Denver Home Prices Up 5 Months In A Row

This from the Denver Post.

I tend to wonder if we are in a mini-bubble with the $8,000 tax credit deadline looming. I was speaking with my brother-in-law about property prices in Aurora and how a 3 car garage home in Southeast Aurora can sell (or at least be listed) for more than a home in Stonegate in Parker. We were at a loss. Bidding on homes in Aurora is a nightmare. We recently offered $5,000 over listed price on my sister's dream home in Aurora. The agent called us back and said that we were up against a bidder that put into his contract a provision that they will beat any offer by $500.

Comparing the home to recent sales in the area, I had difficulty believing it would even appraise at the listed price.

When we got our highest and best notification, the listing agent asked that we strike the appraisal contingencies. He stated that the seller was worried that the property may not appraise and he was willing to give contract to the offer that would withdraw the contingency. In other words to the bidder who would pay above appraised value. We could not do that.

We lost the home. All of this on a re-sale. Foreclosure bidding is even bloodier.

Metro Denver home prices up 5 months in row

By Steve Raabe
The Denver Post

Posted: 09/30/2009 01:00:00 AM MDT

Metro Denver home prices rose for the fifth consecutive month in July, offering another signal that the depressed real-estate market has turned around.

Area housing prices increased 1.5 percent from June but were down 2.9 percent compared with July 2008, according to the Standard & Poor's/ Case-Shiller home-price index.

Each of the index's 20 U.S. metro markets fell from a year ago, although Denver fared third-best by having the lowest annual drop after Cleveland and Dallas.

"The rate of decline in home-price values continues to decelerate, and we now seem to be witnessing some sustained monthly increases across many of the markets," said David Blitzer, chairman of the index committee at Standard & Poor's.

Read More Here

More Evidence We Coming Off The Bottom

This from the Denver Business Journal:







Tuesday, September 29, 2009, 11:00am MDT | Modified: Wednesday, September 30, 2009, 10:08am

Case-Shiller Index: Denver home prices rise again, getting closer to 2008 levels

Denver Business Journal - by Mark Harden

Home prices in the Denver area rose in July for the fifth straight month, and prices are creeping closer to where they were a year ago, according to Standard & Poor's closely watched S&P/Case-Shiller Home Prices Index.

Home prices in Denver rose 1.5 percent in July from the previous month, according to the index report, released Tuesday. That follows a 2.5 percent month-over-month rise in June, a 1.3 percent increase in May, a 1.5 percent rise in April and a 0.1 percent gain in March.

Those increases followed month-over-month price declines in January and February.

As for year-over-year changes, Denver home prices fell 2.9 percent in July from the same month in 2008, down from the 3.6 percent year-over-year decline in June and the 4.6 percent drop in May.

Denver's year-over-year decline in July was the third-smallest of any of the 20 U.S. cities tracked by the Case-Shiller Index, bested only by Cleveland (a 1.3 percent decline from July 2008) and Dallas (a 1.6 percent decline). All 20 cities declined to some extent.

Link To Article

Castle Rock Law Firm Robinson & Henry, P.C. Rolls Out the Bankless Financing Program®

Robinson & Henry, P.C. has inaugurated the Bankless Financing Program, or BFP for short to help increase home sales in Colorado. The buyer can buy and the seller can sell, without need for a bank or mortgage company.

The Castle Rock, CO Law Firm of Robinson & Henry P.C. has announced that they are inaugurating the Bankless Financing Program also known as the BFP® to increase home sales in Colorado. The Bankless Financing Program® allows a Home owner to sell his property and a Home buyer to buy the property without need for a bank or mortgage company to be involved.

"We have seen the need for a new method to allow homes to be sold and we believe that the Bankless Financing Program® will satisfy that need. In Douglas County, Colorado, the number of real estate conveyances has dropped to only one third the volume of a few years ago. This can't go on. The current mortgage backed system is obviously broken and we want to be part of the solution," Mike Robinson, Sr. Partner at Robinson & Henry said.

Under the BFP®, the buyer makes payments to a Licensed Escrow Corporation which in turn makes all required payments to the underlying encumbrances on the property. Because of recently passed federal legislation, a working couple can make the purchase down payment with funds from their tax sheltered account such as an IRA without penalty and have the income tax issues satisfied with a federal tax credit. The BFP® addresses current difficulties caused by appraisal and credit issues for both buyer and seller.

http://mikerobinson.com/

A Serious Warning From the Federal Reserve about Interest Rates

If you follow Peter Schiff: One of his predictions, exploding interest, has not yet become reality. I picked this up from the Economic Policy Journal Blog.

This certainly won't help the housing market.

I believe the use of installment land contracts will surge. A matter of fact, Robinson & Henry in Castle Rock, Colorado have already resurrected the ILC's and coined the name Bankless Financing Program.

The ILC's were set up in the 70's when interest rates were in the double digits. Since individuals could not purchase a home at 18% they would pay the seller's loan (at the lower interest rate) through and outside escrow company. Installment Land Contract is also known by the name Contract for Deed.

Robinson & Henry is actively closing without banks.

A Serious Warning From the Federal Reserve about Interest Rates

This gets a bit technical, but the Federal Reserve is flashing that there could be serious, I am talking major league serious, interest rate hikes down the road.

The first clue to this was last week Thursday's report out of FT that the Fed may use mutual funds as a source to shrink Fed reserves by conducting reverse repurchase agreements with the the funds. When something like this is leaked by the Fed, they are trying to alert the markets so they won't be surprised by such a move when it occurs. As I wrote last week, I saw one reason for this move as the Fed:

...contemplating doing this, if banks start to lend against excess reserves, as a back up to Bernanke's plan to control money growth via the interest rate it pays on excess reserves.

Okay, so the Fed has a back up plan, but now there is an interesting story in WSJ's weekend edition headlined: Official Sees Aggressive Rate Boosts in the Offing. The story reports:

Read More Here

"The Temperature in The United States is 92 Degrees"

When people ask me how bad the real estate market is, I always ask where?
Just as you can't pin the temperature in the U.S. to just one, you can't define the real estate market by one State, City, County or even neighborhood. Real estate is local!

Here is an article from Coloradoan.com:

Home values up 50% in 12 years

Everitt center's semi-annual report also shows 4% depreciation in '09

BY DAVID YOUNG • DavidYoung@coloradoan.com • September 25, 2009

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LOVELAND - Housing prices in Fort Collins and Timnath appreciated nearly 50 percent from 1997 through the first half of 2009, according to a study on home prices released Thursday by the Colorado State University Everitt Real Estate Center's third-quarter conference.

he semi-annual in-depth report was released during the Everitt Real Estate Center's Real Estate Rendezvous 2010 event before about 130 Northern Colorado real estate experts Thursday morning at the Embassy Suites in Loveland.

The study, conducted by John Gerhard and Sriram Villupuram, two researchers for the Everitt Real Estate Center, is released twice a year, in April and September.

The latest report ranks Fort Collins as fifth out of 11 regions in terms of a 48.1 percent appreciation rate from 1997 through the first half of 2009.

At the same time, overall home values dropped nearly 4 percent in the first half of 2009 compared with 2008.

"In spite of the declines in values, home values can vary widely by neighborhood and even block by block," said Gerhard in a prepared statement. "There are still neighborhoods that are doing reasonably well and appreciating despite national trends. It's not all doom and gloom. It's important to look at market trends at a granular level rather than for a large market area."


Read More Here:
http://www.coloradoan.com/article/20090925/BUSINESS/909250323/Home-values-up-50--in-12-years

The State of Denver's Housing Market

This from 5280 Magazine. When you are in the trenches you see it long before the news reports on it. Last October I was working with some clients and we couldn't purchase a foreclosure or distressed property if we tried. We were full price and better on every offer. I think it was nine that we lost before we picked up a HUD home (FHA foreclosure). They were awarded the bid on Christmas Eve! I think the only reason we got the bid was because investors can't bid on HUD homes. HUD favors owner occupants and does not allow investors to bid for the first ten days. BTW we were often bid out with cash offers. Investors you think?

The State of Denver’s Housing Market

Viccy Thongmany and her boyfriend have been trying to buy a home in Denver for months, but they keep getting outbid. While that’s not great news for potential home buyers looking for bargains after the housing bubble burst, it might be an indication that the housing market is bottoming out, notes Fox31.

Although it’s not clear whether the housing market is actually on the mend, sales in July were good across the country. In Western states, 105,000 new homes were sold, the highest number since July of last year, reports the Denver Business Journal. Still, home prices are still declining, down one percent between May and August compared with the same period a year ago. But the big houses are driving the trend, writes The Denver Post.

The average sales price for a single-family home smaller than 910 square feet was up by 14 from May through August compared with the same period a year ago, according to an analysis by Your Castle Real Estate.

“Smaller houses really got beaten up hard by the foreclosure boom, and now they’re rebounding,” says Lon Welsh, managing broker of Your Castle. “It’s pretty clear we’re past the bottom on that. We haven’t seen the overall prices go up yet because sales have disappeared on the high end.”

Just ran across this article today. Colorado is doing well vs the rest of the country but there may be difficult (growth) issues ahead for Northern Colorado if oil and gas prices continue to decline.

From The Northern Colorado Business Report:

NCBR Article

State economy outperforming nation, but held back by oil, gas prices
By Staff


September 24, 2009 --

LOVELAND - The prevalence of the oil and gas industry in the state will keep the Colorado economy from rebounding more quickly or even in line with the rest of the nation, according to an economist with the Federal Reserve.

Mark Snead, assistant vice president in the Denver branch of the Federal Reserve Bank of Kansas City, addressed the Colorado State University Everitt Real Estate Center's Real Estate Rendezvous Thursday morning.

"Never underestimate the role of oil and gas in this state," he said.

Snead explained that Colorado is a "tier two" energy state, so when energy prices took a nosedive it had a substantial impact on the economy. The issue now is that while oil prices have bounced, natural gas prices continue to plummet. As in past recessions, energy states such as Colorado will lag the overall turnaround.

"The good news is that Colorado has been outperforming the nation," he said.

He pointed out that housing inventory may have already hit a baseline in Colorado and that home prices in the Denver market have hit a clear bottom.

"I view that as the single best sign you can point to," he said. "It's a very good sign."

As part of the event, the Everitt Center released its home price indices for the first half of 2009. The research, conducted by Sriram Villupuram and John Gerhard, showed that Northern Colorado home values continued to decline through June. The house price index uses a baseline of 100 set in 1997.

For the first half of 2009, the home price index in Weld County was 106.1, meaning for every $100 in value in 1997 the value is now $106.10. Weld County's index peaked at 145.2 in 2005. Year-over-year, the index declined 9.8 percent.

The home price index within the municipal boundaries of Greeley and Evans was 95.8, meaning values are lower than they were in 1997. Homes valued below $129,900 in Greeley and Evans had an index value of 83.7. It was the only municipal area studied that dropped below 100.

In Larimer County, the index was at 140.2 through the first half of the year. It peaked at 150.8, also in 2005. Year-over-year, the index for Larimer County declined 4.3 percent.

Gerhard pointed out that the number of residential closings for Larimer, Weld and Boulder counties peaked in 2004. For the first half of 2009, closings are down 20 percent.

"My hope is that we would pick up some steam in the second half of the year," Gerhard said. "I'm not sure that's going to happen."

The data showed Greeley and Evans as the only areas with a stable number of closings from 2008 to 2009, with Fort Collins and Timnath seeing the largest year-over-year decline. Gerhard feels that it is a sign that the Greeley market might be ready to pick back up.

The EREC also presented the results from a survey of commercial real estate professionals in Northern Colorado.

"It's just going to be plain harder in 2010 than in 2009 for us," said Steve Laposa, director of the EREC.

In general, commercial real estate professionals indicated that finding financing and closing deals would be more difficult next year than it was this year. Developers were more pessimistic than brokers on most of the issues.

Overwhelmingly, survey respondents felt that private financing would be on the rise in the coming years, while more traditional sources would continue to decline. Additionally, many said that public-private partnerships would be a more integral element to deals in 2010.

See Friday's issue of the Business Report for a more in-depth discussion of the survey results.