Monday, March 23, 2009

The Perfect Storm

I have been asked again and again about when we are going to see the fabled 4.5% interest rate. The answer was always, "I have no idea if that will ever happen". Well we did finally see it! Thursday for a brief period, it dropped to 4.5%. Today it is back at 4.75% but for a brief period it had finally gotten to the point the media has been telling us all about. And we all know that the media is always right... right?
So with 4.5% actually achieved, low prices and an $8000 tax credit for first time home buyers that you can take this year if you buy this year, have we reached the perfect storm in Real Estate? If I had a crystal ball I would know all the answers. But I don't so I can only give my educated opinion.
The first thing to consider is do you have a stable job and a credit score over 620? If you do and plan to stay in the same spot for a while, then yes. This is the perfect time to buy.
I have seen inventory for under $300K drop in Denver dramatically over the last month. If you are interested in buying a HUD home you better be prepared to offer at least $10K over asking on the day it goes to bid.
What all this means is that I think we have reached the bottom and will remain here for at least this year if not start the climb back up in Denver.
The second thing to consider is that if you have a home you are thinking of selling to move up into a bigger home, this may be the time. You may be taking a slight loss on the house you are selling depending on the area but if you wait for interest rates to go back up, you may not be able to afford the house you could have afforded while rates are this low. Plus, with inventory shrinking that means your house will have a better chance of selling. This really goes for houses still under $400K because over $417K and you will be in the Jumbo market which is quite unstable.
I hope this helps anyone thinking of buying or selling right now. I am always available to answer any questions you may have on Real Estate so just give me a call.
Denise Fisher
Real Estate of the Rockies

Thursday, March 19, 2009

Real Estate Auctions

This is my first blog and I hope that everyone enjoys reading my thoughts and news from Real Estate. I always encourage comments and feedback to help me get the news that you want.
I have just returned from yet another Real Estate auction that made me scratch my head. It was located at an old Victorian in Baker and there were about 6 properties auctioned off. When I first arrived I noticed all types of people standing around. There were a few that actually knew what they were doing and were quietly waiting for the sign up. There were quite a few others that had no clue and went up to everyone they could to see if they knew what was going on. In these uncertain times I wonder why people would show up at an auction without representation, where, when the gravel comes down they have just purchased a house that has no "get out of contract" clause. There were probably 50 people at the auction but there really were only about 10 serious bidders. With 1 exception every house on the auction paper that day, went for OVER what the house was being offered a few weeks before on the MLS. And the house that went for the most was the Victorian. The house was in really bad condition and needed a complete remodel. I estimated you could get a top price of about $400K if it was totally fixed up which would be about $150K to $200K because of the Historic designation and extensive work needed. The house went for $253K with the buyer having to pay for all the closing costs. Being that I have been to many auctions, I wasn't surprised at all. People get so excited at these auctions that they feed off the others that are bidding. I can only hope the people that buy these houses at above market price are going to live there for a very long time. There are, of course, exceptions to the rule and there was a house at the auction that did go for a very good deal.
The thing to remember with auctions is that the house is as-is and you should do your research before going to one. You could be overpaying for something that needs a lot of work. And even though Denver is ranked #1 in the nation for Real Estate there are good deals to be had. You have to be patient, do your research and know a professional that will give you the best advice. Otherwise you could be living in a Money Pit eating Romin!
Denise Fisher
Real Estate of the Rockies