Tag Archive for: Denver real estate market

Tracy Shaffer
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Winter Home Buying? You bet your ice skates!

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After you’ve finished your holiday shopping, why don’t we go look for a house?
Winter home buying has its challenges, but winter can be the perfect time to buy a home. As we head toward the snowy months, serious shoppers know their winter home buying power is increased by determination and AWD. Housing market prediction for 2014 is looking good and buying a home this winter might just be the ultimate stocking stuffer.I love me those cold weather clients!
Most people think of buying or selling their homes in the ‘high’ season, and while the balmy days of spring and summer are perfect for cruising open houses and power shopping, they also bring the crowds. In 2013 we saw a big bump in the Denver housing market:lots of buyer activity and low inventory meant happy sellers and buyers who were frustrated by the return of the multiple offer. Even when the market was down the notion that summer is the best time to buy/sell your house is one that is hard to break. After spring break, sellers prepare to list the moment the last school bell rings pushing inventory up and in the seller’s minds prices too. Many of these listings are sellers who want to test the waters, plant a For Sale sign in their yard along with the annuals and see if they get the price they want. But this supply side increase often works in the buyers’ favor or frustrates them when the fair-weather seller lacks the motivation to agree on a fair price. Sellers feel the same when sunny day buyers, indulging in some fantasy house hunting, create lots of traffic and little else.
Cold weather buyers and sellers are serious.
The real estate market is driven by many factors but the first and most enduring one is CHANGE. One of the most enduring reasons people buy or sell a home is because their lives are in transition. Though many plan their home sale or purchase, life happens without regard to season or convenience. Families change, jobs are gained, lost or relocated, promotions happen, marriage, divorce, birth and death– all create someone with a housing need.
Shopping or selling in a Denver winter are obvious– driving in show, slipping on ice, shoveling the walkway, taking your boots on and off so you don’t track sludge into the house, fewer showings– but the buyers are BUYERS and not just lookers. Winter sellers are ready and willing to make a move, and tend to price accordingly from the start. The slower season also means that lenders, title companies and appraisers are not so swamped, smoothing out the process and lowering emotion. And of course, there are fewer people submitting offers on your dream home.
As savvy shoppers know, the post-holiday season comes with plenty of opportunities for a bargain and that includes houses as well. Though we in Denver are beyond the clearance sale in our housing market, home prices are on the rise giving sellers more leverage as well.
Enjoy the holidays, spend time with your loved ones, take a spin around town and take in the lights. Then call me when you’ve got the ornaments put away and we’ll get the ball rolling.

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Tracy Shaffer
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The Mortgage Interest Deduction in Trouble?


How would it affect you if you could no longer write off the interest you pay on your mortgage?
According to panelists at Friday’s housing forum hosted by Zillow and the University of Southern California’s Lusk Center for Real Estate:

The burgeoning federal debt makes it unlikely that the mortgage interest tax deduction will survive in its present form. Of course, any proposed changes to the tax break for homeowners will spark a fierce debate over the fundamentals of the U.S. housing market, the value of home ownership, and consumer behavior.

“Fierce debate” he says? I’d call it a jobs-killer! But then again, I’m in real estate. Change is never easy, but when it hits our pocketbooks and the government, it really hits home. I advise my clients to educate themselves, talk to their tax professional and view the tax benefits icing on the cake. Knowing the long-term financial upside leaves them feeling good and more secure as they move forward with their biggest single purchase.

“I think it’s entirely likely that something big is going to happen (with the MID) starting next year with either administration,” said Jason Gold, director and senior fellow at the Washington, D.C.-based Progressive Policy Institute, an independent think tank.

A Congressional contingent advocates for the elimination of the mortgage interest deduction to help address the nation’s debt and budget deficit. Obviously things must be done to right the problem, but sticking it to a Middle Class whose beginning to feel the effects of a post-crisis housing market recovery seems a bit harsh. At the end of this year, a series of tax increases and spending cuts are scheduled to go into effect automatically unless Congress acts to prevent or alter them. Revamping the mortgage interest deduction is on the table as a way to head off that “fiscal cliff” scenario. (I wonder how many of those guys have a mortgage.)

Two years ago, a bipartisan deficit reduction commission recommended scaling back the mortgage interest deduction, which is currently capped at mortgages worth up to $1 million for both principal and second homes and home equity debt up to $100,000 and the deduction is only for taxpayers who itemize.
The Simpson-Bowles commission proposed turning the deduction into a 12 percent non-refundable tax credit available to all taxpayers, capping eligibility to mortgages worth up to $500,000, and eliminating the deduction on interest from second homes and home equity debt.

Though that seems more reasonable to me than the first idea, the National Association of Realtors has consistently defended the mortgage interest deduction in its current form.

Highly critical of the recommendation and claiming any changes to the MID could depreciate home prices by up to 15 percent, they are promising to “remain vigilant in opposing any plan that modifies or excludes the deductibility of mortgage interest.”

So… we’re back to whose going to pay down the debt? And how.

The MID is a “tax expenditure,” meaning its cost must either be made up through higher taxes elsewhere or by adding to the debt, and it costs the government about $90 billion a year. Richard Green, the director of the USC Lusk Center for Real Estate, told forum attendees that reforming the MID is necessary for fiscal sustainability. “We need to get revenue,” Green said. “You need to make a judgment about what’s better or worse for the economy. In my opinion, it’s better to do it with tax expenditures, rather than rates, though you may have to do both to get to where we need to be.”
Because mortgage interest rates are currently so low, he added, “This may be an opportunity to do less damage by reforming the mortgage interest deduction than at other times.”

(I wonder what cuts would make this guy feel the pinch.)
The mortgage interest deduction is particularly polarizing because of the disconnect between how people use it and how it is perceived. Green gave the example of Texas where most people do not itemize their taxes (only about 30% of taxpayers do) so they cannot take advantage of the MID. This line of thought perplexes me. So… if more Texans itemized their taxes it would make things fairer? or does he mean that if they actually knew they could they would, adding to the deficit? And haven’t Texans done enough of that? 😉
No matter how the chad falls in the next three weeks, watch for ongoing and loud debates over the Mortgage Interest Deduction. *covers ears*

Source: Inman News, Andrea V. Brambila, Monday October 15, 2012

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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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“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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