Tax credit drives surge in home sales

Denver Post

Tax credit drives surge in home sales

By ALAN ZIBEL AP Real Estate Writer

Posted: 12/22/2009 12:17:19 AM MST

Updated: 12/22/2009 02:39:18 PM MST

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... (Chart shows the 10 best and worst housing market sales percent change for August 2009 from...)

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WASHINGTON—Extraordinary government efforts to stabilize the housing market are paying off. What happens when the help runs out is anyone's guess.

Sales of previously occupied homes surged in November to the highest level in nearly three years, spurred by federal subsidies for starter homes and a massive Federal Reserve push to drive down mortgage rates.

The strong figures were driven by a race to take advantage of a tax credit of up to $8,000 for first-time homebuyers. The credit has since been extended to next spring, but the government initially planned to end it Nov. 30.

"It was like the end of the world," said real estate agent Stephanie Somers of Re/Max Access in Philadelphia. "All the first-time buyers converged onto that one month."

The pace of home sales is now up 46 percent from its bottom in January and still 10 percent shy of its peak from four years ago, according to data released Tuesday by the National Association of Realtors.

The real estate recovery depends not only on taxpayer dollars but also on the health of the economy at large, which grew at a less robust pace in the third quarter than previously thought.

The economy grew at a 2.2 percent annual pace from July to September, down from an initial reading of 2.8 percent, the government said Tuesday.

Experts think the economy is even stronger now than it was last quarter, but they expect it to ebb again early next year. And that's when the tax credit will wind down and the Fed plans to stop buying mortgage-backed securities, which could raise mortgage rates.

Whether the real estate rebound can continue without the help remains to be seen.

"The housing market recovery can't continue if the overall recovery in the economy doesn't persist," said Michelle Meyer, an economist with Barclays Capital.

While prices for homes in many parts of the country are still falling, analysts said the tax credit clearly helped the volume of sales.

"In the short run, it's an effective stimulus," said John Ryding, chief economist at RDQ Economics. "If you give someone money to spend on something, they will spend it."

With April 30 as the new deadline, experts forecast sales will drop during the winter and pick up again in the spring. Without the looming deadline, "buyers have no sense of urgency now," said Gary DeRosa, an agent with ZipRealty Inc. in Seattle.

About 2 million homebuyers have taken advantage of the credit so far, the Realtors group said. It expects 2.4 million more to use it by the middle of next year. First-time buyers made up about half of all transactions last month, driving sales up 44 percent above last year's levels, a record.

Overall, sales of existing homes rose 7.4 percent in November to a seasonally adjusted annual rate of 6.54 million, up from 6.09 million in October. That was far stronger than the 6.25 million forecast by economists surveyed by Thomson Reuters.

The inventory of unsold homes on the market shrank about 1 percent to 3.5 million. That's a healthy supply of about six and a half months' worth, the smallest in three years.

That home prices are still falling shows one government housing program, an effort to get lenders to prevent foreclosures by lowering monthly payments for hundreds of thousands of borrowers, isn't working as well as the Obama administration would like. Only about 31,000 borrowers have completed the process so far.

In the meantime, high unemployment is causing homeowners to default on their loans in record numbers. Banks are unloading foreclosed homes, driving prices down in many areas, particularly Arizona, California, Florida and Nevada.

Nationwide, the median sales price was $172,600 in November, down 4 percent from a year earlier, but flat from October.

Many experts warn that lenders have millions of properties in the foreclosure pipeline that have yet to come on the market, suggesting prices could fall even further. Plenty of traditional sellers are also keeping their homes off the market.

"When they start thinking they can sell them, we could see a surge in homes for sale," wrote Joel Naroff, president of Naroff Economic Advisors.

In the meantime, homebuyers can take advantage of record-low mortgage rates, deeply discounted prices and federal incentives. Besides the tax credit for first-time buyers, owners who have lived in their homes for at least five years can now claim a tax credit of up to $6,500 if they relocate. To qualify, they have to sign a purchase agreement by April 30.

Real estate agent Tim Surratt of Grenwood King Properties in Houston said activity has remained healthy this month, even only days before Christmas. "The window to purchase where the prices are right and the interest rate is right is closing," he said.

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AP Economics Writer Jeannine Aversa in Washington and AP Real Estate Writers J.W. Elphinstone in New York, Alex Veiga in Los Angeles and Adrian Sainz in Miami contributed to this report.

Read more: http://www.denverpost.com/business/ci_14046898#ixzz0bHPdnD52

Home resales surge to nearly 3-year high

MSNBC.com

Home resales surge to nearly 3-year high

Sales spurred by original expiration of tax credit for first-time buyers

The Associated Press

updated 9:02 a.m. MT, Tues., Dec . 22, 2009

WASHINGTON - Home resales surged last month to the highest level in nearly three years, reflecting an extraordinary level of federal support that has pulled the housing market back from the worst downturn since the Great Depression.

Buyers were racing to complete their sales before the original expiration date of a tax credit for first-time buyers that was scheduled to expire Nov. 30. Last month, Congress decided to extend and expand the credit to ensure the housing market could sustain its recovery.

The Realtors estimated that about 2 million homebuyers have taken advantage of the credit so far and forecasts that another 2.4 million will use it by the middle of next year. First-time buyers made up about half of all transactions last month, driving sales up 44 percent above last year's levels, a record jump.

Sales are now up 46 percent from the bottom in January, but down 10 percent from the peak more than four years ago.

The median sales price was $172,600, down 4.3 percent from a year earlier, and up 0.2 percent from October.

"Things are stabilizing," said Pete Flint, chief executive of real estate Web site Trulia.com. "There is a significant amount of buyer interest out there."

November sales rose 7.4 percent to a seasonally adjusted annual rate of 6.54 million, from a downwardly revised pace of 6.09 million in October.

Sales had been expected to rise to an annual pace of 6.25 million, according to economists surveyed by Thomson Reuters.

The inventory of unsold homes on the market fell about 1 percent to 3.5 million. That's a healthy 6.5 month supply at the current sales pace, the lowest level in three years.

Besides the existing tax credit of up to $8,000 for first-time buyers, homeowners who have lived in their current properties for at least five years can now claim a tax credit of up to $6,500 if they relocate. To qualify, buyers must sign a purchase agreement by April 30.

Postponing the deadline could mean sales will drop during the winter months and recover in the spring.

"Buyers have no sense of urgency now," said Gary DeRosa, an agent with ZipRealty Inc. in Seattle.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

URL: http://www.msnbc.msn.com/id/34521144/ns/business-real_estate/

business

Colorado bill aims at abandoned properties' sale time

The measure to be introduced next year would allow homes to be occupied more quickly.

By Margaret Jackson
The Denver Post

Posted: 12/23/2009 01:00:00 AM MST

A bill to be introduced in the state legislature next year would cut in half the time it takes lenders to sell abandoned properties.

Gov. Bill Ritter and state legislators announced the bill Tuesday at a news conference at the Clements Community Center in Lakewood. The bill, to be co-sponsored by Reps. Jeanne Labuda, D-Denver, and Dianne Primavera, D-Broomfield, and Sen. Mike John ston, D-Denver, will allow homes to be occupied more quickly so they don't become a safety hazard, a magnet for vandalism and other crimes, or a drain on nearby property values.

"Abandoned properties turn a family-friendly neighborhood into a hazard for children," Ritter said.

Current law calls for a minimum four-month sale process, but many foreclosure sales take seven to nine months to complete.

Currently, when a lender submits the paperwork to start the foreclosure process, the title for the property is still with the mortgage holder, even if the home is abandoned. That means there is no one responsible for maintaining the property, because the homeowner is gone and the home does not yet belong to the lender.

The bill would allow the bank to take over a property faster, giving municipalities and homeowners associations someone to hold accountable for maintenance.

"Before, we didn't discriminate between abandoned and non-abandoned," Ritter said. "When someone moves out and abandons their property, there's no reason not to move (the time frame) up and move it up quickly."

Colorado is on track to top the record of 39,900 foreclosure filings set in 2007 as widespread unemployment makes it harder for borrowers to make their mortgage payments. New foreclosure filings statewide during the third quarter reached a record high of 12,468, according to a report released last month by the Colorado Division of Housing. New filings for the first nine months of the year were up 18 percent to 35,112.

The number of completed foreclosures grew to 5,618 in the third quarter, the second consecutive quarter- over-quarter increase. But the total number of completed foreclosures fell to 14,971 during the first three quarters, compared with 16,265 during the same period last year.

The legislation would complement the $5.8 billion federal Neighborhood Stabilization Program designed to help foreclosure-blighted neighborhoods.

"More folks are fighting hard to maintain their mortgages," Johnston said. "The next critical step is to protect neighborhoods."

Margaret Jackson: 303-954-1473 or mjackson@denverpost.com

Read more: http://www.denverpost.com/technology/ci_14052416#ixzz0b5LcQ1R3

Renovating doesn't pay off like it used to

By Les Christie, staff writerDecember 21, 2009: 7:15 AM ET

NEW YORK (CNNMoney.com) -- Home remodelers are getting less bang for their bucks. For the fourth straight year, renovation jobs have added less to resale values relative to their costs, according to an annual Remodeling Cost vs. Value Report released this week by the National Association of Realtors.

The average remodeling job cost $50,908 in 2009 and added $32,497 to the value of the home, a ratio of 63.8%. That was down from a cost-to-value ratio of 67.3% in 2008, when the average was $49,866 and the added value was $33,568.

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One common renovation, a mid-priced bath remodel, for example, runs an average of $16,142 and adds only $11,454 to the resale value of a house -- recouping just 71% of its cost. In 2008, the same job cost less -- $15,899 -- and typically added $11,857 to the home's value, recouping 74.6%.

The most financially successful jobs are smaller-scale, lower-cost renovations that improve the exterior appearance of homes. In this down real estate market, curb appeal is king.

"Once again, this year's report highlights the importance of a home's first impression," said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz.

Ron Phipps, a real estate broker in Rhode Island, said how the house looks from the outside is more important than ever.

"If you're driving down the street and the house doesn't have great appeal, it doesn't matter how nice it is inside," he said.

But here's the kicker: Clients are savvier than ever in their shopping. Even though the costs of home improvements are less likely to be returned on resale than they have been in prior years, sellers may still have to bite the bullet and do the remodeling if they want their house to sell at all, he said.

"It's kind of intriguing," said Phipps. "Buyers are using the unimproved houses to negotiate lower prices, but they wind up buying the remodeled homes."

So, if there are two similar houses in the area, buyers will use the listing price of the one that has not gone through a metamorphosis to get the seller of the renovated house to slash their price. Buyers want to pay for the caterpillar but get the butterfly.

Seller must play along if they want to make deals. "You get to sell the house more quickly if you do the renovations," Phipps said.

Biggest pay-offs

The major job that returns most in resale value is an upscale replacement of siding using fiber-cement. The job costs an average of $13,287 but increases home value by $11,112, or 83.6%. A vinyl siding replacement returns 79.9% of costs.

Adding a basement bedroom is also fairly cost effective, averaging $49,346 but adding $40,992 in value, an 83.1% return.

"Increasing livable square footage with a new deck or an attic bedroom is usually more valuable than just remodeling existing space," Phipps said.

The return on investment for some jobs varies greatly by region.

In New England, where winter are long and cold, vinyl window replacements reap a better return than they do in the warm South Atlantic region, where poorly insulated windows don't mean as much expensive heat leaking away.

So, although replacement windows cost more in New England -- an average of $11,155 -- they add $9,152 to home values there, recouping 82.3% of their cost. In the South Atlantic states, they cost $9,705 but add just $7,417 to home values, 76.4% of their cost.

On the other hand, buyers in the South Atlantic seem to reward sellers for adding living space more than they do in New England. Maybe thrifty Yankees hate having to heat those extra rooms.

Finishing a basement returns 84.4% of its $55,357 cost in the South Atlantic and only 64% of the $65,715 New Englanders spend for the job.

Among the remodeling jobs faring the worst in return on investment were large, upscale kitchen remodels. They cost an average of $111,794 in 2009 and added $70,641 in recoupable value, just 63.2%.

That was down a whopping 7.5 percentage points from their 70.7% return on investment in 2008 . At the height of the housing boom, in 2005, upscale kitchen renovations returned more than 80% of their costs.

"A lot of the things that, historically, had huge value, don't have as much today," said Phipps. "If you want to redo a kitchen, it may no longer make as much sense to use upscale appliances -- Viking ranges, Sub-Zero refrigerator. Buyers may not pay any more than they would for a home with GE appliances instead."

Of course, most remodeling jobs are done to please homeowners. Any increase in home value is a bonus, not an end in itself. But for anyone thinking of selling in the near term, keeping an eye on the bottom line is always a good idea.

Monday, December 21, 2009, 2:56pm MST | Modified: Monday, December 21, 2009, 10:01pm

Foreclosure sales down from 2008, but new filings up, in Colorado’s urban counties

Denver Business Journal - by Mark Harden

Foreclosure auction sales in urban Colorado counties declined 13 percent in the first 11 months of 2009 from the same period of 2008, the state Department of Local Affairs’ Division of Housing reported Monday.

But at the same time, new foreclosure filings rose 12 percent in the 12 urban counties covered by the report, officials said.

In Denver itself, new foreclosure filings changed only slightly between 2008 and 2009, while completed foreclosure sales fell 33 percent.

There were 36,628 foreclosure filings and 14,975 foreclosure sales from January through November this year in Colorado’s 12 urban counties, versus 32,744 filings and 17,160 sales in the same months of 2008, the new report said.

For November alone, foreclosure sales in the urban counties were down 0.5 percent from same month of 2008, to 1,512, while new foreclosure filings rose 11.8 percent, to 2,802, the state report said.

Both filings and sales declined between October and November of this year in the urban parts of Colorado, by 13.4 percent and 0.4 percent respectively.

“At this point, it appears very unlikely that the number of completed foreclosures will reach the totals set in 2007 and 2008,” Division of Housing spokesman Ryan McMaken said in a statement.

“November was a relatively light month for foreclosures, but with new foreclosure filings still up compared to last year, foreclosures will continue to be a challenge,” McMaken added.

The 12 counties covered by the report include the Denver metro area counties — Denver, Adams, Arapahoe, Boulder, Broomfield, Douglas and Jefferson — as well as El Paso (Colorado Springs), Larimer (Fort Collins), Mesa (Grand Junction), Pueblo and Weld (Greeley) counties.

For January through November of this year in the Denver metro area, new foreclosure filings rose the most in Boulder County (up 39 percent) and Broomfield (up 23 percent) from the same period of 2008.

There was almost no change in filings in Denver between 2008 and 2009 and only a 3 percent rise in Arapahoe County.

As for completed foreclosure sales, changes varied widely from a 126 percent increase in Boulder County to Denver’s 33 percent decrease and Adams County’s 22 percent drop.

Click here to download the full Division of Housing foreclosure report, including county-by-county tables.

mharden@bizjournals.com

Citigroup to suspend foreclosures for 30 days

MSNBC.com

Citigroup to suspend foreclosures for 30 days

Bank is working on ‘long-term fundamental alternatives’ to foreclosure

The Associated Press

updated 5:45 a.m. MT, Thurs., Dec . 17, 2009

WASHINGTON - Citigroup Inc. will suspend foreclosures and evictions for 30 days in a temporary break for about 4,000 borrowers during the holiday season.

The New York-based bank said Thursday the suspension will run from Friday through Jan. 17. It applies only to borrowers whose loans are owned by Citi. Borrowers who make payments to Citi but whose loans are owned by other investors are out of luck.

"We want our borrowers to have a much less stressful time, to spend their time with their families during the holidays as opposed to worrying about their homes," Sanjiv Das, head of the company's mortgage division, said in an interview.

The suspension means Citi will halt foreclosure sales and stop evicting homeowners from properties it has already seized. The company projects it will help 2,000 homeowners with scheduled foreclosure sales and another 2,000 that were due to receive foreclosure notices.

Das also said the company is working on "some long-term fundamental alternatives" to foreclosure, but declined to be specific. "We know that moratoriums are not permanent solutions," he said.

Most major lenders suspended foreclosures last winter while the Obama administration developed its $75 billion loan modification program. Foreclosures picked up again after those suspensions lifted. In recent months, they have fallen as banks evaluate whether borrowers qualify for the government program.

Citi has enrolled about 100,000 borrowers in the Obama program, but had made only about 270 of those modifications permanent as of the end of last month, according to a Treasury Department report. But Das said the low number resulted from a "reporting error" and said it will rise dramatically by year-end.

"I have put a lot of pressure on my team to make sure that there is almost nothing left in the pipeline," he said.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

URL: http://www.msnbc.msn.com/id/34460803/ns/business-real_estate/

Fannie, Freddie halt foreclosures for two weeks during holidays

Fannie, Freddie halt foreclosures for two weeks during holidays

WASHINGTON (AP) — Mortgage finance companies Fannie Mae (FNM) and Freddie Mac (FRE) are suspending foreclosures and evictions for about two weeks in a temporary break for borrowers during the holiday season.

The suspension, announced Thursday by the government-controlled companies, runs from Saturday through Jan. 3. "No family should have to face the prospect of being evicted during the holiday season," Michael Williams, Fannie Mae's chief executive, said in a statement.

Earlier Thursday, Citigroup announced a 30-day suspension of foreclosures and evictions, affecting about 4,000 borrowers. Fannie and Freddie did not estimate how many homeowners would get this grace period.

INTERACTIVE MAP: Home foreclosures state-by-state in the third quarter

GRAPHIC: Tracking housing market's rise, fall and rebound

Last winter, most major lenders suspended foreclosures while the Obama administration developed its $75 billion loan modification program. But foreclosures picked up again after those suspensions lifted.

Investor Report: Tax Extender Act

Investor Report: Tax Extender Act

by Kenneth R. Harney

Real estate investors are facing a squeeze play on Capitol Hill, with important tax incentives nearing an end-of-the-year deadline.

Last week the House approved what's known as the Tax Extender Act, a Christmas tree bill filled with nearly 50 tax program extensions beyond their December 31st scheduled expiration date.

Two of the extenders are especially significant for investment real estate: First is the so-called "leasehold improvements" provision, which allows owners of commercial, retail, hotel and office buildings -- large and small -- to use an accelerated 15-year depreciation schedule in writing off renovations and upgrades they make to their real estate.

The House bill extends favorable leasehold writeoffs for another year.

The second key one year extension in the bill involves depreciation writeoffs for developers who clean up so-called "brownfield" sites that have experienced environmental damage from toxic chemicals or pollution.

But the House bill also contains a massive penalty for real estate, a multi-billion dollar tax increase for investors in real estate partnership deals.

The House bill would remove favorable capital gains treatment that now exists for a type of compensation that general partners frequently receive, known as "carried interest," and instead tax it at ordinary income tax rates.

For many investors functioning as general partners, that would mean a crushing tax increase -- more than double their tax rates overnight.

Though strongly opposed by housing, real estate and other financial market groups, the extender bill with the "carried interest" tax change has now gone to the Senate for a vote.

And that's where the deadline squeeze comes in. The Senate already has a jampacked year-end schedule dominated by health care, and is not likely to take up the tax extender bill before December 31st.

As a result, the popular leasehold improvements and brownfields tax programs are likely to expire, effectively go into limbo, as of January 1st.

Real estate industry legislative analysts say the Senate could take up the tax extenders bill as early as January or February, but will probably not accept the House's controversial carried interest changes.

Should investors worried about the expired tax benefits get upset?

Not quite yet, lobbyists tell Realty Times. If the Senate can quickly cobble together some alternative tax increases to satisfy the House, the extender bill is likely to pass sometime early in the year with a January 1 retroactive date - minus the tax increase for real estate partnerships.

Then again, nothing is certain on Capitol Hill.

So talk to your tax advisor before committing to investment decisions that might be affected by the expiration.

Published: December 18, 2009

Homeowners sue management company accused of not forwarding rent

Homeowners sue management company accused of not forwarding rent

posted by Dan Boniface Jace Larson Date last updated: 12/21/2009 4:31:01 AM

Associated Images

DENVER - More than a dozen homeowners claim they are out thousands of dollars after their property management company did not pay them rent on time or did not pay it at all.

A multi-agency investigation is under way into Mile High Management, which also goes by the name Move in Colorado.

The Colorado Division of Real Estate and the Arapahoe County District Attorney's office confirm ongoing investigations into the company's practices.

Three lawsuits filed against Mile High Management or company owner Kevin Allen claim he owes homeowners $21,991, according to court records obtained by 9Wants to Know. Two of the lawsuits are closed, one of the lawsuits is still pending.

The Division of Real Estate provided 9Wants to Know with copies of 10 complaints against Mile High Management or Allen. The Arapahoe County District Attorney's office confirmed it also received complaints.

9Wants to Know went undercover making appointments to view a house Allen's company listed for rent on Craigslist. Allen and Mile High Management Operations Director David Gladu showed our producer around a three-bedroom house in Centennial.

"We don't do any credit check," Gladu said. "We won't even call your references."

When asked how rent payments are set up, Gladu told us renters pay the company and it pays the homeowners.

"You'd be sending us the money and we'd be forwarding it on," he said.

But the homeowners and renters who filed complaints say that is not what happened.

"I will tell you, he is one smooth talker," flight attendant Debra Black said. She is in a legal battle trying to get back some of the money she says Allen owes her.

When it came time to get paid, Black says Mile High's checks often arrived late and eventually not at all.

She hired him to manage her Aurora condo after she decided to transfer with United Airlines from Denver to Washington, D.C.

"I'm worse off today than I was a year ago," she said. "The reason I went to Washington, D.C. and rented my home with all of my belongings in it, everything I own, was to get financially stable."

In court paperwork from a claim filed in Arapahoe County, Black says Mile High Management paid her from February through July 2009 but claims she wanted to terminate her agreement with the company for cause "to include not having timely paid over the rent."

She asked her tenant, Jessie Carter, to pay her directly.

Carter told 9Wants to Know he worried he would be liable for breaking his agreement with Mile High Management, but did not want to pay the company if Black was not getting her money, so he sued them both.

"It's been a nightmare that I cannot even believe," Black said.

9Wants to Know called Allen to ask him about homeowners' and renters' claims of not being paid on time or fully. Allen agreed to meet with us, but never showed at the scheduled time.

Allen's attorney, Dion Persson, called to say his client had decided not to talk to 9NEWS so 9Wants to Know went to Allen's house.

"These people are getting their money," Allen told 9Wants to Know. He said all funds are forwarded on to the owners.

After 9NEWS spoke with Allen, his attorney sent a letter calling the number of lawsuits "small."

He said Allen and Mile High Management "are working hard to resolve these disputes," and said some of them arose from a business policy where Mile High Management guaranteed the homeowner would receive the rents from the tenant.

"In these cases, the tenants stopped paying and the company was unable to honor the guarantees. The company is working with these homeowners to address these claims. Of course, the company no longer provides that type of guarantee," Persson wrote in the letter to 9Wants to Know.

Persson said his client is a good businessman.

"Regretfully, the company has had a few unfortunate disputes in connection with its business," Persson wrote. "Due to the lessons learned from these disputes, the company has improved its systems to provide security to the homeowners and ensure compliance with all applicable laws."

If you have information about Mile High Management or a tip for 9Wants to Know Investigator Jace Larson, e-mail him at jace.larson@9news.com or call 303-871-1432.

Recession over in Colorado, economist tells legislators

Recession over in Colorado, economist tells legislators

By CHARLES ASHBY/The Grand Junction Daily Sentinel

Friday, December 18, 2009

The recession in Colorado is over, but the recovery is just beginning, the Legislature’s chief economist declared Friday.

Natalie Mullis told state legislators in Denver that while all signs indicate the worst recession to hit the state since the Great Depression has ended, the recovery, particularly in jobs, will take years longer.

“There are a lot of glimmers of light,” she said. “We’ve had over the last year, a free-fall in consumer spending (and) it looks like that free-fall is over. So, it looks like the recession is over, and the recovery is beginning. However, the end of the recession does not mean the end of difficult times.”

Mullis said the last time the state had a recession earlier this decade, it took five years for jobs to reach pre-recession levels. This time, the state lost about 5 percent of its job base, and she’s predicting that won’t return until well into the next decade.

Part of the reason behind that, she said, was the credit market.

“The recovery is going to be constrained primarily because the credit markets are constrained,” Mullis said. “The banks, while they are shoring up their bank balances, still have to deal with problem loans. They still are facing additional burdens related to the recession’s impact on the commercial, industrial and retail real estate markets. It’s going to take several years for the credit market to loosen.”

In a 93-page revenue forecast, Mullis said the Western Slope will have a harder time in its recovery because it is too closely tied to the oil and gas industry, which won’t begin to see real recovery until natural gas prices rebound.

Unemployment rates in the region fell to 6.8 percent in October, more than double what they were a year earlier, she said.

“Mesa and Garfield counties, in particular, have been significantly affected by the decline in the natural gas industry,” according to Mullis’ report. “During the first week of December, a total of 34 rigs were operating in Colorado, down from 109 rigs at the same time last year. In Mesa County, not a single natural gas rig was operating during that period, down from nine that were operating at that time last year.”

The report said consumer spending in the western region of the state dropped nearly 21 percent in the first nine months of the year, with some counties in the region seeing greater drops.

Mullis said residential construction in Mesa County had dropped 47.7 percent in the first 10 months of the year, and the number of foreclosures was up to 165 in October, compared to 44 in October 2008.

Mullis did point to some good news for Grand Junction, including a proposed new Colorado National Guard armory that is to have 130 jobs, a new U.S. Census Bureau office that is to hire up to 1,000 temporary workers for the 20-county region, and Cabela’s announcement it would open a 75,000-square-foot outfitter’s store in town.

Sen. Josh Penry, R-Grand Junction, said that while the overall picture may be looking up, the state, and particularly the Western Slope, still faces a difficult recovery.

“There’s been a lot of rosy scenarios coming from some in the Capitol, but the reality is we’ve got some difficult months in front of us,” he said. “I look at this community on the Western Slope, and most indications are we’re in for a long 2010.”

Email CHARLES ASHBY

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Denver commercial investments fall to $250 million

Exclusive: Denver commercial investments fall to $250 million

Patrick Devereaux, an investment broker at Cushman & Wakefield, found that commercial real estate sales this year in the Denver area are at the lowest point in recent memory.

Investors purchased only $250 million in Denver-area commercial real estate properties this year, the lowest tally on record.

And a single deal, the $134.25 million purchase of the 32-story, 17th Street Plaza, accounted for 53.7 percent of the total sales volume. Without that deal, there would have only been $115.750 million of office, industrial and retail properties of more than $1 million each, shows the report released to InsideRealEstateNews.com by Patrick Devereaux, a senior director of the Capital Markets Group for the Denver office of Cushman & Wakefield.

“What is going on in commercial real estate is analogous to what is happening in residential real estate,” Devereaux said in an interview in his office at Independence Plaza in downtown Denver. In a nutshell: Fewer properties are selling for less money.

But the downturn is even more pronounced on the income-property side.

This year’s sales volume is 85.7 percent lower than the $1.725 billion in sales in 2008, the biggest year-over-year percentage drop on record. It was the first time since 1996 that the sales volume had dropped below $1 billion. Even in 1992 – as far back as Devereaux’s records go - there was $365 million in sales, 31.5 percent more than this year. And while sales volumes in the 1980s at times fell below $250 million, if adjusted for inflation, they almost certainly were higher in today’s dollars.

Indeed, J.P. Morgan this year sold 17th Street Plaza for an estimated 30 percent to 40 percent less than it was it had been negotiating to sell it for last year. But even at the reduced price, the purchase of the 662,653-square-foot building by HRPT Properties Trust, a real estate investment trust, was one of the largest office deals of the year in the country. The building was sold by Mary Sullivan and Tim Swan of CB Richard Ellis. REITs, priced out of the buying sprees of a few years ago, are returning to the market because they can raise money on Wall Street and acquire buildings at a low enough price that they can pay investors dividends, Devereaux said.

And, also, as with the residential market, “all of the buyers want to feel as if they’re getting deals,” Devereaux said.

And they are, he said.

Investors are buying properties at below replacement cost, he said.

And with the residential sales market, it is difficult for buyers to get loans.

“Only a handful of banks are really in the market,” Devereaux said. And buyers need to make hefty down payments, just like someone buying an expensive home, he noted.

There also is a disconnect between prospective buyers and and property owners, he said.

Buyers are looking for “value-add” opportunities, where they can buy properties cheap, fix them up and re-tenant them. Owners, meanwhile, want to wait until the fundamentals of the market improve, so they will fetch higher prices, he explained.

And while current owners have little motivation to sell, investors are increasingly looking to buy distressed properties, just like it has been the case with many home buyers.

“The new clients are going to be the lenders,” Devereaux said. And while most of the income-producing properties that have been sold by lenders so far have been B and C properties – that is, older, less-well-located buildings than Class A – it is only a matter of time before some trophy buildings are sold by lenders, he said.

“Lenders will stop amending loans and delaying foreclosures, resulting in a surplus of assets on lenders’ books,” Devereaux said. “The number of distressed assets for sale will increase in 2010. It will not be a flood of product, but the cycle will last for years.”

Devereaux said the perception among would-be buyers it that they will get better deals, once the buildings are in the hands of the lenders. “I’m not sure that is going to be the reality, though,” he said. “There are going to be a lot more people bidding for properties in foreclosure or in a receivership, so the competition may drive up prices.”

The good news, he said, that as with the residential market, Denver seems certain to bounce back quicker than most national markets. The same economic forces drive both residential and commercial markets. Denver did not become as overbuilt as other markets, its unemployment rate is lower than most parts of the country and the national average, and the economy is more diversified than it has been historically.

“Denver will continue to be a preferred market,” Devereaux said.

Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.

Monday, December 14, 2009, 10:01pm MST | Modified: Tuesday, December 15, 2009, 7:13am

Brookings studies recession's impact on Rockies

Denver Business Journal - by Renee McGaw

The cities of the mountain West have felt the recession as deeply as any in the nation, although the pain has not been spread evenly, according to a report Tuesday.

Denver emerged as one of the strongest cities in the six-state region on a number of measures, according to the report by Brookings Mountain West, a partnership between the Brookings Institution and the University of Nevada.

“Phoenix, Boise, and Las Vegas... remained three of the most troubled metropolitan areas in the entire nation in the third quarter, with all residing in the weakest quintile of metros on a combined measure of overall economic performance,” researchers wrote. “Still, metros like Colorado Springs, Albuquerque, and Denver have only been moderately affected by the recession and seem poised to renew their upward trajectory as the pace of recovery quickens.”

Denver’s unemployment rate averaged 7.1 percent in the third quarter, below the 100-city average of 9.6 percent. It ranked 14th of the 100 cities in terms of unemployment rate — with 1 signifying the strongest-performing metro and 100 the weakest-performing — and ninth in terms of change in the unemployment rate over the 12 months ending in September.

The city also fared well on housing prices: over the 12 months through September, Denver house prices were up 1.6 percent, compared with an average drop of 3 percent.

But foreclosures remained a problem, with the city ranking 76th out of 100 in terms of real-estate-owned properties per 1,000 mortgageable properties.

Denver ranked 70th for gross metropolitan product, and 57th for employment growth.

Click here for the full report.

rmcgaw@bizjournals.com

Real Estate Outlook: Housing Warmer Than Weather

December 15, 2009

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Real Estate Outlook: Housing Warmer Than Weather
by Kenneth R. Harney

If new applications to buy homes are any gauge, the U.S. housing market is warming up, and that's despite the fact that we're now into the traditionally quiet holiday season.

Applications for home purchase loans soared 42 percent last week on a non-seasonally-adjusted basis compared with the week before, according to the Mortgage Bankers Association.

That burst of activity may have been influenced in part by the long Thanksgiving week layoff. Or it could have been an early reaction to the extension of the $8,000 tax credit or the start-up of the new $6,500 credit.

Either way, it was an exceptional week for mortgage lenders.

But here's another possibility: With the economy gaining a little momentum, interest rates have begun edging up again.

Mortgage rates are still close to historic lows, 4.9 percent on average for 30-year fixed and 4.3 percent for 15 year fixed, but MBA chief economist Jay Brinkmann says they're likely to exceed 5.2 percent by this coming March.

So, maybe the rush to nail down financing by home buyers is a smart move … compared with paying half a point higher rates by early spring.

On other economic fronts, we're looking at a mixed bag of reports this week, though mainly positive:

Freddie Mac's found home prices nationwide up by about one point on average during the third quarter. That's on top of a two percent gain for the second quarter. Clear Capital, a real estate data company, also found prices up marginally - by 1.4 percent - during the month of November, though a few local markets came in with double digit gains.

But not all surveys agree on that. The well-regarded “IAS 360” index came in with a contrarian result. It found that overall prices in the U.S. were down slightly on average -- by about half a percent.

Since there's not a huge variation among the three reports, we can probably safely conclude that -- at the very worst -- prices have stabilized in most markets -- and at the very best, they're up a little.

There were also positive indications on lower delinquencies and foreclosures across the country. Realty Trac says foreclosure filings in November dropped by 8 percent - the fourth consecutive month of declines.

And Trans Union, the big credit bureau, forecasts three percent fewer mortgage delinquencies next year - after three straight years of rising delinquency rates.

Meanwhile, ZIP Realty's latest national study on price reductions on listed properties found that during November the number of price cuts dropped in 27 major markets, a welcome sign of more realistic asking prices.

Good Deals For Prospective Condo Buyers

TheDenverChannel.com

Related To Story Video: Condo Prices Still Falling

Good Deals For Prospective Condo Buyers

Experts Say It's A Buyers Market But Loans Still Hard To Get

POSTED: 5:36 pm MST December 14, 2009

UPDATED: 8:28 pm MST December 14, 2009

DENVER -- If you're interested in the urban lifestyle, there is great selection. However, real estate experts warn prices will probably continue to drop and it could be hard to get a loan."There’s a huge discrepancy with the low end, and not even the luxury market, even $285,000 to $300,000 you have a lot of inventory right now, which is why you’re seeing sellers trying to sell and prices coming down in a lot of these areas," said Charles Roberts, a mortgage broker with Your Castle Real Estate.Prospective buyer Blake Harrison agrees."Obviously there’s selection, but some are more than they’re worth," said Harrison.Harrison said he's attracted to condo living because of the low maintenance, the amenities and the location.

In Denver, condo prices vary greatly. Even at "The Spire", located on 14th Avenue in downtown Denver, units range from $200,000 to $1.1 million."What we’ve seen in this economy is we’re selling from the bottom up," said Chris Crosby, the Executive Vice President of Nichols Partnership, the developer.Of 493 units, Crosby said they had sold 110. The first buyers will move in next month."We’ve been selling about three to four per week here so sales velocity has been pretty strong," said Crosby.However, Crosby acknowledges that buyers have a lot to choose from. In part, he credits incentives for helping to sell units."We’ve done a $35,000 dollar incentive on some selective floors," he said.

Crosby said that means buyers can take $35,000 dollars off the selling price, or get that much in upgrades."They’re making deals. They want to get these things sold," said Roberts.So, 7NEWS asked if it's a condo is a good investment right now."If you’re an investor, and it makes sense for you it can be a very good time right now, the rents are fairly strong and the interest rates are low," said Roberts. "

As an owner, sure, if you want to live some place and you’re going to be there for awhile and you’re qualified right now, it’s great."However, Roberts added prices will probably continue to drop before going up.

"The prices have gone down about seven percent in the last year. They went down about nine percent the previous year. I personally don’t think we’ve hit bottom above $200,000," he said.Getting a loan can be difficult too, according to experts."They’re usually treated as a more risky investment," Roberts said. "You’re not just buying your condo. The lender has to buy into the whole project. They’re going to want to know what percentage of the other units are owner-occupied. They're going to want to see 51 percent of units owner occupied. Also, with new developments, they need to see construction pre-sales."

Roberts said be prepared to have 10 percent down in order to qualify.

• December 9, 2009, 5:24 PM ET

Why Loan Modifications Are Like ‘Jurassic Park’

Everett Collection

Controlling the dinosaurs in “Jurassic Park” proved difficult.

As he appeared before the House Financial Services Committee Tuesday to discuss the slow progress of government efforts to force lenders to ease payment terms on home mortgages, Anthony B. Sanders was reminded of the movie “Jurassic Park.”

It might be possible to bring dinosaurs back to life, but does that make it a good idea? Similarly, says Dr. Sanders, a professor of real estate finance at George Mason University, it might be possible to slash interest rates on millions of loans, but that doesn’t mean we should.

What if the government’s Home Affordable Modification Program somehow finally gains traction and manages to reduce interest rates to 2% on millions of loans and extend their terms to 40 years? That would just create fresh problems, Dr. Sanders says.

“Our banking industry, Fannie Mae, Freddie Mac and our Federal Reserve would now be sitting on trillions of dollars of mortgages, many at super-low interest rates and stretched maturities to 40 years,” he writes. Any rise in inflation and interest rates would then slash the value of those mortgages. “When one considers the precarious balance sheets of our lending institutions and our government agencies, we should think very, very carefully about loading up their balance sheets with these mortgages,” he warns, adding:

“Congress and the Administration should bear in mind that it is not just the banks that will suffer, but our pension funds, our own government agencies and the viability of the economy going forward.” Banks would be “stuck with low-interest, long-maturity loans on their books that will prevent them from lending to other borrowers or small businesses for a long, long time.”

The solution, he says, is to encourage financial institutions to sell distressed loans and mortgage securities at big discounts from face value to private investors, who could then restructure the loans on realistic terms related to today’s house prices. Such sales would force banks and other financial institutions to book big losses, but perhaps regulators could allow those losses to be absorbed in stages over five years.

If U.S. financial institutions don’t clean up their balance sheets by shedding dud assets soon, “we will make the Japanese zombie banks look the role model for a healthy financial system,” Dr. Sanders says.

But what about all those borrowers struggling to avoid foreclosure? “The (loan) servicers and financial institutions should be able to modify distressed loans as they see as economically appropriate,” Dr. Sanders says. “After all, these are private market contracts between borrowers and lenders.”

Please follow me for housing news on Twitter at: http://twitter.com/jamesrhagerty

up 23% over nov. 2008

Metro Denver housing sales surge 23 percent in November

By Margaret Jackson
The Denver Post

Posted: 12/09/2009 01:00:00 AM MST

Metro Denver's housing market showed its first year-over-year improvement in 11 months, as the number of homes sold in November surged 23 percent over the same month in 2008, data released Tuesday showed.

At least part of the increase was attributed to a rush by buyers to take advantage of the $8,000 federal tax credit for first-time homebuyers, originally set to expire at the end of November but later extended through the spring.

But it wasn't just first-time buyers who returned to the market. The median sales price for condos and single-family homes increased, a sign that more-expensive properties were also selling well.

"An increase of 23 percent versus a year ago suggests that confidence levels of potential buyers are higher," said Jeff Thredgold, an economist for Vectra Bank Colorado. "Part of that is based on better economic news, and part is based on the most attractive mortgage interest rates in 40 years.

"We were all in this massive state of flux a year ago. The sky was falling, for all we knew."

Last month, 3,599 homes sold, compared with 2,920 in November 2008. Sales last month were down 9.1 percent compared with the previous month, when 3,958 homes sold.

The data covers previously owned homes and not new construction purchased directly from builders.

"We're not out of it by any means, but even in a bad month where things slow down, there are still a lot of positives," said David Simonson of Re/Max Professionals Inc. "This time last year, we were looking at a market that had an absolute free-fall feel to it. We've definitely made some strides forward."

The median price for a single-family home was $218,000, up 11.8 percent from the November 2008 price of $195,000 but down 1.8 percent from the October 2009 price of $222,000.

The median price for condos increased to $135,900, up 4.5 percent from last year's $130,000. The price also was up 0.7 percent from October, when it was $135,000.

"As far as pricing, we're very close to the traditional mix of homes selling," said Gary Bauer, an independent real estate analyst. "Through the majority of this year, we've had a larger percentage of first-time buyers. Now we have first-time and move buyers. Move buyers definitely bring the average up."

Move buyers are owners moving from one home to another.

For the first time in nearly three years, sales in the $1 million-plus market increased 30 percent year-over-year, said Chris Mygatt, president and chief operating officer for Coldwell Banker Residential Brokerage.

"This is possibly the beginning of the recovery of the million-dollar market," he said. "You wouldn't have thought the tax credit would have an effect on the million-plus market, but the renewed energy and renewed confidence has spilled over into the upper-end market."

During November, six homes priced at $2 million or more sold; 23 homes priced between $1 million and $2 million sold; and 150 priced from $600,000 to $1 million sold, according to Bauer's analysis.

"There are pockets that are thriving regardless of their price range," said Mike Burns of Re/Max Professionals. "But overall, the market above $500,000 is not as healthy as below, and below is very, very good."

Margaret Jackson: 303-954-1473 or mjackson@denverpost.com

Tuesday, December 8, 2009, 10:01pm MST | Modified: Tuesday, December 8, 2009, 10:01pm

Denver among top U.S. cities for 2009 home-value gain

Denver Business Journal - by Paula Moore

Metro Denver had the third-largest gain in home values among cities nationwide in 2009 through November, with a $10.7 billion increase, according to Zillow Real Estate Market Reports.

Only Boston ($23.3 billion) and Providence, R.I. ($12.4 billion) had greater gains in home value.

U.S. home values as a whole dropped $489 billion in this year’s first 11 months, which was significantly less than the $3.6 trillion drop in home value sustained in 2008, the Zillow report said.

Forty-eight of the 154 markets Zillow tracks showed gains in home values through last month.

The report was produced by Seattle-based Zillow Inc., a provider of housing information related to sales, values, foreclosures and mortgages.

“Home values stabilized significantly during the second half of 2009, with total dollar value of U.S. homes increasing since June,” Stan Humphries, Zillow’s chief economist, said in a statement. “Most housing markets across the country had a good summer, spurred largely by the government’s tax credits for [first-time] homebuyers combined with very low mortgage rates.”

Future home values will be affected by mortgage rates that are expected to “creep back up” in the first quarter of 2010, as well as a foreclosure rate that continues to be high. “Both these factors will challenge the recent stabilization of home prices,” Humphries said.

Denver-area home values increased $10.7 billion to a total of $215.7 billion this year through November, according to Zillow. Values dropped $20.2 billion in 2008.

Los Angeles had the biggest decrease in home value through November, with a $60.8 billion drop to $1.7 trillion in total home value.

Other markets seeing major losses in home value included:

• Chicago — Down $49.6 billion to $688.8 billion total.

• New York City — Down $49 billion to $2.7 trillion.

• Miami-Fort Lauderdale — Down $45.9 billion to $403.5 billion.

• Phoenix — Down $45.1 billion to $241.1 billion.

Home value dropped so much in those markets partly because of the high number of homes in those metro areas, the report said.

pmoore@bizjournals.com

Home buyer tax credits: Frequently asked questions

Home buyer tax credits: Frequently asked questions

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• By Sandra Block, USA TODAY

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If you're in the market for a home, the world is your oyster. Interest rates are at record lows. Housing prices in many parts of the country are still depressed. And you may be eligible for a generous tax break, even if the home you buy isn't your first.

On Nov. 6, President Obama signed legislation that provides a $6,500 tax credit for some current homeowners who buy another home. The law also extends the $8,000 tax credit for first-time home buyers, scheduled to expire Nov. 30, until next spring.

CHART: Original tax credit vs. newer expanded version

HOME PRICES: Index shows gains; see 20 metro areas

Judging from the mail we've received, a lot of people are interested in taking advantage of this tax break. But the expanded credit also has whipped up a lot of confusion. Here are some answers to questions from readers:

Q: How do I qualify for the $6,500 credit?

A: This credit is available for home buyers who sign a binding contract on a new or existing home by April 30, 2010, and settle by July 1 (deadlines that also apply to the first-time home buyer credit). You must have lived in your existing home for five consecutive years out of the last eight. The home you purchase must be your primary residence. However, the law doesn't require you to sell your old home, says Bob Meighan, vice president at TurboTax, the tax software provider. You can use it as a second home or a rental and still claim the credit, he says.

Q: I sold a home I had lived in for more than five years and bought a new one in August. Do I qualify for a tax credit?

A: No. For existing homeowners, the $6,500 credit is limited to homes purchased after Nov. 6.

Q: Does the home I buy have to be more expensive than the one I own now?

A: No. While the real estate industry is hopeful that homeowners will use this credit to buy a nicer place, there's no prohibition against using it to downsize, Meighan says. That makes this credit particularly useful for seniors who are interested in moving into a smaller home.

If you are planning to move up, keep in mind that you can't claim the credit if the purchase price of the home exceeds $800,000. Unlike some other tax credits, this one doesn't slowly phase out once you exceed the threshold, Meighan says. If you buy a home for more than $800,000 — and that refers to the purchase price, not the assessed value or the amount of your mortgage — you are ineligible for the credit, period.

The $800,000 cap also applies to first-time home buyers, but only those who purchase a home after Nov. 6. First-time home buyers who bought a home for more than $800,000 between Jan. 1 and Nov. 6 can still claim the credit, assuming they meet the other criteria, Meighan says.

Q: I'm an existing homeowner, and would like to build a new home. Can I claim the credit?

A: Yes, but make sure your builder is good at meeting deadlines. You can claim the credit as long as you have a binding contract in place by April 30 and close by July 1. In the case of a new home, the closing date is the day you move in, Meighan says. If your home isn't habitable by June 30, you won't be able to claim the credit, he says.

Q: I bought a home in 2008 and claimed the old $7,500 first-time home buyer's credit, which must be repaid over 15 years. Did the new law change that rule?

A: No. That credit, which was available for homes purchased between April 9, 2008, and Dec. 31, 2008, must still be repaid.

The $8,000 first-time home buyer credit, available for homes purchased after Dec. 31, 2008, doesn't have to be repaid as long as you remain in the home for at least three years. Existing homeowners who qualify for the $6,500 credit don't have to repay that money, either, as long as they meet the three-year requirement.

Q: We have a rental home and would like to sell it to our son, who has never owned a home. Would he qualify for the first-time home buyer credit?

A: No. The legislation specifically prohibits taxpayers from claiming the credit if the sale is between "related parties," Meighan says. A home sale to a parent, grandparent, child or grandchild would fall into that category.

Q: I sold my home this year and have been renting since. If I buy a new home, do I qualify for the expanded credit?

A: Yes, as long as you meet all of the other requirements, says Mel Schwarz, partner with Grant Thornton in Washington, D.C. The eight-year period used to determine eligibility ends on the day you buy your new home, he says.

Sandra Block covers personal finance for USA TODAY. Her Your Money column appears Tuesdays. Click here for an index of Your Money columns. E-mail her at: sblock@usatoday.com. Follow on Twitter: www.twitter.com/sandyblock

ORIGINAL TAX CREDIT VS. NEWER EXPANDED VERSION | Column

On Nov. 6, President Obama signed legislation expanding a tax credit implemented this year as part of the economic stimulus package. What changed:
	Stimulus credit	Expanded credit
First-time home buyer credit	$8,000	$8,000
Credit for current homeowners who buy a home	Not available	$6,500
Expiration of credit	Nov. 30	April 30, 2010*
Income limits	$75,000 single; $150,000 married; additional $20,000 phase-out.	$125,000 single; $225,000, married; additional $20,000 phase-out
Limit on cost of purchased home	None	$800,000
* = home buyer has until July 1 to close; Source: National Association of Realtors.

Monday, November 30, 2009, 3:15pm MST

Denver-area luxury housing market drops in October

Denver Business Journal

The Denver area’s luxury-housing market declined in number of resales and selling price in October year over year, partly because homeowners in that price range haven’t been able to benefit from federal homebuyer tax incentives.

Sales of existing homes in the $1 million-plus price range dropped 15 percent in October, to 44 homes, from 52 for the same month of 2008, according to the Coldwell Banker Residential Brokerage of Colorado’s Denver Metro Area Luxury Home Report, released Monday. Coldwell Banker’s data came from metro Denver’s Metrolist Inc. multiple listing service (MLS).

October high-end home sales were down from 46 in September of this year.

Existing home sales, or resales, are those of homes that have been sold at least once before.

Median selling price decreased 8.5 percent to $1.22 million last month from $1.33 million year over year. The October sales price was down 16.5 percent, from $1.47 million in September of this year.

Median selling price is the midpoint between highest and lowest sales prices. Some real estate professionals consider median a truer measure of price than average because it’s not skewed by highest and lowest prices.

Sellers of luxury homes received 88 percent of their asking price on average in October, compared to 92 percent for the same month in 2008. Home sellers got 87 percent of asking price in September of this year.

“The high-end market continues to try to find its footing, as much of the activity in housing is still in the entry-level market,” Chris Mygatt, president of Coldwell Banker in Denver, said in a statement. “Distressed property sales and the first-time homebuyer tax credit have kept the mix of sales at the lower price ranges in many areas.”

Sellers and buyers of higher-priced homes haven’t benefitted from the first-time homebuyer tax credit generally because they’re not interested in living in lower-priced homes, and/or couldn’t meet the income and homeownership requirements. (Housing investors don’t qualify for the credit.)

This year’s first-time homebuyer tax credit allowed buyers who hadn’t owned a home in the last three years to get a tax credit of as much as $8,000 for buying a home.

The tax credit, which was to have expired Monday, was recently extended, and another homebuyer tax credit was added by the U.S. Congress.

In addition to the first-time homebuyer credit, there’s now a tax credit of as much as $6,500 for repeat homebuyers who have owned a home for the last five years. The credits expire April 30, 2010, and home sales must close by June 30.

Income limits for credit users range from $125,000 for individuals to $245,000 for joint filers.

Other October data regarding sales of luxury homes:

• It took longer to sell a house in October of this year — 130 days — than it did in October 2008, when it took 84 days.

• The priciest sale of the month was a three-bedroom, three-bath house in Boulder that sold for $2.4 million.

• Denver had the most $1 million-plus sales with 11, followed by Boulder with eight.

Total metrowide October resales were down 7.6 percent year over year to 3,958, from 4,282 in October 2008. Sales last month were up 2.9 percent from September resales, partly because buyers wanted to take advantage of the first-time homebuyer tax credit before what was to have been its Nov. 30 expiration.

Compiled by Paula Moore | pmoore@bizjournals.com | Paula's blog: http://denver.bizjournals.com/denver/blog/real_deals/

Monday, December 7, 2009, 10:16am MST | Modified: Monday, December 7, 2009, 10:01pm

Denver near the middle in Forbes report on affordable cities

Denver Business Journal

When it comes to affordable cities with stable employment and good housing markets, a new Forbes.com report ranks Denver as a bit better than average.

Forbes puts Denver at No. 43 out of 100 large U.S. metro areas on a list of the "Best Bang for the Buck Cities."

The survey looked at factors like commute times, home vacancies, housing affordability, real estate taxes, unemployment and jobs forecast.

The Denver-Aurora area ranks 14th among the 100 cities for low unemployment, 17th for best home-price forecast, and 20th for best job forecast.

On the other hand, Forbes ranks Denver 82nd out of 100 for typical travel times, 78th for housing affordability, and 71st for rental-home vacancies.

The "best bang for the buck" list is topped by Omaha-Council Bluffs, Iowa; Little Rock, Ark; and Jackson, Miss.

The lowest-ranked communities on the list include the New York-Northern New Jersey-Long Island metro area (No. 98), Miami (No. 99) and Los Angeles (No. 100).

Click here for the Forbes report. And click here for the full list of 100 cities.

denvernews@bizjournals.com

Government Announces Short Sales Guidelines

Government Announces Short Sales Guidelines
The U.S. Treasury Department announced new guidelines this week designed to make short sales go more smoothly.

To qualify under these new guidelines:

• The property must be the home owner’s principal residence.
• The home owner must be delinquent on the mortgage or close to defaulting.
• The loan must have been made before Jan. 1, 2009, and be for less than $729,750.
• The borrowers’ total monthly mortgage payment must exceed 31 percent of their before-tax income.

Under the plan, borrowers will receive $1,500 from the government for selling homes for less than the amount of their mortgages. Mortgage-servicing companies will get $1,000 for each completed short sale. Second-mortgage holders can receive up to $3,000 of the sales proceeds in exchange for releasing their liens. Investors who hold the first mortgage can collect up to $1,000 from the government for allowing the payments.

Borrowers who complete a short sale under the program must be "fully released" from future liability for the debt, according to the guidelines.

Source: Associated Press, J.W. Elphinstone (11/01/2009) and The Wall Street Journal, Ruth Simon (11/01/2009)