Contracts Written vs. Contracts Accepted

We have seen some good buyer activity lately but I’m noticing a trend regarding buyer offers.  In the past the process was:

  1. View a handful of houses
  2. Pick out one you love
  3. Buy it by making a reasonable offer.

Today the process has changed a bit.  Home buying circa 2009 usually goes something like this:

  1. View a bunch of homes
  2. Pick out one you love (and a backup or two just in case the sellers are looking to get market value)
  3. Insult the sellers by making a low-ball offer.
  4. Negotiate until the seller is hobbled or if seller won’t succumb to the pressure move on to house number two and go back to step 3.

What is getting lost in the mix is that the goal is to find a place to live.  A place to connect to.  A place to make memories with family and friends.  The home buying experience is so much richer when you end up with the house you want.  Not just the house where you felt like you got a “below market” price.

I wonder about our number of offers written compared to the number of offers accepted.  I bet it is at an all-time low.  Enjoy the pretty picture below and take a deep breath…

The Trouble With Loans

The tight credit market has been well documented.  Commercial deals are falling apart, large companies are not buying smaller companies and fewer real estate transactions are taking place. 

The first step in the home purchase process is to consult a lender to see how much you can afford.  This friendly conversation consists of a one-sided interrogation about your work history, financial history, bank balances, familial relations and taxes.  At the end of the conversation you will get an indication from the lender about your chances to qualify for a loan.  It is a tough environment right now and lenders are understandably cautious.

So let’s assume that this first conversation (pre-qualification) went well.  You would then get busy with your Realtor (me!) in finding a new, great place to live.  Once this happens (sometimes this takes awhile), a whole new set of deadlines and documents comes into your life.  There are application deadlines, appraisal deadlines, loan condition deadlines, inspection deadlines etc.  No problem right?  As long as the dates are reasonable you are protected (this is where a good agent comes in).

But here is the rub.  The dates as we have known them for the last half decade or so are out the window.   It takes longer to do everything right now.  Last summer the mortgage companies trimmed their staff, lean and mean awaiting the real estate trough.  Their prediction was pretty good one over the winter but come spring the interest rates plummeted and a refinancing boom …well boomed.  And when it boomed it didn’t take much to clog up the arteries.  Then came some real estate transactions.  What used to happen in 10 days is now 15 days.  Appraisals now have to not only come in but need to be reviewed.  A file goes through underwriting not once but up to seven times.  Lenders are being careful, very careful and their caution is leading to much angst in making a deal happen on time.

The problem right now is that lenders are making their money right now on refi’s with no specific deadlines and no angry and impatient realtors calling asking about the status of a loan which was sent to underwriting last week.  They would rather us go away for a little while, but that would be short sighted now wouldn’t it?

FHFA Appreciation – Boulder Ranks 23rd in Nation

According the the Federal Housing Finance Agency (FHFA), Boulder County ranked 23rd out of 294 metropolitan statistical areas in 1 year appreciation for the time period ending March 31, 2009.  The yearly appreciation for our area was reported as 1.99%.  As a nation the appreciation was -7.14%.  As a state, Colorado ranked 13th with -1.7%.

The top states in the rankings were Alaska (4.79%), Oklahoma (.3%), North Dakota (.3%) and South Dakota (.29%).  In fact these four were the only states to record a positive return for the year.  The hardest hit states during the past year were; Nevada (-31%), Florida (-22.46%), California (-22.12%) and Arizona (-19.51%).

 

 

The first chart above shows how Boulder has compared to the nation in yearly appreciation each quarter since june of 2006.  This shows how steady our market has been compared to the rest of the country.  The second graph shows show we compare to the rest of the metropolitan areas.  Even though our appreciation has been steady our ranking has jumped because of the declines seen across a majority of the country.

1580 Kalmia Avenue Boulder, CO 80304 $714,000

Smart, Unique, Serene, Contemporary,and Efficientare just a few of the words that describe 1580 Kalmia Avenue. The house isunlike any other in the neighborhood and its design is not only beautiful it is totally useful. The house is designed for those who want to live well and do their part in the greening of the planet.

The sun shines brightly over Boulder for more than 300 days a year. It’s a wonderful place to use solar energy as an alternative to traditional coal powered electricity or natural gas.1580 Kalmiais designedwith both active and passive solar systems which not only harness the power of the sun, theyadd to the design andoverall characterof the home. But alas, one cannot live on efficiencyalone! The house is filled with upgrades, great living spaces, good design and a fantastic North Boulder location.

The centerpiece of the home is its great room which includes; an amazing kitchen, workspace, dining area and living room. The large room has vaulted ceilings, great light and many interesting and beautiful textures.

The gourmet kitchen is great for entertaining and features great workspace,a sub-zero fridge, granite counter tops, stainless steel detailing, two sinks, etc.

The main floor master bedroom boasts natural light andvaulted ceilings.Each of the three bathroomsisrecently finishedwith high grade materials. The master bath includes a smooth river rock floor.

The house is well located in a quiet North Boulder neighborhood with easy access to downtown and the Pearl Street Mall. The lot is well landscaped and features a south facing deck, and a great organic garden where you can grow vegetables or flowers.

This isdefinitely not another cookie cutter house. If you are looking for somethingunique, beautiful, and efficient, this is your house. If you would like to set a private showing or would like more information please contact me or give me a call at 303-818-4055.

For more details go to http://www.1580Kalmia.com

MLS# 601030

 

Boulder County Market Update – What’s Selling

Spring is here and summer is just around the corner. Activity has definitely picked up but to me the market still rings a little hollow. There are some great listings out there that have yet to find a buyer. Some real head scratchers. The news lately has been hinting about an economic recovery in late 2009, the earlier the better as far as we are concerned. I think we are well positioned for recovery of our own but the national economic engine has to warm up before we will see it locally.

 

Combined sales during April were up 3.5% from March, but were down roughly 38% from April 2008. Much of the activity is in the lower ranges of each area but median prices are still resisting large statistical loses. There are specific homes which are selling for less than they did a year or two before so it will be interesting what the future holds. Will prices slide before the economic recovery takes hold? I think there is some risk of that in the higher price ranges. We’ll see, prediction is an activity rife with failure. Remember Y2k?

 

Here is what is happening right now.

I have included some under contract percentage statistics that compare May mid month data from 2007 and 2009. For single family homes, there is a smaller percentage of homes under contract in all areas but Longmont, Erie and Weld County. I don’t think that there is any coincidence that these are areas where good low priced deals can be found.

 

In general, condos and townhomes are faring much better than single family homes. Under contract percentage is up or equal in 7 of the 9 areas. Superior should the best improvement with an increase of 13%.

 

 

Single Family 2009 (2007)

· Louisville 29.5% (36.5%) of active homes are under contract

· Boulder 13.7% (29.6%)

· Superior 26.3% (28.4%)

· Lafayette 17.1% (23%)

· Boulder County 16.6% (19.6%)

· Longmont 23% (14.7%)

· Suburban Plains 12.3% (14.7%)

· Suburban Mountains 9.7% (11.2%)

· Erie 13.7% (10.9%)

· Weld County 18.1% (9.46%)

 

Condos 2009 (2007)

· Louisville 20% (30.6%)

· Boulder 21.7% (26.4%)

· Boulder County 20% (20.4%)

· Lafayette 28.9% (18.1%)

· Suburban Plains 18.6% (17.3%)

· Longmont 14.4% (10.3%)

· Weld County 9.4% (9.8%)

· Superior 16.6% (3%)

· Erie 7.6% (2.6%)