Wednesday, January 7, 2009

Why Colorado Will Be OK

Our reality is what we choose to focus upon. With the media constantly focusing on the negative, I think it is important to temper those messages with good news. Here is some great news about how Colorado is positioned in down economic times.

One of our preferred lenders from Denver, Chris Lien with American Home Funding, recently shared this article with Barb Rankin, a broker at Landmark. It lists many of the positive stats and aspects about Colorado that show why that we have a good future ahead of us as a state. This is important for the Summit County real estate market because our local economy depends heavily on the wealth from the Denver and surrounding metro areas. Many of our second home owners live within 2 hours away, and spend time and money here with their family and friends.

shows people are moving here.

• The region’s population growth rate has consistently outpaced U.S. growth every decade since the 1930s.
• According to the U.S. Census, Colorado had the second-highest migration rate in the U.S. between 1995 and 2000 for unmarried college graduates, with Metro Denver having the sixth-highest migration rate among all U.S. cities.

is a main factor in our popularity.

• The metro area averages 300 days of sunshine per year.
• The metro area ranked seventh on a list of the 10 least-stressful metropolitan areas, according to
• Our area is one of only six in the U.S. having eight or more professional sports franchises.
• There are more than 100 public and private golf courses in the area.
• 11 world-class ski resorts are within 100 miles of the Front Range.
• The Denver Performing Arts Complex is the largest such facility in the country under one roof.

Colorado’s Geography:
means opportunities for business.

• Metro Denver is at the exact midpoint between Tokyo and Frankfurt, offering opportunities to easily serve growing international markets.
• Metro Denver is within four hours flying time of every major city with a population of one million or more on the continent.

Real Estate:
stats show a stable market.

• According to the S&P/Case-Shiller Home Price Indices of 20 metropolitan areas tracked by the group, only Charlotte, NC and Dallas, TX fared better than Denver in home prices between June 2007 and June 2008.
• In the Fall 2008 Risk Index conducted by PMI Mortgage Insurance Co, the metro Denver area was one of 15 areas where the risk of price declines is less than 1 percent in the next two years.

a highly educated workforce that’s good for businesses and employers.

• Colorado has the country’s third-highest percentage of college graduates.
• Boulder topped’s 2008 list of the smartest metropolitan areas in the U.S. and the Fort Collins-Loveland area ranked 12th in the nation out of 200 largest metropolitan areas.
• Four University of Colorado professors have been awarded the Nobel Prize, including three in physics and one in chemistry.

Work and Employment:
shows stability, diversity and vitality.

• Since 2004, Colorado has gained jobs in all sectors except manufacturing, according to Elizabeth Garner, Colorado’s state demographer.
• In the 2007 Development Report Card for the States produced by the Corporation for Enterprise Development, Colorado earned an “A” for business vitality, an “A” for development capacity, and a “B” for economic performance. Colorado has maintained an “A” rating in business vitality since 1991.
• Colorado has the third-highest concentration of high-tech workers in the country according to the American Electronics Association.
• The unemployment rate in the metro area is below the national average.
• Metro Denver is a national center for the telecommunications industry, and is the birthplace of the cable television industry.

The Cost of Living:
is affordable.

• The median income in the metro area is 14.2% higher than the national median.
• Over the past four years the state has posted one of the biggest income gains in the nation. The state’s median household income jumped 8.2 percent from 2004 through 2007. That gave Colorado the third steepest gain in the nation.
• The area has some of the lowest health insurance premiums in the nation and utility rates that are consistently among the lowest of any major U.S. city.

Investing in the Future:
by focusing on green growth.

• Set for completion by 2017, Metro Denver is constructing FasTracks, the largest one-time build out of a metro area mass transit system in U.S. history.
• Colorado is home to the National Renewable Energy Laboratory in Golden, the U.S. Department of Energy’s primary national laboratory for renewable energy and energy efficiency research and development.
• In 2004, Colorado became the first state in the nation to pass a voter-approved statewide renewable energy requirement (Amendment 37).
• Colorado ranks sixth in the nation in terms of installed megawatts of wind energy.
• The second-largest solar plant in the country is located in the San Luis Valley of Colorado.

So things don't really look so bad after all!

Lending Guidelines in the Age of Subprime Fallout


Apparently there are plenty of rumors going around with respect to what it takes to finance a mountain property purchase. We talked with Darlena Marmins, of Colorado State Bank and Trust, one of Landmark’s preferred lenders, to set the record straight on financing Summit County real estate.

Recently Darlena gave us advice on current lending conditions to give us good solid information and try to dispel some of the negative rumors that have been spreading about lending. It is still possible to get a loan!

Some of the more important areas that need addressed are down payment, credit scores, condos, and stated income.


Down payments require the following minimums: For primary residences, a 3.5% down payment is required for FHA financing and 5% for conventional financing. With some lenders, second home purchases require a 15% down payment but 20% is preferred. However we have a client who is doing an 80-10-10 right now. Investment property requires a 20% down payment, but again there are many varied options.


All non-conforming loans, or loans over $417,000, require a minimum credit score of 680.

Interest rates on conforming loans, those under $417,000, are now tied to credit scores and buyers will receive the best rate available if they have a score of 740 or better.

Summit County conforming loan limits were raised to $729,750 for 2008 and while the limit has not been set for 2009, it is rumored to be around $625,000. However, these higher loan limits do not necessarily translate into the same rates as if the loan is under $417,000, i.e. conforming.


In Summit County, some lenders have been having difficulties lending on some condos because lenders are considering them “condotels” and therefore they do not conform to underwriting guidelines. Darlena says that her company still lends on normal Summit County condos. Her suggestion is try to remember the old definition of condo, (no maid service, no front desk, and no required rental pool). However if you’ve found your perfect mountain property and it is a condotel, that doesn’t mean you can’t get a loan, it just won’t be a traditional one. There are always options.


This dinosaur doesn’t exist anymore. Expect to provide all relevant documentation - tax returns, bank statements, etc.

When exploring lending options, remember that today’s rules may be obsolete tomorrow, and you really need to talk to a professional, and the ideal situation is to use someone extremely familiar and experienced with Summit County real estate. If you have questions, or want to explore obtaining a loan for a mountain property, please contact us at Landmark Real Estate Group or Darlena Marmins at Colorado State Bank and Trust at 970-668-2200.