Glenwood Springs, Carbondale and New Castle Colorado real estate listings, home buying, selling and relocation information

Market Update for Aspen to Rifle - October 2011

(This analysis is designed for those of you who love numbers - For those of you who don't, you may want to skip to the end for the summary!)

Year on year, up and down our valley inventory and absorption rates have dropped significantly (absorption rate is a calculation that lets us know how long it would take to sell all of the current inventory if no more homes were listed).

The biggest decreases (almost 60%) have been in Basalt and New Castle, the two towns that experienced the most speculation during the boom. The lowest decreases (around 30%) were in Aspen and Carbondale.

For the absorption rates to decrease, you need some combination of decreasing inventory and increasing sales, both of which have happened.

On the supply side, there has been a lull in Foreclosed properties being listed caused by issues in processing them (robo signing). Year on year, supply has fallen between 10% (Aspen) and 40% Basalt.

On the sales side, it appears that prices have fallen far enough to bring a level of confidence to able buyers (in many towns at the lower end of the price range, mortgage payments are below rents).

Through February of this year, sales surpaseed 100 in only 1 month since Lehman brothers in September 2008 (almost 2 and a half years!). In the last 7 months sales have been over 100 every single month.

Based on the above, it would be easy to present a rosy picture of our improving market but it would not be entirely accurate. While there have been significant improvements, the absorption rates still remain stubbornly high - from a low of 13 months in Rifle to a high of 41 months in Snowmass Village (Rifle 17, Glenwood 17, Carbondale 29, Basalt 25, Aspen 32). Absorption rates of over 12 months indicate an imbalanced market with supply outstripping demand and putting downward pressure on prices.

So, while the the decreases in supply and increases in demand have brought the market along way back towards an equilibrium, it is clearly not there yet. With many foreclosures still to work their way through the market, it certainly appears that the market is going to continue to favor investor buyers and first time home buyers for quite a while yet.

What a Great Buy in New Castle, CO (8/26/2011)

I would like to share the details of a closing I had today, especially for those of you who are wondering if it is a good time to buy.

(On a side note, I found it interesting that Warren Buffet just decided to take advantage of the depressed prices with his investment in BOA)

I was contacted by a buyer looking to purchase his first home in New Castle. After going over his needs and wishes, we identified the best fit as a newer subdivision of duplex homes.The home is in immaculate condition, has 3 beds / 2 baths over 1600 sq. ft. and a 2 car garage. Since there were none currently available, I did some research and calling and found a seller.

He closed today for $130,000 (they sold for $350,000 in 2007!!). Including taxes and insurance, his total monthly payment of $850 is $400 less than the current rental rate for these units.

This offers a very favorable positive cash flow for an investor or all the advantages of home ownership to a first time home buyer at a price significantly below rent.

Have You Ever Dreamed of Building Your Custom Home in the Roaring Fork Valley?

This blog was prompted by the list price of a variety of bank owned lots that have come on to the market recently.

Click here to see a selection of these lots:

With the dramatic fall in real estate prices over the last couple of years, the prevailing wisdom has suggested that it is better to buy existing homes than build since they are so cheap.

While I would not disagree with this outlook, land prices have fallen so dramatically that I believe it is now possible to build a brand new home to your exact specifications at a cost that could be equivalent to the current depressed market values.

Along with every thing else in the valley, labor costs have fallen as the construction sector has been the hardest hit and contractors can no longer charge the high prices of 4 years ago.

As a very rough guide, it should be possible to build a fairly simple home for around $150 / square foot and one with "high end" finishes for around $200 / square foot.

I can personally recommend several excellent local builders, who specialize in traditional "stick build" and modular construction.

Please don't hesitate to contact me if you are intersted in builiding your custom dream home.

Best wishes,

Julian

June Real Estate Market Analysis

Here is our friend Joe Carpenter's always enlightening analysis of the sales numbers for the month of June.

Sales volume held steady at 99 units for the month of June while listings jumped considerably from 200 units in May to 297 new added units in June (+49%) producing a 3:1 list to sales ratio. The ratio was 5.71:1 in June of last year which happened to be the highest listing volume month of 2010. Let’s hope for the same this year. Year over year, monthly sales doubled that of last year at this time. YTD, sales are running 73% ahead of last year while listings are down 11% TYD. The net result is a 50% reduction in the YTD absorption rate from 40 months to 20.

Activity in the western suburbs essentially held steady with last month in terms of listings and sales with a ratio of about 2:1 for the month compared to almost 3:1 last year at this time. YTD, the list to sales ratio is fully one-half of last year and currently stands at 1.88:1 verses 3.79:1 last year. YTD, inventory levels continue to be contained with an absorption rate of just 13 months verses 29 months through June of last year.

The market is likely to continue a choppy pattern of activity until listing volumes are checked. The 3rd quarter historically represents the most active sales period though the home buyer tax credit offered through the end of last year appears to have enhanced Q4 results. While nothing is a given in these uncertain times, conventional wisdom would suggest that monthly sales activity should top 100 residential units in the next few months allowing for some much needed absorption of existing inventory, presumably including a large segment of distress sales which have accounted for about 40% of transaction activity YTD. It’s all a part of the process that is necessary to restore the market to more balanced levels that we will ultimately see.

Best Regards,

Joe Carpenter

Vice President

Special Assets Banker

American National Bank

429 Railroad Avenue

Rifle, CO 81650

(970) 625-2895

Joe.Carpenter@anbbank.com

Aspen Glen Golf Course Community News

Aspen Glen is the premier gated golf course community in the lower part of the Roaring Fork Valley. The Jack Nicklaus designed golf course has won numerous awards and enjoys a significantly longer season than some of the golf courses closer to Aspen. The spectacular club house with pool, tennis and gym facilities at Aspen Glen enjoys incredible views of Mt. Sopris and is a popular venue for local events.

Like all golf course communities, Aspen Glen has been affected by the economic crisis and prices have fallen significantly from their peak in 2007-2008. Probably due to the general financial strength of the typical Aspen Glen resident, the neighborhood has not been as affected as other parts of the valley by foreclosures.

In the last 12 months, there have been 11 residential sales in Aspen Glen, with prices ranging from $475,000 to $2,750,000. The median sale price was $1,050,000 and the average list to sale price reduction was 20%.

Currently there are 43 properties listed for sale, showing that there is still a significant oversupply. Asking prices range from $485,000 to $2,400,000. There are 3 bank owned properties currently for sale.

Based on the absorption rate of 46 months and the median days on market of 221 days, in my opinion, prices will need to come down further before sales pick up. This being said, every seller sets their own price and the properties that are selling are the ones that reflect a true value.

if you would like more information on Aspen Glen, including a list of properties available or reent sales, please contact me at Julian@TheBestWayHome.com. For more area information, please visit my website at www.TheBestWayHome.com or www.FaceBook.com/TheBestWayHomeRE or call me on (970) 309-5169

June, 2011

Market Update for May 2011

What do flood waters and housing inventories have in common? Answer: They both rise and fall.

As we’re experiencing record run off from the snowpack of the past season and see the rivers reaching or exceeding flood levels in many areas, I can’t help but draw a parallel to the local housing market over the past three years where we’ve seen inventory levels swell as a dramatic decline in sales dammed the flow of transaction activity and flooded the market. Like the flood waters, the gage of whether housing stock is rising or receding is a function of the relationship between what is flowing in (new listings) and what is flowing out (sales) with consideration given to the existing levels (total inventory). Flood waters are expected to reach their peak for the season in this area any day now but in that regard, the housing market is well ahead having reached its high water mark in January of 2009 where we saw a stunning imbalance of nearly 9 listings for each sale and an absorption rate of over 73 months! The housing waters have been receding steadily ever since and the trend continued during the past two months.

April results for the broader market (Aspen to Parachute) reflected a listing-to-sales ratio of 1.28:1 on 150 new added units to a respectable 117 sales. One would have to go all the way back to 2007, the peak of the market, to find a single month in which the balance of listings to sales was as close as this. The absorption rate fell to just over a 12-month supply compared to over 43 months a year earlier and nearly 48 months in April of 2009. The western suburbs (New Castle to Parachute) also set another new record in April for recovering market balance posting just 1.12 listings for each sale (also a best since 2007) and an absorption rate of a scant 6 months compared to 27 months a year earlier and nearly 44 months in April of 2009.

May results reflected an increase in listing activity to 200 units typical of the spring but well below May of the two prior years which had 256 and 288 new added units for the month. Meanwhile, sales for the May posted another good showing at 97 units compared to 63 in the same month a year earlier and twice that of the 49 units recorded in May of 2009. The absorption rate as of May month-end stands at about 17 months, nearly half that of a year earlier where it stood at 32 months. Similar trends were reflected in the western suburbs for May.

The housing figures are as telling of the conditions as the flood gauges posted in the rivers. There is no question that the market is well on its way to recovery. Just the same, there remains an excess amount of “standing water” with 1,631 available residential units for sale as of May month-end, including 364 units in the western suburbs. Prices will remain suppressed until the inventory of distressed sales, now about 40% of the market, has run its course. Once the market is separated from those that HAVE to sell from those that WISH to sell, the artificially low prices that currently establish “market value” will evaporate. At that point, a new stage and a significant change in the dynamics of the housing recovery will have occurred. It’s not of question of “if”, but “when”. And it’s evident from the statistics that it’s getting closer by the month.

(Courtesy of Joe Carpenter, American Nationa Bank, Rifle CO (970 625-2895 - Joe.Carpenter@anbbank.com)

Market Update April 2011

(courtesy of Joe Carpenter)

The March results reflected a continuing trend of contraction, most notably in the absorption rates for the overall market and particularly for the western suburbs. As of month-end, the overall absorption rate stood at just under 18 months down 39% year over year and the best showing since June of 2008. Things got even tighter in the western suburbs comprised of municipalities from New Castle to Parachute where the absorption rate as of March month-end was just under 13 months, the best rate since August of 2008 and a decline of 50% year over year.

While those numbers are encouraging, the year over year decline in total inventory is likely a function of discouraged sellers pulling their homes off of the market, rather than attempting to compete with distress and short sales that are contributing significantly to the increased sales activity and driving down prices.Nonetheless, there were 96 sales transactions for the month, an increase of 43% year over year and the highest transaction count for any month since August of 2008.

Consider for a moment that the average number of transactions in 2011Q1 is 71 units. In all of 2010, only one month of activity exceeded that amount and that occurred in December. Statistically, the market bottomed out in January of 2009 with a list to sale ratio of nearly 9 new listings for every sale and an absorption rate of over 73 months. Contrast that with the results of the most recent month at 2:1 listings per sale and an absorption rate of 18 months. The progress has been consistent and undeniable.

So why all the continued doom and gloom? In a word: There continues to be an excessive amount of inventory on the market. With 1,726 available units as of March month-end (down 13% year over year) and many of these representing distress situations where sellers are forced to liquidate, buyers are in a position to cherry pick the best of the best in terms of value. And they’re doing exactly that. While this has an adverse affect on prices, it does serve to absorb inventory, a necessary component to eventual stability and recovery.

For reasons already mentioned, there will continue to be a steady supply of homes to choose from. Until the distress, foreclosure and short sales run their course as they eventually will, prices will continue to be suppressed. Provided that buyer activity continues to increase as it has steadily since the anemic 22 units in January of 2009, at some point (I don’t pretend to know when), the distress sales will be replaced by market driven transactions where buyers will be required to meet the price expectations of sellers motivated by things other than desperation.

Watch for monthly transaction counts to consistently exceed 100 units as an indication of this transition phase of the recovery and the period where market balance begins to be restored. During this phase, an increasing number of buyers begin competing with one another and opportunities for the best available values might well have already passed.

The Best Loan Program You Have Never Heard Of

1.Are you either a first time home buyer or do not currently own a home?
2.Can you demonstrate a history of on time payments for the last 2 years?
3.Do you have at least $2,000 in savings?

If so, you may qualify for this program.

The Advantages:

The interest rate is typically 1% below prevailing market rates for “A paper loans” (a savings of around $120 / month on a $200,000 loan)

Through seller concessions, you can buy the rate down an additional 1.5% (an additional savings of around $260 / month on a $200,000 loan)

There is now down payment, no closing costs and no mortgage insurance.

Based on your income, the maximum loan amount goes up to $406,000

You can use part of your loan amount to make renovations, repairs or upgrades to your home.

If you experience financial difficulties, you may defer payments for up to 3 months.
You may qualify for this program 2 years after bankruptcy, foreclosure or short sale!

The Caveats:

The goal of this program is to ensure that the homebuyer is thoroughly educated on the whole process of home ownership and is financially ready. Because of this, the process is more involved and time consuming than for a traditional loan.

You must attend a home buyer workshop, fill out detailed financial budgeting for your household and provide very complete financial documentation.

You must commit to live in the house the whole time you own it.

If you would like more information on this program and to find out if you may qualify, please call me on (970) 309-5169

or email me at Julian@TheBestWayHome.com

Why you want a Buyer's Agent in the Aspen Market

Each state has different rules of agency with regards to Real Estate. In any transaction it is very important to know the relationship between you and the Realtor you are working with.

In Colorado there are 3 possible relationships and one “non-relationship”. They are: Seller’s Agent, Buyer’s Agent, Transaction Broker and Customer.

As you read through the definitions below, there is one key sentence that for me explains why you want to have a Buyer’s Agent assisting you with the transaction.

“A buyer’s agent works solely on behalf of the buyer to promote the interests of the buyer with the utmost good faith, loyalty and fidelity.”

This is the only option that clarifies that the agent has a “fiduciary” duty towards you and on most occasions, this representation will not have any additional cost to you!

Since a signed agency agreement is a legally binding contract, the only person who can explain the nuances of the different choices is an attorney.

Here are the definitions of these different options from the Colorado Real Estate Commission Form:

Seller’s Agent:

A seller’s agent (or listing agent) works solely on behalf of the seller to promote the interests of the seller
with the utmost good faith, loyalty and fidelity. The agent negotiates on behalf of and acts as an advocate for the seller. The seller’s agent must disclose to potential buyers all adverse material facts actually known by the seller’s agent about the property. A separate written listing agreement is required which sets forth the duties and obligations of the broker and the seller.

Buyer’s Agent:

A buyer’s agent works solely on behalf of the buyer to promote the interests of the buyer with the utmost good faith, loyalty and fidelity. The agent negotiates on behalf of and acts as an advocate for the buyer. The buyer’s agent must
disclose to potential sellers all adverse material facts actually known by the buyer’s agent including the buyer’s financial ability to perform the terms of the transaction and, if a residential property, whether the buyer intends to occupy the property. A separate written buyer agency agreement is required which sets forth the duties and obligations of the broker and the buyer.

Transaction-Broker:

A transaction-broker assists the buyer or seller or both throughout a real estate transaction by performing terms of any written or oral agreement, fully informing the parties, presenting all offers and assisting the parties with any contracts, including the closing of the transaction without being an agent or advocate for any of the parties. A transaction-broker must use reasonable skill and care in the performance of any oral or written agreement, and must make the same disclosures as agents about all adverse material facts actually known by the transaction-broker concerning a property or a buyer’s financial ability to perform the terms of a transaction and, if a residential property, whether the buyer intends to occupy the property. No written agreement is required.

Customer:

A customer is a party to a real estate transaction with whom the broker has no brokerage relationship because such party has not engaged or employed the broker, either as the party’s agent or as the party’s transaction-broker.

Roaring Fork Lodge Condo / Hotel project in Glenwood Springs, CO (1/29/09)

Despite so many big projects in our area being put on hold, the developers of the Roaring Fork Lodge hotel are moving full steam ahead. As well 106 hotel rooms, there are 40 condominiums for sale. It appears that once the developer has sufficient reservations / contracts in place, construction will begin. Reports suggest that around 25% of the units have reservations on them at this point.

Recent news has Denver based Magnolia Hotels signing a partnership and operating the lodge upon completion. Magnolia operates upscale boutique hotels in several large U.S. cities.

It seems that the development is likely to be popular with front range buyers - Glenwood Springs is the most popular destination for Coloradans - who enjoy coming up to Glenwood for the holidays and weekends. The bike trail just across the street leads straight to downtown and of course the Hot Springs Pool. An additional advantage will be the ability to take advantage of short term rentals to offset the cost. It also seems likely to be popular with local professionals looking for a great in-town location, and maintenance free living.

This really is the first development of this kind in Glenwood and I suspect that despite the down economy, units will sell well. There is nothing similar available in Glenwood and for all the folk from Denver who are regular visitors to the local hotels, this may prove to be a very attractive proposition.

With units ranging in size from just under 1,000 sq.ft to just under 2,000 sq.ft. pricing looks like being around $400 / sq. ft.

With the extended time-frame from contract to completion, it will be important to analyze the contract carefully and be aware of deadlines affecting earnest money deposits.

If you are making a purchase, consider working with a buyer's agent rather than directly with the developer - This way you are guaranteed a representative promoting only your best interests.

Prices in the Aspen Real Estate Market (2/5/09)

Prices in the Aspen Real Estate Luxury Market

The world over, Aspen is known as a "must-own" town for the ultra wealthy. When you see a 6,000 square foot lot listed in town for $3,250,00, you can not but be reminded of the tried and true real estate axiom; location, location, location!

So how have prices been holding up in the face of this global economic crisis? Well, it is certainly true that sales have fallen significantly - down 40% from 2007. But in terms of prices, somewhat surprisingly, there has not been a significant change. This is perhaps explained by the extraordinary power of the Aspen name. Celebrities, Intellectuals, Business magnates, political leaders and power brokers the world over are drawn to Aspen.

Aspen is a place where, once people visit, they dream of owning a second home or retiring. For many, being right in the heart of town or right next to the ski slopes is the most important factor in their real estate choices. However, a growing number of families are looking just a short twenty minute drive away in the mid-valley area around the increasingly popular town of Basalt; described by many as "the way Aspen used to be". And of course the additional advantage for many is the proximity to the city amenities of Glenwood Springs with its award winning hospital, world famous hot-springs and big-box stores.

Indeed when you make the comparison, the numbers are quite illuminating. Three million dollars can buy you the aforementioned 6,000 square foot vacant lot in downtown Aspen, a twenty year old 1,700 square foot condominium on the slopes at Snowmass or a brand new 6,275 square foot custom luxury home on 3.5 wooded acres in the mid-valley area.

An Aspen home with the Aspen lifestyle at a fraction of the cost - This is where the smart-money is investing in their generational legacy.

Click on the following links to see the different properties:

Ski-in / Ski-out condo in Snowmass

Vacant Lot in Aspen

Custom Home 20 minutes from Aspen

Financing Your Home >Home Free

Conventional wisdom says, "Don't pay off your mortgage early." Are you foolish to consider an early payoff? Absolutely not! By adding just $50 to $100 to your mortgage payment every month, you can save thousands of dollars in interest, pay off your loan quicker, and eliminate a major monthly expense.

The argument usually given against paying off a mortgage early is that you can make investments with your extra cash, such as mutual funds, stocks or bonds, which pay higher returns. This approach enables you to take the mortgage interest deduction and have easy access to your money, in case you need it. These are all definite pluses, but are not guaranteed savings results.

Any extra income which an investment might generate above your home equity appreciation can be offset by a bad year in the investment market. Investment earnings can virtually eliminate the income tax advantage of your mortgage interest deduction, since stocks and bonds are likely to generate a fair amount of dividends, interest income and capital gains.

It isn't as simple as conventional wisdom--consult a financial expert.

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Q	What famous building receives a fresh coat of 300 tons of reddish-green paint every seven years?
A	The Eiffel Tower in Paris, France.
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