Rents rocket 10.9% in Denver over last year

Great article from Denver Business Journal

Rents rocket 10.9% in Denver over last year

Denver Business Journal by Mark Harden, New Media Editor Date: Tuesday, July 3, 2012, 2:58pm MDT

The average asking price for rental housing in the Denver area was up 10.9 percent in June from a year earlier, the third-biggest gain among large U.S. markets in that period and twice the nationwide increase, according to a report Tuesday from Trulia Inc.
Denver’s rent increases over the 12-month period were exceeded only by San Francisco (up 14.7 percent) and Oakland (up 11.2 percent), according to the quarterly Trulia Rent Monitor report issued by the San Francisco-based real estate information service.
Nationwide, big-city rents were up an average of 5.4 percent higher in June from a year earlier. Rents rose year over year in 24 of the 25 biggest U.S. markets, except for Las Vegas.
In a previous Trulia report, comparing Denver-area rents from March 2011 to March 2012, rents rose 9.4 percent.

Yes It's a Rare Opportunity

interesting article from Wall Street Journal Article this summer...

Yes It's a Rare Opportunity

This could be the best time in a generation to be a first-time home buyer.

ERIC LASCELLES: Investors 'understand that this is the mother of all buyer's markets, and won't last forever.'

Cheery views such as this are out of vogue and easy enough to dismiss as the ravings of a serial optimist. And yet this opinion isn't based on any heroic economic assumptions. To the contrary, it is constructed upon a more curmudgeonly foundation: In my estimation, the stock market probably underestimates Europe's woes, U.S. economic growth may fall short of expectations, and—of greatest relevance—the overall housing market is likely still several years from normality.

Nevertheless, this is still a remarkable time to be a first-time home buyer. Affordability is the best it has been in 30 years, thanks to the combination of a 34% decline in prices since the 2006 peak and a historically low 4% average rate for a 30-year, fixed-rate mortgage.

The two affordability metrics that truly matter are how much monthly income a mortgage consumes, and whether this is less costly than renting. On the first count, I calculate that home prices are now an astonishing one-third cheaper than the historical norm. On the second, real-estate website Trulia figures that buying is cheaper than renting in 98 out of America's 100 major markets. That is practically a clean sweep.

Rock-Bottom Rates

Investors get this. While households dither, investors ramped up their home buying by 64% across 2011. They understand that this is the mother of all buyer's markets, and won't last forever. The prospect of making a profit by flipping these properties is still rather distant, so they lay in wait for an eventual rebound and in the meantime make money by renting out their properties for more than the monthly mortgage payment.

Yet most people are sitting on their hands, frozen not by the fundamentals but by psychology. For those able to overcome their phobias, a blazing contrarian opportunity exists.

Here's a dirty little secret about recessions: They aren't bad for everyone. They can even be downright beneficial if played right. Roughly one in 30 Americans is unemployed as a result of the financial crisis. The rest have sidestepped this blow, and what's more have been given the gift of extraordinarily low interest rates.

The long arc of history reveals no other sustained period of real interest rates this low. It is mind-bending that American home buyers can now borrow for 30 years at a cheaper rate than either General Electric Co. or the Australian government. And unlike their counterparts in most other countries, Americans can lock in today's borrowing costs for the full life of their mortgage, enjoying perfect certainty about future payments.

The finances of most households have had a rough go over the past several years. Many were ravaged by financial markets. Others are trapped beneath an illiquid and possibly underwater home.

However, the situation for first-time home buyers is different. They largely skated through the past few years. They weren't yet in the housing market, and so escaped that devastating hit. And with an average age of 30, they hadn't yet accumulated sufficient assets to truly suffer when markets fell.

A significant part of this cohort's savings has been generated in just the past five years, and while markets have been enormously volatile over that period, a monthly savings plan would have generated a 26% return in equities and 22% in bonds. First-time home buyers may not be so hard up for their down payment after all.

Heck of a Deal

But is it wise to take the plunge in this era of economic uncertainty? While the economy remains very fragile, it has become less so since the fall. Still, say the worst happens—you buy a home and then immediately lose your job: The foreclosure backlog provides breathing room, and there is ample evidence that the newly unemployed are regarded preferentially by employers over the poor souls in long-term unemployment purgatory.

Could home prices fall further? Yes they could. The home-inventory overhang is still quite large and credit availability remains poor. Home prices are unlikely to bloom in earnest for quite some time. But inventories are finally shrinking and mortgage availability has at least stabilized, and if you wind up buying a house on sale for one-third off its fair value instead of discounted by 40%, you still got one heck of a deal.

Arguably, the bigger risk is rising interest rates, which could erode affordability and snuff out this buying opportunity.

What if you are presently unemployed, or a grim-faced banker has rejected your mortgage application? Alas, your decision has been made for you. But for viable first-time home buyers—those with a stable job and a preapproved mortgage—this opportunity is ripe for the picking. Investors are already eating your lunch.

Mr. Lascelles is the chief economist at money-management firm RBC Global Asset Management Inc. He can be reached at reports@wsj.com.

Home prices rise nationally; Denver gains 2.8% in past year

positive news in the post...

Denver Post

6.26.2012

Home prices rose in nearly all major U.S. cities in April, further evidence of a housing market that is slowly improving even as the job market slumps.

The Standard & Poor's/Case-Shiller home price index showed increases in 19 of the 20 cities tracked. It's the second straight month that prices have risen in a majority of U.S. cities.

Home prices in the Denver area have risen 2.8 percent in the past year and improved 1.7 percent from March to April, according to the report.

And a measure of national prices rose 1.3 percent in April from March, the first increase in seven months.

San Francisco, Washington and Phoenix posted the biggest increases in April. Prices fell 3.6 percent in Detroit, the only city to drop.

The month-to-month prices aren't adjusted for seasonal factors.

A separate report issued Tuesday painted a less optimistic picture for Denver's housing market.

That report, from housing data provider CoreLogic, said the share of metro Denver mortgages delinquent by 90 days or more increased slightly in April from March, ending a 14-month streak of declines.

The rate of seriously delinquent mortgage borrowers in metro Denver ticked up to 4.05 percent in April from 3.91 percent in March. The Associated Press

6 Things to Consider When Pricing Your Home To Sell

always good information

How to Price Your Home
Pricing decisions should be grounded in reality rather than wishful thinking.

By Marcie Geffner

When the time comes to price your home for sale, you may be tempted to start with the price you paid for it, add a healthy markup and call it a day. Unfortunately, that strategy is unlikely to result in a true reflection of your home's market value.

Here are six strategies to help you figure out how much your home is worth:

1. Abandon your personal point of view. How much will a ready, willing and able buyer be willing to pay for your home? Buyers don't care how much you paid for the home, how many memorable moments you and your family shared in the home, how much cash you need for the downpayment on your next home or how much time and money you've invested in your home's hardwood floors, fresh paint, lush landscaping or other improvements.

2. Get a couple of CMAs. Invite at least three real estate agents to visit your home and give you their opinion of its likely selling price. Ask for a "comparative market analysis" (CMA), which shows the prices of comparable recently sold homes, on-the-market homes and homes that were on the market, but weren't sold. The on-the-market homes are the "competition" for your home. Ask the agents why each home was included in the CMA and whether any other comparable homes were eliminated from the CMA. Price recommendations based on CMAs aren't gospel. Some agents will tell you to under-price your home in hope of sparking a bidding war. Others will suggest a flatteringly high price to "buy" your listing only to demand a price reduction a few weeks later.

3. Do your own market research. Go to open houses in your neighborhood and try to make an impartial assessment of how those homes compare to yours in terms of location, size, amenities and condition. Assuming all the asking prices were the same, would you buy your home or someone else's?

4. Calculate the price per square foot. The average price per square foot for homes in your neighborhood shouldn't be the sole determinant of the asking price for your home, but it can be a useful starting point. Keep in mind that various methodologies can be used to calculate square footage.

5. Consider market conditions. Are home prices in your area trending upwards or downwards? Are homes selling quickly or languishing? Will your home be on the market in the spring home-buying season or the dead of winter? Are interest rates attractive? Is the economy hot or cold? Will you be selling in a buyer's market or a seller's market? Is the local job market strong or are employees fearful of staff reductions?

6. Sweeten the transaction terms. Some buyers have needs that go beyond the bottom line. If you're willing to close escrow quickly, you'll attract buyers who want to move in right away. If you can offer seller-financing, your home will appeal to buyers who need to stretch their financial resources. A lease-option can help first-timers who need downpayment assistance. The more creative and flexible you can be in meeting the buyer's needs, the more success you'll have in pricing your home to sell.

8 Things to Know about Buying a Home Today

national article not totally applicable to the local market, yet helpful all the same...

8 things to know about buying a home today

Use mortgage preapproval to your advantage
By Dian Hymer
Inman News

The home-sale market is showing signs of life. More buyers are confident now than they were a year ago that now might be a good time to buy. Interest rates are near all-time lows and home prices in some areas are back to 2002-2003 levels.

Some analysts are finally suggesting that we may be headed for recovery. If you have a secure job, plan to stay put and feel this is the right time for you to buy a home, consider the following.

In most places in the country, home prices are still declining. It has only been recently that the market picked up and it's too soon to know if this will result in a sustainable increase in prices.

The recent home sales in areas around California's Silicon Valley defy the norm. Significant job growth in the area combined with a low inventory of good homes for sale has resulted in multiple offers with buyers bidding the price up sometimes hundreds of thousands of dollars over the asking price.

In other high-demand, low-inventory areas, you may find yourself bidding against other buyers, perhaps even more than once. This doesn't necessarily mean that the price will be bid up significantly over the asking price. This will vary from one listing to the next depending on property location, condition and price.

It's important to research the local community where you want to buy. Find out what homes are selling for, if multiple offers are common and if listings are selling for more than the asking price. This will help you make a realistic offer that might be accepted when you find a home you'd really like to buy. It helps to work with an experienced local real estate agent.

Some sellers in high-demand niche markets intentionally list their home at a low price hoping to stimulate multiple offers. If you see such a listing and there are a lot of buyers wanting to make offers, you will be better able to know how high your offer would need to be to win the contest if you have done your due diligence.

HOUSE HUNTING TIP: Whether you're anticipating competition or not, you should be preapproved for the mortgage you'll need to complete the purchase before you write an offer. In competition, this will make a big difference, particularly if everyone else who is offering is preapproved. It also lets you know what you can afford. And, it puts you in a good bargaining position with the seller.

Buyers aren't the only participants in the housing market that have heard the news that the market has improved. Some sellers are putting their homes on the market because they've been waiting for a better time to sell. This is good news for buyers looking in low-inventory markets.

You should expect that you will have to negotiate. Many of today's sellers are selling for less than they paid. Even though the market has improved a bit, sellers may be disappointed with the current market value of their home. Be prepared to negotiate, not just the initial price, but after inspections are completed if items come up that you hadn't anticipated.

Include realistic contingency time frames in your purchase contract for loan and appraisal approval if you're applying for a mortgage. The recent uptick in the market means that lenders are suddenly overwhelmed.

In mid-March, buyers in Oakland, Calif., who were seeking approval for a jumbo loan were told they could close a transaction in 21 days. Not only could they not close in 21 days, it took more than 21 days for loan approval due to lender backlog.

THE CLOSING: Underwriters could require that additional conditions be met before you can be approved. Act quickly to avoid further delay.

Economists: 2012 marks the end of a long bottom

interesting article....

Real estate industry experts offer midyear forecastsBy Paul Hagey, Friday, June 22, 2012.

Inman News®

DENVER -- U.S. housing markets are likely to continue on a path of slow recovery after seeing a multiyear bottom, according to three real estate industry economists participating in a forum hosted by the National Association of Real Estate Editors said today.

Continuing uncertainties over negative equity (about a third of homeowners with mortgages owe more than their homes are worth, according to Zillow), fuzzy housing finance reform possibilities, lagging foreclosure processing and tight lending standards are potential obstacles to the slow-rising tide of the U.S. housing market, they said.

David Crowe, the chief economist and senior vice president of the National Association of Home Builders (NAHB); Lawrence Yun, chief economist and senior vice president of research at the National Association of Realtors (NAR); and Stan Humphries, chief economist at online real estate marketplace Zillow gave their insights at a panel discussion.

Despite the semi-bright outlook, recent years have been tough for the market. "Last year was the worst year on record for house sales, for 60 years of housing-sale info," Crowe said.

NAHB is forecasting a 19 percent improvement in single-family housing starts this year over last, Crowe said, from 434,000 last year to a projected 516,000 this year.
There's an increase in demand, despite frictions in the market, NAR's Yun said. Appraisal issues are holding back 15 to 20 percent of home sales, he said, and strict mortgage underwriting standards are holding back another 15 to 20 percent of potential deals.

These issues are slowly being resolved. And that the percentage of distressed home sales is declining -- from about a third in 2011 to a projected 25 percent in 2012 and 15 percent in 2013 -- bodes well for the outlook for housing for the next couple of years, Yun said.

Yun said he "wouldn't be surprised" to see a 60 to 70 percent increase in housing starts next year, or 10 percent home price appreciation, as the market responds to increasing demand. Both will not happen, he said, but one or the other could -- if lawmakers manage to avoid a fiscal cliff as the U.S. once again approaches its debt ceiling.
If lawmakers can't reach a compromise by Dec. 31, more than $1 trillion in automatic spending cuts are set to begin taking effect at the end of this year.
Zillow's Humphries sees a recovery as well; he's more optimistic than he's been in a couple of years, he said. The recovery is one that starts on the micro level, ZIP code by ZIP code, he said.

"It's almost like a bacteria attacking a bad virus," Humphries said of the recovery occurring in metros; he showed ZIP code-level map views of recoveries in Phoenix, Miami and Detroit in 2011 as examples.

What's more, the recovery won't be L-shaped, Humphries said. It's going to stair-step as homeowners with large negative equity begin to enter the market as housing prices go up, which will temporarily swell the supply and pause the recovery briefly.

However, Humphries says the rush of investment in the single-family rental market could be the next housing market bubble. As rental rates increase and homeownership looks more attractive with increasing supply, that now-hot sector of the market will cool.

Boulder's boom: More than 30 building projects on tap for next 2 years

Developments could add 1,500 new apartments, hundreds of hotel rooms

Boulder's Boom: More than 30 building projects on tap for next 2 years

 

interesting daily camera/denver post article

Big changes are brewing in Boulder.
The city is on the brink of a building boom that -- in relatively short time -- could alter the look and feel of large parts of the city.
The developments that are expected to come online within the next two years are on track to add 1,500 apartments, a few hundred new hotel rooms and a large volume of new office and retail space.
Of the dozens of projects either in their planning process or already under construction, the Daily Camera has identified more than 30 private developments that are significant in size, location or historical context.
"This long list certainly contradicts the notion that Boulder is not growing -- and, indeed, is a note of caution that we not rush to develop them all at once," City Councilwoman Suzanne Jones wrote in an e-mail to the Camera. "There are finite options for new development and redevelopment within Boulder, so we need to proceed with deliberation, creativity and even restraint to ensure that this pulse of building activity reflects Boulder's long-term values and community aspirations."
The amount of projects that could move forward is not surprising, city officials say. Financing and construction dried up with the rest of the economy four years back.
"I don't know that there would be a dramatic transformation," said Charles Ferro, a city planner. "It may feel that way in certain pockets."
In some of those areas -- notably the transit-oriented Boulder Junction east of 30th and Pearl streets -- the city has planned for change, said Tim Plass, a city councilman. For other areas, this flood of new projects will serve as a "great test" for the effectiveness of the city's rules and regulations, he said.
"My hope is that with the regulatory structure in place with the site review (and other) processes, that we get products that are going to complement our vision for our community," he said. "...While we have room for change, we want to make sure we keep the things about Boulder that make it Boulder."
The influx of construction activity and the resulting projects could be a boon for city coffers.
In recent years, construction by the University of Colorado helped the city get through lean times, said Lisa Morzel, Boulder's deputy mayor. CU's development spree is expected to continue in the coming years with even more activity -- including the construction of a new geosciences building -- on its East Campus.
The intensity of this many developments moving forward at one time also stirs concern. While the last building boom brought more mixed-use and residential units to the city, sales efforts for pricey condos in downtown and at places such as the Peloton stalled.
Others point to a filling of a pent-up demand, especially in the areas of hotels and multifamily housing.
"Quite frankly, there hasn't been a lot of that built in Boulder in the last 15 or 20 years," said Terry Palmos, a local developer building an apartment complex off Broadway and Violet Avenue.