The media often portrays the negatives and nothing else of what is happening in the market, but the facts speak for themselves. And the facts say that as Denver is blooming, we are in a very unique market situation that is equally benficial to both buyers and sellers:

So here’s a riddle: how can it be both a buyer’s market and a seller’s market at the same time? It sounds like a paradox but in fact it perfectly describes our current Denver Metro real estate market. Here’s how:

In the market below $300k where 80% of the homes are sold it’s a blistering seller’s market. You heard it right, a seller’s market! There are only three months of inventory sitting on the market right now, where six months is considered a normal, balanced market. There are simply more buyers than sellers right now and this is translating into multiple offers on listings, sales prices often well above asking prices, and marketing times plummeting.

Particularly hot is the market below $225k, which has only two months of inventory. It’s not uncommon for a listing to have 10 showings and a full price offer in the first week. There are a number of factors that have caused this dynamic, one of which is the dramatic reduction in the number of bank-owned and short sale properties on the market. This reduction in distressed inventory has left regular home sellers in a great position and contributed to the sizzling seller's market.

Ok, so we know it’s a seller's market. Then, how can it also be a fantastic buyer’s market at the same time? It is, because according to the National Association of Realtors the Home Affordability Index is at its highest recording ever. Just like it sounds, the HAI is a measure of how affordable homes are in a given area. It’s calculated by comparing the median price of a home in the Metro Denver market to the median worker’s income level, taking into account the current interest rate for a 30-year fixed rate loan. What this means is that the median income earner can buy more house today than ever before. Why? Because home prices, while rising quickly, are still well below their peak prices of 5-6 years ago and interest rates are at never-before-seen historic lows. Take it all together and the average home on the market HAS NEVER BEEN MORE AFFORDABLE.

So, while it seems like a paradox that it can be both a great time to sell and a great time to buy, it’s actually quite true. Call me and I’d be happy to explain more how we got to this state in the market and how you can take advantage of it.

Buyers

It seems strange but it was only a year or so ago when we had a strong buyer’s market and we felt like we ruled the roost. I would take my buyers out and we would look at a lot properties without any sense of urgency because there was so much inventory in the past 4-5 years. It was such a complete buyer’s market we could negotiate very hard with sellers on price and terms because there was always another property available, always another home coming on the market.

Not anymore. My buyers under $300k are finding a serious lack of inventory and prices rising every month. We have been in a number of multiple offer situations recently, where this was unheard of just a few years ago. With the sophisticated tools I have at my disposal I’m looking harder than ever for just the right property that meets my buyers’ needs, whereas in the recent past there were so many to choose from it was like shooting fish in a barrel.

One of the results of this new market dynamic has been a re-education of my buyers. While we always negotiate strongly, the days of the 80 cents-on-the-dollar offers are fast waning. In today’s market, buyers have to be smart, savvy, quick to act, decisive, and competitive. The great news though is that because the Home Affordability Index is at its highest recording ever, homes are more affordable for the average buyer than they have ever been. By all appearances we are well past the bottom in the housing market and my folks who are purchasing now and locking in sub 4% 30-year fixed rates are buying at the perfect moment in history. Call me and I’ll show you why.

Sellers

Blistering. Sizzling. Red hot. These are the words that describe our housing market under $300k. We haven’t seen a market like this in years. Multiple offers are the order of the day. There’s simply too little inventory to meet buyer demand so sellers are pushing prices back up to pre-crash levels. The laws of supply and demand are very much in effect. Look at the inventory levels in Metro Denver for the past 10 Februaries:

2012 – 10,086

2011 – 17,358

2010 – 18,869

2009 – 20,059

2008 – 25,037

2007 – 24,838

2006 – 25,484

2005 – 21,730

2004 – 23,212

2003 – 22,989

This is what a recovery is supposed to look like: a dramatic drop in inventory followed by rising prices. If you’ve been considering a move, call me so I can do an analysis of the inventory and price movement in your neighborhood. After many years stuck in a buyer’s market, now might be the time to put your house up for sale and take advantage of the great seller's market.

Investors

The sudden, dramatic rise in prices has been a boon for our fix and flip investors. High quality, fixed-up properties are selling at a premium right now because there are so few of them. An investor colleague sent this email a couple of days ago:

“I’ve been answering the phone "Multiple offers on Ash - if you’re interested in submitting a contract you need to have highest and best tonight and be over list price NET!"  I didn't get a single low-ball and since I answered my phone that way - they knew I wasn't bluffing! I had three written offers and two other verbals that were going to write but couldn't compete.”

Consequently, investors are scrambling to get their properties on the market to take full advantage of this hot seller's market. This in turn means they’re buying properties as quickly as they can, further reducing the available inventory and ironically pushing up prices even further. Tracking this dynamic serves as a great lesson on the real estate market. Everything is always interconnected: home prices, inventory, vacancy rates, interest rates, unemployment, and more.

Your Castle Real Estate in the News

The dramatic turn around in the real estate market has resulted in a flood of press requests for the data and opinions from folks at Your Castle. In the past month we have contributed to articles in the Denver Business Journal, Inman News, Colorado Public Radio, and Money Magazine. The April issue of Money will have an in-depth article on the state of the Denver real estate market and we were happy to contribute to it and all the other stories written about our market.

Mortgages

The mortgage market continues to remain strong with historically low interest rates. Low rates combined with low home inventory are making this a great time to sell your home and move up to a larger home with the same or lower monthly payment. We have several recent examples of clients selling their current homes and getting in to a home $40,000 - $50,000 more with the exact same monthly payment. Please give me a call or send me and e-mail and I’ll do a free analysis to see if this might be a good scenario for you to take advantage of.

Neighborhood Spotlight

Park Hill South

For years, Park Hill South has been one of the most desirable neighborhoods in all of Denver. Bordered by 23^rd Ave., Quebec St., Colfax Ave., and Colorado Blvd., this beautiful neighborhood is anchored by glorious Georgian Revival and Italian Renaissance mansions. Years ago it became popular as a bedroom community to Denver. Now it is an ideal neighborhood just a few minutes to all the restaurants, culture, sports, and fun of downtown Denver. The Park Hill Library, Denver Zoo, Museum of Nature and Science, and City Park all are within easy reach. Multiple generations of families have grown up and stayed in Park Hill South and are a testament to the stability and desirability of this neighborhood. Take a drive through it, you’ll love it!

Market Stats for March 2012:

Denver Metro Single Family Housing Stats:

Active Listings: 8,082

• Down 40% from Feb. ‘11

Under Contracts: 3,329

• Up 13% from Feb. ‘11

Solds: 1,978

• Up 12% from Feb. ‘11

Average Price: $270,821

• Up 2% from Feb. ‘11

Average Days on Market: 106

• Down 14% from Feb. ‘11

Denver Metro Condo Housing Stats:

Active Listings: 2,004

• Down 49% from Feb. ‘11

Under Contracts: 821

• Up 11% from Feb. ‘11

Solds: 517

• Up 13% from Feb. ‘11

Average Price: $161,143

• Up 4% from Feb. ‘11

Average Days on Market: 101

• Down 22% from Feb. ‘11

Thanks for reading our market update and feel free to contact The Rickard Group at any time with questions about buying or selling a house!

This home features:

• 2 Beds
• 2 Baths
• 1294 Sq. Ft.
• 2-Car Attached Garage
• Completely upgraded kitchen with slab granite countertops, gorgeous hickory cabinets, and stainless steel appliances including a professional gas range!
• Hand-Scraped Brazilian Walnut Hardwood Floors
• Marble and Granite entryway
• 5-Piece master bathroom with immaculate tile floors and a jetted tub.
• Amazing great room with gas fireplace and tile finishes.

You will love this home! The Brownstones at Town Center is conveniently located within minutes of C-470 near Lucent Blvd. and Highlands Ranch Parkway, and is within walking distance to brand new shopping areas, fabulous parks and recreation centers, and schools.

For more information please contact Dane Rickard at (303)880-5410.

The only major downfall is the raising by the Federal Housing Authority of its Mortgage Insurance Premiums, so buyers should be cognisant of sitting on the fence and 'waiting' for greener grass. Otherwise, momentum is pushing us towards a solid spring and a phenominal summer market here in Denver!

All information collected from MLS, and deemed reliable but not gauranteed.

From my friend Chris Starks at First Class Financial:

Denver, CO - In December 2011, Congress reached a last-minute deal to fund the payroll tax cut extension. The payroll tax extension will provide a 2% tax reduction for individuals making up to $106,800, so the tax extension will be very helpful for many Americans who are struggling during these tough economic times. But like so many things in our tangled economy, there's a flip side. In this case, the tax cut deal has a rippling effect that will impact the mortgage world.

Here's what's happening and what it means to home loan rates:

What is happening and why? To put it bluntly, the passage of the payroll tax cut extension is being funded via a mandate to Fannie Mae and Freddie Mac (the nation's largest providers of mortgage money) to increase their guarantee fees or "g-fee's" by at least 10 basis points on the rate. So rather than giving a par rate of 4.00%, for example, the par rate is now increased by at least 10 basis points, or approximately 4.10%. But as you probably know\205home loan rates are priced and offered in .125% increments, so this will most likely impact the consumer by .125% in rate. Whether you agree or not on the politics behind this cost being passed along to folks who are taking out mortgages, the Congressional Budget Office recently estimated that the increase will ultimately pay for about $35.7 Billion of the cost of the payroll tax extension.

What exactly is this "g-fee"? The guarantee fee or "g-fee" is an amount charged by mortgage-backed securities (MBS) providers, like Freddie Mac and Fannie Mae, to help protect against credit-related losses in the overall mortgage portfolio. In other words, it acts a lot like insurance and helps lower the overall risk\205which means home loans can be offered at terrific interest rates to borrowers that have good - but not perfect - credit.

What exactly is the impact of the rate increase? For example, for a $200,000 home loan, the increased g-fee (assuming a .125% increase in rate) would equate to $250 more per year in interest, or $7,500 more over 30 years. Someone buying or refinancing a home can certainly choose to buy down the cost with cash up front - but most folks will not do this.

Who will this impact? The change will impact all new borrowers of Fannie Mae and Freddie Mac loans. The bill will also impact Federal Housing Administration (FHA) loans by increasing the annual mortgage insurance premium that borrowers pay by one-tenth of a percent.

When will it start? Officially, the increase to guarantee fees will begin on April 1, 2012. However, the increase is already starting to be seen in rate sheets right now, since home loans being originated now will likely not be closed, pooled and securitized until April\205and therefore will need the increased g-fee priced in earlier.

How long will this be in effect? The increase will be effective through October 1, 2021.

The bottom line is that the g-fees will be going up and this will impact homebuyers looking to obtain a home loan through Fannie Mae, Freddie Mac and FHA.

The good news is that home loan rates are still at historic lows right now, and it's a great time to purchase a new home or refinance. If you or anyone you know has any questions, please call or email!

Denver, Co. - The big headline these days in the Denver real estate market is the massive drop in inventory (homes for sale) over the past couple of years. In December, 2007 there were 27,127 homes and condos on the market in metro Denver. As recently as December, 2010 there were 14,275 properties on the market. Today there are only 10,993. We have to go all the way back to 1999 to see inventory this low. This massive drop in inventory in the under $300k market segment has profound ramifications for our local real estate the market.  

DENVER METRO SINGLE FAMILY HOUSING STATS:

Active Listings: 8,854

ŠŠDown 37% from Dec. ‘10

Under Contracts: 2,253

ŠŠUp 6% from Dec. ‘10

Solds: 2,531

ŠŠUp 5% from Dec. ‘10

Average Days on Market: 107

ŠŠDown 4% from Dec. ‘10

Average Price: $275,610

ŠŠEven from Dec. ‘10

DENVER METRO CONDO HOUSING STATS:

Active Listings: 2,139

ŠŠDown 50% from Dec. ‘10

Under Contracts: 579

ŠŠUp 3% from Dec. ‘10

Solds: 625

ŠŠUp 4% from Dec. ‘10

Average Days on Market: 106

ŠŠDown 20% from Dec. ‘10

Average Price: $166,420

ŠŠEven from Dec. ‘10

Denver, CO - Enter…Your Castle. The Rickard Group, Southwest Denver’s premier real estate team and owners of REzipline.com have announced a change! Starting in 2012, we are now a part of Your Castle Real Estate, LLC. This change was made in order for us to bring you a more exceptional amount of technology and service to deliver the results you deserve in your next real estate transaction.

Your Castle Real Estate will help us to convey the highest level of service through their innovative marketing, commitment to excellence, and local expertise. A Denver-based real estate firm, Your Castle Real Estate has enjoyed continued growth and recognition throughout all of Colorado in the past decade.

According to the Denver Post, "Your Castle Real Estate is a trusted source of information, as we frequently provide background for their real estate articles. The recent Denver Business Journal ranking of the largest realty firms in the Denver area ranked us #3 among non-franchises for transaction volume. Being locally owned enables us to customize our approach to the unique needs of our local clients, unlike the big national franchises."

The Rickard Group is one of the most successful real estate teams in Denver because we build our client base by bringing you nothing but the absolute best when it comes to working with you through any real estate transaction. We rely on integrity, knowledge, local expertise, technology, and a dedication to service, and know you will be 100% satisfied when you choose to work with us.

With Your Castle Real Estate, we will be able to take that level of service even higher. By focusing on local market trends, analytics, and neighborhood metrics, our expertise on the areas you live in will increase tremendously. Additionally, Your Castle’s focus on ground-breaking and effective marketing will give us the best edge in the market to sell your home or find you the one you want to purchase next.

Your Castle Real Estate also provides many services that we can relay onto our clients, including market reports and public classes to educate you on things like investing and other great areas of real estate. Please check with us often to learn more about our ongoing efforts to become your Realtors for life!

For more information about The Rickard Group, please visit our website at www.REzipline.com or our Facebook page at www.facebook.com/therickardgroup.

To learn more about Your Castle Real Estate, please check us out at www.yourcastle.org.

We thank you for your continued business and look forward to helping you in 2012 and beyond!

Sincerely,

Dane and Linda Rickard
The Rickard Group

2012 is quickly approaching! I’m excited! Some predict it will be the year of the “end of our world” as we know it, but I recall several other times or dates in my life that were supposed to be the end and yet we are still here.  I am an optimist by nature and can’t wait to see what the New Year is going to bring besides a new four year presidential term for whomever. Just watching the latest reports on this year’s Christmas sales, I feel our economy is rebounding, if ever so slightly. Those of us working Americans can help the cause by getting out and spending a little more – thus creating jobs for those who need them – it is all a domino effect. I still believe we can have the American dream despite the fact that the past few years it has been in question. I’ve heard reports that the housing market is at a stalemate and that prices will continue to fall – that comes from the pessimists – personally, I think prices will remain about where they are and buyers sitting on the fence will see the value of record low interest rates and begin buying again.  We’ve all been living in this depressing, bad news state of mind long enough!  It's time to re-energize ourselves and prepare for a fantastic year. 

Anticipate Success; Anticipate Encouragement; Anticipate Growth; Anticipate Ambition and last but not least Anticipate Happiness for yourself, your family and our country! 

It is an absolutely fantastic time to be alive!  We have so many amazing technological devices in our world, never has it been more convenient and easy to connect with each other.  As a baby boomer, I have seen advances that boggle the mind from a simple cordless phone now to the smart phone. Cumbersome computers have led to lap-tops, iPads and Skyping. Wow, every day comes something new – I’ve heard this will be the big year for Q-R codes. The younger generation is even leaving email behind and replacing it with social networking and texting. Our world is so much easier in so many ways!  Despite all the wonderful advances, we still find ourselves dwelling on the negative economy comparing it to the great depression -  yes, there are hard times but there is so much more in our lives that outweigh the gloom -  is it simply a matter of our state of mind?  

Dr. Deepak Chopra writes; 

The very instant that you think “I’m happy”, a chemical messenger translates your emotions, which have no solid existence whatever in the material world, into a bit of matter so perfectly attuned to your desire that literally every cell in your body learns of your happiness and joins in.

As an optimist, I believe this statement can apply to life in general and if we believe “life is good”, it will be good.  I understand that some situations arise that cannot be prevented but for the most part if we remain positive and tune out all the negative news we may just be able to turn the whole state of the economy around.  I guess it would all be worth a try! 
 

Come on 2012!  – give us your best shot – not only can we take it –but we are determined to turn it around!  No more waiting for the government to make things happen – we’ll do it ourselves! So here's to a year behind us that we all should be thankful for and for the one ahead that will prove to be a great year in real estate and for America.

What a year 2011 was, intriguing and hard-fought by those of us in the real estate industry. As with any year, you cannot classify it as good, bad, or ugly. No, I think those words only truly correlate to an individual's opinion. Some people faced unfortunate job losses and home foreclosures, while others prospered in finding a beautiful home for their family for a great price. So you can't truly sum up a market without understanding it totally depends on millions of different perspectives. What I can say, however, as that the real estate industry continues to face challenges and obstacles, and will so for a long time, but we are moving in the right direction, and are possible closer to middle-ground than we thought.

But what about the market? What about house values, reports of foreclosures going up, then down, then up. Every week it seems there is a new piece of sensationalism the media puts out there that drive people insane. It's hard to keep up with, and for most of you, I sense that the only way to make a judgment on what it's like in real estate is basing the number of negative news stories versus the number of positive stories, and whichever has more, wins. And as we all have hopefully come to realize, news isn't news unless it's bad most of the time.

Don't believe it.

If there is anything I ask for this Christmas when it comes to my clients and prospective real estate inquiries, it is this; Santa, please deliver all people in this nation and state to look past the sensationalism created by the media, and give them the foresight to at least talk to a professional (preferably me) who is active in the industry before gaining judgment on decisions to buy or sell!

In all seriousness, the Colorado real estate market, in my opinion, had a wonderful 2011. 2011 brought us one step closer to bringing back a complete stabilization in the market. Rates continued to fall throughout the year, and many people were able to take advantage of 30-year mortgage rates lower than 4%!!! Yeah, I said LOWER than 4%...

Historically, 2011 was the best year for lending rates than when some fellows by the name of George Washington, Thomas Jefferson, and Benjamin Franklin helped us to "borrow" some land from the good ole' British Empire.

And for all the people I was able to help this year, I am happy to say I was a part of such a phenomenal turnaround. This year truly has been a blessed one, and I think 2012 will only get better.

So, what should we look forward to in 2012? I think there are a few questions that we must answer to help see what is to come in the next year:

1.) Will rates stay as low as they have been?

This is hard to answer. So much of what happens with rates comes down from what happens in Washington. And it's difficult even for the top lending professionals to predict what is going to happen. What I do know, however, is that rates are currently hovering in the low 4%'s, and I do expect them to stay at least between 4%-5% throughout the summer of next year. And if you have a qualm about being in a 30-year fixed rate for 5%, you might need to have your head checked out because that kind of rate is still nearly unheard of when you look at the history of mortgages. Even the best mortgages that turned out to be total shams never had this good of rates! 

With rates staying in this area, we should see an increase in people buying. There are a lot of people out there that want to buy, but for one reason or another have had to put it on hold until they improve their credit, their job, or their family life before moving forward. Fortunately, I think there is still time to take advantage of these rates, but I warn you not to sit back before making a move if it is on your mind, because it is a risk that could cost you thousands of dollars.

2.) Will the market continue to be a Buyer's Market?

Well, to answer this, lets first define the difference between a "buyer's market" and a "seller's market".

Buyer's Market - A buyer's market occurs when the inventory (number of sellers) significantly outnumbers the number of buyer's in the market. This surplus in inventory makes it easier for buyers to drive prices down on homes, because there is always "another home" they could put an offer on if the seller doesn't accept their lower offer. More houses also means more days on the market, and the more desperate the seller gets.

Seller's Market - A Seller's market is the reverse of a buyer's market, where there is a shortage of homes for sale and buyers are forced to put in higher offers to secure a contract on a property.

The past few years have been considered a great buyer's market for people. Rates have dropped, and inventory is higher than the number of buyer's, not to mention there have been a lot of foreclosures, short sales, and other REO properties that have driven prices down.

People who have been buying have been able to get lower priced homes, while many homes sit on the market for months and months waiting for a contract. This leads to desperate sellers who are willing to take less on their house just to get out from underneath it and move on.

Now that we understand how these markets work, lets look at 2012 and what we might see:

Firstly, I think the continuing "stabilization" of values, and the continued low rates will help a lot of prospective buyers get off the fence about buying and they will actually start to buy. And when you kick in the sensationalism of rates starting to go back up because the economy is recovering better, more and more people will want to jump on the buying bandwagon before rates get too high.

What I feel we might see with sellers is that they will also be thinking about not missing out on lower rates on their next purchase, so the inventory will continue to increase, but so will the level of buyers, creating a sort of equilibrium within the market that hasn't been seen in years.

The continued decline in foreclosures, the lower amount of short sales either through stabilizing prices or through people's ability to re-work their mortgage to avoid losing their home will also help to drive home values up, helping other sellers to maintain their ground on pricing.

Ultimately, I feel 2012 will be the absolute best year for home transactions that we have seen in a long, long time. It will still be extremely friendly to buyers because of rates and the mortgage industry having been cleaned up so well, yet sellers will find more buyers more easily for their homes, helping to drive prices back up. A truly great market lies ahead for everyone out there and returning confidence to the industry that drives more economic growth than anything in our country cannot be stopped, even by the media!

I wish you all a Merry Christmas and a Happy Holiday season, and I can't wait to help you in 2012!!

1.       Hiring an agent because they promise to price the home higher than any other agent.

2.       Hiring an agent because they promise the lowest commission.

Sellers naturally want to sell and get the highest possible price and want to pay the least amount of commission.  Believe it or not those two choices have very little to do with hiring a competent agent and could turn the experience into a nightmare.

An agent can’t guarantee what your home will actually sell for, but a good, competent agent can prepare an up-to-date market analysis by comparing homes similar to yours that have recently sold.  The agent can show you active sales and pending sales. From the multiple listing data the agent can show you upgrades that are listed, finished square footage, location and the days on market.    Based on the criteria, you should be able to determine a fair and realistic asking price. Market conditions also play a big part in determining the “right price”. The agent should always suggest a “price range” from the low-end to the high-end.  In that range, you can discuss what improvements would be needed to get top dollar and what staging ideas would be helpful. Depending how much you want to do and spend will help you determine where you want to price it.

 Preparing your home for the sale is one of the most critical steps of the process and may even take some time.  A good agent should be able to give you a rough idea of what improvements will bring you the most return on your investment. If an agent is just in a hurry to take the listing, that should be a red flag.

Pricing is an art. If it is priced correctly, your best offer is usually within the first 30 days on the market.  Make sure the agent you choose doesn’t just agree to list it at a high price to satisfy you.  The agent should be the professional in this field. Let them show you the criteria and discuss it with you from their point of view and experienced knowledge.  If you price it too high and haven’t prepared the home, it will be on the market longer and you will eventually end up reducing the price, anyway.

If you’ve done your homework, you will realize all real estate agents are not equal. Real Estate companies are not equal.  Each is unique.  Each has their own marketing techniques and advertising budget.  If you choose an agent that is willing to spend more on the advertising, you will gain greater exposure to your home and that is what brings more buyers to look at it.  More potential buyers means a better chance to get a good offer.

There are always agents willing to work for less, cutting their commissions just to get the listing. They make it sound great and may make you promises they cannot fulfill.  Since a majority of the marketing expense comes out the agent’s commission; a discounted commission will mean discounted advertising and possibly a smaller buyer pool and many more days on the market.  If an agent brings a cheap fee to the table, ask yourself why. Is the agent desperate for business?  Is the agent unqualified?  Do you want to work with a desperate agent?

An agent may also present different commission plans in which they could provide you with various levels of marketing on your home. Be sure to discuss all of your concerns with the agents you interview.

And when it’s all said and done the seller needs to make the choice of:

“Do I really want to sell my home…or do I just want to have it “For Sale”?

By Linda L. Rickard, CRS, GRI, REALTOR