Scott J. Lee

If you have the time and don't want or need to move into a new home immediately or just want a home that is customized to yuor personal tastes and style, consider new construction when house shopping. In most communities you have a good selection of neighborhoods, lots, builders and home plans for about the same price as a resale home.

In some cases the price of the lot includes the home plans and still allows you to work with the builder to change or customize the plan and finishes at a reasonable cost. Most builders will work with you to get the home just right before, during and after construction. This is a great way to get the basic style and design of home you want without having to start from scratch with an architect. In most cases your new home will be completed and ready for move in in 6-9 months!

Most builders will also offer a home warranty and come correct any problems covered by the warranty at no cost to you. If you decide to build your home now but want to finish a basement in a few years, your builder can also help you out. Builders are also a great source of referrals for other services you may need for your new home such as landscapers and suppliers.

So consider a newly constructed home next time you're thinking of buying and get everything you wanted in your new home the first time around!

Scott J. Lee
Coldwell Banker
www.ScottJLee.com
sold@ScottJLee.com

Save on Your Property Tax Assessment; Seniors & Veterans May Get Exemption

Colorado property tax law requires reappraisals of residential properties every two years. For the 2009 reappraisal, property is valued according to the real estate market as it was on June 30, 2008.

What makes this appraisal different from previous ones is the current economic condition. The county has also expanded the sales database to make more data available to the public.

If you believe your new assessment to be too high or unfair, you can protest it. There are instructions on how to do so on the back of your Notice of Valuation. You will need to gather info on 2-4 comparable properties in your neighborhood that sold as close to June 30, 2008 as possible and have similar features, rooms, room sizes, and square footage to your home. You may use properties that sold prior to June 30, however there will be a monthly appreciation amount added to reach that June 30, 2008 value. Your Realtor can help you get the information on comparables that you need, or you can check the Larimer County Assessor website.

If you are a senior citizen or veteran, you may qualify for an exemption. Veterans must apply by July 1, 2009 by contacting the CO Dept of Military & Veterans Affairs at 303-343-1268 and seniors must apply by July 15 by contacting the Larimer County Assessor at 498-7101.

You can find more info about the property valuation process and how to file for exemptions or protest your reassessment at www.Larimer.org/assessor.

Scott J Lee
Coldwell Banker
www.ScottJLee.com
sold@ScottJLee.com

What do changes in rates do for a Buyer's purchasing power and how low is "low" when it comes to rates?

First, to give you a better perspective as to how low current rates really are, here's a look back at mortgage rates over the years:

Some things to be aware of when it comes to interest rates over the years:

- As of January 2009 a 30 year fixed mortgage rate was approximately 5.05%; the lowest in Freddie
Mac's history which dates back to 1971
- In October 1981 interest rates topped out at 18.45%; more than 3 times today's current rate
- Rates came down but remained in the double digit numbers for most of the 1980's and into 1990
- Since 2000 rates have remained low, with a peak of 8.52% in May 2000, down to today's low of 5.05%

So how do changes in interest rates affect purchasing power? Here's an example showing the payment difference on a $300,000 loan at just a 1/4% interest rate difference:

So even a 1/4 % interest change increases the amount paid over the life of the loan by over $16,000; therefore an interest rate of 5% increases a buyer's purchasing power and makes the payments more manageable. As you can see there have been few opportunities over the years in which buyers can prevail; now is the time for buyers to consider that home purchase while rates are still at historical lows.

Scott J Lee
Coldwell Banker
www.ScottJLee.com
sold@ScottJLee.com

Earlier this week, the National Association of Realtors reported that in December, existing home sales rose unexpectedly while inventory declined. Over the past few months we have started to see a gradual turnaround in home sales in Northern Colorado.

So why the sudden, surge in sales? Here are a few reasons:
- A lot of people who were previously priced out of the housing market can finally buy.
- With interest rates under 5%, a buyer's purchasing power is at its best in more than three decades.
- After months of increasing or stable inventory, we are finally starting to see the numbers fall.
- Increased consumer confidence (as of late).
- We're seeing a lot more investors coming into the market in addition to first time home buyers.
So is it too early to call it a trend? Probably; we still have a lot of distressed properties to move through before we can begin to see prices stabilize. At least for the foreseeable future, buyers will probably have the edge, but with an 84.9 percent increase in sales year after year and inventories on the decline, we're finally moving in the right direction. The key to all of this: buyers are ready to buy when they perceive a good value. Until then, they wait. The bottom line is that while sales are on the rise, we still have many distressed sales that must work their way through the system.

Scott J. Lee, Realtor
970-419-6549
sold@ScottJLee.com
www.ScottJLee.com

The Housing Assistance Tax Act of 2008 has made some serious changes for Real Estate and tax benefits for you (especially if you are, have been or plan to be a Real Estate investor). Many people have purchased homes with the 1031 Tax Deferred Exchange to defer capital gains taxes and later converting it to their primary residence to again defer capital gains-this rule has changed.

The Housing Assistance Act of 2008 includes a modification to Section 121, the Universal Exclusion for the sale of a primary residence. Section 121 allows an individual to sell his/her primary residence and receive a tax exemption on $250,000 of the gain or $500,000 as a married couple filing jointly, as long as the property has been held as the individual's primary residence for 2 of the last 5 years.

Effective January 1, 2009, the exclusion will not apply to gain from the sale of a residence that is allocable to periods of "nonqualified use"-this includes the use of a second home as well as rental property.

If you have purchased a property through a 1031 Tax Deferred Exchange, own a 2nd home, or have investment property it may be time to sit down with your CPA to discuss the new tax law and how it affects you.

Scott J. Lee, Realtor
970-419-6549
sold@ScottJLee.com
www.ScottJLee.com