There have been some bright spots in the residential real estate market over the last couple of months. Several price indices have reported a stabilization of prices and some regions have even shown small levels of appreciation. This has led some to believe that we may have reached a bottom for home values. We must realize that what we are actually experiencing is a ‘window of opportunity’ as the banks are delayed in bringing certain inventories of distressed properties to the market. Let’s look at what others are reporting:

Bloomberg Businessweek

“The crux of Simon’s analysis is that the loose lending practices seen during the housing bubble allowed 5 million renters to become homeowners, and that the market is in the protracted process of evicting this group. He believes housing prices will decline 6 percent to 8 percent nationally, with 6 million to 7 million more foreclosures yet to come.”

Yahoo Finance

“The problem with the real estate market remains excess inventory. Based on Shilling’s research, there are 2 million to 2.5 million excess homes in the country — a supply that will take 4-5 years to work-off. The result: Housing prices will fall another 20% and underwater mortgages will balloon from 23% to 40%, he says.”

Housing Wire

“Both warmer weather and the drop in distressed sales percentage have contributed to recent home price improvements. However, given the disappointing pace in housing demand recovery, both factors may turn against us in the coming winter and push home prices lower again…

This supply-demand imbalance affirmed JPMorgan analysts’ estimate of a further 4% drop in home prices from the first quarter of 2011 to a new bottom next year.”

DS News

“Home prices have gotten a little bit of a boost in recent months thanks to a seasonal uptick in market activity. Most analysts, however, expect further declines to characterize the later part of the year and possibly extend into next year, largely because of the huge supply of foreclosures on the market.”

Bottom Line

If you are thinking of selling in the next twelve months, you would probably do much better if you sold your house sooner rather than later.

Adjustments to FHA and MHA requirements to allow 12-month Forbearances

(Washington, DC)-Today, the Obama Administration announced adjustments to Federal Housing Administration (FHA) requirements that will require servicers to extend the forbearance period for unemployed homeowners to 12 months. The Administration also intends to require servicers participating in the Making Home Affordable Program (MHA) to extend the minimum forbearance period to 12 months wherever possible under regulator and investor guidelines. These adjustments will provide much needed assistance for unemployed homeowners trying to stay in their homes while seeking re-employment. These changes are intended to set a standard for the mortgage industry to provide more robust assistance to unemployed homeowners in the economic downturn.

The changes to FHA’s Special Forbearance Program announced today will require servicers to extend the forbearance period for FHA borrowers who qualify for the program from four months to 12 months and remove upfront hurdles to make it easier for unemployed borrowers to qualify.

“The current unemployment forbearance programs have mandatory periods that are inadequate for the majority of unemployed borrowers,” U.S. Housing and Urban Development Secretary Shaun Donovan said. “Today, 60 percent of the unemployed have been out of work for more than three months and 45 percent have been out of work for more than six. Providing the option for a year of forbearance will give struggling homeowners a substantially greater chance of finding employment before they lose their home.”

Changes to MHA’s Home Affordable Unemployment Program (UP) will require participating servicers to extend the minimum forbearance period from 3 months to 12 months for eligible unemployed homeowners, whenever possible subject to investor and regulator guidance for each mortgage loan. Additionally, forbearance under UP will become available to borrowers who are seriously delinquent.

All FHA-approved servicers must participate in FHA’s Loss Mitigation Program, which includes the Special Forbearance program. In addition to extending the forbearance period and removing the up-front hurdles for borrowers, the FHA also reemphasized its requirement that servicers conduct a review at the end of the forbearance period to evaluate the borrower for all additional, applicable foreclosure assistance programs and notify the borrower in writing whether or not he/she qualifies for any other available option. If the borrower does not qualify for any foreclosure assistance option, the servicer must provide the borrower with the reason for denial and allow the borrower at least seven calendar days to submit additional information that may impact the servicer’s evaluation.

These reforms build on successful Administration initiatives to support unemployed borrowers through the $7.6 billion Hardest Hit Fund and the $1 billion Emergency Homeowner Loan Program (EHLP). The Hardest Hit Fund, first announced in February 2010, provides support to 18 states and the District of Columbia, which represent the areas hardest hit by steep home price declines and unemployment, to design and implement programs to help struggling homeowners avoid foreclosure. Participating states have dedicated approximately seventy percent of program funds toward programs to help homeowners struggling with unemployment or underemployment. As of this month, each participating state is accepting applications from borrowers and providing direct mortgage assistance to those that qualify.

The EHLP program complements the Hardest Hit Fund, by serving the remaining 32 states and Puerto Rico. Congress provided $1 billion dollars to HUD, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, to implement the recently launched program. EHLP assists homeowners who have experienced a reduction in income and are at risk of foreclosure due to involuntary unemployment, underemployment due to economic conditions or a medical condition. EHLP is expected to aid up to 30,000 distressed borrowers, with an average loan of approximately $35,000.

Read a fact sheet about today’s announcement.

Business School professors Eli Beracha of East Carolina University and Ken H. Johnson of Florida International University have done extensive research on which makes more sense financially: to rent or own a home. They published, Lessons from Over 30 Years of Buy versus Rent Decisions: Is the American Dream Always Wise? In their paper, the professors do not dispute the social benefits of homeownership:

“Home ownership is touted as the “American Dream”. It is credited with enhancing wealth, increasing civic pride, improving self-esteem, crime prevention, child development, and better educational outcomes, among other benefits. This paper does not dispute any of these claims.”

What the professors were proposing is that homeownership is not a better investment strategy than renting. The first of the two major findings was:

“After setting the holding period to the average American’s tenure in a residence, renting (not buying) proves to be the superior investment strategy over most of the study period… Individuals, on average, were better off in economic terms to have rented for most of the years in the study period. This first result is strongly dependent upon fiscally disciplined individuals that, without fail, reinvest any residual savings from renting.”

Historically, people do not actually reinvest savings “without fail”.  Check here for the findings of a recent study from The Joint Center for Housing Studies at Harvard.

The second major finding says it all. According to both professors Beracha and Johnson, NOW IS THE TIME TO BUY!

“(F)undamental drivers now appear to be in place that favor homeownership over renting in the near term future…

The second finding might seem unwise to many given the recent crash in the real estate markets around the country. However, rent-to-price ratios now seem to be in place along with other fundamental drivers that favor ownership over renting.”

They conclude their research paper with this sentence:

“Conditions (historically low mortgage rates and relatively low rent-to-price ratios) now seem in place to favor future purchases.”

Bottom Line

Two researchers set out to prove that homeownership is not a good financial decision. After completing that research, they have determined that now is the time to buy. What more needs to be said?

Best Piece of SoHo in Denver, In The Heart of Downtown.

The Baldwin Lofts 1617 California Street, 22 Lofts Located adjacent to the 16th Street Mall

History: The Baldwin Building started as a two story building Constructed in 1896 by Phillip Feldhauser who built the Colorado Building and the Oxford Hotel. It grew to five stories over the years as home to the Baldwin Piano Company. This Historic Building is Significant because it May be the Only Surviving, Fully Cast Iron Facade in Downtown Denver. Unlike Many Historic Buildings of this Period, The Baldwin Has Huge Floor-To-Ceiling Windows, Due to the cast Iron Façade that was the First Type of “Curtain Wall” Construction. I was the Original Listing Broker for St. Charles Town Company and on Site Sales for The Baldwin Lofts. If you have any questions about The Baldwin Lofts please Call me.

What is the most important thing a seller in Denver should look for when hiring a real estate agent to sell their house? We are often asked this question. Is it the size of the company they are licensed with? Is it their marketing program? Their years experience in the business? Should you choose the agent who suggests the highest listing price?

There are many things that should be taken into consideration when hiring someone and giving them the responsibility for selling your home. In our opinion, the most important question you can ask a potential listing agent is a simple one:

Do you truly believe that now is a good time to buy a home?

Why should this matter when hiring someone to SELL your home? Buyers are nervous about purchasing right now. They want to know they are making an intelligent choice. We believe, especially in today’s market, you need to hire someone who realizes that this is one of the best times in American real estate history to buy. If an agent doesn’t believe that, how will they be able to convince a potential buyer to buy your home?

When interviewing a real estate professional, ask them to explain why purchasing a home makes sense today. They should be able to explain it simply and effectively. See how many of the following facts (which should be shared with every potential purchaser) the agent knows:

The Wall Street Journal last week stated:

“With home sales starting to improve, and with prices now possibly forming a bottom, real estate could well be the asset class that represents the best low-risk buying opportunity out there today.”

Donald Trump was just quoted saying:

“I’m pretty sure this is a great time to go out and buy a house. And if you do, in 10 years you’re going to look back and say, ‘You know, I‘m glad I listened to Donald Trump’.”

John Paulson, a multibillionaire hedge fund operator and the investment genius who made a killing betting against housing a few years ago, is now bullish on residential real estate market. He recently said:

“If you don’t own a home, buy one. If you own one home, buy another one. If you own two homes, buy a third. And, lend your relatives the money to buy a home.”

A recent Gallup Poll showed that 67% of American’s think that now is a ‘good time’ to buy a home. The Gallup Organization went on to say:

“Overall, there is good reason for most Americans to think now is a good time to buy a house. Interest rates remain near historic lows. Home prices are down sharply, providing many incredible buys.”

The iconic financial paper in this country, the country’s most famous real estate investor, the most successful prognosticator of the housing market and 2/3 of all Americans say now is the time to buy a home. Shouldn’t your agent agree?

Bottom Line

Selling is nothing more than the transference of conviction. How can agents transfer that conviction if they themselves are not convinced? Find a listing agent who truly believes that someone should buy your home – TODAY! This is the single most important thing you should look for in a potential listing agent.

Golden Triangle, Denver’s Art & Museum District

$300,000 – $1,000,000 price range

1,400 to 2,500 square feet

12 Month Evaluation – 6 sold properties in last 12 months. 6 divided by 12 months equals 1 property sold per month. There are currently 11 active comparable properties on the market. 11 divided by 1 equals 11 months of worth of inventory. This means a strong buyers market.

Average Price per Square Foot | $244 | Sold Properties, Last year it was $320 per square foot

An absorption Rate of 5-7 is considered a normal market. Less than 5 is a sellers market and more than 7 is a buyers market.

Normal Market – In a normal market there is a 5-7 month supply of homes. A normal market has a balanced level of inventory where the market is not leaning in either the seller’s or buyer’s favor.

Seller’s Market – In a seller’s market there is less than 5 months supply of homes. Since there are fewer homes to choose from, sellers are in control and buyers have to be willing to pay top dollar to get the home that they want. Multiple offers are often the norm in a seller’s market.

Buyer’s Market – In a buyer’s market there is more than 6 months supply of homes. Buyers are in control since there are so many homes from which to choose from. Sellers often have to give an incentive (pay for closing costs or pay for repairs) to buyer’s to buy their home.

Capitol Hill’s borders are Colfax to Seventh and Broadway to Downing.

It was Henry C. Brown who donated land to Colorado for a State Capitol. Henry ownded substantial adjacent land and wanted to develop it. Brown built the Brown Palace Hotel. He had no relation to Margaret Tobin Brown (Molly, the unsinkable). 

It was Brown who named Broadway, referencing the Broadway of New York City. Broadway Street was the original eastern border of Denver where the diagonal streets of Downtown Denver ended.

Pre-eminent among Capitol Hill’s numerous historical residences are the 1899 William Lang designed Molly Brown House and the 1906 Crawford hill mansion at Sherman and 10th. This French Renaissance Revival extravaganza became home to the “Sacred 36″ an elite group of Denver Socialites. Today it’s executive offices.

Among Capitol Hill’s numerous Historical Multi-Unit Residences are the 1896 Spanish Colonial Revival Style Sterns Mansion at 1030 Logan, the 1891 Queen Ann Style Pennborough at 1265 Pennsylvania and the 1890 Richardson Romanesque Style Charline Place at 1419 – 1441 Pennsylvania.

Noted for it’s density and diversity, it’s bohemians, gays, punks, politicos, artists, urban homesteaders and professionals, Capitol Hill has a total current population of 15,000 with 11,700 housing units. Home ownership on the Hill is at 18%, while in Denver it’s over 52%. More than 50% of 25 and Over Hill Residents have College Degrees, compared to less than 40% for Denver.

Lower Highlands, also called LoHi is located adjacent to Riverfront Park on the West side of I-25. It is close enough to Downtown and Lodo with only a short jaunt across the walking bridge on 16th street and Commons Park. LoHi is full of life, you can lose a Sunday afternoon at LoLa’s sipping Cocktails listening to Jazz and eating Tacos overlooking the skyline.

The Neighborhood overlooks the new Commons Park, the Central Platte Valley and the Downtown Denver Skyline. The street have some of the oldest real estate in the city going back to the mid-1800′s along with modern infill townhomes w/rooftop patios that overlook the skyline

• Commons Park is a 30-acre park with wetlands and trails along the South Platte River.
• The 16th Street Mall Shuttle will connect the 16th Street Mall to the Central Platte Valley and the Highlands.
• The Light Rail Spur connects riders between Central and Southwest Light Rail Lines to Denver Union Terminal and 16th Street Mall and many of the Central Platte Valley’s attractions including Coors Field, Invesco Field, Auraria Campus, and The Pepsi Center.

Attractions you love are so close.  Many restaurants, brew pubs, espresso bars and night spots are all nearby. The Denver Center for the Performing Arts brings Broadway to your doorstep and four major league sports teams are in the downtown area. LoHi is definitely on the rise, buy now because LoHi is Denver’s most happening Neighborhood

Boundaries:  Larimer Street, Speer Boulevard, Wynkoop Street and 20th Street

Population:  2,180

Overview: Lower Downtown–or LoDo, as it is commonly referred to–is located in the area where Denver was founded in 1858 by General William Larimer. Redolent with history, this neighborhood of three and four story red brick buildings was built on the site of Denver’s first Gold Rush settlement. I have been working and playing in LoDo since 1992 when the only bars were The Cruise Room, The Wazee Supper Club and Billabongs. Coors Field was just a Field of Dreams, Now the Colorado Rockies are the 2007 National League Champions. What a transformation and what a Rocktober in Denver. Today, LoDo is a vibrant 25-block urban neighborhood and tourist destination.

Lower Downtown was a bustling commercial area during Denver’s early years. However, much of Denver’s industrial economy shifted away from Lower Downtown after World War II, and almost one-fifth of the buildings in the area were demolished in the 1960s and 1970s. In order to preserve Denver’s historic legacy, Denver City Council created the Lower Downtown Historic District in 1988. The historic district designation introduced zoning ordinances that limited building heights, preserved dozens of buildings from the wrecking ball, and instituted strict guidelines for building rehabilitation and new construction.

Today, LoDo is a  neighborhood with lots of entertainment options. Art galleries, dozens of restaurants, brewpubs, jazz clubs, and specialty retail stores line the ground floors of historic buildings. LoDo Loft residents enjoy proximity to outdoor parks, including the Cherry Creek bike path, the 16th Street Mall, The Pepsi Center, and the recently completed 30-acre Commons Park in the Central Platte Valley. Coors Field, home of the Colorado Rockies, anchors the neighborhood at 20th and Blake Street. Wynkoop Street is home to historic Denver Union Station, the Tattered Cover bookstore, and the Wynkoop Brewing Co., Denver’s first brewpub (and the country’s largest) that opened in 1988.

Most recently I lived in West End Lofts (In the Bridge Loft over the Alley) and walked my Labradoodle around the street’s of LoDo 4 times a day. So you could say that I do Know this Neighborhood every street and every alley.

The Golden Triangle – Home is Where The Art Is
This is My Neighborhood, I Live Here, Work Here and I Love It!!

An evolving Arts and Residential district adjacent to Denver’s Civic Center Located on the east end of Downtown Bordered by Colfax, Speer and Lincoln, The Golden Triangle is becoming the city’s architectural core it is home to The Gio Ponti Designed Art Museum, The Hamilton Wing Expansion designed by Daniel Liebskind, The Acoma Plaza of the Arts, The Colorado History Museum, the Public Library designed by Michael Graves, and the soon to be built Clyfford Still Museum.

The Golden Triangle has a Walk Score of 97, Located in Downtown Denver only 4 Blocks to the Central Business District also Walk to Art Museum, The State Capital & City & County Building. An 8 Minute Bus Ride to Cherry Creek, Leave Your Car at Home and Reduce your Carbon Footprint. Tony’s Market is in the Golden Triangle along with the Updated King Soopers