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7% vs 3.5% for a Monthly House Payment, Now is the Time To Buy!

by Roberts Johnson and Rachel Diedrich, Real Estate B

Happy Tuesday Morning.

I hope everyone had a great weekend!

Let talk about interest rates again.

Hi, Roberts Johnson with Cool Denver Homes.  Interest rates are continuing to stay at their lowest levels since mortgages were introduced in the 1050’s.  Just a few years ago, interest rates were at 7% and everyone thought it was such a great deal.  Now they are 3.5 to 4% for a 30 year fixed loan.  Well I want to show you the difference in a $200,000 loan at 7% and a $200,000 loan at 3.5%, which is half of what it was 3 or 4 years ago.  A $200,000 loan at 7% is $1330.60 a month.  That same loan today at 3.5%, will cost you $898.00 a month, a difference of $432.80 a month.  That’s more than a car payment in savings every month.

Find your Dream Home!

If you think you need help fixing your credit, contact me, I have lender’s that specialize in getting your credit back on track and then we can get you into a house.

How much is your house worth?

www.CoolDenverHomes.com

www.303home.com

www.bankowneddenverhomes.com

www.yourdenverhousevalue.com

We service metro Denver including, Northwest Denver such as Lohi and northwest Highlands, Denver northeast such as Park Hill, Curtis Park and Stapleton.  Denver Southeast, Lowry, Washington Park, Cherry Creek and Country Club.  Denver Southwest, like Golden Triangle, Barnum and Baker and finally downtown Denver such as Lodo, Downtown Denver and Ball Park.

We also serve all cities around metro Denver.  Here is a list of cities: Arvada, Aurora, Broomfield, Castle Rock, Centennial, Cherry Hills Village, Commerce City, Denver, Edgewater, Englewood, Federal Heights, Glendale, Golden, Greenwood Village, Highlands Ranch, Lakeside, Lakewood, Littleton, Morrison, Northglenn, Parker, Thornton, Westminster, and Wheat Ridge.

Waldo Canyon Fires

by Roberts Johnson and Rachel Diedrich, Real Estate B

Hi, Roberts Johnson with Cool Denver Homes.  Can you believe all the fires that are going on here in Colorado?  Rachel and I were watching the Hayden Fire when the Waldo Canyon fire started.  That’s in Colorado Springs close to where Rachel’s parents live.  We thought no big deal until yesterday when the winds turned ugly and the fire began to take off.  We were in Colorado Springs a week ago for Father’s Day and took a t drive through Garden of the Gods and Manitou Springs.  We even went by the Flying W Ranch which is where Rachel held her 1st job.  As we listened further, last night the fire got closer and closer to the populated areas.  We were sure her parent’s house would not be in the evacuation zone.  Then we heard the fire was moving north and the Flying W Ranch was burnt down.  Then her parents got the evacuation notice at the same time as they started evacuating the Air Force Academy.  We watched on TV houses burn that we had just seen the week before.

You don’t really think about these things until someone you know is in the middle of it.  I think we all know of someone or knows someone that is going through this right now.

Our thoughts and prayers go out to everyone affected!

Think of me when you hear some say they have to buy or sell a house and then tell them about me!  Then call me and tell me about them!

www.CoolDenverHomes.com

www.303home.com

www.bankowneddenverhomes.com

www.yourdenverhousevalue.com

The REO Rental to Own Joint Venture Program Stats

by Roberts Johnson and Rachel Diedrich, Real Estate B

The REO- Rental to Own Joint Venture Program.

What the statistics show us.

Between the GSE, Government Sponsored Enterprise, and HUD, Department of Housing and Urban Development, there are more than 250,000 REO properties for this new program.

Fannie Mae, Freddie Mac, HUD has put about 2,500 home up for auction for the new REO-Rental Program.  Atlanta, GA, however has the highest number in the mix, 572 properties making up 23% of the total up this first sale.

1.75 million Homes are currently unoccupied.

Amherst Securities Group last fall suggested that there are more than 7 million shadowed properties.

 

Approximately 12 million homeowners, more than one out of five with a mortgage, are underwater. In

Georgia 30% of mortgages are in negative equity position.

 

1.3 million Consumer bankruptcies were filed in 2011

 

Nationally, house prices have plunged about 30% in nominal terms from their peak and nearly 40% in

Real (inflation-adjusted) terms. By some estimates, declines in house prices have reduced homeowners’

Equity by more than 50% in the aggregate since the peak of the housing boom, resulting in more than a

$7 trillion loss of household wealth.

 

Experts reported 2.8 million homeowners lost their home in 2009 with a forecast of 3.8 million during

2010 and 9 million over the next four years.

 

Three in 10 young adults live with parents, highest level since 1950s

 

Outstanding student loans are now about $870 billion, a bigger debt pile than credit card balances

($693 billion) and auto loans ($730 billion). And student debt was the only major loan category growing

in the middle of last year. What kind of balances do people carry into their 30s and 40s? The data shows

that most people (66%) who carry student debt are under 40. Sixty-two percent of borrowers have loan

balances under $25,000 and 43% have balances under $10,000. Of the 37 million borrowers who have

outstanding student loan balances as of third-quarter 2011, 14.4 percent, or about 5.4 million borrowers,

have at least one past due student loan account. Together, these past due balances sum to $85 billion, or roughly 10 percent of the total outstanding student loan balance.  The deferred student loans are not included in the past due balances.

Today’s life expectancy is 78.2.

40.3 million people are 65 and older with 10,000 turning 65 daily.  The south has the greatest number oat 14.9 million.

There are 7.4 million people age 75 – 79.

Those that are between 45 – 64 equal 81.5 million, 26.4 percent of the total U.S. population.

74.2 million people are between the ages of 18 – 44.

Information provided by Cathy McDaniel. 5/2012.

Great Deals Available Now!

by Roberts Johnson and Rachel Diedrich, Real Estate B

Wow, what a stellar weekend!

Had an inspection on a condo with great views, under a $150,000 in downtown Denver, while it rained on the garden Saturday morning and then Rachel and I went to the Five Point Jazz Fest and met up with a bunch of friends.  We weathered the weather under the Denver Water tent, best water in the country.   Then the rain stopped, the jazz started up and then a flash mob started to form dancing to the jazz and just grew and grew in size!  It was the coolest thing ever!  We all had a great time and Sunday was a day of rest.

I have 2 deals for you this week. 

1st deal is a condo in the golden triangle, 1322 sq ft, $209,900, that’s $159 a sq ft, 1 bedroom, 2 baths, enough room to put in a 2nd bedroom, it needs some TLC.  Unit in the same building, 1523 sq ft, 2 bed, 2 bath, sold for $295,000, that’s $194 a sq ft.

2nd deal is a 2 unit condo for $60,000.  Both units are currently rented at $1100 a month.  Cash on Cash return is approximately 19%.  You get your money back in a little more than 5 years.  (I know of 2 of these deals!)

Send me an email with a couple of available dates and times and we will take a look!

Also, I need to help at least 30 new clients between now and the end of the year, please send me their contact information and I will call them right away!  Thanks in advance.

Double-Digit Price Increases Coming Soon?

by Roberts Johnson and Rachel Diedrich, Real Estate B

Double-Digit Price Increases Coming Soon?

Home buyers and sellers need to get ready to pounce. Hard-hit housing markets are on the road to recovery and expected to see major price gains soon.

Some of the hardest-hit markets during the housing crisis — plagued by soaring foreclosures and plummeting home prices — are expected to post some of the biggest gains through 2013, according to a report released this week by Fiserv.

"Some markets may have overshot to the downside, and people are jumping in to try to catch the bottom," says David Stiff, Fiserv’s chief economist. Fiserv recently projected that nationwide housing prices will gain 4 percent a year over the next five years.

The areas projected to have the largest price gains, according to Fiserv:

1. Madera, Calif

Projected price increase by the end of 2013: 21.5 percent

2. Medford, Ore.

Projected price increase: 20.1 percent

3. Yuma, Ariz.

Projected price increase: 16.7 percent

4. Corvallis, Ore.

Projected price increase: 11.4 percent

Source: “10 Housing Markets Set for Double-Digit Price Gains,” CNNMoney (May 9, 2012)

 

Home Prices to Rise 4% Per Year?

by Roberts Johnson and Rachel Diedrich, Real Estate B

Home Prices to Rise 4% Per Year?

Have home prices finally hit bottom? Many analysts think so. According to the latest forecast by Fiserv, the market watcher sees a big boost to home prices on the horizon, projecting that home prices will rise nearly 4 percent per year for the next five years.

The real estate markets expected to see the biggest increases in home prices will likely be those hardest hit the last few years by foreclosures, such as in Phoenix and Las Vegas, and areas where prices have fallen the most, according to Fiserv’s forecast.

Housings rising affordability mixed with falling inventories of for-sale homes are the main factors driving the expected price increases, according to Fiserv.

Initially, investors are expected to help drive most of this price increase, and then followed by first-time and trade-up buyers as they re-emerge in bigger numbers to the market.

Source: “U.S. Home Prices Could Rise 4% a Year, Forecast Says,” USA Today (May 8. 2012)

 

True Test For Real Estate This Spring

by Roberts Johnson and Rachel Diedrich, Real Estate B

This Spring Is True Test to Real Estate Recovery

How the real estate market will fare in the spring home-selling season will prove a test for housing demand and show which markets will lead a housing recovery, economists say in a recent article at USA Today. The spring selling season usually runs March through June.

"This spring will be the litmus real estate test for housing demand," says Steven Ricchiuto, chief economist for Mizuho Securities USA.

The sluggish housing market in recent years, which has seen a flood of foreclosures and falling home values, has been inching toward a turnaround in recent weeks. Existing-home sales and pending home sales are up about 9 percent compared to the same time year ago, according to February housing data by the National Association of REALTORS®.

Paul Dales of Capital Economics told USA Today that he expects the spring selling season to “be the best in four or five years” for the real estate industry.

Economists predict that where the housing supply of for-sale homes has dropped the most and is more balanced is where prices have the greatest potential of gaining this year. For example, Phoenix has had a 42 percent drop in its housing inventory recently and is projected to see prices gain 5 percent this year, according to Eric Fox, an economist for Veros Real Estate Solutions.

Source: “Spring Home Sales Could be Omen,” USA Today (April 2, 2012)

 

Home Inventory Plunge 42%, sales rise

by Roberts Johnson and Rachel Diedrich, Real Estate B

Home inventory plunge 42%, sales rise

 

This 1,946-square-foot home at 1640 Garfield St. is priced at $274,900, close to the average sales price of $270,821 in February.

If you were house hunting in the Denver area last month, numbers released today will confirm what you have been seeing – or not seeing – as it were: the number of unsold resale homes plunged 42 percent in February from February 2011.

There were only 10,086 unsold single-family homes and townhomes/condominiums on the market last month, compared with 17,358 in February 2011. The inventory was down 3.4 percent from January, when buyers had 10,443 homes to choose from, according to the report released by independent broker Gary Bauer.

The last February when there were fewer homes for sales was in 2000, when there were 8,357 homes on the market.

“The inventory is still a somewhat challenging situation,” Bauer said. “It’s a good-bad situation, depending on whether you are a buyer or a seller. Quite frankly, I think as the word gets out more and more about how low our inventory levels are, more people will start to put their homes on the market.”

Other than the inventory, February was an extremely strong month that bodes well for the spring and summer prime selling seasons, Bauer said.

Strong start

“We started on Jan. 1 with some momentum, and it continued through the end of February,” said Bauer, who bases his report on Metrolist data. Because this is a Leap Year, he adjusted the 29 days this February for the 28 days in February 2011.

“We are seeing a lot of pent-up demand,” Bauer said. “We are seeing multiple offers for homes. We are also seeing very well-educated buyers and very well-educated sellers.”

That is absolutely correct, according to Eaun Graham, a broker with 8z Real Estate.

Snooze and you lose

Graham had an experience with the lack of dearth of houses on the market this morning, in fact. He and a client who is interested in buying a home in the Broomfield-Westminster area looked at six homes on Saturday. He offered full-price for one priced at the full-asking price of $250,000, but was out-bid. He was prepared to make an offer on his second choice, looking at it Saturday and 5 p.m. on Sunday.

“First thing this morning I called the listing broker and the home was gone,” Graham said. “In this market, the good inventory is gone right away. You can’t go home and think about buying a well0-priced home – you have to write an offer that days. It wasn’t this way a year ago.”

Graham thinks the lack of inventory is only going to get worse, as the market heads into the prime selling season. Multiple offers are driving up prices at the low-end, and he predicts that is a trend that will later increase the prices of more expensive homes, too.

Demand is improving, even as the supply dwindles.

The report shows that 4,150 homes were placed under contract in February, a 19 percent increase from the 3,486 homes in January and 12.4 percent more for the 3,693 in February 2011.

The number of closings rose 11.9 percent to 2,495 in February from 2,229 in February 2011 and were up 1 percent from 2,470 in January. Year-to-date, contracts are up 11.6 percent and closings are up 13.2 percent from the same period in 2011.

The report showed that the average price of a single-family home that sold last month was $270,821, compared with $265,277 in February 2011 and $272,328 in January. The median price was $220,00, unchanged from a year earlier and up slightly from $218,855 in January.

For single-family homes, 43 percent of the homes that closed last month were below $200,000 and 62 percent of the condos that sold in February were below $150,000.

4-month supply

Peter Niederman, CEO of Kentwood Real Estate, using both January and February closings, calculated there currently is only a four-month supply of unsold single-family homes homes on the market, compared with a 7.7 month at the end of February 2011. Niederman uses two months worth of data “to take some of the noise” out of only looking at one-month’s data. Using the same methodology, there is about a four-month supply of condos on the market, compared to almost a nine-month supply in February 2011.

‘When you get below a five-month supply that is a pretty good market,” Niederman said. “If this trend continues, with strong under contract activity, but little added supply, we could get down to a two- or three-month supply.”

Niederman was especially pleased by the jump in under contract activity in February, as it indicates activity in a given month and is a leading indicator of future closings.

An even more basis indicator is the number of showings and those numbers have been off the charts.

“Last Friday, we had the highest number of showings we have experienced in many, many years,” Niederman said. “Fridays kick off the showing activity for the weekend. You can’t sell a home unless you show it, so that is a very important leading indicator.”

Chris Mygatt, president of Coldwell Banker Residential, said buyers at the high-end still have quite a bit of inventory to choose from.

Why wait?

Still, given the historic low mortgage rates, he is encouraging anyone who is thinking of selling their home to list it now.

“What the whole Denver real estate world is talking about is our low inventory,” Mygatt said. “If you are a homeowner and in any way you are just waiting in the wings looking to sell at some point, the message these numbers tell me that if you are dreaming of moving up in Colorado, this is a great opportunity to sell.”

It wasn’t that long ago that the market was fearing quite the opposite – a flood of “shadow-market” inventory as banks unloaded properties that they had repossessed.

Legal issues involving the settlement such things as “robo-signing” of foreclosure documents likely delayed banks processing all of the pending foreclosures.

“Now that the banks have some kind of agreement with the government, we might see some more of these foreclosures being processed,” Mygatt said. “I think the banks are smart enough not to dump everything they have on the the market at the same tie. But the truth is, here in Denver, we could absorb a significant amount of additional inventory at this time.”

However, it is not just the inventory, but the condition of the homes on the market.

One buyer, named Chris, last week made a full-price, $300,000 offer for a 2,100-square-foot in Mayfair, but the deal fell apart over $5,000. Following the inspection, Chris and his wife wanted $10,000 in concessions, but the seller only offered half that amount.

“I was surprised they pushed back that hard,” said Chris, who didn’t want his last name used. “But the place would need a new roof, water heater, electrical upgrades, etc., in the next two to three years, as well as a lot of upgrades inside, so it was too much for us.”

203(k) to the rescue

That is one reason that Jocelyn Predovich, president and CEO of the Limetree Lending Group, is pushing what is called 203(k) mortgages, HUD’s primary program for the rehabilitation of properties.

“No home is ever perfect, but what is so hard in this market, when there is almost nothing to choose from, a lot of the homes out there are kind of tired and worn out,” Predovich said. “That is why we are pushing the 203(k) loans so hard.”

Borrowers typically pay an extra $49 to $52 each month for every $10,00 in 203(k) financing rolled into the mortgage, she said.

She said a lot of Realtors are surprised that more people aren’t buying homes, given how unbelievable low rates are today.

Lender Jocelyn Predovich offers a free "webinar" class to Realtors for continuing real estate education at 10 a.m. every Wednesday.

Predovich compared it to someone shopping for a new wardrobe expecting to get the perfect outfit at a basement-bargain price. Instead, she walks into store after store and everything she sees is “old, worn, torn and full of holes. No matter how much the clothing is discounted, or how inexpensively you could finance your purchases, it does not matter. You are not buying this ugly clothing. You are better off to keep the clothing you have. Agents are pushing worn-out, broken-down, outdated properties to an impatient generation seeking immediate gratification in a ‘buyer’s market.’”

That’s where the 203(k) comes in.

She said the beauty is you can hire professionals come in and do the work on just about any improvement, a move that more times than not will increase the value of your purchase from Day One.

“While I can’t guarantee that it is going to result in instant, organic equity, that has been the case of everyone in our files,” Predovich said. ‘It really lowers the risk of buying a home. You’re not going to be sucked into a home that needs to be fixed up and you can’t sell. It’s a huge benefit to anyone who needs to sell their home in a year or two. The improvements offers you a hedge against having to sell your home in a year, because the improvements usually provide you with instant equity.”

It seems to be catching on.

“Last Thursday, nine contracts came in (to our office) and they all had 203(k) loans.”

 

Could Rising Rents Bump Up Home Sales?

by Roberts Johnson and Rachel Diedrich, Real Estate B

Could Rising Rents Bump Up Home Sales?

Home sales may get a boost from the rising prices occurring in the rental market, which is making it cheaper to own rather than rent in a growing number of cities.

“We might see a spring season better than the numbers are predicting," Jay Brinkmann, the Mortgage Bankers Association's chief economist, said during the an MBA conference in Florida this week.

The number of renters in the country increased during the housing crisis, while home ownership dropped to a 14-year low. But with rental costs rising nationwide, more renters may be lured to buying a home, particularly with home prices falling and mortgage rates hovering at record lows.

Mike Fratantoni, MBA’s vice president of economics and research, is forecasting home sales to increase 10 percent in 2013. An improving employment picture also is expected to have a positive impact on housing, MBA economists noted.

Still, "everything is going to be based overall where the economy goes," Brinkmann said. "This is going to be a slow year. There are a number of headwinds we're facing in terms of economic growth."

Source: “MBA: Rising Rental Costs May Drive Home Sales Up,” HousingWire (Feb. 23, 2012)

 

Foreclosed Homes to be Sold to Investors to use as Rentals

by Roberts Johnson and Rachel Diedrich, Real Estate B

NEW YORK (CNNMoney) -- Federal officials hope to launch a pilot program in early 2012 to convert government-owned foreclosures into rental properties.

The program, which was cited by Federal Reserve Chairman Ben Bernanke last week as one way to address the housing crisis, would sell foreclosed homes now owned by Fannie Mae (FNMA, Fortune 500) and Freddie Mac (FMCC, Fortune 500) to investors in bulk. The properties would then be converted into rentals.

The initiative began back in August, when the Federal Housing Finance Agency, the Treasury Department and the U.S. Department of Housing and Urban Development announced they were seeking suggestions on ways to dispose of repossessed homes now owned by Fannie Mae, Freddie Mac and the Federal Housing Administration.

In addition to getting the properties off the government's books, officials are hoping putting the homes back into productive use will stabilize neighborhoods and housing values. Also, it is looking to expand the supply of rentals, which are increasingly in demand.

The agency is not releasing details on how the rental program would work, instead saying it is "proceeding prudently but with a sense of urgency to lay the groundwork for the development of good initial transactions in early 2012."

Administration officials said they are continuing to work with the agency to develop the program.

Housing, stocks, gold and oil: Hot or not in 2012?

Until now, most foreclosed homes have been sold individually because investors have demanded bigger discounts to buy large numbers of properties.

But federal officials are warily eyeing the expected surge in foreclosures as banks ramp up their action against delinquent homeowners. The process had been stalled since late 2010 when banks' shoddy paperwork practices came to light.

There are close to 2 million homes in the late stages of delinquency, according to Lender Processing Services. Since foreclosed properties often sell below market value, they can wreak havoc on home prices.

Converting these homes to rentals can both help the neighborhood and minimize losses to Fannie, Freddie and the FHA, which hold about 250,000 properties, Bernanke told lawmakers last week.

He urged lawmakers to ramp up their efforts to fix the housing market, placing particular emphasis on the problem of vacant homes on the market.

"Restoring the health of the housing market is a necessary part of a broader strategy for economic recovery," he said.

Bernanke's comments launched a full-court press by Federal Reserve officials last week to raise awareness of the continuing problems plaguing the housing market.

His proposals were quickly followed by Fed Governors Sarah Bloom Raskin, who spoke on ramping up enforcement of mortgage servicers, and Elizabeth Duke, who said Fannie Mae and Freddie Mac could do more to help heal the housing market.

Meanwhile, New York Fed President William Dudley gave a speech that touched on a wide range of housing policies -- including principal reduction and mortgage refinancing -- that he believes will boost the economy.

The Fed has already tried to boost real estate sales by pushing mortgage rates down to record lows through massive bond-buying programs.

But the renewed push for housing help indicates that the Fed, which has basically run out of monetary policy ammunition to revive the real estate market, is urging the federal government to ramp up its efforts.

"The Federal Reserve is signaling in even stronger terms the need for the government to do more to help housing," said Jaret Seiberg, a policy analyst with the Washington Research Group. To top of page

Displaying blog entries 1-10 of 91

Contact Information

Photo of Roberts (Bobby) Johnson Real Estate
Roberts (Bobby) Johnson
Cool Denver Homes, Inc.
2314 Curtis Street
Denver CO 80205
Roberts Cell: (303) 525-7599
Fax: (303)9635335

Providing Real Estate Solutions Every Day!