Summit County Colorado Real Estate Market Conditions - June 2011 Market Update

Real Estate Statistics

April 2011 sees large increase in dollar volume!
2011 year to date dollar volume up 50% from 2010 year to date

April 2011 had a total of 87 residential improved transactions, up 15 from 72 in March 2011. Total residential dollar volume in April was $55.7 million up almost 60% from $34.9 million in March. Total number of transactions in April for all types of real estate was 106, increasing only slightly from March’s 102. May 2011 residential sales from our MLS indicate 79 residential properties sold with dollar volume at $43.5 million.

The price point with the most activity in April is the $300,000-$400,000 with 14 sales. In second place is the $200,000-$300,000 with 12 sales followed by the $400,000-$500,000 price point with 11 sales. Fourteen sales over $1 million sold in April.
Average prices from 2006 to 2010 are below; 2011 numbers reflect year to date.

Single Family Homes:

2006 - $737,253
2007 - $798,889
2008 - $835,803
2009 - $905,030
2010 - $770,797
2011 - $764,853 ($710,227-March, $705,177-February, $767,461-January)

Multi Family:

2006 - $333,501
2007 - $406,529
2008 - $463,633
2009 - $398,051
2010 - $425,080
2011 - $409,960 ($401,769-March, $429,237-February, $426,174-January)

Vacant Land:

2006 - $311,951
2007 - $391,587
2008 - $470,260
2009 - $399,025
2010 - $336,625
2011 - $285,563 ($252,583-March, $185,923-February, $221,950-January)

As of May 5, 2011, there are 1,590 residential properties for sale, up 204 or almost 15% from last month. Many listings come on the market at the end of May. Expect listing inventory to increase as the summer progresses. The total dollar value of current inventory is $1.12 billion. As of the same date there are 390 land listings, up 21 from last month.

With respect to residential listings, average days on the market is 267; median days on the market is 149. Eight hundred and sixty-nine listings or 55% of these listings have been on the market for more than 120 days.

Our MLS is showing 125 residential properties currently Pending, down 10 from April. Total dollar volume of pending properties per list price is $61.5 million.

According to Summit County assessor data there are 25,660 residential properties and 2,564 pieces of vacant land. When looking at inventory for sale, 6.1% of residential properties are for sale and 15.2% of vacant land parcels are for sale. Industry experts say that a healthy market has less than 10% inventory.
Industry experts also say that more than 6 months of inventory is a sign of a weak or “buyers” market. With 87 residential properties selling in April and inventory of 1,590, it will take 18.2 months to sell the entire residential inventory. Now, while there might be less than 10% of properties for sale, the lack of buyers can make for a long holding time.
Below are the total dollar amounts of sales in April from 2004 to 2011:

April 2004 $77.3M
April 2005 $94.4M
April 2006 $110.9M
April 2007 $133.8M
April 2008 $94.2M
April 2009 $37.7M
April 2010 $40.7M
April 2011 $66.3M

April 2011 total dollar volume shows improvement over the same month in 2009 and 2010, improving by 75% over 2009.

Total Dollar Volume for 2004-2010 is as follows:

2004 $1.12B
2005 $1.47B
2006 $1.63B
2007 $1.63B
2008 $1.06B
2009 $683M
2010 $698.4M

The year 2006 had the most dollar volume totaling $1,637,874,800.

What does all of this mean to you?

The story of April echoes the story of March. Month over month, March 2011 showed a 20% increase in dollar volume and a 19% increase in number of transactions over March 2010. April 2011 showed a 63% increase in dollar volume and a 16% increase in number of transactions over April 2010. Year to date dollar volume for 2011 is up 50% ($109M to $164M) and number of transactions is up 40% (213 to 300) compared to year to date 2010.

I asked last month, “Is 2011 looking better?” The statistics indicate that more activity is happening and as the old saying goes, “the numbers don’t lie.” While the over $1M luxury sector remains the place to find the real bargains, buyers have taken notice and properties over $1M sold more in April than previous months.

To the Sellers out there: Depending on the type of property you own, my advice may differ slightly. In no circumstances are you in the driver’s seat of getting the price you were told it was worth in 2007, but some property types and sectors are fairing better than others. I was told by a wise agent this week that he is telling sellers, “You are in a price war and a beauty contest . . . and you have to win both.” I couldn’t have said it better myself.

To the Buyers out there: You have been waiting patiently for the perfect deal haven’t you? While I can’t claim to be able to read the tea leaves, the tide does seem to be slowly shifting from a market where little buying activity was occurring to increased buying activity. Can you still get good deals? You can, but more competition exists in the under $400,000 market than in the last couple years.


How else can I help?

Amy Nakos, JD, GRI
Realtor
970-389-8388
Anakos@yourcastle.org
www.anakos.yourcastle.org
Your Castle Summit, LLC

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.

Growth/Population:
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.

Lifestyle:
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 Bizjournals.com.
• 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.

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

• Colorado has the country’s third-highest percentage of college graduates.
• Boulder topped Forbes.com’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

LENDERS AND LOANS IN THE AGE OF THE SUB-PRIME 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

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.

CREDIT SCORES

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.

CONDOS:

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.

STATED INCOME

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.

Like Abusers: It's Time to End the Like

I can trace the improper use of the word "like" back to Shaggy on Scooby Doo or perhaps Sarah Jessica Parker in Square Pegs. Regardless of the source of the word, its misuse today as a language filler is incorrect, annoying, and even foolish.

If you don't know what I'm talking about, then listen to yourself talk. You, like, might be part of the problem.

This language phenomenon is most prevalent in people under 35 proven solely by my own observations. Given that I am 36, I think I missed it by 12 months. It crosses professions, gender, and age. I hear 30 somethings "liking" and I hear eleven year olds "liking." I have even seen writers quote people in the following manner: "That was like such a good game, you know, it like was like nothing I've ever seen before." Reality TV is filled with "like" abusers. "We like totally love our new house. It's like the most beautiful thing I've ever seen. Thanks like ABC."

I interviewed close to 15 candidates for a receptionist/office admin position about six months ago. Only three of them didn't use the word "like" excessively and improperly. I hired one. One of the candidates used the word like at least twice in every sentence, dragging the long i sound out: "Liiiiiiiiike, I really would like you know like a position like this because it would liiiiiiiiike be a Monday to Friday job rather than liiiiiike having to work at night." I suggested she keep her bar tending job.

I had two nannies, at two different times, taking care of my boys in our home. I had to have separate conversations with each of them to curtail use of the word "like." Both my husband and I went crazy hearing our 5 year old son saying "like" three to four times in each sentence. We are still deprogramming him. Good thing our 2 year old wasn't talking enough to pick up on that habit.

What is most impenetrable about this issue is that "like" abusers don't even realize they are doing it. It's not akin to a drug addiction where you have to go out and retrieve a substance. There are no support groups. People are not telling "like" abusers to stop. This bad habit just pours out of people's mouths, punching my inner peace with each sounding of the word "like."

If I had the magic wand for mankind, I would wave it high and fast and wish for the like-fest to end. Until then, I will publish this post and hope it gains traction among those "like" minded.

Fractional Ownership -- owning a perfect piece of mountain property

What is Fractional Ownership?

The official definition of fractional ownership is a 1/15th share to a ¼ share of a property. Title is conveyed by a deed, the closing occurs at a title company, and the deed is recorded. Colorado boasts the largest concentration of fractional ownership, which isn't surprising. Resort properties have increased in value dramatically over the years and many people can no longer afford a full ownership mountain property.

According to Ragatz Associates, a market research firm specializing in fractional ownership, in 2007 fractional sales in developed properties equaled $2.3 billion.

Obviously fractional ownership is not a product that would work in a suburban housing subdivision, because people actually live there full time. But in Summit County Colorado, where I sell real estate, at least 50% of the properties here are vacant 75% of the time, presenting a perfect scenario to better utilize these vacation properties.

Why May Fractional Ownership Work for You?
1) Price.
The first reason people are drawn to fractional ownership is price. Buying ¼ of a property is financially feasible for some people who may not be able to afford full ownership.

2) Size
You may be able to afford a studio in Summit County but don't really feel like sharing the same room with all three of your children. For the price of a studio, you can own a fraction of a three bedroom residence.

3) Location
As we know in real estate, location, location, location is the key to buying right. Unfortunately, ski-in, ski-out properties sell for upwards of $1,000 a square foot here in Summit County. Fractional ownership units often times can be found in great locations such as at the base of a ski lift or on the river with fishing rights.

4) Taste in Finishes
Fractional ownership properties, as a general rule, are newer construction and outfitted with modern finishes and amenities.

5) Convenience
In addition to looking good, fractional ownership properties are furnished down to the silverware and washcloths. There is no need to go to Target or Wal-Mart and purchase kitchen utensils and towels. Also, there is usually a cleaning company that puts the place back together after you leave and the next owner arrives, so it makes your vacation stay even more convenient.

6) Investment
Fractional ownership appreciates like full ownership of real estate. Plus, if you are not using all your time, you can put your fraction into a rental pool and gain some income from your investment.

7) Efficient Use of Time
Aren't we all busy?? Most people use vacation property from 3-6 weeks per year. That leaves 48 weeks unused and wasted. Fractional ownership cuts down the amount of waste and allows people to rent the property when they are not using it.

8) Standards
Similar to Number 4, people want what they want. Fractional ownership allows for people to have their standards met in a real estate purchase and still stay within their budget.
Summit County has a large variety of fractional ownership opportunities available ranging from condos to single family homes. If you love the mountains and want to make the dream of mountain home ownership a reality, you owe it to yourself to give me a call!

Authored by Amy Nakos, JD, CLHMS, Owner/Managing Broker, Landmark Real Estate Group, LLC, 111 Main Street, Frisco, CO 80443, 970-668-1430 office, 970-389-8388 cell, anakos@landmarkregroup.com

Homemade Power Bar Recipe

I found this recipe in Backcountry Magazine and then tweaked it for high-altitude baking and added some extra ingredients. These healthy power bars are great for biking, hiking and skiing or for whatever it is you do! When people try these bars, they want the recipe. So I'm sharing it with the activerain community! Also, if you have kids or grandkids, you can call them "cookies" and they will love them! If you make these -- email me and let me know how you like them! Enjoy.

INGREDIENTS
10 T butter, melted
1/4 c Splenda, fructose or brown sugar
3/4 c white grape juice concentrate
2 large eggs
1/4 c peanut butter
1 tsp vanilla extract
2 1/2 c old fashioned rolled oats
1 c plus 2 T whole wheat flour
1/2 tsp baking soda
1 tsp ground cinnamon
2 T wheat germ, oat bran or ground flaxseed
1 c chopped walnuts or almonds
1 c raisins, or dried fruit
1/2 c chocolate chips
1/4 c coconut flakes

INSTRUCTIONS
1. Preheat oven to 375 degrees.
2. Place butter, Splenda (or brown sugar), grape juice concentrate, eggs, peanut butter, and vanilla in a mixing bowl and beat until well mixed.
3. Place oats, whole wheat flour, baking soda, cinnamon, and wheat germ in another bowl and mix. Add the oat mixture to the butter mixture and stir until thoroughly combined.
4. Fold in the nuts, dried fruit, chocolate chips and coconut until combined.
5. Spray a baking sheet with non stick spray. Shape heaping tablespoons of the batter into two by four inch bars with an inch or two of space in between. Bake the bars until the bottoms are brown and the tops are golden brown - about 13-15 minutes.
6. Let the bars cool before taking them off the baking sheet.
After cooling, we wrap the bars in plastic wrap and put them in the freezer. When it's time for a bike ride, hike or other outing, we grab a few to go!

Authored by Amy Nakos, JD, CLHMS, Owner/Managing Broker, Landmark Real Estate Group, LLC, 111 Main Street, Frisco, CO 80443, 970-668-1430 office, 970-389-8388 cell, anakos@landmarkregroup.com.

Pre-listing Real Estate Inspections -- Will they reduce the drama?

Yesterday, a broker in my office starts singing a song he made up: "My least favorite part of this job is dealing with inspections." It was a catchy tune, and he sang it with emotion. After all, he just received an inspection report with no less than 30 items that needed to be addressed. He had just completed the Inspection Notice, asking that every item be repaired or replaced for his Buyer client. On a deal that he closed a couple months ago, his Seller client had to pay over $10,000 in credits for inspection items that were revealed for the first time when the Buyer's inspector found them.

Can inspection drama be avoided? Well, maybe not avoided, but I'm convinced it can be reduced. A number of home inspectors I know suggest conducting a pre-listing home inspection. The Seller hires the inspector and then gets a report of items needing attention - the same report a Buyer would get if he/she hired the inspector. The Seller can then repair the items on the report before a Buyer even comes along.

What if you are the Buyer looking at a home and you know a pre-listing inspection was done and all the items were repaired. What would you think? "I want to see that report," is the first thought. The second might be, "this Seller really cared about having this property ready for sale." A more cynical thought might be, "I wonder if the Seller knew the home inspector and certain items were not included in the report." "I better get my own inspection."

The Buyer is certainly entitled to an inspection of his/her own, and as a listing agent, I would encourage they get their own inspection. It is up to the Seller whether to show the Buyer the pre-listing inspection report. I would suggest to my Seller clients that being open and honest is a good policy and share the report. I will venture to say that the Buyer's inspection report will have far less items than the Seller's original inspection report.

The challenge in getting a pre-listing inspection report will be convincing your Seller to pay for it. I have had a number of clients who refuse to pay $200-$500 to know the items that are wrong with their home. One of my clients even told me that he didn't want to know if there was something dramatically wrong with his property because then he would have to disclose it! I said, "Wouldn't you rather know now than when you have a pending contract and the Buyer's inspector finds it??!!"

It is my policy that my firm and I will not hire home inspectors. It is the responsibility of the Buyer or the Seller to engage the inspector. After the inspection, the report belongs to them. If you can't get your Seller to agree to a pre-listing inspection, you are going to have to wait until the Buyer's inspector comes along.

I believe the more information the better when it comes to real estate transactions. Sellers should find out as soon as possible whether their properties need any repairs. If they do, please fix them! It will make your client's property much more attractive to potential Buyers. When the perfect Buyer comes along, you can rest assured that on the day the inspection objections are due, you and your client will be drama-free.

Authored by Amy Nakos, JD, CLHMS, Owner/Managing Broker, Landmark Real Estate Group, LLC, 111 Main Street, Frisco, CO 80443, 970-668-1430 office, 970-389-8388 cell, anakos@landmarkregroup.com.