Denver Chamber 2010 Economic Forecast

Denver Metro Chamber of Commerce hired the Metro Denver Economic Development Corporation to report on our local, state and national economy. In a report on Jan 13, 2010, they presented their findings. For the whole report and the details, just ask me (303-962-4272 626#).

Highlights for Metro Denver in 2010
• Job Losses Beginning 4th quarter of 2008, the US recession hit Colorado and the Metro Denver area. In 2009 the rate of job losses in Metro Denver exceeded the national rate after resisting change in 2008.
• New Jobs Several companies relocated new headquarters operations here. Sectors include
renewable energy and healthcare. Neither large construction projects nor large increases in jobs can be expected in 2010 from these relocations. They set the stage for stabalizing the economy.
• Unemployment Unemployment rates about 8.2%, like in the 1980s, are expected for 2010.
• Housing Market Metro Denver is healthier than most of the US due to a decrease in unsold inventory and stabalizing home prices in many neighborhoods. Home sales should rise in 2010.
• Foreclosures Depending on job stability and the effectiveness of foreclosure avoidance probrams, there should be fewer foreclosures in 2010 than in recent years.
• Commercial Real Estate Due to tighter credit and decreased demand, the commercial real estate market is weak, yet it is still healthier than in other metropolitan areas nationwide.
• OVERALL "Metro Denver continues to attract businesses with the potential to support growth in the long term. The fact that businesses have moved to the region even during recession itself speaks to the region’s competitive advantages. While the recovery may prove underwhelming in 2010, the rebuilding, restructuring, and repair that will happen throughout the year will set the stage for more stable growth in the long term."

These findings fit what we're tracking at Your Castle Real Estate. There is much opportunity in this time period as the economy shifts.

Forbes Ranks Denver Metro 5th For Smart Home Buying

10 Cities Where It's Smarter to Buy

For people who want to own a home, the premium to buy—the spread between what they’d spend to rent and what they’d pay for a mortgage—is much lower than the 15-year average in many cities.To determine what cities are smart buys, Forbes magazine computed the premium and also identified locales where economists predict home prices will go up the most over the next five years. Here are the top 10 cities the magazine chose as the best places to buy right now.
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.

Source: Forbes, Francesca Levy (01/21/2010)

More Details on Home Buyer Tax Credit

As you may have heard, Congress did extend the $8000 first-time home buyer tax credit. They also allow the tax credit to be used at closing with an FHA loan! There are some income limits to qualify for the full tax credit.

Congress also opened the tax credit to repeat home buyers who've lived in their homes for 5 consecutive years of the 8 years prior to this purchase--up to $6500 for a primary residential purchase! And no, the old home doesn't have to be sold first. This among other quirks gives all home buyers a great potential bonus.

The deadline is purchasing a home between 6 November 2009 and 30 April 2010.

Get the full scoop here: http://www.federalhousingtaxcredit.com/faq2.php#

Consider how you or someone you know might you benefit. Feel free and email me with your questions at BethBakerOwens@comcast.net

Gardening for Colorado

Before the snows flew last week, I realized some of my plant choices have fared better than others this year. Do you notice the same thing? The dry extremes in temperatures make this a challenging climate for gardeners. Some gardners, like my friend Pete, are able to develop microclimates around his yard. His results are amazing. Mine are not so great. I'm forever looking for hardy plants that have year round appeal, low water needs, noninvasiveness, and insect resistance. Now, here is a resource for Colorado and other mountain and high plains gardeners. In a joint effort by the Denver Botanic Gardens, Colorado State University, and area horticulturists and nurseries, we have Plant Select. Check out the web site for durable and lovely plant suggestions, nurseries, and more. Or, if you like books with beautiful plants, especially for winter garden planning, consider their colorful volume with suggestions. You can order the book at the web site. This coming spring, ask your nursery if they have Plant Select varieties for you to consider adding to your garden.

http://www.plantselect.org/index.php

$8000 Tax Credit Extended?--It's TBD

Many people have asked me if news reports about the US Congress extending the $8000 tax credit for first time home buyers are true or not. The bill containing language to extend the $8000 first time home buyer tax credit is in the middle of the legislative process. Last Friday I received a request from NAR to send letters to my 2 Senators and US representative. That request was the clear sign that the final votes had not yet been taken.

Here's an excerpt from an email with a colleague who called Linda Goold at NAR, the National Asso of Realtors, for clarification.

"Linda Goold serves as the Director of Federal Tax Programs for the National Association of REALTORS® and works for the NAR in Washington, DC. She is an advocate for NAR tax policies that protect and enhance ownership and investment in both residential and commercial real estate.

The current news reports are misleading. Senate has agreed to the content of the home buyer tax credit extension with some modifications, BUT senate not taken vote on final passage. It will be GOING UP FOR VOTE MONDAY EVENING at 5:30pm. Then it would have to go back to the house, but expectation is that the House will take it up the next day and approve it without amendment, and then it will go to President.

When I asked how long it might take to go before the President, Linda said that sometimes it takes a while, and sometimes it will occur the next day – it has to be printed on parchment and go through an administrative process. This bill extension of home buyer tax credit is included in an extension of unemployment insurance benefits, which Linda says she has "to think the president will want to sign it as soon as possible. Hopefully it’ll be accomplished a week from now, but no guarantees.""

So, the extension is to be determined (TBD).

I'll let you know what the results are after the bill is signed and the dust settles.

Know How Real Estate in Your Neighborhood is Selling

Indeed the real estate market is changing again. The Denver and suburban neighborhood matters. So does the price range. Remember absorption rate? If there are <6>6 months supply, then we call is a buyer's market. In general, homes less than $210,000 with a absorption rate less than 3 months. These affordable homes have a strong seller's market due to decreased inventory and constant demand. Homes from $210,000-$315,000 have a fairly balanced inventory with the most volume and much pent up demand (an absorption rate of 5 months). Homes from $315,000-$460,000 have a slight buyer's market (an absorption rate of 8 months). Homes priced above $460,000 have a very strong buyer's market (an absorption rate of 20 months).
For the details of your specific neighborhood, just ask me for a quarter 3 2009 heat map. I'll email it to you free of charge.

Market Update for September

The entire MLS had a 5 month supply of homes on the market in September 2009, making it slightly a seller's market. 3,846 homes and condos sold in September out of 19,834 listings. An overall decrease in sales volume reflects the slow down in processing pending foreclosures by banks unwilling to flood the market and fewer homeowners choosing to sell in the depressed market. The 4.9% increase in average home sales price reflects the bidding wars in the least expensive neighborhoods, as prices begin to bounce up a bit in the SW and NE parts of the city. There is a strong sellers market in the lower end of the market that is pitting eager investors with first time home buyers trying to close before the Nov 30th deadline for the $8000 tax credit. Even where prices are slighty up, there is much ground to regain after the losses from recent years. Parts of the market that previously were resisting downward market forces (the upper end and certain neighborhoods) are now feeling the effect of distressed home sales (foreclosures and short sales). The upper end of the market is still depressed and has a strong buyers market. So, ask the most important question, "What is the market in my neighborhood?"