Kristal Kraft ~Denver Real Estate~720-279-4599

The Berkshire Group compiles monthly talking points about the Denver Real Estate market and housing statistics. This month the observations are very interesting.

1. Mortgage rates continue to creep back toward 5%, but the rates are not the story. The real reasons for the slow recovery in the housing market are continuing employment fears and unreasonable mortgage loan qualification standards. As unreasonably willing as the financial industry was in giving away mortgage money in the middle of the last decade, the same markets have become unreasonably reluctant to lend mortgage money as we begin the second decade of the millennium. There is a great opportunity here for aggressive and well managed regional banks to capture a large slice of the mortgage market for their portfolio.

2. The single family average price is just barely below March of last year, with the condo average and overall average beating out last March by 3/10ths of a percentage point. Cautious optimism is the watchword, as the market is moving past the effects of the tax credit, which ended in April of 2010. Median prices in both categories are still below 2010 levels, which can be blamed in part on those previously mentioned underwriting guidelines, especially in the plus $450K market segment.

3. Resale inventory is in decline again. That fact, coupled with the fact that 25% of the market is somewhat less than desirable distressed property, and the new builder community’s necessary caution in limiting new starts, means the average turnkey home buyer has a lot less to choose from, and well priced and well presented properties are selling quickly.

4. Those distressed properties are selling, but often to all cash or mostly cash buyers to be converted to the rental market. Those that cannot, or do not wish to buy, will rent. Investors are everywhere in the market place.

5. Let’s take a look at the RENT vs. BUY equation in the Denver market. We will use as an example a typical 3 bedroom, 1200 square foot house, considered ideal for the average first time buyer. According to a quick look at Craig’s list, such a home in the Metro Denver market will rent for approximately $1,400, a little less in some areas, a little more in others. The average sale price in the month of March for such a house was $155,000. With a 5% down payment, and closing costs paid by the buyer of 3%, such a buyer brought approximately $12,000 to the closing table, with an average total monthly payment including taxes, hazard and mortgage insurance of approximately $1,100. That is $300 a month in favor of buying rather than renting. BUT, you say, what about the $12,000 in down payment and closing costs? At $300 monthly, the $12,000 is recovered in less than 3 ½ years. And none of this discussion considers the appreciation and income tax benefits of owning vs. renting. Everyone thinking about establishing their first home should consider the implications of buying vs. renting. Is buying for everyone? Of course not, and it never has been. BUT, it is right for many people who think they cannot afford to buy today, believing incorrectly that they cannot afford to buy and need to rent. As a disclaimer, the above discussion is based on apparent averages, and will be different for every potential homebuyer.

My friend Leigh brown in Charlotte, N.C. had clients who purchased a Bank of AMerica Short Sale.  AFTER closing BoA sends the Trash It Team out to the house!

The Trash It Team is industry jargon, for the guys who go in to "take the trash out" on foreclosed homes.  Typically they only go into homes that the bank ACTUALLY owns.  These people often need to break locks to enter homes, because the bank does not have the key.  Foreclosed homes are often very messy.  People often take anything that is not nailed down and leave every piece of garbage they don't want.

So no one would ever dream that the home they own would be invaded by a Trash Out Team!  Just the thought of this is scary.  Imagine coming home to find every belonging you own, gone!

Here's a TRUE story as told by Leigh.

Protect yourself folks!  Friends don't let friends deal with Bank of America!

February is a great month in Denver, because it is the time foodies get rewarded for living here. For two weeks beginning February 26, 2011 dozens of participating restaurants offer multi-course meals for a fixed price. Two can dine for $52.80, or one for $26.40 (not including tax or gratuity).

This is a great time to take advantage of the price and try out a new restaurant or support your favorite old-standby. Why not do both?

Visit the site to learn about participating restaurants. You can also research restaurants by neighborhood or your favorite cuisine to save time.

Be smart! Mark your calendar now so you don't miss this event.

The past few weeks it seems the country has been having extreme weather. Freezing temps in Scottsdale alarm and entertain residents as their fountains turn to ice.

At the Super Bowl in Texas they are dealing with cold unlike they have seen in recent years.

Chicago officials had to rescue people on Lake Shore Drive using snowmobiles!

Finally Denver got a taste of winter as our temps dropped well below freezing for a few nights in a row. Now the snow flakes are falling leaving the beauty of innocent snow covering the land.

All the while the conversation on Twitter, Facebook and on the street, people are talking. People who might otherwise have nothing to say to one another, are being friendly having discourse on you guessed it, the weather!

(About the Photo: Taken this week at the end of day when the temps were below freezing. Location on the grounds of the Historic Schweiger Ranch in Lone Tree, Colorado)

Arctic cold temperatures descended upon Metro Denver today. Last week I was rejoicing in 69 degree weather and now we are at 2 degrees and expected to fall below ZERO tonight and for the next few days!

Burr!

I got to spend the day in a nice warm court house, while doing my civic duty. Yes, I finally won a lottery, I get to be a juror this week!

It was an interesting day to say the least. We recessed early and on the way home while it was still daylight I noticed my favorite local homestead the Schweiger Homestead.

I enjoy watching this charming old ranch that is now being restored. I've taken images of it in all seasons, but winter is probably my most favorite.

It was snowing when I stopped my car to capture the scene. Twice gentleman stopped to check on me to be sure everything was OK. By the puzzled looks on their faces I could tell they were not expecting me to be poking around outside on a freezing cold windy day!

Funny, the cold doesn't distract me when I find a scene like this to capture. All I feel is joy, pure joy to have the freedom to stop and practice my art.

I feel very grateful for the freedom, my family, for nice gentleman who took the time to care, for my warm wool mittens and the nice pot of hot ham and bean soup awaiting for me when I arrived home.

(About the photo: It would probably spoil the image if I told you directly behind me was a bumper-to-bumper traffic cloaked Interstate. So, I'll leave that part out!)