Useful information on buying or selling a home in the Denver market.

Tracy Shaffer
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More Good News on the Denver Housing Market

And don’t we all need a little good news? Working in the real estate trenches I’ve been watching the steady turn around, especially evident in 2012 as the Denver real estate market took a sharp turn for the better. Today’s Denver Business Journal announced the data to back up my experience.

Colorado’s housing market stands out as the fifth-strongest in the country, according to the website 24/7 Wall Street.
Home prices across the state have increased by an average of 7.3 percent over the past year, putting Colorado between North Dakota (7.1 percent) South Dakota (8.3 percent). The ranking was based on a review of data from various sources, including the CoreLogic Home Price Index and foreclosure reports from RealtyTrac. 24/7 Wall Street forecasts Colorado home prices will increase by 3.7 percent between the first quarter of the year and the first quarter of next year.

Good news for the Dakotas, but we get to live in Colorado! If you’d like more information about your neighborhood or how you can make this market work for you, call, text, email or comment here and we’ll talk.

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Tracy Shaffer
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Light and Grace in Willow Trace

UPDATE: This house went under contract in 8 days. Buyers are happy, sellers are happy… agent is very happy.
Just listed a wonderful 3 bed/3 bath home in the Willow Trace subdivision of Aurora South. I really like the floor plan as it lives large. The master bedroom is huge, closets are bigger than my house ; ) and the second/third bedrooms are nice and roomy. Great loft space upstairs to keep the little ones close or use for study/gaming area. Over-sized two car garage with secure storage. Partial basement is insulated, plumbed and egressed; ready for your finish if you need more space and Cherry Creek Schools! This house is totally move in ready! Check out the virtual tour.

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Tracy Shaffer
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How Affordable is Denver Home Ownership? Glad you asked.

“I See What You Mean” (Big Blue Bear) created by Lawrence Argent, photograph by Elizabeth Thomsen
You may be surprised to know that in the Denver metro area, The Home Affordability Index (HAI) is at its highest recording ever. What does that mean? The HAI compares the median price of a home in the Metro Denver real estate market to the median income level, and brings the current interest rate for a 30-year fixed rate loan into the equation. As a home buyer this is good news as the median income earner can buy more house today than ever before. Why? Because home prices, while rising quickly, are still well below their peak prices of 5-6 years ago and interest rates are at never-before-seen historic lows. It is the interest rates that continue to make homes so wonderfully affordable, so let’s dig into those a bit.
The typical rate on a 30-year fixed mortgage tumbled below 3.5% for the first time last week, the latest record low in a trend that has fired up homes sales around the country. Freddie Mac’s weekly survey of what lenders are offering to qualified borrowers showed the 30-year rate at an average of 3.49%, down from 3.53% the week before. The 15-year fixed loan fell from 2.83% to an almost unbelievable 2.8%! Let’s put this in perspective. In late July 2010 and 2011 the typical 30-year rate in the Freddie Mac survey was just over 4.5%, more than a percentage point higher than now. The 30-year rate was above 6% in 2006 and most of 2007, over 8% back in 2000, and over 10% in 1990. Back in the bad old days of inflation, the rate topped 18% in 1981. Look at how the interest payments affect your monthly Principle and Interest payments:
$200,000 property in 1981 at 18% interest: $3,014
$200,000 property in 1990 at 10% interest: $1,755
$200,000 property in 2000 at 8% interest: $1,467
$200,000 property in 2007 at 6.5% interest: $1,264
$200,000 property in 2011 at4.5% interest: $1,013
$200,000 property in 2012 at 3.5% interest: $898
But wait, there’s more! According to a recent CNN Money article the average cost of closing on a mortgage has fallen by 7.4% over the past year. At the end of June, a homebuyer looking to close on a $200,000 mortgage with 20% down paid an average of $300 less than 12 months earlier. Even if you don’t have 20% down payment saved, you can put 3.5% on an FHA mortgage. Very attractive, no?
No one knows how long these historically low rates can last. But in the meantime my clients are taking advantage of them to buy the homes of their dreams and lock in once-in-a-lifetime interest rates.

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Tracy Shaffer
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WHAT I DID ON MY SUMMER VACATION

It’s the third Monday of August and I can’t believe school started today. It never seems like there’s enough of summer, no matter how you fill it. This year we took off for New York the week after graduation, spent ten jam-packed & fun-filled days, and then returned to Colorado’s wildfires and 50+ days of oppressive heat. Where did those idyllic summer days spent swatting bugs and camping on a lake go? Did they evaporate in the drought or global warming, or was I just making that stuff up?
My summer sons used to fill their days with parks and pools and tennis lessons. They tried baseball, fencing, went to soccer camps, tore up playgrounds and ran everywhere they went. Then came the summer of love… as I was frantically trying to satisfy their (or was it my?) artistic, culturally aware, intellectually stimulating and physically challenging schedules, they piped up with “Mom. Why do we have to do anything? We just want to sleep in.” I get their point. I love to sleep in too and with the freedom from school bells and missed buses, I can usually make it to… about seven. Three months of sleeping boys and selling houses gives way to the rude awakening as the laughter of the morning DJs hit my ear at 5:30.
Back to school puts us back on schedule. I’m up; I’m at the gym, home, showered, caffeinated and ready to take on the day. As autumn approaches, I begin to squirrel away my proverbial nuts, making plans for the year ahead and switching into high gear as the temperatures drop. Though summer is regarded as the selling season in real estate, fall and winter are most often my most productive quarters. And while that might feel like the salmon swimming upstream, I find the lazy daze of summer bring out recreational buyers who may be toying with the idea, and more sellers who want to ‘put it on the market and see what happens’. The cooler months coax the serious out of hibernation. Denver real estate stats for the second quarter were up and July looks equally promising for the market with inventory down and prices edging up. Fall, with its focus on the election, will tell its own story, but I see brighter days even as we lose the light!
Denver Metro Single Family Housing Stats, July 2012:
Active Listings: 9,087 • Down 35% from July ‘11
Under Contracts: 4,181 • Up 23% from July ‘11
Solds: 3,713 • Up 20% from July ‘11
Average Price: $312,920 • Up 5% from July ‘11
Average Days on Market: 64 • Down 35% from July ‘11

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Tracy Shaffer
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Forward Movement

I’m moving! Well actually, I am planning to move. Next year. That’s how long it will take me to prepare my current home as a rental, give the tenants in the other house notice, and most importantly, let my son finish eighth grade at his current school. The idea came to me this summer when my old friend/former neighbor/current client called to discuss her options regarding the inspection objection on her new home. “We’re sitting in the backyard having wine. I wish you were in the hood, you could come over.” And that’s when it hit me; I’m too far away from my friends! I’ve been rumbling a plan around in my head since then, but I knew it was in the cards when my thirteen year old jumped in the car one day and stated, “Mom, I don’t think these suburban kids are my people.” Oh, I feel ya, babe.
Moving to Denver from Los Angeles, we settled in to Congress Park for the first ten years. The boys went to Denver Public schools and loved them. I loved the sense of community I felt; summers under the elm trees at the Congress Park pool, cool autumn evenings on the soccer fields, and all the school activities with the kids and parents I was growing up with. I felt safe, and I felt loved. People got my sense of humor, we shared our sorrows, our secrets and our extra tomatoes when the gardens were good. As our family’s needs and the market changed, we crept slowly southward. I kept the boys in Denver Public Schools as long as I could but the daily commute in the winter was fraying my sanity and my tread. I began to notice my urge for the urban as I kept putting buyers into my favorite neighborhoods; Park Hill, Congress Park, Washington and Platt Parks, Mayfair, (I could go on) but never realized it was all part of my secret plan. Now that Gabe has decided he wants to forgo the big suburban high school experience to attend East with his best friend and the other members of his “tribe”, I’m out of the walk-in closet and all in!
I grew up in the suburbs, have nothing against them in general or my neighborhood in particular. Actually I like it here in this funky little sweet spot called Dream House Acres. Free from the covenants and cul de sacs that make me claustrophobic, I love the wide, hilly streets, the mid-century modern houses and the mountain views from my back patio. I don’t even mind the 20 minute commute when I choose to make it; I’m just a city girl. I need the proximity to the arts and cultural centers, the theaters, restaurants and farmers markets that pop up spring through fall. Most of all, I need to be around a wide variety of people and the sense of community that Denver offers.
Why do I bring this up, you ask? As a real estate agent, I spend my days and into the nights helping movers and shakers change up their lives. While I’m focused on the business of buying and selling homes that make these moves worthwhile, my clients are focused on the mental, emotional, physical and financial planning that leads up to a big change in your habitat. Following a page out of my own playbook, I’ve pulled out the Task Timeline Template which I lovingly bestow upon my clients.

I have completed phase one; Making The Decision. Phase two, Preparing the House, will take much longer; pulling up carpet, throwin’ down a little love on the hardwood floors, the painting, slight upgrades to the kitchen and baths…slight? Who am I kidding? And along the way,I will partake in my favorite slice of Virgo heaven— PURGING! When you think about it, there is no way to move without making a decision about every single thing you own. What stays, what goes, how many sets of socket wrenches do I really need, will I really wear this? Thank god I have a year.

Taking the time to wrap up the dishes and the memories this house holds, I will be mindful to keep the valuables and leave the rest behind. A fresh coat of paint, like a white sheet of paper, lets the new occupants write their own stories on these walls (not in the literal sense, I hope), as I move forward to the next chapter of life. Painting the new place.
If you’re ruminating on such things~ buying or selling, up or downsizing, Spanish Olive vs. Navajo White~ give me a call. We can share tips as we scrub grout and fantasize about the new digs. After all…I’m improving my skills just for you.

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Tracy Shaffer
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The Stats Behind the Real Estate Recovery

Nothing happens overnight. After years of struggling with the housing crisis and millions of Americans struggling to stay in their homes, it looks as though we are finally seeing some light at the end of the tunnel. I live and work in Denver so this is the market of my expertise. With boots on the ground here, I’ve seen signs of the housing recovery for the past six months and it just keeps getting better. The Denver real estate market keeps trending upward and the following article from Canyon Title gives you some of the nuts and bolts reasons why that is so.

According to Reis Analytics, expansion and growth continue in the Denver Metro Area. While the recession did not bite as deeply into Denver as into other high-growth economies, the losses inemployment were substantial. But with job creation running positive for about the past two years, a substantial portion of the overall loss has been redeemed. According to preliminary data for April 2012, provided by the U.S. Bureau of Labor Statistics (BLS), non-farm employment was up 2.0% (24,100 jobs) from 12 months prior and was up 3.8% (45,300 jobs) over 24 months.

Additionally, “Metro Denver is repeatedly recognized as a bright spot in the national economy, thanks to our diverse array of high-tech businesses, relatively low cost of doing business, active and highly educated population, and ability to attract and retain a young and vibrant workforce,” said Patty Silverstein, the Metro Denver EDC’s (Economic Development Corporation) chief economist. “Forbes recently ranked Denver fifth on its 2012 list of the ‘Best Places for Business and Careers’ and Colorado ranked eighth on the Enterprising States report list of states expected to grow and prosper in the coming years. Across the nation, others are taking note of the slow and steady-but promising-momentum in Metro Denver.”

If you, or someone you know, is interested in learning more about how TODAY’S real estate market relates to you, please shoot me an email, sign up for the newsletter or give me a call. I’d be glad to go over your options and serve your best interests.

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Tracy Shaffer
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The Bust Has Burst

As a follow-up to my previous article about the housing market and the mainstream media, I thought I’d post this. Just in from
The Wall Street Journal it seems they’re finally confident to announce what we’ve been watching here in Denver for the past six months.

From here on, housing is unlikely to drag the U.S. economy down further. It will instead reflect the strength or weakness of the overall economy: The more jobs, the more confident Americans are about keeping their jobs, the more they are willing to buy houses.

Though one thing in the article is not likely to affect the Denver market.

The biggest threat is a large shadow inventory of unsold homes, homes which owners won’t put on the market because they are underwater, homes that will be foreclosed eventually and homes owned by lenders. They have been trickling onto the market, slowed in part by government efforts to delay foreclosures; a flood could reverse the recent rise in prices.

In Denver, the ‘Shadow’ is but a phantom. We currently have such low inventory, especially in homes priced under $250k, and our pre-foreclosure stats are well below the national average. Combine this with the Colorado’s swift foreclosure process and the fact that we hit the slump ahead of the curve, allowing us to recover sooner, we are not counting on a glut of “Shadow Inventory”.

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Tracy Shaffer
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Get Your Ducks in a Row Before You Go Hunting

There was a time, early in my real estate career, when I would take buyers out “window shopping”, testing the waters to get a feel for what my clients liked, before they had talked to a lender. More seasoned agents would scoff, “I don’t let a buyer in my car if they’re not pre-qualified!” I felt this was harsh. After all, loans were easy to come by and “pre-qualified” lender letters weren’t worth much. (It’s a pre-approval you’re looking for, anyway.)
Those days are over.
Though interest rates are still at historic lows, loan approval is harder to get. Even those who think their ducks are all lined up may find something sneaky lurking in their credit report: that Victoria Secret card you forgot to pay in the rush to the alter, the seventeen applications you filled out to finance the wedding, the car you had to buy last month when you blew a gasket on the Civic and that FreeCreditReport.com service you’re paying for is not the same as the credit score your lender pulls. Other factors, like your debt-to-income ratio may be working against you if your credit card balances are high. Now that the market is hot, don’t let the numbers leave you out in the cold.
So when your agent tells you to talk to a lender and get pre-approved before you go house-hunting, assume she knows what she’s talking about. It will not only give you a pretty accurate assessment of how much house you can afford and what your payment will be, it will save you (and her) valuable time. I’ve found many buyers their dream home, watched them fall in love, and witnessed the heartbreak when what they thought was pre-approval didn’t pan out. Some lenders have you fill out online applications (a drag, I know) and zip out a BING! YOU’RE APPROVED! message without having enough information to be sure. Best practice is to set up an appointment, have an in-depth phone call, or follow-up on that online application with the necessary paperwork (tax returns, pay stubs, etc.) your lender asks for. Real estate agents are your best resource for mortgage brokers and lenders because we work with them all day long. We know who answers their cellphone at five o’clock on a Saturday, guides the loan through underwriting and shows up at the closing table. And we know who doesn’t.
These days, before I put a buyer in my car, I want them pre-approved. I also want them to schedule a clear window of time to look at houses and be prepared to write an offer on the first one they fall in love with, because by some miracle, in 2012 that house may not be there tomorrow.

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Tracy Shaffer
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Renters Renting Regardless of Rising Rents

The Denver rental market is more than just healthy; it’s got a rosy glow. With vacancy rates low, prices for rental properties have risen and according to Poppy Harlow of CNN’s Early Start, Denver is one of the top five cities for rent increases, 10.9% over the past twelve months. That’s great news if you’re a landlord!
As the market fell and foreclosures soared, I have been focused on helping clients build wealth through investing in rental properties. Where are you going to move when you lose your home? A clean, safe, single-family home to rent where their lives and families can live and recover from the ordeal they’ve been through would be ideal. Many of these tenants would have had no problem paying their mortgages had they stayed at the pre-adjusted interest rates, or the troubles that befell them has passed. They are willing and able to pay good rent for a well-kept property that makes them feel back in balance. A recent survey on the rental market bears this out.
After surveying property managers, TransUnion found that increasing prices aren’t keeping tenants away. Overall, managers reported they are doing better than the year before and are having an easier time attracting in residents despite the increase in prices.
The credit bureau’s June survey included 1,248 property managers across the U.S. who represented a range of property sizes.
Read the Survey: Rental Market Attracting Residents Despite Price Increases. and let me know what you think.
There are some very attractive deals out there for those who want a good annual cash-on-cash return on their investment that owning real estate investment property provides, but the market is moving swiftly. I would recommend you do as well. “I don’t want to be a landlord” you say? I can help you with that through a few concise classes or introduce you to some affordable pros.

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Tracy Shaffer
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“Home Sales Slow Slightly but Still Up”… see what I mean?

Every little thing is a big thing these days. Working our way out of the greatest economic downturn in recent history, combined with election year histrionics tend to create some confusing headlines. It’s like seeing a fire ant on the sidewalk, taking a magnifying glass to it and finding you’ve blown the damn thing up!
CNNMoney ran an article late June featuring the ant and the magnifying glass, but buried the picnic basket. If you read only

Home sales slowed slightly in May, as the housing market continues on its bumpy road to recovery.Sales of existing homes in May slipped 1.5% versus the month prior, the National Association of Realtors said Thursday…

well that sounds kinda bad. Until you read the next line “to an annualized rate of 4.55 million.”
And now the picnic basket the ant is presumably heading toward.

The May sales figures are still a big improvement versus last year, up 9.6% compared with the annualized sales rate of 4.15 million in May of 2011, the NAR said. The median existing home price in the U.S. rose 7.9% over the same period, according to the report.

Now I’d like to lay out the checkered table cloth… (bold type mine)

Analysts say that demand among potential homebuyers remains solid, with many having put off purchases during the downturn in the past few years. Home prices remain affordable and mortgage rates are at record lows, but limited access to credit and high down payment requirements are holding back sales.

The last part about the credit scores and down payments? It’s true that lenders and underwriters being more diligent, as they should be, but there are also a wide variety of mortgage products and down payment programs available. The dramatic ending, “holding back sales” may be doing just that.

Read the article in its entirety and tell me what you think.

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