Residential Real Estate Blog~Douglas County, Colorado

"Should I Buy?...Should I Sell? I hear, see and read that I should/shouldn't do either?"

Sun, 04 Mar 2012 05:39:00 -0800

I’ve had several phone calls and emails from friends, clients and friends of clients about what they’ve been reading and hearing about the “lack of resale inventory right now” (sellers) and those have heard “it's the best time to buy…prices are lowest in years” (buyers). So, the dilemma…”do I sell now, but if I do, won’t my final price be super low?” or…”why buy now, won’t prices continue to drop?”.

Well, the articles below tell the story. And both buyers’ and seller’s thinking may be correct, HOWEVER, way back when I got into this business, someone said that “Supply and Demand drives and creates the final selling price, with neither party in the transaction under duress”. I know, sometimes emotions enter into negotiations, but overall, that’s a bottom line, super true, statement of fact…and not just for purchasing houses!

So, here’s my story: My last listing was under contract in 21 days…and based on recent comparable sales BUT the lack of inventory, we priced it about 4% higher than the analysis indicated. And the two I have coming to the market this week will be priced accordingly!

Moral to story: We are in a time when both stories are correct, but I say NOT FOR LONG! Seller’s know the lack of inventory is in their favor...Buyer’s need to look for a while to find a good home, and often times are paying full price to get it! Prices will be rising!

So, please let anyone you know that may be interested in either buying or selling that this may be the best time to really consider doing either in the past 5 years! And do it before the inevitable happens…interest rates rise!

Below are the two articles that prompted this month’s topic! Check out the publishing dates on both.

Existing home sales continue upswing

Publish date

02/22/2012

Source

CNBC.com

Main Category

Economy - US

Article Summary

The existing home market continued to experience increased sales in January, according to data by the National Association of Realtors. The agency reported the measure posted its highest level since May 2010 with a total of 4.57 million, which is a gain of 4.3% from December and brings the increase over the past six months to nearly 13.0%. Additionally, the agency reports the sector posted only a 2.0% decline from January 2010 for median sales price and was encouraged that the supply of homes for sale was at its lowest level in almost 6 years

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Denver metro area continues decline on Case-Shiller index

Publish date

02/28/2012

Source

Denver Business Journal

Main Category

Economy - Denver

Article Summary

The Denver metro area declined in December in the latest assessment of home appreciation by Standard and Poors and Case-Shiller. Falling from November by 0.9% in the 20-city measure to place it 23.62% above the January 2000 benchmark, the period also marked the 18^th consecutive month of decline in the market for the measure and resulted in it posting a decline of 0.4% from December 2010. Nationwide, the measure posted a 1.1% decline from November to bring the 20-city composite measure down 4.0% from the year-ago period.

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Signs of economic weakness relieve pressure on mortgage rates

Wed, 04 May 2011 07:07:00 -0700

GOOD NEWS FOR BUYERS! RATES TO REMAIN LOW (FOR A WHILE, ANYWAY). AS OUR ECONOMY RECOVERS, SO WILL MORTGAGE INTEREST RATES. WHY NOT TAKE ADVANTAGE! WHAT DO YOU THINK?

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Signs of economic weakness relieve pressure on mortgage rates

Purchase loan demand falls as FHA raises premiums

By Inman News

Mortgage rates fell for a second consecutive week on signs of weakness in the economy, Freddie Mac said in releasing the results of its latest Primary Mortgage Market Survey.

Rates on 30-year fixed-rate mortgages averaged 4.78 percent with an average 0.7 point for the week ending April 28, down from 4.8 percent last week and 5.06 percent a year ago.

The 30-year fixed-rate mortgage, which hit an all-time low in Freddie Mac records dating to 1971 of 4.17 percent during the week ending Nov. 11, 2010, this year has ranged from 4.71 percent in early January to a high of 5.05 percent in February.

Rates on 15-year fixed-rate mortgages averaged 3.97 percent with an average 0.7 point, down from 4.02 percent last week and 4.39 percent a year ago. The 15-year fixed-rate mortgage hit a low in records dating back to 1991 of 3.57 percent in November.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loan averaged 3.51 percent with an average 0.6 point, down from 3.61 percent last week and 4 percent a year ago. The 5-year ARM hit a low in records dating to 2005 of 3.25 percent in November.

Rates on 1-year Treasury-indexed ARM loans averaged 3.15 percent with an average 0.6 point, down from 3.16 percent last week and 4.25 percent a year ago.

"Mortgage rates followed Treasury bond yields lower this week amid weak local economic data reports on business conditions and house prices," said Frank Nothaft, Freddie Mac chief economist, in a statement.

"Regional Federal Reserve Banks reported that business and manufacturing activities declined in Philadelphia, Dallas and Richmond in April," Nothaft said. "In addition, the Standard & Poor's/Case-Shiller 20-city composite home price index recorded year-over-year declines through February in 19 of the 20 markets."

Looking back a week, a separate survey by the Mortgage Bankers Association showed demand for purchase loans falling a seasonally-adjusted 13.6 percent during the week ending April 22 compared to the week before.

The decline was driven by a 26.6 percent decrease in applications for government-backed loans, as premium increases on FHA loans announced Feb. 14 went into effect. Buyers trying to beat the deadline were probably responsible for a 20 percent increase in government purchase loan applications during the preceding four weeks, said Michael Fratantoni, MBA's chief economist.

Demand for purchase loans slipped to its lowest level since Feb. 25, and was down 28.8 percent from the same week a year ago.

In an April 14 forecast, MBA economists said they expect rates on 30-year fixed-rate loans will average 5.1 percent during April, May and June, and climb to an average of 5.6 percent during the final three months of the year.

MBA economists expect a more gradual rise in rates on 30-year fixed-rate loans next year, to an average of 6 percent in the final three months of 2012.

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Sterling Ranch Brings Hopes for Bright Future for Residential Housing/Economic Growth for County

Fri, 22 Apr 2011 11:39:00 -0700

Sterling Ranch hearings begin

By Rhonda Moore

Published: 04.20.11

The developers of Sterling Ranch pulled out all the stops in their bid before county commissioners for approval of their village-based development.

Developer Harold Smethills gave his team of experts a chance to weigh in on the development in a video presentation unlike any the county commissioners had seen before. The Sterling Ranch team submitted its verbal presentation in a 40-minute video, hosted by Diane Smethills and featuring narratives from water, economic, transportation and safety experts.

The April 12 presentation was meant to save time as commissioners make the final decision on the development that has been 10 years in the making, Harold Smethills said.

Commissioners were impressed with the presentation, which was not without a few glitches. Technical problems caused the video to continually stop and start during the presentation, a malfunction that did nothing to detract from delivery of the message.

“It was easy to follow and made it a more cohesive presentation,” said Jack Hilbert, Douglas County commissioner, District 1. “We got to hear from all of the experts without people having to get up and down (to approach the podium).”

The video was a culmination of years of work by Smethills, his wife, Diane, and her brother Jack Hoagland. The family partnership is proposing a development of more than 12,000 homes on 3,500 acres of grassland in the Chatfield Valley, bordering Roxborough in Western Douglas County.

Touting its proposal as a community that will set the standard for sustainability, Sterling Ranch is asking commissioners for approval of a development built around homes clustered in villages, with a town center, sports complex, commercial district and 37 percent open space.

Residents in the Chatfield Valley and the neighboring Roxborough community are split in their support of Sterling Ranch. Opponents to the proposal decry the loss of their rural lifestyle while supporters praise the developer’s vision.

Smethills’ vision includes a request before the board for an appeal to the county’s water requirements, to give Smethills permission to purchase water for the development as the area grows. The county’s water requirement historically asks developers to purchase enough water to serve the entire development before breaking ground.

With a 20-year build out, Smethills wants Douglas County to allow him to purchase his water at each plat, or phase, of development. If he is required to purchase enough water for 12,000 houses at the front end, the interest carrying costs would inflate the price of water for homeowners in the subdivision beyond any reasonable rate, he said.

With plans to establish water-saving measures throughout the development, Smethills also asked commissioners to approve a water plan with a reduced per-household rate of consumption.

“We have a robust plan that works,” Smethills said in his video presentation for the public hearing. “We have three different sources of water, any of which can supply all our needs, and used selectively, can provide the most reliable systems for our users at the least cost.”

Planning commissioners previously recommended approval of Smethills’ water appeal but recommended denial of the development. Public comment at the April 12 opening hearing began with supporters who lauded Smethills’ efforts.

Beth Lancaster, a Roxborough resident who is poised to be among the first of the adjacent homeowners to be impacted by Sterling Ranch, praised Sterling Ranch’s willingness to accommodate its neighbors.

“We have met several times with Sterling Ranch and they have shown a lot of good faith working with us,” Lancaster said. “They listen to the wants and needs about open space and views; they’ve taken pictures from our decks. We believe they are trying very hard to accommodate the wants and needs of everyone in our neighborhood.”

Lancaster was among about 90 people who signed up for public comment at the Sterling Ranch hearings. Public hearings are scheduled for four nights and will continue until everyone has had a chance to speak, said Jill Repella, Douglas County commissioner chair, District 3.

Public hearings for Sterling Ranch continue at 6:30 p.m., April 19 and 26, in the commissioners hearing room at 100 Third St. in Castle Rock.

For more information about Douglas County Real Estate go to www.georgebonick.com

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