I for one say enough with tax credits to help the housing market. It’s time the real estate market deals with the issues that ail it. The market is over supplied still with homes that are overpriced and over loaned. We need to deal with this head on to get through it

 

                Yes the tax credit was a good thing, but now, the buyers are waiting again for it to come back. If we as a government eliminate it, the buyers will come into the market to enjoy great interest rates. The sooner buyers quit waiting, the sooner we get through the inventory and the sooner to a balanced market.

 

                The tax credit is a crutch that we need to forever more leave behind. Loosen mortgage guidelines. Give people loans with 5% down payment and lower the credit score requirements. Over 40% of the public is having financial distress. Loosen the guidelines and allow people to stay in their homes and eliminate ½ of the foreclosures. Banks get off you *** and work with sellers and homeowners. If banks would work faster and efficiently through the defiencies, it would solve lots of our problems. But, NO, they keep taking the government bailout and pocket it themselves.

 

                Bottom line! Government get out of real estate. Then lenders and investors might start solving all the loan issues that plague us.

 

Thanks,

 

Brian

Yes it’s true. The Wall Street Journal published on May 24, 2010, that the European Financial Crisis is helping our interest rates.

 

            Actually international investors are seeking safety in the American Bond Market and that is driving interest rates lower. Yesterday I was quoted from Kevin Bent WR Starkey Mtg and Lori Sorrells of Bank of America rates below 5%. That is still near the record lows we saw last year

            As a buyer, what are you waiting for? There are homes in Briargate, Powers Broadmoor that are priced 10% below last year’s prices. High end homes are reduced as much as 30%. Homes in the Rockrimmon and Northeast areas are in the same boat.       

 

            What are you waiting for? Give us a call and we’ll show you how to maximize this buyers market.

 

Thanks,

 

Brian

Once again I have received another low offer on a listing and once again the offer is ridiculously low. Like 15% low. Once again I need to educate a seller that buyer agents are giving buyers bad advice. Once again I need to calm the seller down with “At least they were interested enough to make an offer.”

 

Buyers and buyer agents, “What are you thinking?” how many offers are you going to write that have no chance of getting accepted. Don’t you think that if a seller was willing and able to accept a 15% low offer they would list it at that price. Buyer agents do you deliberately price your listings 15% high? I didn’t think so. So why do you write such stupid offers?

 

Let’s talk reality. The city MLS is averaging 96% sales price to list price. There is a place to start especially if you are asking for closing costs. How bout trying a market analysis? If buyers and agents did an analysis of solds and actives perhaps the buyers would understand the market better.

 

I believe buyers are being misinformed. In Colorado Springs, inventory is shrinking and prices below $300,000 have stabilized. Instead of writing ridiculous offers, try to be realistic and perhaps you will get a better offer accepted. Most of the time, low offers create anger. That anger gets personal and no one wins. If a buyer takes a “No prisoner” attitude, I pretty much guarantee that in the end you will pay more than you otherwise might have.

 

Play fair and it’s a win win scenario.

 

Thanks,

 

Brian

This week Forbes Magazine rated Colorado Springs the 9th Best Bang for the Buck city in the United States. The top city was Omaha NE. This is more good news for our little city. Last week Forbes rated us 14th most likely city to rebound from the housing slump.

I believe Colorado Springs is a good value. In affordable housing, most of our prices hover between $90-$110 per feet. In the heyday it rose to $130-$150 per foot. The one golden thing that has happened with the housing slump is that it’s made housing affordable again. In Colorado Springs you can find decent housing around $100,000. In markets like Florida, Arizona, Las Vegas and California home prices dropped 50-70% from the peak. Now there is value in owning a home.

I also think now is the time to buy and invest in real estate. Many people catch it when its on its way up. Almost always people buy into the frenzy when it’s peaking. Now is the time. We have been at bottom for about 8 months. I think we will stay here for only a couple more months before we start increasing values. Fact is, sales this year in 2009 are equal to 2006 and inventory is down 1800 units. That spells relief and increasing values.

Yes, buy into the fact that Colorado Springs is a good value. Say yes that Colorado Springs is rebounding. Get on board the bus before it passes you by.

Thanks,

Brian

Did you see the article by Forbes Magazine listing Colorado Springs as the 14th fastest recovering city in America? Do you believe it? Are we really in for a rebound? Well, let’s see!

Forbes online produced a list yesterday that names Colorado Springs the 14th most likely place in America to Rebound. It ranked Omaha NE #1 most likely. It took into account Gross Metropolitan Product (measure of city economy) foreclosures, home prices, and sales rates. They ranked based on statistics compiles through the month of September.

I think this is great news but is it really true? Now that Doug Bruce has gotten his way in raping our city dry, are we really going to be a quality place to live? By voting for his anti tax measures I feel our city is going to dry up and die. You don’t need to look far to see it.

1st check out our infra-structure and roads. Why do we waste money on a bridge overpass at Woodmen & Academy but vote down public transportation? Why are we closing inner city schools and not putting money into educating Dist 11 kids. Today Dist 11 can’t make ends meet and those of you who don’t have kids in school you keep voting down amendments. That is why your home values don’t climb like other areas. How many of you were fooled by Doug Bruce’s amendment for abolishing storm water. Soon, you will figure out when curb gutter and sewer systems don’t work it was your vote that caused it.

People you need to be more long term thinking! You need to look past the slight increase and look at the big picture. No real airport, bad schools, no public transportation, brown grass parks, broken curbs, gutters, sewers, pot holed streets and slow fire and police protection does not make us an appealing place to live. If we are not appealing you won’t get good prices for your homes. People you need to think beyond today and look to tomorrow. If you don’t we certainly won’t be a top place to live.

Thanks,

Brian

This is part 3 of the investment series I’ve been blogging about. The previous 2 installments were about pure rental investment and fix and hold. This part is about fix and flip.

 

Fix and flip is where an investor/contractor buys a home that needs dramatic improvements. The hope is to make all the improvements to make it “Model Ready” and then sell it for a profit. This is not a bad business but I see more people get burned by this than those who are successful. So what separates success from failure? It’s knowing the numbers!!

 

Knowing your numbers is the key to success in a fix and flip, the main number that needs to be considered is what will the market allow for a sales price. By this I mean, that the market will only allow a certain price on any home. Many investors fail to realize this and make a price based on what they invested in it. Many people think they can create a value and a market and that is simply not true. The second biggest mistake is underestimating the repairs, the carry time, loan costs and exit expenses. Many inexperienced investors team up with inexperienced agents and don’t consider all the costs. There are several costs as I’ll outline that need to be considered. Here is an example: 

 

Let’s assume from our previous 2 blogs that you find a fix & flip for $130,000. The first number that needs to be considered is what will the market let the home sell for. The scenario I will outline happened earlier this year for one of our investors. The market said the high price was $210,000-$220,000 and $195,000-$200,000 for a fast sale. We used $200,000 as our end number. ALWAYS use the end number and WORK BACKWARDS:

 

                        Future Sales Price                                $200,000

                        Repairs                                                  $23,000

                        Exit Commissions                                   $12,000

                        Carry Payments and Insurance                 $2,100

                        Entry Closing Costs                                 $2,600

                        Exit Buyer Closing Costs                          $6,000

                        Exit Seller Closing Costs                          $2,000

                        Misc                                                        $2,000

 

                        NET                                                    $150,300

                        ORIGINAL SALES PRICE                $130,000

                        NET PROFIT                                        $20,000

 

Our investor in this scenario actually made $24,000 for 2 ½ months work. We did not use the miscellaneous expense and repairs and carry time were slightly less. This investor made 10%. This is a reasonable expectation.

 

In summary, know your numbers particularly the end sales price. Work backwards and work with an experienced agent. One other thing is if you are using a contractor, get a price commitment very early and hold them accountable. Please call me with your questions @ 719-593-2963

 

Thanks

Brian

The tax credit is coming to an end. At the end of November 2009 the $8000 tax credit will no longer be able to be used.

What is the $8000 tax credit? The tax credit is exactly what it says, “It’s a tax credit”. It cannot be used for down payment or closing costs. It does not come to you in the form of check. It comes to you as a credit when you file your 2009 tax return. The U.S. Government as part of the stimulus package instituted the $8000 tax credit to first time home buyers. If you are a first time home buyer then you can file for the credit.

All of us in the real estate community have been lobbying our Congress to extend this credit. We have also been asking that this credit be used for all buyers as long as they are owner occupants. That is also true of the first timers is that be owner occupants. Since home prices have fallen and interest rates are low, it’s a great time to be a first time buyer.

So why are so many of you waiting? Are you waiting for prices to go lower? Are you waiting for rates to go lower? I don’t know! I do believe that in my 25 years of selling real estate I have never seen such a perfect scenario. The prices are low, the interest rates are within ½% of record lows and you get a $8000 tax credit. Call us now before it’s over. I know you will be happy you did.

Thanks,

Brian

Two weeks ago I attended Howard Brinton’s Star Power Conference in Denver, Colorado and received some good information on where the real estate market is heading.

The panelists that I got to hear from were Dave Linegar President of Remax, Larry Kendall owner of The Group, Gary Keller owner of Keller Williams, Jim Gillespie President of Coldwell Banker, Alan Domb from Pennsylvania and the President of Prudential Properties. This was an astounding group of men that shared different but same opinions.

·         Point Number 1, - email or speak to your congressman or senator to extend the tax credit past November. This $8000 tax credit is set to expire in November and so far this year, this program is stimulating home purchases. While your at it, ask them to extend the credit to any and all home purchases for owner occupants 

·         Number 2, - the home/housing market is local. What is happening in Florida is different than Colorado. All panelists blamed the media for sensationalizing the housing doom. Yes the market is bad in Florida, Nevada and California. Those states are making the headlines for the national news. States like Texas, South Dakota, Missouri and the Carolinas are actually doing well. Colorado, Arizona and Oregon are stabilizing and are hitting bottom. In Colorado Springs, sales are only down 3%. Inventory is down 19% from last year. This is recovery. All of us need to know our markets. 

·         Number 3, - full recovery will not be here for 5-7 years. All panelists agreed that it will be from 2014-2016 before we return to 2006 prices. The recovery will be slow and methodical. It will be a 2-3% per year process. The higher end in all markets will be the last to go up. 

·         Number 4, - baby boomers and genx’rs will continue to have buying power. This part of the equation will stress the lower ends of the market. Blend in the new immigrants to our country and affordable home options will be stressed. Many baby boomers want to scale down. Many 1^st time buyers will want the same homes. Builders will be unable to fill this niche because costs will exceed the value. Land & materials have not gone down. 

Summary- now and the coming 1-2 years will be a great time to buy a home. Prices are at 2003 levels. Interest rates remain low. Knowledge is power! Know the market and wise investments will follow.

 

Thanks,
Brian

How many buyers are still waiting to buy a house? According to today’s Gazette newspaper fear of job loss is keeping 16% of the buyers from the market. According to Realtor.com 1/3rd of all buyers are waiting because of job concerns.

I think the number is closer to 60% of all buyers are waiting because of job concerns or thinking that the market has not dropped yet. I spoke with 2 potential buyers yesterday and both feel the market has more drop in it. I asked them why they felt that and both quoted national news sources such as T.V. and USA Today. I countered with local information and hopefully that is enough to move them. This week I’ll know.

In Gary Keller’s book “Shift” he talks about how buyers do one of two things. They wait for the market to come to them or they go to the market. The latter always gets the better buys because they are constantly in the market. They are not greedy but prudent. No one knows where the bottom is. No one knows where the top is. In the book “Shift”, Gary uses clear graphs that illustrate this. It will be something I will use starting today.

The other reason I feel 60% of buyers are waiting is motivation. I do feel job concerns play into this. Many people are tire kicking and trying to solidify their income and debts. That is a good plan. Many buyers understand that financing is difficult. But we need to educate them that financing is still very possible. The VA & FHA options allow for 0 -3 ½% down payment. Many buyers feel they need 20%. Educate them.

When we talk about education it’s not just about financing. A good realtor will educate a buyer that a good deal is a priced well home in good condition. It’s not always the bidding war on a foreclosure. Sometimes it’s worth the wait for a short sale. A good realtor educates both buyer and seller on the local economy. Colorado Springs is not the same market as Ft. Lauderdale, Florida. We have a stabilizing market due to military and Ft. Carson expansion. We are not the condo foreclosure capital that is reflected in national news. We and you are all in our local markets, educate your customers. Most of the time it’s good or at least average news.

All in all this economy is something we all have to deal with. It’s the “Normal” for now. Work within it and adapt. As Gary Keller say “Shift.”

Thanks,
Brian

For those of you who will see this in newsletter form, I invite you to our blog site, www.colospgsblog.com. For those of you who are already within my blog, thanks for being here. I am writing a dual newsletter and blog this week.

It’s official that we are half way through the 2009 year and the year is shaping much like I expected. We are seeing foreclosures driving the market with over 2000 foreclosures filed and closed this year. We are seeing the medium sales price hovering in the high $170’s. That’s 17% lower than last year. Year to date there has been over 2600 single family home sales which is a little less than last year. Interest rates are remaining at near record lows. On July 1st I was quoted from 5 ¼-5 ¾ for owner occupied financing. This is still very low.

So what’s in the Maecker Team crystal ball? I expect foreclosures to remain a factor in the market. We will set a new record this year with over 5000 foreclosures. The good news is that investors and first time buyers will absorb these homes. Inventory will remain flat and prices will stabilize except above $ 400,000. In some pockets from $400-$1,000,000 there is a 3 year supply of homes.

Interest rates should also remain flat with some slight rising at year end. I expect by this time next year we should start seeing positive upward movement in most areas of the market. We will see a trickle up effect. This means 1st time sellers will buy up and the movement will continue up to around $600,000-$700,000. Those folks will probably sell and reenter and scale down.

My guesses are based on almost 25 years of experience and over 3600 homes sold. There are only a few of us in Colorado Springs with this extensive experience. This is and will be a market that requires experience and hard work. Already this year we have sold almost a 100 homes with 85 closings. We are doing great. The reason we are doing so well is referrals and hard work.

Please call and I can explain.