A friend of mine is a lender in a mountain town in Colorado.  We’ve been talking about home sales and where the market might be headed.  Here is an excerpt of an email he sent me yesterday:

“From what I’m hearing around the country (from lenders,) everyone has seen the buyer market completely dry up.  Like off a cliff.  Wonderful.  At least I’m busy with refinances.”

Why is the buyer market drying up?  Rates are at unbelievable lows. Like nothing any of us has seen in our lifetime.  Prices are as low as they’ve been since 2004.  With low rates and low prices, buyers can now purchase a home they could only dream about 5 or 6 years ago.

But here’s the rub - some buyers are struggling with unemployment, some are pulling back on spending and paying off debt or refinancing, and some have changed their mindset from a house being a home to a house being an investment. Those in the last category seem compelled to wait until the market “bottoms out.”

They may be able to time the bottom, but they’ll likely as not miss it. The buyers who are buying now are the ones who realize that this current combination of low rates and low prices affords them the opportunity to focus on home as a lifestyle.  To find the home they want to live in and raise their families in, to retire in, to relax and shut out the craziness of the world in.

How do you get those buyers to make an offer on your house today?  Here the top 5 things you must know to get your house sold:

1.  Know your competition - There has been a lot of talk about “shadow inventory” the past few months.  What does that mean and how does is affect you?   Homes that are in the pipeline to come on the market, but aren’t on the market yet are in the shadow inventory.  Homeowners who are delinquent, but not yet in foreclosure are highly likely to have their homes added to this inventory.  Bank owned properties tend to reduce the value of all homes for sale, so this potential inventory poses some risk that we’ll have flat or reducing prices until we work this pig through the snake.  The experts suggest that we have between 4 and 8 million distressed properties not yet on the market.

2.  Know where you stand - You MUST pay attention to the feedback.  Some sellers say, “no one has said anything about price!”  They counter that the feedback has been about the size of the basement, the size of the back yard or the master bedroom closets.  I’m here to tell you now - this is disguised price feedback! Sellers, know this - There’s an ass for every saddle.  If you are getting feedback like the above the only way to address it is through price.  The buyers aren’t finding the value in your house yet, so they’re looking for another saddle.  If the feedback says your house is dirty or the paint is chipping, then you can clean and paint.

3.  No showings means wrong price - Are you getting no showings?  You rightfully feel that you can’t react to the feedback because you aren’t hearing any.  First, have your broker review the listing as it’s entered into the MLS. Make sure that there isn’t a mistake like the wrong sub area or incorrect directional information.  Check that the house is showing up on the typical internet sites.  Then consider whether you are ready to plunge into potentially severe price reductions.  With no showings at all, you could we way off target.  You’ll need to step down your price until you begin to get showings. You can now react to the feedback and see if you hit it, or if you need to reduce further.

4.  Keep abreast of new competitors - Shadow inventory doesn’t only include bank owned properties.  It’s also comprised of the homes that sellers will be putting on the market while you’re still trying to sell.  Studies suggest that a tremendous number of sellers have been waiting until they perceive the market is turning around.  In Denver, this shadow inventory has been hitting the market since our news got better.  Available properties are increasing as the news about homes sales improves. The good news has been fabulous, but the added inventory will lengthen the time it takes to sell a home, which could result in further price depreciation.  22 million people in the U.S. are at least somewhat likely to put their home on the market at signs of a turnaround.

5.  Don’t get behind the rock - No, not Dwayne Johnson.  I wouldn’t mind being behind Dwayne.  I mean the rock that’s rolling downhill.  If your house has been on the market for more than 30 days and/or 25 showings without an offer, you’re behind the rock.  Once you’re behind a rock that’s rolling downhill, it’s very hard to get back out in front of it.  Get in front of it now.  Look at the last chart carefully.  This is Case Shiller’s projected increase in inventory for the Denver area.  We’re facing an 89% increase in inventory in the next year.  Of course, that won’t be released all on the same day or week, but it’s a number to pay attention to.  If they’re even half right, we’ll have a lot of homes to sell in coming months.

Your broker’s job is to expose the house to the larger market - via MLS, internet marketing, personal networking, open houses, blogging, mailings, etc.  Your job is to react to the feedback.  Don’t take it personally. It’s not a reflection on your choice to buy the house (it may be if you live on a freeway.)  It’s a reflection on the market and what buyers - the only ones who count - think the house is worth.

Originally published at LifeStyleDenver.

An agent in my office is attending the Denver County and Arapahoe County foreclosure auctions regularly.  He has an investor client looking for properties at foreclosure sale.  We had an interesting discussion last week.

Many buyers think that they need to buy a foreclosure to "get the best deal."  There are a few things buyers should know:

• You must bring cash to the foreclosure auction.  There are no mortgages.
• You won't have the opportunity to inspect the property. They are truly sold "as is."
  
• Investors are breathing heavy over the foreclosures in Denver these days. Our market is hearalded as the first to emerge from the downturn.  Investors want to snap up rentals and properties to fix and flip while the getting is good.
• Therefore, prices at the auctions have been wildly bid up in recent weeks. This is only in certain price points - generally $400,000 and below.

Buyers - truly there are better deals in the MLS right now. Ask your broker to look for properties that have been on the market awhile. If you have the time and patience, consider bidding on a short sale.  These sellers are motivaed, and while there might be some bidding going on, you won't need to bring cash for the entire purchase amount before you've even looked at your new home.

Search here for Denver Homes - with all the available listings and a cool mapping tool too!

Lenders are requiring higher and higher credit scores these days.  These days, if your score is less than 720, you may be at risk for not qualifying or not getting the best rates.

When I started selling real estate nearly 15 years ago, a score in the high 600's or low 700's was adequate and last spring a score of 720 was the base. Now, it seems that lenders are looking for 730 to 740 FICO scores.

In Bad Score, Bad Score - What You Gonna Do? you can learn about my recent attempt at refinancing our home.  Plus, you'll find tips for credit repair and links to help obtain your credit report.

It's actually not that hard or that time consuming to repair your credit, but you can't bury your head  in the sand, you need to pay attention and be proactive.

Having grown up in Southern California,  I was more a beach bum than a horsey person when I relocated to Denver nearly 28 years ago.

In fact, one thing I completely rejected about my new hometown was anything to do with western wear, western culture or cows.

My boots were ski boots, and my jeans were definitely not boot cut.  I attended the National Western Stock Show and Rodeo a couple of times, and while it was somewhat fun to watch the little kids chase pigs and the high school girls proudly carry flags on their horses, I couldn’t stand the smell.  The odor of cows, pigs, horses and fried food definitely got me down.

About three years ago, I got a new attitude.  I went to the stock show twice that year and once the next year and had a blast.  I embraced my “new” hometown’s culture and even bought cowboy (or girl) boots. I love them!  It’s true what they say, those boots are comfortable!

So from a novice’s perspective, here are the top 5 things you should see or do at this year’s Stock Show. It runs two more weeks, until Sunday, January 24th at the Denver Coliseum. Just follow your nose and you’ll find it.

1.  The Rodeo:  Bareback riding is an awesome feat. Watching those guys ride their bucking broncos gives new meaning to buns of steel.  The barrel racing is an exacting sport of speed and finesse.  The rodeo is an inspiring ode to Americana and regardless of the smell, something everyone should see.

This post continues at LifeStyle Denver.

By now, many of you have heard the story of DUKE, who we adpoted one year ago. Duke is a Golden Retreiver/Shar Pei mix who has the disposition of Budda and loves tummy rubs and peanut butter.

He was abandoned in Texas, and we got him last year during the weekend of Hurricane Ike.

We've entered Duke into the "Cutest Dog Competition" as a way to support orgasnizations that resuce dogs. If Duke hadn't been rescued and found his way into our household, we'd be the poorer for it.

If Duke manages to garner any winnings, we'll make a donation to two excellent local shelters - The Denver Dumb Friends League and the Max Fund.  The top prize is $1,000,000!

Here's how you can help. This contest is all about social networking. There are thousands of dogs entered every week for twelve weeks. Today begins week 6.

During this week, everyone can vote for the same dog once a day every day.  Please sign up and vote for DUKE F!

It's a lot to ask, but once you've registered your email (so they know the voting is fair) you can bookmark Duke's site and vote in seconds.  Here's the link to Duke's site: http://www.cutestdogcompetition.com/vote.cfm?h=B73E47A9FA9E71F0C087B6006A4F18F2&page=1.

The main contest site is: www.CutestDogCompetition.com.  You can also go there and search for DUKE F. in the "Cutest Gallery."

Help us raise money for resuced animals and the organizations that rescue them!  Vote for DUKE F. once a day every day this week!  It would mean a lot to him:)

Also, please pass this message on to anyone who you think might be interested in helping Duke.  Tweet it!  Put it on your Facebook! We'll need in excess of 3,000 votes to win - that's a lot of you clicking away.

Thanks and have a great week!

A broker in my office came to me yesterday with some questions about a seller’s recourse if the loan doesn’t fund at closing.

Colorado is a “table closing” state, and our contract expressly states that the buyer must attend the closing with all moneys and documents.  This means that if a closing is at 4 p.m. on a Wednesday, as this broker’s closing was, the buyer and the buyer’s lender must perform under the terms of the contract at 4 p.m.

This lender had a lackadaisical attitude, ignored the new HERA/HOEPA regulations and essentially didn’t do his job.  He was told on August 23rd that there was a slight change in the final figures, but he failed to disclose the change to the buyer.

Under the new regulations, any change upward to the buyer’s APR (over 1/8%) must be disclosed in writing to that buyer and the closing can’t happen until 3 days after the disclosure is made.

The loan broker did not disclose the resulting change in APR to the buyer until yesterday, the day of the closing. Actually, it was the second date for the closing, since this lender also didn’t order the appraisal on time (another story.)

Real Estate Buyers - Caution!

You are at risk to lose your earnest money in Colorado if you aren’t prepared to close at the date and time the closing is scheduled in the contract.  In this case, the earnest money was $8,000.  You lender and your real estate broker must be watching out for you and advising you. How could you possibly keep up with the changes in our industry?  It’s obvious that many lenders and real estate brokers aren’t even keeping up.  If the real estate broker in this instance had been on top of her game, she would have hounded the loan broker to get his disclosures out.

Her managing broker is helping her out, and using this as a “teaching moment” by paying the sellers’ damages. This equates to their loan per diem until the closing and various other pro-rations and charges. He’s a good broker and stepped up to the plate immediately because he understood that we must not stand in the way of a buyer and seller finalizing the transaction, or risk our clients’ earnest money.  I’m sure he’ll also go after that lender for leaving him hanging in the wind like that.

This added level of complexity makes it more essential than ever that you hire a professional and seasoned real estate broker and that you listen when they tell you what to look for in your lender.

Don’t leave your earnest money to chance.

This was fisrt written at LifeStyle Denver.

Denver real estate is in recovery. We’re the baby sapling, taking root and growing strong.

The thing is, we never totally crashed and burned like other cities did. Prices went down for sure and according to yesterday’s S & P - Case Shiller Report, we’ve seen depreciation of 4.9% since this time last year. Compare that with Phoenix, down 35.3% year over year.

Since last month, Case Shiller reports that Denver’s prices have appreciated 1.5%. That’s an awesome bounce.  Some analysts think this may be a seasonal adjustment, and may not signal a recovery.

I disagree.

Our available inventory hasn’t risen significantly this year. We didn’t experience the typical big bounce in available listings in the Spring.  For that reason, we’ve been able to stabilize the market.  The ratio of properties available for sale and days on the market is stable.  We still have a stratified market, and we need to see high end properties shake out some inventory.

High end sales are increasing slightly too.

I looked up Park Hill and Hilltop sales since April yesterday, several million-plus sales have been recorded.  Jumbo rates have become more competitive in recent weeks and there are cash buyers out there looking for a deal on their dream home.

Appreciation follows a reduction in time on the market.

As the days on the market have fallen, as we’ve begun to have multiple offers, as rates have remained competitive we’ve had appreciation re-enter the Denver market. We won’t get back to double digit appreciation very soon.  But buyers beware - if you don’t get off that fence soon, you may be looking back over your shoulder in regret.

Margaret Jackson, the Denver Post’s Real Estate Correspondent wrote more about the S & P - Case Shiller Report in this morning’s paper. Read to the end!

This article and others appear on the LifeStyle Denver Blog.

Denver’s new Zoning Code is currently in the community feedback phase.

The new code has been in the works for several years, and Denver’s Zoning Code Task Force and the Community Planning and Development group are currently seeking public input.  There have been several community meetings to review the code in specific neighborhoods, and you still have the opportunity to attend any of the remaining meetings.

The changes to the code will be quite drastic in some instances.  Currently in Denver, we have R1 (single family), R2 (duplex or carriage house), R3 (multi-family) as our primary residential zoning designations.

If you are thinking about buying a property that is currently zoned R2 because you would like to build a duplex there or have your mother-in-law move into a new carriage house above the garage - beware!  Your property could potentially be “down zoned” to single family after the code changes in the fall.

Become informed about the city’s zoning changes if you live in the city, or if you’re considering purchasing a property here.  You’ll want to know how the new transit area zoning might affect your property, what zoning could allow next door or across the street, and what the planning committee means by “areas of stability.”

Highest and best use might not be as high for some properties after the zoning code is changed.  Other properties may benefit from a “better” zoning designation, increasing their highest and best use.

The web site for more information is www.NewCodeDenver.com.  I plan on attending a meeting next week, and I’ll post more information then.

First published at LifeStyleDenver.

Yay! The market statistics are out for the month of April. This is always my favorite blog post of every month, and I wait with baited breath for the Metrolist stats to be put up on their site.

These statistics are based on homes listed for sale in the Denver MLS, and do not reflect private sales, many foreclosures or much new construction.

In April, our inventory remained about equal to what we had on the market in March. Combined single family and condo listings were at 20,628 in March and 20,705 in April.  Sales have dropped from a year ago, but are up from last month.  I showed a house to some clients this past Sunday, and when we called to tell the listing agent we had some interest I found out they already have 3 offers…

The most notable thing I see this month is the average days on the market continues to drop for single family homes. We’re at less than 4 months on the market, average, for most properties. This suggests that properties are selling much faster than they were, and is a sign of a market that is in balance.  Even condominiums, where DOM have risen slightly since last month, are selling in less than 4 months, average.

It looks scary to see that we’ve dropped 17.56% in number of homes under contract, but as a percentage of inventory, we’re actually doing better.  We had 25,030 active properties in April ‘08 and 6,093 were under contract.

Our high end of the market is still out of balance. There are $million+ homes selling, but buyers seem reticent to get into the market just yet and sellers are resistant to drop their prices any more. Many sellers in this price point have the financial wherewithal to hold out so we’re at a stalemate.

What does all of this mean for buyers and sellers? Many sellers are getting real with their prices or taking their homes off the market.  I think that the lower price point is the hot spot, but since the average sold price for single family homes is up over 1% that may be a sign that the recovery is gradually trickling up to a slightly higher price point.

Spring is here, buyers need to get off the fence quickly.  The current combination of low rates and low prices can’t last. If the economy at large stabilizes (the DOW was up again today) then rates will begin to creep back up. You’ll stand to lose a lot of buying power that you have right now. With Denver Real Estate sales showing more and more signs of life, we’ll see more than a 1% jump in average sales price.

Real estate is not scary, if you are wise and educate yourself you can make a smart real estate decision.

These stats were first published over at LifeStyleDenver.com.

Downtown Denver has seen several developments taking shape.  Once particularly interesting building is Spire.

Developer Randy Nichols is building a mid-priced condo development aimed at the average price range for a downtown buyer.  The development is rapidly rising across from the Denver Convention Center and includes cool amenities like loaner cars and a doggie park on one of the decks.

With 41 stories (483 feet high) and 503 homes (714 bedrooms), Spire will be one of the tallest residential buildings in the Western United States and the first new residential high-rise to be built in the central business district of Denver in decades (24 years).   The sales office is now open across the street from the building, and Chad or any of the staff will gladly give you a tour through the models.

Our entire office was invited down for lunch and a tour recently, and we had a great time learning about the Spire development and the city’s idea to make 14th Street a “mini Times Square.”

Denver Real Estate and development is ever changing. We’re fast becoming a city to envy - and the mountain views from Spire will prove that.  Downtown Denver is being transformed from a sea of office high rises to an extremely livable and walkable city. Get down there and enjoy!

First posted over at LifeStyleDenver. Check it out!