During these seemingly tumultuous times, very few people have defaulted on their home loans.  Ninety eight percent of homes in the nation are not going to foreclosure.  And most of the other 2 percent of homeowners purchased homes in Denver or elsewhere that they could not afford. 

We must remember that when we crunch the numbers over 45 years, homes have appreciated an average of 5.98 percent.  A house purchased seven years ago for $200,000 was worth $360,000 within five years.  So, if the average price fell by 10 percent each year for the next two years, the home was still worth $291,600.  For a $40,000 down payment, this home increased $91,600 in value—a pretty good return on investment.  And since tax law benefits homeownership, these profits are tax free.

Some say that home prices have risen at a higher rate than incomes have increased.  However, over the past 45 years, disposable income has increased 6.5 percent, paralleling the average increase in home prices at 6.47 percent.  Since 1963, home prices have remained at about 5.44 times the average individual income. 

If people took out loans based on 80 percent of the median income, their payments averaged 41.44 percent of their incomes during the past 45 years.  In 2007, however, people were paying only 33 percent of their individual incomes in house payments.  The national median price is about $208, 600 right now.  If the 41.44 percent figure is applied, today’s income could even support a median home price of $256,061. 

According to Brian T. Larrabee, Founder of Estate of Mind, Inc., “The notions that homes are unaffordable and prices have outpaced income are neither true, nor responsible journalism.” 

Larrabee cajoles people into buying homes.  “Think of it this way:  Food, Shelter, Clothing—these are the basic necessities of life.  Housing is right in the middle.  It is the foundation of survival—and prosperity….The inevitable down cycles should be seen as springboards of opportunity.”

Indeed, in contrast to the interest rates that approached 20 percent during the early 1980s, we are seeing interest rates near 5 percent and homes for sale offering the buyer great values in today’s market.

For more information about homes, farms, horse properties, and real estate in the Mile High City, call Michael Paul of Realty Oasis at (303) 268-6052.

“Buy American. I am.”  We echo Warren Buffet’s comments in the October 17, 2008 issue of the New York Times.  With the stock market still on the roller-coaster ride of a lifetime, folks continue to pull their money out in cash equivalents.  However, real cash value is sure to deteriorate with the likely inflation caused by the Federal Reserve printing paper money for bailout appeasement.

Buffet explains the simple rule that dictates his buying principles.  “Be fearful when others are greedy, and be greedy when others are fearful.”  So, too, in today’s fearful market, he’s been moving his own personal investments from U.S. Government Bonds to U.S. equities.

The prices are definitely right today to invest in sound American companies and real estate.  Although in the short term, all may appear weak, the pillar companies and surrounding land are strong enough over time to endure the temporary quakes of the economy.  Buffet ventures to say that “most major companies will be setting new profit records 5, 10 and 20 years from now.” 

Nationwide, elements of the economy, especially the banking, manufacturing, and housing sectors, continue to look pretty bleak.  The fearful buyer will miss out on current deals, coupled with the unbelievably low interest rates.  Some people do remember the 18-percent interest on mortgages during the early 80s, but more and more are too young to believe that interest rates could ever go that high.

The Mile High City, with better rankings for business and employment, holds more promise for your hard-earned cash.  A diverse selection of solid companies is woven into our landscape and the local real estate market is already rebounding in many areas.

For more information about farms, horse properties, and real estate in the area, call Michael Paul of Realty Oasis at (303) 268-6052.

Denver CO real estate

Realtor.org says, “Areas with affordable housing and healthy local economies continue to see price growth.”  One indication of a positive economic health now and coming up on the horizon is the growing population.  People are steadily moving into Denver homes.  In fact, the population in Colorado is hovering around 5 million now.  It is predicted to reach over 6 million by 2020.

Metro Denver also added 3,800 jobs between July and August 2008.  The state’s job growth in August 2008, according to Metro Brokers Real Estate Adviser, was 1.6 percent.  The average job growth for the entire nation during the same period of time was only 0.2 percent.  In addition, the state’s unemployment rate during September 2008 was down 0.2 percent from the August figure of 5.4 percent, according to the Denver Post.

And housing in the area is more affordable at low interest rates and more attainable than it has been in quite awhile.  As long as home sales remain somewhat sluggish, real estate prices will be within reach for many who could not afford the previous market activity.  According to the S&P/Case-Shiller Home Price Indices, the string of positive returning months ended in August. 

Median sales prices for existing single-family homes in the area are down about 11.8 percent from last year.  The Denver-Aurora median prices since second quarter 2007 look like this each quarter:  $255,200, $254,100, $230,100, $223,500, and $225,200 for second quarter 2008.  Additional factors like inventory will also affect future prices.  Inventory has gone down 2.9 August and September 2008 according to Metrolist data. 

As the state capital, the Mile High City is the queen of the Front Range cities.  Its eclectic mix of communities offer something for everyone—from wonderful horse ranches to urban lofts to residential suburbs and master-planned communities and revitalized real estate in popular areas close to downtown.  It is located an hour or two from recreation and world-class ski resorts in the Rocky Mountains and boasts a new international airport. 

For more information about farms, horse properties, and real estate in the greater metro area, call Michael Paul of Realty Oasis at (303) 268-6052.

Forecasters are predicting that investment real estate in Denver will hold its own because it is harder today to be approved for mortgages than in recent years.  With home prices flat in August, the Denver CO investment real estate market may just be a way to diversify.

Over time, the area generally experiences its lowest vacancy rates in the second and third quarters.  So, the recent news of a high 6.5-percent vacancy rate is a bit hard to swallow.  It is up from 5.3 percent for third quarter 2007. 

Broken down by county, vacancies for apartments in Denver CO real estate in the third quarter are as follows:  Adams County 7.5 percent, Arapahoe County 6.9 percent, Jefferson County 6.5 percent, Denver County 6 percent, Douglas County 5.9 percent, and Boulder/Broomfield County 4.7 percent. 

Average rents for Metro Denver increased $33/month to $892.22 since third quarter 2007.  Average rents by county from highest to lowest were:  Douglas County $1,051.05, Boulder/Broomfield County $974.68, Denver County $906.12, Adams County $882.52, Arapahoe County $850.72, and Jefferson $847.43.

The Colorado Division of Housing issued a recent report citing the soft national economy for some of the higher vacancy levels.  However, average rents are actually at a record high.  Investors and landlords saw rental losses not because of depreciating values but because of vacancies and incentives.  To attract tenants, landlords have been offering incentives such as a month’s free rent and absorbing the losses. 

For information about farms, horse properties, and investment real estate in the metro area, call Michael Paul of Realty Oasis at (303) 268-6052.

The average sales price in August 2008 for single-family Denver CO real estate was tracked as follows:  Denver $245,753, Aurora $167,069, Englewood $293,399, Highlands Ranch $336,810, Littleton $295,640, Lone Tree $710,768, and Parker $322,258.  In most of these communities, Denver CO homes are selling to smart buyers at a slower pace than a year ago.  However, Aurora and Highlands Ranch real estate actually sold more units August 2008 than in 2007.

Below are the total numbers for existing home sales from January 1 through August 31, 2008:  Denver 8977, Aurora 4,923, Englewood 483, Highlands Ranch 1,211, Littleton 1,915, Lone Tree 123, and Parker 1,204.  Quite a few families are taking advantage of the positive aspects of today’s market.

Something must be going right in our communities.  Even though unemployment rates have been edging up in Colorado this year, Coloradoans have a history of morphing to meet the changing needs of the hour.  Some who came out for the gold rush decided to build farms and Colorado horse properties and Colorado ranches.  Traders settled down into mercantile stores and other businesses, one community applied to open a university, and many built places of interest to attract tourists.  We’ve landed several government offices and military training operations.  Our citizens creatively moved into the high-tech industries, into transportation and recreation.  Our creative communities can meet to solve problems and challenges.  After all, who hasn’t moved to this state to find excitement and a better quality of life?

So we see that in our state this year, the number of jobs has increased—in spite of everything going on.  Jobs have increased in Boulder-Longmont County and we are waiting to see just how the rest of the counties in our metropolitan area discover new ways to serve the sectors of need in today’s world during this challenging time.

For more information about horse properties and real estate in the metro area, call Michael Paul of Realty Oasis at (303) 268-6052.