Friday, November 9, 2012

When is the right time for a price reduction?

A price reduction is determined by 3 factors:

1.  Neighborhood comparable sales (comps)
2.  Time on market (number of days)
3.  Showing activity

In the Denver Market:

1.  Your agent will gather this data and compile monthly for you to review.
2.  Average Days on Market for Denver Metro Area is 78.
3.  Average Number of showings before acceptable offer is 14.


The "norm" for a typical selling market over the last 5 years has been under 24%.  A 24% chance of selling your home based on what is currently available compared to number of homes that sold that month.  In 2012, the "norm" began at 24% and has been over 40% for the months of  May - August & now October.  The odds of selling your home, even in the 4th quarter, are very high.  Price is critical in capturing a buyer in today's market.  The odds are in the homeowner's favor if the house is priced right.  Continually review and analyze the data on a monthly basis.  The market will always reveal the target price.

Summary of October's Stats:

October 2012
Monthly Market Update:  data obtained from Denver Metrolist
                                                                        by Nicki Thompson

Condo Sales:

Total # Sold:  7743 which is up 1,018 units from 2011.

Residential Sales

# sold 2012:  31,464 units
# sold 2011:  26,438 units
We have reached last year’s totals for all of 2011 with 2 months remaining.

Ave. Days on Market:  dropped down to 78 days

Average Price:  $302,956 (last year, it was 279,858)
A larger percentage of the higher priced homes have been selling this year.

Active Inventory:  8108 homes are currently available
                        Inventory dropped nearly 600 homes from last month.
                                    & dropped nearly 4,000 homes from Oct. of 2011

October’s # of Sold Homes:  3246; up 100 from last month
                                                & up 764 homes from Oct. 2011

The ratio of sold vs. active homes is now at 40%.  For the past 5 years, the highest ratio was 29% until 2012.  During 2012, May-August & October all experienced ratios above 40%.  Even during the 4th quarter, the statistics are showing very high odds of selling your home.

If you are currently listed on the market, your showing activity should continue to be high.  Statistics show that an average of 14 showings will produce an acceptable offer.   If your days on market is approaching 78 or if you have had over 14 showings on your property, a price change is strongly encouraged to take advantage of the current market conditions.

Wednesday, September 5, 2012

Low Interest Rates mean Big Advantages!! (RIGHT NOW)

Rates are low.  We all know this and we have heard the advertisements on the radio "historical lows", "now is the time to buy or refinance", and "purchase power".  But what does all of this mean for the consumer?

Below you will fine 4 scenarios of fictional individuals who are taking advantage of today's rates:

Bill = Move-Up BuyerSally = First-Time Home Buyer;
Rick = Investor Buyer; & Jane = FHA Assumable Loan Buyer



MEET BILL

FHA Loan buyer wanting to stay under the Jefferson County limit of $406,250.
If he purchased today, his rate would be at 3.375% for 30 years fixed rate.
If rates went up to 6% and Bill wanted a 30 year fixed rate, his payment would go up $640 per month increasing the loan amount by $145,000!  Same house, same price, but with different rates; Bill saves $7680 per year by purchasing a home now....

MEET SALLY

Sally is first-time home buyer.  She went to her lender and they qualified her at $200,000 purchase price at a rate of 3.375% fixed for 30 years.  Let's say that Sally decides to wait on purchasing a home and rates are now at 6%.  The difference in Sally's payment would $315.10 per month or a loan amount of $72,000.  She now qualifies for a max purchase price of only $128,000.

MEET RICK

Rick wants to purchase a duplex which is listed for $325,000.  A duplex or up to 4 units requires 25% down payment.  At $325,000, 25% down, 4% rate fixed for 30 years, principal and interest = $1164 per month.  It is now 3 years from now and Rick would like to purchase that duplex after all.  If primary rates would go up to 6% then investor rates will be at 6.5%.  The new payment if rates went up to 6.5% would be $1540.67 per month.   Rick would have an increased cash flow of $376.67 a month or an equivalent of $4,520.04 a year if he purchased his investment now at the low rates!

MEET JANE

Jane purchased a home in 2012.  She had an FHA loan at 3.375% fixed rate.  Eight years later, Jane decides to sell her home.  She can now offer the new Buyer an FHA assumable loan with their purchase.  She has an added "selling bonus" that her neighbors can not offer.  She can offer the new Buyer her loan at 3.375% instead of today's rates of 6% (saving them money each month!).  The potential buyer MUST qualify FHA and qualify for the home, but this will be a strong tool for re-selling your home in the future!

As always, if you have any questions about the above information, please contact myself or your preferred realtor of choice.  Please also remember that the above scenarios are fictional individuals with good credit and income.  Each situation is different, but these examples are meant to only show the advantages of purchasing a home with today's rates!    


Wednesday, June 20, 2012

Buyers Beware...USUALLY NOT NEEDED!!

If you receive a letter asking you to send payment for a copy of your grant/deed....please know that its not necessary
Some of the sample letters that we are receiving from our clients who have just closed on their new home are from:

RECORD RETRIEVAL DEPARTMENT - 1550 Larimer St.  Denver 80202
or
SECURED DOCUMENT SERVICES - Washington, DC
or
LOCAL RECORDS OFFICE - 1550 Larmier St. #302, Denver CO 80202

They use verbiage such as:  "deed retrieval services", "final notice", "Jefferson County Public Fee", "Deed Processing Notice", "a service used to obtain copy of your closing documents", and my favorite, "Compliance Response Date."

Please be careful as you comb through your mail as a new homeowner.  There will be important information that you will be receiving but it will be from the county, title company, or lender.  And if you have any questions, don't hesitate to call your agent for further information.

Wednesday, May 16, 2012

Frustrated Buyers..."Are you kidding me?"

Historically, as the summer months begin to approach in Denver, the number of homes on the market starts to increase.  However, the Denver Market and especially the Arvada market has decided to change things up a bit.

As the demand increases due to low interest rates and higher rental rates, Buyers are beginning to get somewhat frustrated.  Properties that have been on the market for 3 months or more are beginning to get snatched up by the market.  If you are not one step ahead of the process, Buyers are missing out on the properties they want and wait for more properties to come...only...they are not coming!!

For whatever reasons, homeowners are not selling.  Bottom line:  if you know of anyone who might be thinking of selling, you may want to encourage them to strongly consider putting their home on the market.  If you see mailings sent to your mailbox that say "I HAVE A BUYER FOR THIS NEIGHBORHOOD"; they probably do! 

We have buyers who are wanting to move into:  Spring Mesa, Tablerock, West Woods, Ralston Valley, Sierra, Oak Park, Allendale, and different condo complexes.  The prices are from $80,000 to $750,000. 

Maybe it's time and maybe it's not....but either way; it's worth a shot!

Wednesday, May 9, 2012

Why we have the "Perfect Storm in Real Estate"...

Welcoming the storm & all that it brings
You've seen the buzz all over the news, Denver Post, and on Facebook.  Why now?  What is happening to create the ideal combination and why is this important to you (whether you are in the market to buy/sell or not)?

The 1st variable:  Low Inventory. Why do we have such low inventory?  (click here)
The idea of using your home as a piggy bank has completely vanished from the market.  Homeowners are beginning to make changes to their current home instead of moving to a house that fits all their needs.  Consumer confidence has been low in the past and homeowners who have already taken a hit in the stock market are not willing to withstand a 2nd blow with a low home sale.

The 2nd Variable:  Increased Buyer Demand.  Why do we have so many buyers now?
Low interest rates (below 4%).  The Federal Reserve Board announced in August of 2011 that they were going to keep interest rates low for the next two years.  Now, what is "low"?  For some of us, low interest rates would be below 6% or for others, they consider low rates below 5%.  Low does not necessarily mean below 4%.  (Denver Post - record low rates)


Lender Ease in the Market:  Getting a loan is not as hard as it has been in the past.  Most lenders have a streamlined process that puts the Buyer's mind at ease after the first two weeks.  The knee-jerk reaction that we witnessed two years ago has slowly become more stable and the process has become less complicated.    Did you know that most FHA loans are assumable?  How does this help you when you re-sale your house?  The Washington Post says it best -- click here.

Rental Rates are on the Rise(Denver Post article)  With apartment vacancy rates dipping below 4.9%, landlords are charging more for their leases and are signing 2-year lease agreements with their tenants.  Buyers are understanding that purchasing a home (receiving the tax benefits of the interest paid on their home and becoming a homeowner) is far better than paying a large monthly rent payment.

We need a good storm in Colorado!  With a good storm comes growth and stability to what once was a stagnant area.  Job demands grow with home sales, builders are hiring again, permits are being pulled.  We appear to the outside markets as a more desirable area to families, small business, and large corporations.

Thursday, May 3, 2012

Xcel costs go up as of Tuesday, May 1, 2012

As of Tuesday (May 1, 2012) , Xcel Energy will be nearly doubling their costs once a homeowner goes above 500 kw per month.   This two-tiered pricing goes into affect from May thru September.  As of May 1, 2013 homeowners will not be allowed to replace their furnaces with an 80% efficiency system.   This is good for both home buyers and home sellers to know for the next year if the furnace is reaching it's life expectancy which can be from 15-25 years.  Some helpful links and current rebates for Xcel:  click here.  To calculate your savings on a newer furnace and central air unit:  click here.  An example of cost savings by using a more energy efficient furnace/AC unit is attached.  This is an estimated cost for the Denver area assuming you have a 2,000 sq. ft. home.  For a list of preferred vendors, please contact me directly:  Nicki@NickiThompson.com.