Wednesday, February 27, 2013

Denver: Largest Annual Increase in Home Prices Since 2001

Best market in 12 years? Well, home prices in the Denver metro area rose 8.5% in December 2012 over December 2011, marking the 12th straight month of year-over-year gains, according to the S&P/Case-Shiller Home Prices Index released Tuesday.

The report said it was Denver's largest annual increase since 2001!

Have I mentioned to you that it is a competitive market? The Denver Post interviewed an agent who had this to say: "I've sold real estate that long, and I can tell you this is the hottest market of my career," said Michelle Ackerman, Redfin's managing broker for the metro area. "Prices are up — that's a proven fact. Inventory is loosening up a bit, and we're seeing multiple bid offers all over the metro area. It's a seller's market, and it's extremely competitive. I've been doing things I've never done before to capture a home."

I have the same exact experience. As soon as a house is put on the market, I have to take my buyers there that same day, and they know they have to decide that same day whether to write an offer or not, because chances are it will be gone very soon. A few years ago, buyers had a few days or weeks to decide whether they want to put an offer in on a house. I've had to do many things in order to get under contract, including begging listing agents to take our over asking-price offer and not waiting for any others. It's hot right now. Let me know if I can help you compete!

Wednesday, February 13, 2013

FHA Announces Fees Going Up Soon

I told you these rates and these low fees would not last forever. Mortgages for homebuyers with low down payments are about to become more expensive -- again. And this time, borrowers will get stuck with the higher fee for the life of their loans.
The Federal Housing Administration has announced several changes to FHA loans, including increasing the mortgage insurance premium fee that is added to the borrower's monthly mortgage payments. The FHA will also tighten the requirements for borrowers with low credit scores and will propose raising the down payment on larger loans.

What changes for mortgage insurance
Starting June 3, borrowers who take out new mortgages will have to pay for mortgage insurance for the life of their loans. Under the current rule, the FHA has to stop charging the borrower for mortgage insurance when the loan reaches 78 percent of the original loan amount.
The higher fee goes into effect on April 1. The other changes will be issued in "coming days," according to an FHA statement.

The annual mortgage insurance premium on most new FHA mortgages will increase by 0.1 percent to 1.35 percent of the balance of the loan. A borrower with a $200,000 FHA mortgage pays about $2,500 per year, or $208 per month,  in mortgage insurance. After the increase, the same borrower would pay $2,700 a year, or about $225 per month. In 2008, before a series of increases that the FHA implemented over the years, that borrower would have been required to pay only $91 per month, totaling $1,100 a year.

The changes are "essential and appropriate measures to manage and protect FHA's single-family insurance programs" says FHA Commissioner Carol Galante.
For now, it's unlikely the small increase will affect a borrower's ability to buy a home or refinance, says Rob Nunziata, president of FBC Mortgage in Orlando, Fla. But once mortgage rates rise, FHA loans might simply become too expensive for some borrowers, he says.
"Once rates start to go up, its going to become a problem and it's going to make borrowers think twice about going with FHA ... and it's going to affect their purchasing power," Nunziata says.

Low FICO scores
Borrowers will have to jump through additional hoops to get an FHA mortgage when their credit scores are lower than 620 and their debt obligations represent more than 43 percent of their income.
"Lenders are already very hesitant to lend to borrowers with scores under 620," Nunziata says. Generally, they make exceptions if the borrower can compensate for the low score by showing a savings account with enough money to pay for at least four months' worth of mortgage payments. It's also helpful when the mortgage payment will be significantly less than what the buyer pays in rent.

Large loans, bigger down payments
The FHA will propose increasing the minimum-required down payment from 3.5 percent to 5 percent for loans of more than $625,5000. The large FHA loans are available in high-cost areas.

Wednesday, February 6, 2013

5 Reason You Should Sell This Winter

Forget the myth that winter is the bad time to sell real estate. While sales usually inch lower in the cooler months, some real estate pros are saying this winter in particular may be a great time to sell a home...especially in the Denver Metro area, the 4th fastest real estate market in the country. 

Here's why: 
1. Mortgage rates are near record-breaking lows: 30 year fixed loans are dipping below 3.5%, and 15 year fixed are below 2.8%! This is unheard of in modern history. Inflation will happen, it's imply a matter of time. Just a few years ago rates were 6.5%. In the 80's, they were near 20%.

2. Home prices are starting to rebound in many markets across the country, especially Denver. The National Association of REALTORS® reported that home prices in December were 11% higher than a year earlier in Denver.

3. Homes still remain a good deal: even though prices are rising, they remain mostly below 2007 highs, and in most areas the cost of buying is cheaper than renting. 

4. Household demographic changes: Many buyers used to want to wait until the end of a school year before moving, but households are changing and moving schedules are less tied to school terms. That's because households with children are making up a smaller part of the mix nowadays. According to William Frey with the Brookings Institution, 80% of all households in the U.S. do not include children. This means buyers are not attached to waiting until the end of the school year and beginning of summer. 

5. Household formation is growing. "Many people who ran into tough economic times several years ago are again looking at real estate ownership," says Wendy Forsythe, executive vice president with Atlantic & Pacific Real Estate. "Enough time has passed so that many of these individuals have re-built credit, built up their savings and now qualify for FHA, VA and conventional financing."
Text or call me to discuss options for selling your home! 720.987.8998