Real Estate Information Archive

A lot of people selling homes today are asking what they need to do to get their house sold.  Immediately following the question comes the conversation of price.

Although I'm an advocate of effectively pricing your property as the initial important element to attract the eye of buyers, I argue that it's not the only thing to consider.  In a buyer's market, getting creative with offers is a secondary step often overlooked by agents and sellers alike.

For instance, instead of simply dropping the price of your property to compete for prospective buyers, why not offer to contribute money towards closing costs?  This money can be used to cover any interest rate buy-down points a lender might charge and holds a lot of buyer appeal when it comes to positively impacting their monthly mortgage payment.  Overall, as a seller it will cost you less in the long run (than simply dropping the price by an arbitrary number) and the perceived value to buyers remains high.

A great example of this is illustrated with a property with a $300,000 sales price.  A $10,000 price reduction has the same qualifying effect as buying the interest rate down ½ percent which will cost the seller $2,400 in discount points. This saves the seller $7,600! Win/ Win!

The annual Rubber Ducky Race hits the Yampa River once again tomorrow.  This annual event benefits the Yampa Valley Medical Center Auxiliary and has been in existence since 1988.

Just one man's opinion, but you've never seen anything until you've seen roughly 2,000 yellow duckies riding the rapids of the Yampa.  For just $10 per duck, you too could have a chance at some amazing prizes.

First place would snag you a 2009/10 season ski pass from the Steamboat Ski Resort which has a value of about $1,000.  Not too shabby if you happen to choose a fast swimming duck.  

The race will take place from the 5^th Street Bridge (where the duckies get dumped) to the finish line at 13^th street.  This year's funds will benefit the hospitals new Cardiac Care Services, which includes new diagnostic equipment.  If you're a current Steamboat local or just have Steamboat in your heart, you should swing by and check it out.  If you're in town tomorrow, it's a spectacle not to miss.

City Council will hear even more community opinion as well as revised plans for the Steamboat 700 proposed development tomorrow night.

The Steamboat 700 annexation agreement is nearing a final vote by City Council, coming up on October 13^th.  The proposed master plan of the community would include roughly 2,000 new homes amongst the 500 acres west of Steamboat Springs.  The annexation agreement calls for new capital facilities like a fire station, community center, community trails and parks.  Other highlights of the proposal include:

• Metro districts that will tax the development to help finance the responsibility of public improvements
• An option for Steamboat 700 to sell off large "super lots" that can be developed by other entities
• 12.5 acres deeded to the city and 0.5% real estate transfer tax to provide land and money to affordable housing projects

The biggest issue that's still under negotiation is the capital facilities phasing plan.  This basically outlines the target dates for when certain things need to have building completed.

Another piece of the project to be defined is the layout of the community as a whole.  Using a new designation known as "new urbanism" as the overall model, Steamboat 700 is still hashing out the design details.  Communities laid out under this type of designation typically include dense, pedestrian-friendly neighborhoods that incorporate commercial districts, parks and other recreation.

View the Prudential Connection Newsletter!

In the latest Prudential Connection newsletter we discuss the current real estate trends in Steamboat Springs.  Understanding the trends and trying to predict them seems to be a national pastime right now.  Of course we're all looking for the crystal ball that will help us make good decisions when investing in real estate.  (if you find it, let us know!)

At Prudential Steamboat Realty, we've seen a large increase lately in the amount of scheduled showings.  This shows us that buyers are getting excited to once again enter the market by making a purchase.  For sellers, this means that more than ever it's imperative to have the most attractive asking price for the property you have for sale.  Working with sellers on price has been a major focus for the Boyd Team as of late.

"New Trends in Lending" are also highlighted in the newsletter.  Give it a read to better understand how the current lending atmosphere is making it difficult, but not impossible, to get a deal done.  An influx of government loans like FHA, VA and USDA programs are helping to ease the pain of borrowers looking for cash. 

And please take a look at the "Steamboat Market at a Glance" section.  This will give you a great snapshot of where we are as compared to previous years.  We'd love to go more in depth with you on the current market conditions if you'd ever like to talk.  Shoot us a call or email and as always... happy hunting!

For the first time in five years, existing-home sales have increased for four months in a row, according to the National Association of REALTORS®.

Existing-home sales - including single-family, townhomes, condominiums and co-ops - rose 7.2 percent to a seasonally adjusted annual rate of 5.24 million units in July from a level of 4.89 million in June. Sales are 5.0 percent above the 4.99 million-unit pace in July 2008. The last time sales rose for four consecutive months was in June 2004, and the last time sales were higher than a year earlier was November 2005.

Largest Gain in a Decade

Lawrence Yun, NAR chief economist, said he is encouraged. "The housing market has decisively turned for the better. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales," he said.

The monthly sales gain was the largest on record for the total existing-home sales series dating back to 1999.

"Because price-to-income ratios have fallen below historical trends, there are more all-cash offers. In some recovering markets like San Diego, Las Vegas, Phoenix, and Orlando, the demand for foreclosed and lower-priced homes has spiked, and a lack of inventory is becoming a common complaint," Yun said.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.22 percent in July from 5.42 percent in June. The rate was 6.43 percent in July 2008.

"First-Time Buyer Tax Credit is Working"

An NAR practitioner survey showed first-time buyers purchased 30 percent of homes in July, and that distressed homes accounted for 31 percent of transactions. NAR President Charles McMillan said the first-time buyer tax credit is working. "In addition to first-time buyers, we're also seeing increased activity by repeat buyers. While many entry-level buyers are focused on the discounted prices of distressed homes, they're also freeing some existing owners to sell and make a move," he said.

"Realtors are the best resource for consumers in these changing market conditions because the transaction process has become more complex. Since it's now taking longer to complete a home sale, first-time buyers who want to take advantage of the $8,000 tax credit should try to make contract offers by the end of September," McMillan said. "Otherwise, they may miss the November 30 closing deadline."

Inventory Up, Prices Down

Total housing inventory at the end of July rose 7.3 percent to 4.09 million existing homes available for sale, which represents a 9.4-month supply at the current sales pace, which was unchanged from June because of the strong sales gain. Raw inventory totals are 10.6 percent lower than a year ago when the number of unsold homes was at a record.

The national median existing-home price for all housing types was $178,400 in July, which is 15.1 percent lower than July 2008. Distressed properties continue to weigh down the median price because they typically sell for 15 to 20 percent less than traditional homes.

Single-Family Homes and Condos

Single-family home sales increased 6.5 percent to a seasonally adjusted annual rate of 4.61 million in July from a pace of 4.33 million in June, and are 5.0 percent higher than the 4.39 million-unit level in July 2008. The median existing single-family home price was $178,300 in July, which is 14.6 percent below a year ago.

Existing condominium and co-op sales jumped 12.5 percent to a seasonally adjusted annual rate of 630,000 units in July from 560,000 in June, and are 5.9 percent above the 595,000-unit level a year ago. The median existing condo price was $178,800 in July, down 18.9 percent from July 2008.

By Region:

• The Northeast surged 13.4 percent to an annual pace of 930,000 in July, and are 3.3 percent higher than July 2008. The median price in the Northeast was $236,700, down 15.0 percent from a year ago.
• Existing-home sales in the Midwest jumped 10.9 percent in July to a level of 1.22 million and are 8.0 percent above a year ago. The median price in the Midwest was $157,200, which is 5.9 percent less than July 2008.
• In the South, existing-home sales rose 7.1 percent to an annual pace of 1.95 million in July and are 5.4 percent higher than July 2008. The median price in the South was $164,500, down 7.1 percent from a year ago.
• Existing-home sales in the West slipped 1.7 percent to an annual rate of 1.13 million in July, but are 1.8 percent above a year ago. The median price in the West was $202,300, which is 28.0 percent below July 2008.

Source: NAR

The Steamboat Pilot & Today put out part three of a 5-part series titled "House of Cards" last Friday.  The focus of this week's reporting was mainly pointed at construction and the woes that the industry has seen in the last 9-12 months.

Obviously with any industry slowdown, the layoffs from one segment of the economy are going to ripple into others.  If construction workers begin to get laid off, then yes, restaurants and retail establishments might feel a pinch too.  But that's nothing different than we're feeling on a national level.

To write an expose on our small town and frame it in the light of being some special case, different from what the country as a whole has experienced, is a bit dramatic.  The fact that times are tight for everyone rings true around the nation right now.  Is Steamboat Springs going to be any different?

One local added a public comment to the article online noting that resort towns typically have deeper recessions than the rest of the economy since tourism is discretionary spending.  That might be the case however, in my industry, why am I still having to explain to sellers why showings are down?  Why is it still so difficult to convince clients to lower their price if they want their house to sell?  Could it be that we simply aren't feeling the true impact what the paper says has fallen on our fair town? 

For example, I understand that restaurant numbers might be down year-over-year and that many of those establishments aren't making as much profit as they have in years past.  But I still had to wait 30-minutes to be seated at Creekside Café for Sunday brunch yesterday.  It seemed as busy as I've ever seen it.

In other industries around town, the newspaper quotes owners in saying that they've really had to start watching expenses and trim the fat.  While those cuts most likely have residual effects on other areas of the economy, it's probably about time.  I know that the Boyd Team has had to trim down hours for the staff until sales pick back up again, but there hasn't been an overwhelming amount of complaint about it.

As Mark Hoovler of Peak Mechanical says in the TODAY article, the bright side of having more time off is having the time to remember why we moved here in the first place.  "You get your life back" Hoovler says.  I tend to agree.

The Steamboat TODAY newspaper recently printed the first of a 5-part series regarding the real estate market in Steamboat.  This first segment is titled "House of Cards" and depicts a struggling housing market in our town.

Sufficed to say that property values have declined since their record highs in 2007, but I think we can count ourselves lucky that relative values are still holding strong.  Let's be honest, we witnessed record leaps in sales price over the last decade.  Properties were appreciating at stupendous rates.  Total dollar volume of Routt County home sales more than doubled in just four years from 2003-07.  The typical home owner saw their equity in real estate increase by six figures in the span of just 5 years.  Practicing a little conservatism in borrowing, these people find themselves in a good position right now.  It's those that got swept up in the storm of the buying frenzy and borrowed irresponsibly against their home's value that are now experiencing difficult times (thank you sub-prime mortgage lenders for that one).

The TODAY is quick to predict that the arrival of the next increase in property values might not be for a few more years.  Author Tom Ross then goes on to say that the future of real estate development might "never be the same."  Same as what, I ask.  Buying over-valued property in the hopes of building high density projects to turn for a quick profit?  Perhaps that's not such a bad thing.  Perhaps serious developers should take this as a lesson to truly evaluate the needs of the community and the economy we're building here and crawl before they run without careful planning.

And in the grand scheme of things, is a few years practicing a "buy-and-hold" strategy of investing really a big deal when it comes to realizing gains on real estate?  What has happened to the idea of buying property for both the enjoyment of ownership as well as the potential for profit?  For those with the means, this flattening of market prices in Routt County should be taken as a sign that now is as good a time as any to buy.  Think about what folks like Warren Buffett would do.  This market correction needed to happen eventually and now its here.  This is the time to seek opportunity, not be overwhelmed by naysayers spouting doom and gloom.

If history has taught us anything, it's that real estate in coveted communities such as ours, with good planning and solid infrastructure, will rebound.  Don't wait 5 years and wonder "What if I had bought when prices had flattened?"

Routt County property owners may be finding themselves in what is being called a "perfect storm" for property value assessments.  In a time when most people find themselves in the grip of a recession, trying to hang on to everything they've got, assessed property values (and taxes) have actually increased.

So how does it happen that when property values have seen a decline in recent months, that assessments for tax purposes have shot up?  Way up in some cases. 

It's because of a mandated comparison period between the end of 2006 and the first half of 2008.  In hindsight, this is when record sales were achieved in Routt County and property values soared.  Some areas were seeing appreciation figures upwards of 1.5 to 2 percent per month!

With many owners looking around at current comparable sales and asking the county commissioners how this is fair, the results have led to a record number of property valuation appeals filed this summer.  2,800 appeals have been filed this year while the previous record was 1,800 back in 2001.  The commissioner's office now finds itself scrambling to resolve all appeals by the early August deadline.

One might think that living in Steamboat Springs is all about the quaint downtown feel of Lincoln Avenue and the world-class ski area that put us on the map.  But let’s not forget that the underlying framework of the new developments and luxury hotels in the area is a warm, western ranching heritage.

And to coincide with this tradition, there are numerous equestrian properties for sale that are within spitting distance to town.  Places where it’s perfectly ok to kick up your heels, enjoy the beautiful Yampa Valley and ride horses to your heart’s content.

The Steamboat Pilot recently compared two of my listings in relevance to their appeal to the horse-minded.  Whether buyers are looking for a year-round, primary residence or a second-home getaway, the main draw to these properties is the option to host a full-time caretaker to tend to the animals.

Whether or not it’s the skiing that first attracts buyers to look at Steamboat Springs, equestrian enthusiasts have plenty of options to buy right now.  And buying horse property with 35 acres or more around Steamboat Springs doesn’t mean completely leaving civilization either.  Many of the area’s finest ranch homes are within 15 miles or less from the downtown epicenter.

So for those that feel like staking their claim at a bit of the “old west” traditions (with a modern flair, I might add) there’s currently a wealth of opportunity.  You can read the full story at:  Horse Property listed by Cam Boyd

Steamboat Springs — Local lenders, real estate agents and appraisers are bemoaning recently enacted appraisal regulations that have frustrated an already difficult market and spoiled potential sales, refinancings and efforts to access home-equity lines of credit.

The Home Valuation Code of Conduct was implemented May 1 and prohibits communication between appraisers and real estate agents, loan officers or mortgage brokers. Instead, appraisals must be ordered through appraisal-management companies, new middlemen in the process that cycle through a roster of appraisers and take a cut of their fees.

Whether they think it was a problem, many involved in mortgage deals locally and nationwide say they are supportive of efforts to reduce collusion and shield appraisers from being pressured to inflate home values. They say the HVCC, however, is a solution that has proven far worse than the problem by creating delays, removing flexibility, decreasing appraisal quality and substantially increasing costs. The National Association of Mortgage Brokers, which is working to see the regulations repealed, estimates the HVCC is costing consumers more than $2.8 billion a year in extra fees.

“I think the intention was good, but the result is really going to make things difficult,” said John Truslow, of Castle Appraisals in Steamboat Springs. “To have a lack of communication throughout the entire process really hurts everybody. … I think it’s a disaster in the making, and I see nothing good coming out of it.

“The last thing you need to be doing right now is killing real estate deals because of the HVCC … and that’s what’s happening.”

Truslow said he has lost business because of the rules because anybody with a Colorado appraiser’s license has an equal chance of receiving an assignment from an AMC regardless of his or her experience, skill or familiarity with a local market. Truslow also said AMCs take a cut of the appraisal fee and seek the lowest rate possible. He said he used to receive an average fee of about $400 for an appraisal, and now that number has dropped to $250 to $300.

“The impetus to do a good job is exactly where?” said Kathy Arce, of Phoenix Resources Mortgage in Steamboat. “The idea of it is fine. It’s to take all fraud out of the appraisals. It’s not a bad idea, but it doesn’t work. And the customer is suffering as a result. … The appraisals are not as carefully done. … We, as brokers, can no longer work with appraisers that we have good working relationships with.”

Cam Boyd, managing broker and co-owner of Prudential Steamboat Realty, said he has begun receiving calls from out-of-town appraisers asking him questions about properties he’s been involved with in the past. He takes that as a sign that the appraisers don’t have a good understanding of the Steamboat market. Arce, Boyd and Ed Allbright, of Columbine Mortgage in Steamboat, said they have seen deals fall through because of appraisal stumbling blocks since the HVCC was implemented.

“We had a couple of transactions fall through because of appraisals that probably were not done correctly,” Boyd said. “The new rules are making it a lot harder for us.”

Multitude of problems

Lower quality appraisals, however, is just one of many downsides to the process, opponents say. Arce said she used to be able to call an appraiser and ask whether a home value being sought was realistic before paying for an appraisal.

“We used to be able to figure out if a deal was doable before doing the whole thing,” Arce said. “Now, we can’t even inquire as to whether it’s in the ballpark. … We did not influence the appraiser to say we need this value, but we could ask their honest opinion.”

Allbright said he used to be able to have technical errors in an appraisal corrected the same day by calling the appraiser. Now disputes, even small technical ones, must be handled through the AMC and can take longer than a week to resolve. That alone can be enough to kill time-sensitive real estate deals.

“It’s god-awful,” Allbright said. “Timing is critical here. … You end up banging your head against the table.”

Customers also no longer can transfer an appraisal between lenders. If they find a better deal or otherwise decide to switch lenders, they must repeat the entire HVCC appraisal process.

“If the borrower wants to explore another option, they can, but they have to pay another $400 for a new appraisal,” said Arce, who said she knows customers who have had to buy as many as three appraisals. “That’s unacceptable in my mind.”

Sledgehammer for a fly

The HVCC is the result of a deal struck between New York Attorney General Andrew Cuomo and Fannie Mae and Freddie Mac, the federal government-backed mortgage companies. Although inflated appraisals may have been a legitimate problem in New York and other parts of the country, Truslow, Arce, Boyd and Allbright said there was not a problem in Steamboat.

“They’re using a great big sledgehammer to kill a fly,” Allbright said.

Local appraiser Jim Yanna­ccone, of ASI Appraisal Services, disagreed and said he absolutely has felt pressure from lenders to inflate home values.

“There was definitely a need for more impartiality,” Yannaccone said. “There were some lenders who had appraisers they knew they could call to look the other way. … That’s the good part (about the HVCC), is we can give an honest opinion of value.”

Even so, Yannaccone said he is not a fan of the HVCC overall. He complained about his inability to ask simple questions of lenders or brokers and noted that the HVCC system is not conducive to a unique resort market such as Steamboat’s.

“I send my appraisal to somebody who is sitting in a high-rise in Chicago. They don’t understand the market,” Yannaccone said. “It’s costing the consumers a lot of money and the lenders a lot of time. What we used to be able to do in two to three weeks is taking six to eight weeks.”

Truslow said he is skeptical that the HVCC will effectively achieve any of its goals because people who want to collude will find a way around the new rules.

“The people who were criminals before are going to be criminals after,” he said. “It’s honest people who are going to suffer. … The whole system assumes that everybody is corrupt, when I think a very small percentage are. … Common sense is not the rule of the day.”

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