Overall prices in the county have stabilized and the number of units sold is up very slightly in 2011 compared to 2010 and 2009.   The inventory — the number of homes on the market — is low and in some areas, like Louisville, the lowest it has been in years.

The average price of homes sold has been fairly stable over the year — a few up and downs — but fairly stable.

The charts for each of our local areas — City of Boulder, Longmont, Louisville, Lafayette, mountain and plains can be found on our website: http://www.bernardirealestate.com/Boulder_Home_Sales_Statistics/page_2243790.html

We are seeing an improvement in the number of showings and in homes going under contract.   The spring selling season is approaching.  If you are thinking of selling this spring, give me a call to discuss the recent activity in your area — 303-402-6000 or send an email to karenb@bernardirealestate.com

First, lets break the distressed properties into two groups — bank owned and owners in distress.

The bank owned properties are pretty straight forward — the bank now owns the house either through a foreclosure process or the owner has “given” the house back to the bank through a “cash for keys” program or a deed in lieu or foreclosure.   Bank owned homes are generally in “as-is” condition and may have had the utilities turned off.   The banks generally do not have any information on the condition of the home or the systems in the home (plumbing, electrical, heating, etc) so there will be no disclosures.   Buyers can inspect the home but may incur costs for turning on the utilities and getting them turned back off.   The inspection may disclose big issues with the property and the bank MAY reduce the price but will generally not fix anything.

The price a bank will take can really vary — the longer it sits on the market the lower the price may get but we have not seen banks selling a huge discounts below market value.  Generally the discounts hae been indicative of the condition of the home compared to comparable properties.   The good news is that banks generally act on offers pretty quickly and the process after that is usually smooth on the bank’s side.

Distressed owners fall into two categories — those that owe less than the market value but are having trouble making payments and those that owe more than the house is worth (this is a short sale).  If the owner is facing a short sale, the process can take several months and involves the owner’s lender approving the sale (there can be multiple lenders and that can extend the timeframe).  If its a short sale, the property will generally be “as-is”.  The lender (or lenders) will obtain an estimate of the market value of the home (sometimes called a BPO) as part of the process — they will use this estimate of market value to insure that the home is being sold for a fair price (not too much of a bargain).

If the owner can payoff their loans, the process can be fast but the owner may not be in a position to make any repairs should any major defects be found.

The basic rule in buying distressed property is buyer beware — the sellers of distressed properties will generally be “as-is” and may have a number of defects and deferred maintenance issues.   If the price reasonable reflects the condition, there may be an opportunity for some “sweat equity” but the days of “fix and flips” are over and they don’t seem to be on the horizon — yet.

If you  have questions about bank owned homes or short sales, give me a call at 303-402-6000 or vis our website at www.bernardirealestate.com.

The Boulder area has not suffered as much as many other areas because the local economy is stabilized by a world-class research university, several major federal laboratories, a well-educated workforce, a very favorable quality of life and a history of visionary entrepreneurs.  The Boulder area has been an incubator for emerging industries in the past — technology, biotechnology, alternative energy, etc.

Employment in the county has increased slightly faster than the population.   The number of non-farm jobs increased 1.9% from September 2010 to September 2011 while the population has increased an average of .86% per year.  The average wages in the county ($64,314) are higher than the state  ($55,945) and national ($51,222) averages.   The unemployment rate in the county is 5.9% compared to about 8.8% nationally.

We continue to see some expansion in several different industries.   The aerospace industry continues to be a bright spot in the economy several large employers, the federal labs and university all help create an atmosphere where start-ups can thrive.  Biotechnology also benefits from a strong existing base of employers and will benefit from the completion of the new Biofrontiers Institute at CU.  Other strong areas include information technology, natural and organic products, outdoor products and recreation and clean/renewable energy.  There are also signs that venture capital is now flowing back into our area with a reported $96 million flowing in during the third quarter of 2011.

Real estate is still limping along.   Commercial vacancies in some sectors are down but in some area up.   Residential activity is terms of number of units is down slightly over last year.   Prices have declined slightly overall but this may be partially due to the assortment of homes selling — more moderate priced homes are selling compared to prior years when there were more units sold at the higher prices.   The rental market is very strong and residential vacancy rates are very low.  As has always been the case in Boulder County, individuals cities and towns vary from the county as a whole.   If you are interested in the price information for your particular area, let us know — email us at info@bernardirealestate.com or give me a call at 303-402-6000.

As I thought about the economic impact of selling just one home, I can see much more impact on many more people. The home buying process starts with a homeowner putting their home on the market — usually after doing some sprucing up of the home and perhaps some decluttering. So the local hardware store might have sold a few items, a handyman might have picked up a little work, and maybe a storage facility or local mover might have picked up a new client. A local real estate broker gets a new listing that might turn into a commission.

Once the buyer finds the home with their real estate broker (usually a different broker), they hire an inspector and start working on getting their loan. The inspector earns a fee for inspecting the home. The lender generally has at least three people working on a new loan — the loan officer, the loan processor and the underwriter. The title company that will close the transaction has researchers that check on the title and any outstanding liens and a escrow officer or closer that will prepare the paperwork.

Chances are that the inspection will find some items that need repair. Repair people will most likely be hired to fix the problems — a handyman, a plumber, an electrician, an HVAC contractor, etc.

When the transaction closes, the real estate brokers earn a commission, the title company earns its money for the title insurance and closing the transaction, the lender collects its fees so it can pay its employees. An insurance agent issues a new homeowners policy to the buyer.

Now its time for the movers or renting a truck….

As the new home owner settles in, they make a few changes and buy some new items.

Now the seller needs a new home and it starts over again…..

Ready to help move the economy along by buying or selling a property?   Call me at 303-402-6000, email me at karenb@bernardrealestate.com or visit my website:  www.bernardirealestate.com

The savings are significant — a half a percent saves about $100 per month on a $400,000 loan.   The savings on a 15 year fixed rate loan are also substantial:

The rate for ARMS is also very low — as low as 3.1 percent.   At 3.1 percent the payment for a $400,000 loan would be 1708.07.    This is also a big savings over the 30 year fixed rate — about $275 per month.

Another way to think about this is that you can afford more house for the same payment.   Let’s assume you want your payment to be $2000 per month.   At the current rate of 4.33 you can borrow $402,710.   If the rates go up to 4.75 percent, you can afford $383,400 — a difference of almost 20,000.   The more the rates go up, the less house you can finance for the same monthly payment.

If you think it might be the time to make a real estate move, give us a call at 303-402-6000 or visit our website:  www.bernardirealestate.com

The factors considered included:

• –income levels (median and highs and lows),
• –financial information such as unemployment, purchasing power, insurance date, employers,
• –housing information — sales prices, taxes, trends in prices,
• –educational factors — test scores, percent of students in public vs private schools,
• –quality of life — air quality, crime stats, commute times and methods, weather,
• –intangibles — numbers of restaurants, cultural opportunities (museums, opera, symphonies, etc) , recreational opportunities (recreation centers, golf courses, parks, trails, etc), and finally
• –discussions with locals.

Louisville and Superior both did very well and share many characteristics with other towns in our area — schools, weather, and many other factors.   I suspect if bigger towns were included, more of our “towns” would be included.

To see the full list:  http://money.cnn.com/magazines/moneymag/bplive/2011/snapshots/PL0846355.html

and visit our website for recent sales info:  www.bernardirealestate.com

The trends have been different in each city in the county.   The City of Boulder has been fairly stable both in price but the number of units went up in June and exceeded the number sold the in June of 2009 and 2010.  Lafayette and the moutains and plains are still moving up and down in price.

The trend in number of homes sold by month was skewed by the tax credit in 2009 and 2010 but has increased this year over prior years even with no tax credit– the sales peaked in 2010 in the earlier months because the tax credit required that the home be under contract and close by 6/30/2010.   This caused buyers to move up their purchase into earlier months than the normal cycle.  Charts for the cities and other areas of the county can be found on our website:  www.bernardirealestate.com on the sales statistics page.

Changes proposed to government guaranteed loans:   there has been lots of proposals for changing or even eliminating the roles of Freddie Mac and Fannie Mae.   Proposals range from minimal changes to elimination of both agencies.   Any changes will have some impact on the availability of the “standard” 30 year fixed mortgage.   The costs to obtain a 30 year fixed and the interest rates would probably go up.

Changes to bank regulations:   Banks and other firms have new regulations regarding reserve requirements for loans (risk retention is the technical phrase).   These rules have an exemption for “qualified residential mortgages” (QRM).   The rules for a QRM may make it harder for some potential borrowers to qualify — some proposals would require a borrower to have 20 percent down and define the debt to income ratios that a borrower must meet (28 percent max mortgage debt and 36 percent total debt to income).   The rules would also define what types of loans would qualify — proposals would exclude interest loans  only for example.   The proposals have also recommended minimum FICO cores of 690.   While borrowers not meeting the criteria for QRMs might still be able to get loans, the costs and rates would probably be higher since the lenders would be subject to the “risk retention” rules for those loans.

Rents are up and vacancy rates are down:  As vacancy rates decline (less rentals available), rents will go up — basic supply and demand.

If you are thinking its time for a move, visit our website www.bernardirealestate.com for more information or contact us at info@bernardirealestate.com

The Boulder real estate market looks fairly positive compared with many markets across the country.  The National Association of Realtors (NAR) tracks statisitics in about 146 markets across the country The median list prices of homes in the Boulder area is up slightly compared to last years — about 1.43% higher than a year ago.   Of the 146 markets tracked, only 23 showed any increase in median price (so that means 123 had no change or a decline in median price).  Across all the markets tracked, the median price declined 4 percent. 

Another factor tracked by NAR is the average age of the homes on the market — the longer the average home is on the market, the slower the market.  In the Boulder/Longmont market, the average days on the market for the current inventory is 67 days — this ranks as the 22nd in least amount of days compared to the 146 markets tracked.  Denver is tied for the least at 44 days on the market for the current inventory.

Examining our local market more closely, prices do seem to have staibilzed in most areas and are continuing to show some small increases in some areas.  The number of homes sold this year is above levels in 2009 but slightly below 201o for the county as a whole — probably still a reflcetion of the tax credit that was in effect the beginning of 2010.

Visit our website for more detailed statistics:   www.bernardirealestate.com

• the best loan is the one with the lowest total cost over the length of time you will live in a home. The total cost should include the all upfront charges — loan origination fees, points, credit report fees, appraisal fees, etc — and the interest charges for the years you intend to live in a home.
• look out for low ball rates — lenders offer a low initial rate but as the process continues, the rate increases due to “market changes”. If the rate is substantially below others being offered, the deal may be too good to be true.
• get a complete list of ALL fees up front. You should receive written estimates of all costs and fees.
• lock-in rates and float rates. Rates change on a daily basis and borrowers can either lock-in the current rate (at the time of application) or let the rate float and lock-in later. Make sure your lender explains the terms of the lock — rate and the length of the lock, as well as what happens if rates fall.   Same for float conditions.

As in most situations, if its seems like the deal is too good to be true, it probably is.  Get lender recommendations and check them out.   Talk to your local bank or credit union — they may have excellent mortgage options.