with in the past:

Just a reminder if you are working with a first time home buyer or someone planning to use FHA for their loan; the costs for the mortgage insurance premium will be increasing in 26 more days.
Take advantage of the lower costs now by ordering your FHA case number before April 5th.

FHA loans have been the most competitive options for low down loans (only 3.5%), poor to average credit borrowers, and for condominium purchases with less than 20% down.
After April 5th, they will not be as competitive.

If you have a client that fits into one of these options and have questions, feel free to call or email.

Cheers,
Mike Echery

7.3% of Boulder and Longmont Mortgages "Underwater"

While we're in nowhere near the situation of Nevada, where 70% of properties are worth less than their loan amounts, about 7.3% of Boulder and Longmont real estate mortgages are "underwater," according to a report by First American CoreLogic and an article in the Boulder County Business Report. Negative equity is at 23.5 percent in the Denver/Aurora/Broomfield metro area, and at 8.9 percent in the Fort Collins/Loveland metro area, the study said. Colorado's negative equity figure stands at 20.2 percent.

A negative equity situation becomes problematic when a homeowner needs to sell because of relocation job loss, or other hardship. Options include a short sale, foreclosure or bringing cash to closing.

New Construction Down, Renovations Steady in Boulder Valley

The value of building permits for new construction fell by 58% in Boulder and Broomfield Counties in 2009, even though the number of permits fell only 3%, according to "Building permit values fall 40 percent in Boulder Valley" in the Boulder County Business Report. This supports the logic that in tough times, people stay put and renovate or add on, instead of moving into a new home or office.