In an economy where many people are scaling back and might even be considering the safety of renting over purchasing their homes across the nation, the Denver housing market is proving an exception to the rule.

According to Forbes magazine (in an article printed January 21, 2010 by Francesca Levy), the premium to buy—the spread between what a homeowner would spend to rent and what they’d pay for a mortgage—is much lower right now than the 15-year average in several cities - and Denver makes the list at number five.  Here in Denver, it makes more sense, dollar for dollar, to own your home, rather than rent. 

In determining what makes a city a smart one in which to buy a home, Forbes magazine computed the premium and also identified locales where economists predict home prices will go up the most over the next five years. The top 10 cities the magazine chose as the best places to buy right now are:

1. Boston-Cambridge-Quincy, Mass.
2. Charlotte-Gastonia-Concord, N.C.-S.C.
3. Chicago-Naperville-Joliet, Ill.-Ind.-Wis.
4. Cincinnati-Middletown, Ohio-Ky.-Ind.
5. Denver-Aurora-Broomfield, Colo
6. Minneapolis-St. Paul-Bloomington, Minn.-Wis.
7. Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md.
8. Portland-Vancouver-Beaverton, Ore.-Wash.
9. San Francisco-Oakland-Fremont, Calif.
10. Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.V.

Making this top ten list is confirmation for what we’ve known all along - Denver is a great place to live, home values are holding relatively strong during this economic downturn, and prices are expected to rise into the future.  If you’ve been on the fence about whether to buy a home or continue renting, it seems the time to buy is now! And it’s not too late to take advantage of the $8000 first time buyer tax credit.

Let the experts at Bandy Homes help you find a great deal on your Denver metro area home!  Whether you’re looking to buy in Denver’s Washington Park area, or would prefer a home in Cherry Creek, we will be there for you every step of the way!

Marianne Bandy
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So, you’ve decided to purchase a home in the Denver metro area, and you might be wondering if it is necessary to hire a buyer’s agent (a real estate agent who will represent you, as the buyer).  Many people argue that buyer’s agents aren’t needed, and technically, a buyer could purchase a home without one.  However, I argue that there is no better value than the services provided by a buyer’s agent.  Here is my list of the top 4 reasons you should hire a buyer’s agent to purchase your home - and keep in mind that these services are provided at no cost to you!

Representation

This is the number one reason to hire a buyer’s agent - you need a professional to represent you and your interests in important negotiations for your home. Real Estate is often complicated, and when you’re making what is likely the largest financial commitment of your life, you want representation by a skilled and experienced real estate agent.  Also, your buyer’s agent will be able to warn you about legal implications of backing out of a contract, situations when you could lose your earnest money deposit, or what you can do when a builder doesn’t deliver a finished home within the stated timeframe on the contract (among other things).  Without a buyer’s agent, you’re on your own with all of those matters. That is the problem with working with a listing agent directly when buying a home. By law the listing agent cannot act as your advisor, they must maintain a neutral position, or what is called a Transaction Broker status.  You want some one in your corner looking out for your interests.

Knowledge

Market knowledge is one of the most difficult things to acquire as an agent, simply because it takes so much time.  A good buyer’s agent will know which neighborhoods appreciate the best, neighborhood issues such as expansive soil, which builders are the highest quality, what parts of town have the lowest crime rates, and which schools are top notch.  They will also know the sales history of any given property, which can benefit you when you’re negotiating a price.

Time

It takes considerable time to search the market, drive through neighborhoods, and to preview homes. Even with technology and the information readily available on the internet, the time required to find that “perfect home” and complete the process smoothly is substantial.  You presumably have another job, so lean on the experience of your buyer’s agent, whose job it is to put in the time for you.

Savings

A buyer’s agent will spend hours behind the scenes doing market research on the value of the homes you’re interested in and will share the documented results with you in order to help you find the best deal.  Because the buyer’s agent does not represent the seller, they can advise you about how close any particular home matches what you are looking for, including the price and value, without bias.  Your buyer agent wants you to be happy, and they want you to get a good deal so you will refer all of your family and friends to them and use them again when you buy or sell in the future. 

This is just a sampling of the top reasons you’ll need a buyer’s agent.  If you have any questions, feel free to contact your local Denver area real estate pros, the Bandy Team!  Let us prove to you the value of hiring a buyer’s agent whether you’re searching for a home in the Lowry area of Denver, a house on the golf course at Castle Pines, or any of the other fine communities surrounding Denver.  We are here to help you find your dream home!

Marianne Bandy
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The Urban Land Institute predicts there will be two major changes beginning in this new decade that will affect the housing market across the nation.  We can be sure that we’ll also see these changes take place in our local Denver housing market. 

• The first change is that home appreciation will slow. The report predicts annual appreciation between 1-2% each year.
• The second change is that by the end of the decade, the now record-high U.S. homeownership rate will decline by 7%, from 69% to 62%.

According to the report, four other demographic trends are also likely to have an impact.

1. Aging baby boomers, those 55 to 64 years old, will keep working, and, some may stay put in their current suburban homes until the values recover.  Those in this group, if they do move, will look for comfortable, easy homes (first-floor master bedroom), but they’re expected to be looking for mixed-age living environments that cater to active lifestyles.
2. Those between the ages of 46 to 54 years old, while in their prime earning years, they lack home equity and may not be able to afford second homes (unlike the older baby boomers).
3. There are approximately 68-million people that make up Generation Y (less than 30 years old), but they are typically less interested in homeownership than other age groups.  Whether it’s by choice or by necessity, this group is more likely to be renters and not homeowners.  Not surprisingly, this tech-savvy group places high value on communities—real and virtual—where information and ideas can be shared.  This group also likes walkable, close-in communities that are typically close to downtown.  Another big draw—“net zero energy” homes—green and powered exclusively by alternative energy.
4. Immigrants are the largest contributing factor to population growth in the US.  This group is often attracted to multi-generational housing in areas that have a strong sense of community. So, larger homes are preferred by them, if they are able to afford them.

All of the report seems to point to the need for suburban development to adapt to these demographic trends, or risk becoming obsolete.  Overall, the lasting stability of the U.S. housing market, seems to depend most on the structure and revitalization of the private home mortgage finance system - which will require re-establishing a strong private mortgage market that avoids past abuses.  Based on this report, it seems clear that the next decade holds plenty of challenges, but if we’re paying attention to them, the housing market will evolve and thrive.

Whether you’re in the market to buy a home or sell a home in the Denver area, you want to be sure you’re getting the best value, so let the Bandy Team guide you through the entire process.  We are equipped to help you find the right home in the Denver metro area at the right price, as well as in many other communities along the Colorado front range.  Give us a call!


Marianne Bandy
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Whenever there is a decrease in any commodity, it is natural to see its value rise.  Homes in the Denver market are no different.  According to MLS data released this week, median home prices in metro Denver soared in January compared with January 2009, a year ago.  This, even as sales during the same period declined. 

Last month, the median price for a single-family home was $210,000, which was up nearly 16% from $181,500 in January 2009. The median price for a condo was $130,500, a 15% increase over last year's January price of $113,000.

Analysts are saying the increase in pricing is a function of the available inventory.  Right now, there are 9.9% less homes on the market (17,785) than there were in January of last year (when there were 19,748).  This is reflecting nearly three years of declining inventory, which is great news for the Denver housing market.  It’s simply supply and demand.  The only downside is the lack of homes that appeal to first-time buyers because of their lower price point.

This January, the number of homes sold dropped 4.7% to 2,353, compared with 2,469 a year  ago. The data also showed that sales were down 20.5% from 2,959 in December 2009.  While this may appear to be discouraging, many experts feel this is simply a reflection of the over-inflated sales numbers in November due to the $8,000 first-time homebuyer tax credit that was originally set to expire then.  This credit was eventually extended until April 30 and expanded to include up to a $6,500 credit for repeat buyers.

The good news for the Denver real estate market, is that showings during the last week in January and the first week of this month were strong.  Many buyers understand that they have a limited time to get a home under contract before the tax credit expires for good.  To qualify, a contract must be signed by the end of April.  As a result, experts are predicting significant activity between now and then, which will set in motion the momentum for the busier spring season.

If you’re considering buying a home in the Denver metro area, don’t wait and risk missing out on the tax incentives!  Call the real estate pros at the Bandy Team to find your dream home in any of the wonderful front range communities, like Aurora’s Saddle Rock, Parker’s Stonegate Village, or Denver’s Stapleton community.  Let us help you reach your goals!

Marianne Bandy
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For information about what’s hot and what’s not, home designers and builders turned to the recent  International Builders Show in Las Vegas (held January 19th through the 22nd).  What can Denver homebuyers expect to see in new homes here?  Builders are responding to consumers’ desires for a return to a more simple way of life.  They are building smaller homes featuring lots of natural light, storage, and energy efficient appliances and fixtures that save money and don’t cost too much. 

The economic downturn has reshaped many buyers’ perspectives on what is important, and they are seeking cost-effective features while rejecting things that don’t have lasting value.  There is more focus on family togetherness and casual living.  Today’s new home buyers are looking for flexible spaces that make entertaining easy.

According to Avid Ratings, which conducts an annual survey of buyer preferences, these must-haves in new homes are on buyers’ and builders’ minds:

1. Large kitchens with islands
2. Energy efficiency (energy-efficient appliances, super insulation, and high-efficiency windows)
3. Home offices
4. Main-floor master suite
5. Outdoor living space
6. Ceiling fans
7. An oversized shower with a seat in the master suite and/or a soaking tub
8. Stone and brick exteriors (rather than stucco or vinyl)
9. Well-planned communities with walking paths and playgrounds
10. Two-car garages (but three-car garages are even more desirable)

Two separate surveys conducted by the National Association of Home Builders and Better Homes and Gardens showed there's less appetite than in recent years for big homes decked out with high-end amenities.  Now, the focus for many homebuyers is a desire to keep costs down.  They want to reduce wasted space like vaulted ceilings that drive up energy bills, and favor features like smart appliances that help cut household energy costs. 

Builders said they're less likely to build homes this year with media rooms and sunrooms. The next generation of homes, according to builders surveyed, are more likely to have a walk-in closet in the master bedroom, a laundry room, energy-saving features, as well as an insulated front door.

Additionally, the average size of an American house shrank about 100 square feet last year to about 2,400 square feet, according to the NAHB survey. The percentage of homes with three or more bathrooms fell for the first time since 1992, while homes with four or more bedrooms declined for the third year in a row.

Are you interested in buying a new home in Denver?  Did you know that the Bandy Team is experienced at helping people buy a new construction home in the Denver area, and even if you’re buying from a home builder, you need a realtor to represent you in negotiations?  Give us a call, and let us help you achieve your dreams!

Marianne Bandy
Canterberry Homes in Parker, CO

According to the latest government data, only 1,072 permanent loan modifications have been made to  homeowners in the Denver area (and throughout Colorado) facing foreclosure.  When you consider that so many more families are struggling in our state, that is barely making any impact at all. 

Put into perspective, the latest report from the federal government shows that as of the end of December, there were 11,170 homeowners in “active trials,”  for loan modifications. These trial modifications are required before the loan can be made permanent.  In the nation, Colorado ranked 19th for the number of active trials and permanent loan modifications, and our 1,072 permanent loan modifications represents 8.8% of the trials.  The goal is to provide 3 to 4 million homeowners across the nation with lower mortgage payments through 2012.  Nationwide, at the end of 2009 there were 787,221 trial modifications and 66,465 permanent modifications.

Unfortunately, banks do not have much incentive to participate in the program.  Consider this example: if a bank writes down a loan so the borrower saves $700 a month for two years, the bank needs to write off $16,800 – 24 times $700.  Arguably, the bank is not taking a loss – but it is making less interest on the loan.  Typically, over the long run, it actually hurts a bank less to let the home go into foreclosure, and become an REO property (Real Estate Owned).  Although foreclosures are expensive, most banks would rather put off the cost to the future, than to take an immediate hit to the bottom line.  And that is just what many are doing.

In addition, those banks that are willing to modify loans permanently have been swamped with a huge volume of requests.  The wave of temporary modifications began last summer, and many of them only became permanent in the past two months.  The good news is that analysts predict a big surge in permanent modifications in the next few months, as banks are streamlining the process and homeowners are taking more initiative to follow all of the bank’s procedures accurately and on time.

If you’re a Denver homeowner facing foreclosure and could benefit from a loan modification, be sure to communicate clearly with your bank and follow all of their guidelines within the prescribed time frames.  Also, contact us at the Bandy Team to find out how we can help.  We are your local real estate experts, and are ready to assist you with all of your Denver area real estate needs.

Marianne Bandy
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A recent Coldwell Banker survey of 1,000 homeowners across the nation shows that savvy consumers are cashing in on the new and improved homebuyer tax credit and helping fuel the economic recovery.  Colorado homeowners and homebuyers are part of this smart group, and, as a result, we will surely see a boost to our local Denver area real estate market!

Among those surveyed, 83% said if they purchased a home and qualified for the tax credit they would engage in "smart spending," and only 6% said they would use the money for luxury items such as a vacation or shopping. 

The survey found that most consumers would spend their tax credit to:

• Pay off debts(34%).
• Make home improvements and potentially increase the value of their home and home equity (29%). 
• Put into savings and investments (28%).

When consumers pay off debt, they afford themselves more spending power.  Investing in home improvements also create more equity in their homes, increasing their ability to spend.  Further, when consumers increase their savings and investments, that generated income brings increased confidence. 

The survey also found that, after learning about the tax credit expansion, 20% of those surveyed said they were more likely to consider purchasing a home than they were six months ago.  Much consumer spending is fueled by the housing market -- provided the housing market is energized, and that was precisely the idea behind the homebuyer tax credit and its recent extension and expansion to include repeat buyers (instead of only first-time buyers). 

In October 2009, before President Obama signed the latest extension and expansion, more than 1.2 million tax returns had claimed about $8.5 billion in the refundable tax credit, for both new and resale homes - according to the Treasury Inspector General for Tax Administration (TIGTA).

The new law extends the $8000 tax credit for first-time homebuyers, as well as creating a $6500 tax credit for existing homeowners who buy a new primary residence through April 30, 2010.  The new rule also raises the qualifying income limits to $125,000 for single taxpayers and $225,000 for joint taxpayers, from the current $75,000 and $150,000.  The maximum allowed home purchase price is $800,000.

For more information, visit the Internal Revenue Service (IRS) website, as well as its question and answer page.

Whether you’re thinking of buying or selling a home in the Denver metro area, contact the Bandy Team for all of your real estate needs.  We are your local Denver real estate experts, and we will guide you every step of the way!

Marianne Bandy
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