Denver Real Estate Blog

Denver Home Sales Down Nearly 17%

The Denver Metro area is at a normal level, finishing 2009 with a 5.7 month-supply. In 2009, its inventory fell 8.9 percent from November to December, and dropped 17.0 percent over the last year. Sales of previously occupied homes took the largest monthly drop in more than 40 years in December, plunging far deeper than expected after lawmakers gave buyers extended time to use a tax credit.

Home prices: Denver leads the nation in home price percentage increases,
according to the Standard & Poor’s/Case-Shiller Home-Price Index. Denver’s
S&P/Case-Shiller Home Price Index yearly percentage change improved for
the ninth consecutive month, falling only 0.1 percent between November 2008
and November 2009. As reported by Standard & Poor’s, “Denver and Dallas
are nearing positive territory with their annual figures at -0.1% and -0.6%,
respectively” . Home prices have benefited from the increased activity
in November when buyers rushed to purchase a home before the expiration of
the first time buyer credit. It’s incredible that prices were preserved
during that buying frenzy. With the extension of the first time buyer credit
perhaps we’ll see even more improvement.

The Denver Metro area is at a normal level, finishing 2009 with a 5.7 month-supply. In 2009, its inventory fell 8.9 percent from November to December, and dropped 16.0
percent over the last year.

Colorado – It must be noted that countless issues play into human decision-making. But the impact of public policy often is very important. The relative governmental costs among the states will impact where people live and work, that is, where they seek opportunity.  Starting up, running and/or investing in businesses are risky ventures. But as noted earlier, those ventures spur the economy forward.

Putting aside the political rhetoric, just how friendly or unfriendly are the policies that elected officials actually implement toward entrepreneurship and small business? In terms of their policy environments, the most entrepreneur-friendly states under the “Small Business Survival Index 2009” are: 1) South Dakota, 2) Nevada, 3) Texas, 4) Wyoming, 5) Washington, 6) Florida, 7) South Carolina, Colorado, 9) Alabama, 10) Virginia, 11) Ohio, 12) Alaska, 13) Tennessee, 14) Utah, and 15) Indiana. In contrast, the most anti-entrepreneur policy environments are offered by the following: 37) Maryland, 38) Oregon, 39) North Carolina, 40) Connecticut, 41) Iowa, 42) Hawaii, 43) Minnesota, 44) Massachusetts, 45) Rhode Island, 46) Maine, 47) Vermont, 48) New York, 49) California, 50) New Jersey and 51) District of Columbia. (Please note that the District of Columbia was not included in the studies on the states’ liability systems, eminent domain legislation and highway cost efficiency, so D.C.’s last place score actually should be even worse.)

In September, Colorado was ranked in fourth place by Forbes.com as among the best states for business in a report assessing business costs, labor supply, regulatory environment, economic climate, growth prospects and quality of life. State officials have been crowing about that ranking ever since. Also in September, the Washington-based Tax Foundation said Colorado has the 13th most business-friendly tax system in the country.

Colorado’s index is 48.250.

Among the Centennial State’s individual rankings in the report are:

• 8th for lowest top corporate income tax rates.

• 10th for lowest top corporate capital gains tax rates.

• 15th for lowest state and local sales and excise taxes.

• 18th for lowest electric utility costs.

• 20th for fewest state and local government employees.

• 20th for lowest state and local property taxes.

• 22nd for lowest crime rate.

• 28th for lowest state and local government spend, 2006-07.

• 36th for fewest “health insurance mandates.”

Rated ahead of Colorado as most friendly to small business are South Dakota, Nevada, Texas, Wyoming, Washington, Florida and South Carolina.

New the bottom along with D.C. are New Jersey, California and New York.

Denver Colorado Real Estate

Home price statistics for Denver are beginning to sound like a broken record. Denver held its place as one of the top metro areas in the nation to enjoy
improved home prices from July 2009 to August 2009. During August, home prices increased 1.0 percent, according to the S&P/Case-Shiller Home Price
Index. For the past six months, Denver’s month-to-month change in home price values has increased. Nationally, home prices are looking more promising as well. According to David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s, “Broadly speaking, the rate of annual decline in home price values continues to improve. The two Composites and 19 of the 20 metro areas showed an improvement in the annual rates of return, as seen through a moderation in, their annual declines” (www.standardandpoors.com). Denver’s annual declines have decreased steadily over the past six months,falling only 1.9 percent since August 2008. This continues our hope that Denver’s housing market is recovering as it nears a positive change in its annual returns.

Nationally

3.6%  – The national decline in new home sales during September 2009, following five consecutive months of sales increases.

7.5% -   The national monthly supply of new homes available for sale in September 2009. September was the 29th consecutive month in which the inventory declined, reaching its lowest since November 1982.

10.6% – The decline in new home sales in the West during September 2009. The Midwest gained 34 percent in new home sales during September.

9.4% – The increase in existing-home sales, including single-family, townhouse, condominiums and co-ops in the nation from August 2009 to September 2009. This 5.57 million-units sale pace is 9.2 percent above the 5.10 million-unit pace in September 2008

15.0%  – The decrease in the nation’s total housing inventory from September 2008 to September 2009. During September 2009, there were 3.63 million existing homes available for sale. This represents a 7.8-month supply at the current sales pace.

$174,00-  The national median existing-home price for all housing types in September 2009, down 8.5 percent from September 2008.

Things to consider – highlights for repeat buyers:
For purchases in 2009, the tax credit may be applied to your 2008 or 2009 taxes.
For purchases in 2010, the tax credit may be applied to your 2009 or 2010 taxes.
You must be under contract to purchase a home by April 30, 2010 and closed by June 30, 2010 to
qualify for the tax credit.
The credit only applies to single taxpayers with adjusted gross incomes at or below $125,000.
The credit only applies to married couples filing jointly with a combined adjusted gross income of
$225,000 or less.

Things to consider – highlights for repeat buyers:
$6,500 tax credit for repeat homebuyers does not have to be repaid.
The tax credit is for 10 percent of the home’s purchase price up to $6,500 (up to $3,250 for a married individual filing separately).
You qualify if you have resided in your principal residence for five consecutive years out of the last eight.
The home you use the tax credit to purchase must be your primary residency for at least the next 36 months.
For purchases in 2009, the tax credit may be applied to your 2008 or 2009 taxes.
For purchases in 2010, the tax credit may be applied to your 2009 or 2010 taxes.
The credit only applies to single taxpayers with adjusted gross incomes at or below $125,000.
The credit only applies to married couples filing jointly with a combined adjusted gross income of $225,000 or less.
You must be under contract to purchase a home after November 6, 2009 and on or before April 30, 2010 and you must close on that purchase by June 30, 2010 to qualify for the tax credit.
Purchases of homes that are priced above $800,000 are not eligible for the tax credit.

Advanced MLS IDX Search Available for the Denver Home Market- click on the Iphone App Below and Enter 5358 to activate when prompted!

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Denver home sales, particularly those of lower-priced Denver homes that are proving attractive to first-time home buyers, have been boosted in recent months by buyers wanting to take advantage of the federal government’s $8,000 first-time home buyer tax credit before it expired. The credit was set to expire Nov. 30, but Congress on Thursday extended the credit to 2010. As expected by real estate industry professionals, the credit was expanded to include some existing homeowners looking for new homes as well as first-time buyers.

Total October resales, which are sales of homes in Denver that have been sold at least once before, increased 2.9 percent to 3,958 from 3,846 the month before. Those sales were down 7.6 percent year over year, from 4,282 resales in October 2008.

Total sales include both single-family homes and condominiums.

In Denver single-family home sales rose 1.7 percent to 3,052 in October from the previous month, but were down 9.86 percent from October 2008. During the same period, condo sales increased 7.22 percent to 906 from September and 1.12 percent year over year.

Metro Denver home resales increased in October from September, but were down from October of last year, according to a Metrolist Inc. housing report released Friday.

For the first 10 months of the year, total home resales were down nearly 15 percent to 35,512 from 41,683 year over year.

The average selling price for both housing types was $261,771 last month, down from $274,433 in September, but up from $250,172 in October of last year.

Other key data from the Metrolist report includes:

• Average selling price for single-family homes in October was $261,771, while the average for condos was $161,451.

• Median selling price for houses last month was $222,000, compared to $135,000 for condos.

Median is the midpoint between highest and lowest selling price, and is considered by some real estate experts a better indication of price than average because it’s not skewed by price extremes.

• Average days on the market for both types of home was 93 — a 3.13 percent drop from September and a 2.11 percent decrease from October 2008.

• Year-to-date average total sold price was $241,653, which was down 4.64 percent from $253,419 from the same period of 2008. The average selling price for a house dropped 4 percent to $263,328, while condo price decreased 7.1 percent to $160,382.

The newly passed federal homebuyer tax credit legislation will allow buyers who sign home purchase agreements by May 1, 2010, and close on a purchase before July 1, to use the credit.

First-time buyers, which include people who haven’t owned a home in the previous three years, will keep their home-buyer tax credit of as much as $8,000. The new legislation adds existing homeowners, who have been in their current home for at least five years and want to buy a new one, and allows them a credit of as much as $6,500.

The tax credits apply to principal homes costing $800,000 or less, and excludes vacation homes.

Focusing on month-month changes, Denver has reported its third consecutive
month of positive returns in May, according to the S&P/Case-Shiller Home Price Index. Denver’s home prices increased 1.5 percent from April 2009 to May 2009. According to the Denver Metrolist, the Denver Metro area showed improvements in every statistical category during June 2009.

The average sold price for residential and condominium sales increased 6.3%

The sales volume for residential and condominium sales in the Denver Metro area increased 15.4 %

At the end of June 20,853 Denver homes were for sale. This represents a 5.0 month supply at the current sales pace, which is an improvement from May 2009, when there was a 5.7 month supply.

The number of residential homes and condominiums which were under contract (pending sales) increased 6.0 percent.

The average list price of residential homes and condomimiums increased 0.6 percent to $482,482

The percentage of listings sold increased 14.9 percent.

We should remember while many indicators are showing positive signs of life in the Denver Home market. Home prices are still down 17% on average across the metro area, so we have a long way to go before we see sustained home price appreciation.

What You Need To Know
While there are laws governing the behavior of HOAs, these associations can still have a powerful impact on your rights as a homeowner. Before buying a property in a community that has an HOA you should:

1. Learn the HOA’s rules
You may be able to find an HOA’s CC&Rs online as well as information about what happens if you violate a rule. Make sure any online information is current. If you cannot find this information online, ask your real estate agent to acquire these documents for you or contact the HOA yourself. Pay particular attention to rules regarding fines and whether the HOA can foreclose on your property for nonpayment of HOA dues or fines resulting from CC&R violations. Also, learn about the process for changing or adding rules and whether HOA meetings are held at a time you will be able to attend, if you wish to do so. If the rules are too restrictive, consider buying elsewhere.
2. Make sure the home you want to buy is not already out of compliance with HOA rules
Buying into an existing problem can be a headache.
3. Assess environmental practices
If environmentally-friendly living is important to you, be aware that some HOAs may dictate that you use fertilizers, pesticides, sprinkler systems, and whatever it takes to keep your lawn picture-perfect. They may not allow xeriscaping (an environmentally friendly form of landscaping) and may limit the size of gardens, ban compost piles and prevent you from installing solar panels. If these things are important to you, make sure you check the fine print first.
4. Consider your temperament
Are you the type of person who hates being told what to do? If so, living in a community with an HOA may be a very frustrating experience for you. One of the major benefits of homeownership is the ability to customize and alter the property to suit your needs, but HOA rules can really interfere with this.

5. Find out about fees
Fees will differ for each community. Because of this you should make sure to ask your HOA the following questions: • How are HOA fee increases set? • How often do increases occur, and by how much have they historically been raised? • Can you get a printed history of HOA dues by year for the last 10 years? • How large is the HOA’s reserve fund? • Also, ask for a record of special assessments that have been made in the past and ask if any special assessments are planned for the near future. Note that economies of scale can mean that special assessments are higher in smaller HOAs. • Find out what the monthly dues cover. Will you still have to pay extra for garbage pickup? Is cable included? Compare dues for the complex or neighborhood you are considering to the average dues in the area. Keep in mind that you will have to pay for recreational facilities whether you use them or not. Find out the hours for amenities like pools and tennis courts. Will you be around during those hours, or will you be paying for facilities you’ll never be able to use? Be aware that the HOA may have rules about how many guests can use common facilities. If guest restrictions are severe, forget about that housewarming pool party you envisioned.
6. Try to get a copy of minutes from the last meeting or sit in on an HOA meeting before you buy
The meeting minutes can be very telling to the policies of the HOA. Some questions to ask are: • What are current and past conflicts? • What is the process for resolving any conflicts? • Has the HOA sued anyone? How was that resolved? Be alert for potential drama. Power trips and petty politics can be an issue in some HOAs. Talk to some of the building’s current owners, if possible – preferably ones who are not on the HOA board and who have lived in the building for several years. Talk to the HOA president and get a sense for whether you want this person making decisions about what you can do with your property. If a private company manages the HOA, investigate it before you buy. Some HOAs are professionally managed, but it is common for the association to be managed by building residents who fill the position as volunteers. Even if you like the current HOA board or management company, it can change after you move in and you may end up getting something totally different than what you bargained for.
7. Watch for under-management
Not all HOAs are over-managed. The opposite problem may be an HOA where no one really cares and where no one is interested in maintaining the building, making repairs, hearing resident grievances, or being on the board. Residents may simply take turns serving as HOA president or randomly appoint someone, so be prepared to serve in this role whether you want to or not if that is the case with your community’s HOA.

This would also be a good time to check into any restrictions preventing you from renting out your property or that make it difficult for you to do so. If your property is being under-managed you might not have an issue, but if you’ve got a hyperactive manager it could be a totally different story.
8. Find out what kind of catastrophe insurance the HOA has on the building
This is particularly important if you’re considering a condo or townhouse purchase and you live in an area that is prone to floods, earthquakes, blizzards, fires, tornadoes, hurricanes, or any other type of potential natural disaster – and that is virtually anywhere.
9. Consider the impact of HOA fees on your short- and long-term finances
A condo with high HOA fees might end up costing you as much as the house you don’t think you can afford.
Conclusion
Homeowners’ associations can be your best friend when they prevent your neighbor from painting her house neon pink, but your worst enemy when they expect you to perform expensive maintenance on your home that you don’t think is necessary, or impose rules that you find too restrictive. Before you purchase a property subject to HOA rules and fees, make sure you know exactly what you are getting into.HOS’s