Jason Daniels's Colorado Springs Real Estate Blog

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Time To Appeal Property Tax Bills?

Thursday, May 03, 2007
by Jason Daniels

I recently received a notice from the El Paso County assessor's office notifying me that my property value has gone up in the past year and I will owe more in property taxes for 2007.  I found this great article about property taxes. 

Pay close attention to your next property tax bill.

Your home may be worth less than the local tax assessor or taxing agency believes and that could mean a smaller property tax bill.

However, unless the assessor takes it upon himself or herself to perform a wholesale property tax reduction for all properties -- rare, but possible -- it's up to you to appeal your tax bill.

"An overvalued, over assessed property is one of the most common and successful grounds for challenging your tax bill," says Eric Cunliffe, a senior vice president with RealEstate.com.

Generally, when home prices rise, so do property taxes which are tied to a home's value. Conversely, when home values fall, so do those same property taxes.

The problem is, many taxing agencies simply wait until the property is sold or the home owner performs a major value enhancing alteration before reassessing the property.

In the current market, however, the increased incidence of foreclosures would indicate, in some cases, there's not enough value in some properties to cover the mortgage. Some owners, wisely or not, are allowing their homes to go back to the bank.

The housing boom frenzy caused many buyers to bid up the price of the property and artificially inflate the value. In some markets, sellers who purchased homes at the height of the boom and must now sell, are finding they have to price their home to move. That means a price, and possibly, value reduction.

The National Taxpayers Union (NTU) says as many as 60 percent of all homes are over-assessed and not in line with their actual value.

Many errors are clerical mistakes according to the American Homeowners Association (AHA).

The vast majority of homeowners who find errors and contest their bill enjoy a lower property tax, says the AHA, which offers a quiz that points to signals your home could be over assessed.

Tell-tale signs include:

 

  • Errors in the description of your property on the tax bill.

     

  • Compatible homes in the area that have sold for less than your appraised value.

     

  • Neighbors with lower assessments on similar houses. (Keep in mind some homes retain the same assessed value for years and assessed values often don't rise in step with market values or home sale prices.)

     

  • Value reducers in your home or area, including drainage problems, easements, re-zoning, heavy traffic, nearby railroad tracks, freeways, industry or toxic waste.

     

  • Depreciation factors, including the quality of materials, inefficient heating, structural cracks, deterioration, or chronic defects.

    The AHA, NTU and others offer property tax reduction kits for a fee and while they may be useful tools to help walk you through the process, appealing your property tax is a right you typically can exercise for free.

    Beware of official-looking mailings and email come-ons due out any day now offering to do the work for you -- for a fee. Some are scams designed to appeal to nothing more than your sense of dread at going it alone. They want only your money, but not to appeal your property tax assessment.

    The Federation of Tax Administrators can point you to your property tax assessor or administrator where you can get all the details you need for appealing your property tax.

    Cunliffe says, "The first thing you should do is examine your tax records in the local assessor's office to make sure the information is complete and accurate. To do this, ask yourself the following questions:"

     

  • Did you buy your home in a bidding war? An overvalued property is an over assessed property.

     

  • Are there errors in your tax records? Look closely at your records and make sure there aren't reporting errors. A condo listed as a single-family home, an incorrect age, square footage that's off, too many rooms and other descriptive factors could falsely boost assessed value.

     

  • Do the math. Many states put a cap on how much above the market value an assessment can be and how much it can rise each year.

    To appeal the assessed value and related property tax, prepare yourself for a tough process that could require you to appeal an initial rejection.

    Also pay close attention to your local rules' period of time when you must complete the complete appeals process.

    Cunliffe says, while the process is free if you go it alone, you may need the help of a real estate agent, realty attorney or other licensed professional to assist you gathering some of the information you'll need to make your case.

    You'll have to look at comparable homes in your community to determine how much the owners are paying for property taxes. The information is largely public and available from your tax assessor's office.

    Cunliffe says you'll typically have to find at least three other comparable homes in your neighborhood that have lower assessments. Obviously, the lower, the better.

    A real estate agent or other professional who has access to the multiple listing service can do a comparable market analysis of homes recently sold and in escrow to hone in on your home's true value.

    An appraiser with multiple listing service access can do the same, as well as perform an appraisal of your home.

    In either case, you could be out a few hundred dollars. Don't make a case if you don't think it's worth the cost to appeal.

    The AARP also says some states have programs for property tax deferrals and other programs that let certain home owners postpone payment of some or all property taxes. There are also some tax rebates and exemptions.

    Don't forget, property taxes are also one of many home ownership related expenses that qualify for a deduction on your income tax returns. The smaller the tax, the smaller the deduction.

    Written by Broderick Perkins

    Contatact me if you need help appealing the county's evaluation of your home.

    Jason Daniels - RE/MAX Advantage - 719-268-8086 or jasondaniels@remax.net

    • Putting Zeal In Your Curb Appeal

    Tuesday, May 01, 2007
    by Jason Daniels
    Curb appeal, the first impression your home conveys to prospective buyers, should create an emotional desire to own the home and enjoy the lifestyle and status it represents.

    Putting the best face on your home also should give a lasting impression that motivates buyers to cross the threshold and take that first step toward closing the deal.

    Experts advise, more like a home improvement or exterior staging job than a cosmetic makeover, curb appeal that sings is particularly crucial now that more and more buyers are calling the shots.

    Give your house model home level curb appeal for that "new" look and feel and buyers will beat a path to your door. That's because there's nothing like moving into a home that's ready to go, free of the need for initial touch ups and free of the ghosts of owners past.

    So how do you put a new face on your old home? With lots of attention to detail, in not one, but all the components that make your home stand out on the block.

    New paint. There's nothing like a fresh coat of paint to begin to give your home that "newly built" look, provided you don't rush the job. Choose a contemporary color scheme that doesn't clash with the neighborhood, but sets your home apart. Don't just slather on a new coat over the old. Remove built up layers of paint before applying a new one. If you don't need to remove existing paint, you do need to prepare the surface.

    Exterior surfaces attract dirt and grime from dust and pollutants in the air and that will prevent new layers from adhering properly and cause peeling.

    New landscaping. Well-manicured landscaping is the frame for your home's curb appeal. The approach should be tidy, simple, healthy landscaping that's proportional to your home. Know how your landscaping will appear once it's matured.

    From a practical sense, the plants and trees provide shade and passive cooling as they control erosion and pollution. They also provide privacy, especially if it's a single-level home adjacent to two-story houses.

    New roof. Some real estate agents advise against adding a new roof when sales are brisk, but topping off a complete curb appeal remodeling job, mandates a new roof, gutters and downspouts.

    Today's roofs can add contrasting color and textures to your home's look. Affordability comes with multi-dimensional composition asphalt shingles in decorator colors. For something cheaper than the real thing, but just as unique, try simulated slate shingles to turn a bland tract home into a more appealing abode.

    New paving. New sidewalks, driveways and other non-landscaped surfaces help pave the way to curb appeal. The choices are endless and inexpensive -- concrete stamped with the impressions of cobblestones, interlocking concrete paving bricks, and more.

    New doors, windows. Purposeful portals should make visitors feel welcome. New double doors, new energy-efficient windows framed with shutters, sectional garage doors with half moon or other interesting windows, all add the final curb appeal touches.


    Written by Broderick Perkins - Realty Times

    Consumers Want Digitally Tricked-Out Kitchens

    Tuesday, May 01, 2007
    by Jason Daniels
    A new study reveals home owners want their kitchen, not the home office or the game room, to be the digital nerve center of the home, as well as a social hub.

    The finding was discovered after the Internet Home Alliance commissioned research and consulting firm Zanthus to determine how home owners wanted to customize their kitchens.

    The pollster put a host of questions to 602 home owners responsible for making household purchasing decisions about kitchen appliances and consumer electronics and the answers surprised the alliance.

    "While we expected to learn that the kitchen continues to serve as the hub of the home, we were surprised to find that bigger kitchens aren't necessarily a priority for most U.S. homeowners," said Tim Woods, vice president of the alliance.

    "For example, we thought that a desk or workstation would be a popular addition but, in fact, most homeowners told us that a computer on a counter worked just as well. Eighty-two percent of our respondents told us that they had no interest in creating a separate space to do work assignments in the kitchen, though they did suggest that a more innovative kitchen design that freed up counter space would be useful," he said.

    The alliance is a consortium of Continental Automated Buildings Association members (including Hewlett Packard, Intel, Microsoft and the National Association of Home Builders) who comprise a network of companies engaged in advancing the connected home space. It will release the full study during the 2007 Kitchen/Bath Industry Show & Conference (KBIS) in Las Vegas, May 7-10, where the alliance will display an "Ideal Digital Kitchen" model created based on the survey results.

    Preliminary findings reveal the ideal digital kitchen includes:

     

  • A digital calendar. The primary kitchen user, typically is also the primary schedule keeper and preferred a digital calendar over 22 other concepts. The calendar should be on a large screen used to add appointments and post notes all household members can access in the kitchen or remotely via the Internet.

     

  • A recipe projection system. Lose those food-stained recipe cards and books. Eighty percent of those surveyed want some sort of wireless, voice-activated recipe projection system that would display recipes onto a kitchen surface.

     

  • An energy monitor and control. Home owners want to monitor energy consumption by room and appliance to chart peak energy usage times, to diagnose areas of wasted energy, and to calculate energy costs.

     

  • A home control station. Perhaps the appointment screen could also double as a monitor for the HVAC and security systems. Home owners requested a screen where they can view the temperature inside and outside of their home, adjust the thermostat on a touch pad and view live video of both the front and back of their house.

     

  • A universal charging station. What better place than the social kitchen to juice up cell phones, personal digital assistants, iPods and the like. One-third of households reported that they currently keep their cell phones on the kitchen counter and one-half said they keep their phone chargers there as well.

     

  • Wireless Internet access. Twenty-nine percent of all homeowners and 43 percent of those remodeling their homes want the Internet served up in the kitchen for Web surfing and email but not for offline applications.

    The survey also revealed what could be a changing trend in how the kitchen is used.

     

  • The kitchen is a control center, more than an entertainment center. The vast majority of home owners, 85 percent, said they don’t see themselves watching videos or movies in the kitchen.

    "That's likely because those are activities that need time and attention, two things in short supply when making dinner," the alliance reported.

    Likewise, video games have no place in the kitchen for 93 percent of those polled. Most say just stick to a television and wireless broadband.

     

  • Most parents, 59 percent, would rather kids not do home work in the kitchen. However, 48 percent said their kids do crack the books while the household chef is cracking eggs.

    Likewise, 69 percent would prefer their kids not do arts and crafts in the kitchen, while 43 percent allow their kids to get creative on paper in the kitchen.


    Written by Broderick Perkins

    • Tips on How to Successfully Invest in Real Estate in a Down Market

    Tuesday, April 24, 2007
    by Jason Daniels
    With a volatile stock market and housing prices on the decline, many investors are looking to take advantage of the real estate down market. Although, as real estate pros know, real estate is the greatest wealth creator, knowing what, when and how to buy can scare off even the most seasoned professionals. Here are some tips for industry pros on how to successfully master today's changing real estate market

    1. Make your money going-in when you buy (vs. sell).
    The time to gain is on the front-end when you buy. Go against herd, play contrary to market. Buy something of extraordinary value when no one else wants it. Sell when fewer people are selling and buy when fewer are buying.

    2. Being lucky means being ready.
    In falling markets people need to sell more quickly, which means buyers can get a discount on the true market value. Buyers might consider taking out an equity line on their own home so they'll have easy access to cash and can quickly act on the best deals.

    3. Buy quality.
    When it comes to deals in the overcrowded condo market - look to buy in the projects that were built first during the recent boom. They are usually in the best locations vs. projects that were built later after the popularity of the first projects took off.

    4. Don't be scared off by problems - these can often be the best opportunities for you. Market confusion is an ally - don't despair when problems arise in a real estate deal - often they present great financial opportunity. For example, if you took out a sub-prime mortgage and now are having a difficult time meeting the payment - re-negotiate the terms with your lender. They don't want to take back the property anymore than you want to foreclose.

    5. Invest. Don't speculate.
    Investing means you can rent it out vs. holding on to it just to hope it goes up. A good investment is one that you can rent out quickly to cover your mortgage and expenses - your short-term earnings, then sell when the market is right for significant capital gain. (You can't rent out or live in your bonds.)

    6. Start with what you know.
    For most people, residential properties are easier to understand, purchase and rent out. Start in your area - where you can be close to your investment. When the real estate market stabilizes, you can look to sell for a significant profit.

    For further information about investing in real estate in the Colorado Springs area contact Jason Daniels at RE/MAX Advantage for your own consultation meeting at 719-201-8052.

    Can a Home Stager Help Sell Homes?

    Tuesday, April 24, 2007
    by Jason Daniels
    Everyone who sells a home thinks to tidy it before potential buyers visit. But do sellers understand how to play up their home's assets and mask its flaws in order to sell it quickly and for top dollar? This is exactly what a home stager does. A home stager is a designer or stylist who suggests ways to make the home more appealing to potential buyers.

    "When selling your house, you're emotionally invested in the home you've created," said Holly Slaughter, editor-in-chief of the RealEstate.com Tips and Tools. "Hiring a professional home stager, who is impartial, can help highlight your home's selling points and make it more appealing to a wide range of buyers."

    When deciding whether or not to hire a home stager, consider:

    Select your level

    Home staging offers many levels of service. For $100 or less, a home stager will walk through your house and offer advice on what is the best way to present your home for your upcoming showings. You may be told to clean up the clutter, hang pictures or mirrors in new locations, repaint the walls or scrub those hard to reach areas of the floors. For a higher fee, a stager can perform a more hands-on role such as repositioning furniture, arranging flowers and suggesting great tips for highlighting your home's curb appeal. And then for an even higher fee, home stagers can redecorate your home from a warehouse full of furniture and decor items, bring in shrubs and annuals or clean out that one room collecting clutter over the years.

    It may be worth every penny

    Stagers say the cost is worth it. Some studies show that a house that has been staged is on the market for fewer days and sells for a higher price than comparable homes. Depending on the home and the neighborhood, a home stager may be just what you need to sell your home more quickly and get the top dollar you're looking for.

    Your time is valuable

    Consider your time. For busy people, hiring a home stager is money well spent. If you need to sell quickly, or if your house has been on the market for some time with little interest from prospective buyers, home staging might be the answer.

    You can find home stagers through associations such as the International Association of Home Staging Professionals, Accredited Staging Professionals or the Interior Redesign Industry Specialists.

    Local Sky Sox Stadium Renovation Received Well with Raving Fans

    Monday, April 16, 2007
    by Jason Daniels

    Have you seen the new Sky Sox Stadium?  If you enjoy Americas greatest pastime, treat your family to a Sky Sox game this season at their new stadium right in our backyard.  I came across this article about the renovation and found it interesting.

    Going, going, gone.

    Gone is the old look of Security Service Field, the home stadium of the Colorado Springs Sky Sox professional baseball team.

    The AAA affiliate of the Colorado Rockies spent $7 million over the past two years to refurbish the ballpark, which was built in 1988.

    “Our facility was aging, so we ren­ovated,” says Mike Hobson, director of public relations for the Colorado Springs Sky Sox. “We are in a unique situation because Elmore Sports Group that owns the franchise also owns the stadium and the land it sits on. Almost all other pro teams in the United States have stadiums owned by a city or county, but Elmore Sports Group used only its own money to refurbish our ballpark.”

    The most visible improvement is a four-story building that has been constructed in right field, down the first-base line.

    The building’s ground floor houses the Sky Sox’ clubhouse, complete with an indoor batting cage, pitching tunnel, offices, locker room and weight-training room. The second floor features a large waiting area for family members of the ballplayers, and the third floor leads to five outdoor private picnic terraces that can accommodate 100 people per terrace.

    “The fourth floor is our Centennial Banquet Hall that can fit up to 250 people and was built to be a year-round facility,” Hobson says. “It gives the Sky Sox an opportunity to offer corporate hospitality, which we have never had before. As a result of this new four-story building, our corporate group reser­vations increased from 100 during the 2005 season to 400 in 2006.”

    The Sky Sox also added black wrought-iron fencing around the park, as well as red stamped bricks along the entrance area, and electronic message boards at the ticket offices.

    In addition, all of the 2,300 old box seats were torn out and replaced, and a new catering kitchen was built to better manage food services.

    “The 2007 season will be the 20th in Sky Sox history, and we now have a modern-day, fresh-looking, 8,000-seat stadium to celebrate,” Hobson says. “Our all-time season attendance record is 269,904, and our goal for 2007 is to set a new record of 300,000 fans. We are confident that we will do it.”

    Security Service Field, the highest-elevation professional ballpark in the country at 6,531 feet above sea level, has only one more pending renovation project. Plans are to add a new stadium scoreboard in the near future.

    “The Sky Sox offer a fun, family environment that is affordable, with our ticket prices still at $5 to $9,” he says. “A family of four can enjoy a great day at the ballpark for around $50. That is certainly a bargain in these days of professional sports.”

    Story by Kevin Litwin from Images of Colorado Springs

    Mortgage Market Update - March 2007

    Friday, April 13, 2007
    by Jason Daniels

    "TELEVISION IS NOT REAL LIFE. IN REAL LIFE, PEOPLE ACTUALLY HAVE TO LEAVE THE COFFEE SHOP, AND GO TO JOBS." Bill Gates Right on Bill...and last Friday, the Department of Labor reported that another 180,000 Americans left the coffee shops and found jobs during the month of March, with another 32,000 jobs added to prior month's reports. The Unemployment Rate dropped to 4.4%, matching the lowest rate in six years - and Average Hourly Earnings were up as well, rising to $17.22 per hour. So it was all good news for the US job market...but bad news for home loan rates, since a strong labor market can lead to inflation, the arch-enemy of Bonds and home loan rates. On the release, Bond prices slipped lower, causing home loan rates to rise slightly across the board.

    And the Fed was watching too...remember that the pop in new job formations and stronger wages creates that risk of further inflation ahead, and this news comes on the heels of a higher read on inflation from the Fed's most closely watched indicator - The Personal Consumption Expenditure Index. So, despite the media and many "so called" experts saying the Fed has to cut rates soon - don't expect a cut in the near future, as the Fed's main priority is controlling inflation.

    WANT TO REDUCE THE INTEREST YOU PAY ON CREDIT CARDS? YOU'RE NOT ALONE...SO DON'T MISS READING THIS WEEK'S MORTGAGE MARKET VIEW, TO GET SMART ON THE TRICKS THAT CREDIT CARD COMPANIES USE TO CHANGE THE RULES AND COST YOU MORE, IN WAYS THAT YOU MIGHT NOT EXPECT.
    Forecast for the Week

    What's on the docket this week? A few reports of note - and one of the more interesting items on the calendar will be the Federal Reserve Board's "Meeting Minutes" from the March 21st meeting, due for release this Wednesday afternoon. Why so intriguing? Because unlike the carefully crafted Policy Statement released just following the actual Fed Meeting, the Meeting Minutes is like the Fed "unplugged"...where all the commentary and discussion between Fed members is unbridled and unleashed to the public. Not all members vote at each meeting - but they all have a voice. Was the decision to keep the Fed Funds Rate in a paused position unanimous? Or did non-voting Fed President Jeffrey "the Dissenter" Lacker raise his voice in favor of more hikes? We'll all find out later this week - and the comments could be market movers, so stay tuned.

    The chart below shows that Bond pricing has been skidding lower of late, meaning home loan rates have worsened right along with them. And the next "floor of support" to catch them is lower still - indicating that Bond pricing and home loan rates will likely get a bit worse before they get better.

    The market may see some added volatility early in the week, as last Friday's trading session was condensed into just a few hours of trading before a market close in observance of Good Friday. Stocks should improve off the strong Jobs Report, which could hurt bonds and home loan rates.

    Chart: Fannie Mae 5.5% Mortgage Bond (Friday Apr 06, 2007)
    Japanese Candlestick Chart
    The Mortgage Market View...

    IT'S IN THE "FINE PRINT"...

    Credit card companies do a great job at disclosing all of their terms and conditions...but do so in an exceptionally hard to read font and verbiage, designed to dissuade you from really reading the infamous "fine print". But failing to understand the terms can be costly.

    Most people know that when your bill arrives, it needs to be paid on time or you'll be hit with a hefty late fee - but many don't know that paying late usually entitles the credit card company to raise your rate immediately and significantly. And worse yet - did you know that paying late on one of your credit cards also entitles all your other credit card companies to raise the rates you are paying them as well? You bet - it's called the "Universal Default Clause", and it basically means that if you are late on one credit card account, all other credit card companies that you have accounts with can increase the interest rate too, even if their accounts have been paid completely on time.

    But the plot thickens further - this goes beyond late payments on credit cards alone.

    If one of your credit card companies has the Universal Default Clause noted in their disclosure - and most of them do - this clause states that they have the right to penalize a consumer with an increased interest rate if a late payment is reported to ANY other creditor, including utilities, car loans, and home loans. Better believe that credit card companies with this clause sit back and wait for the opportunity to increase the interest rate...and continually monitor their customer's credit reports, just waiting for the opportunity to do so.

    And just when you thought it couldn't get any worse...

    ...it's not just late payments that trigger the Universal Default Clause; interest rates can be increased if a consumer exceeds a credit limit, bounces a check, or applies for additional credit. All of these signs may be read by the credit card company that a consumer is "high risk". The penalty? You guessed it - a higher interest rate.

    Further, if an offer seems too good to be true, it probably is. This popular phrase rings true for many consumers that sign up for zero percent interest offers. Although these offers sound great and every consumer goes in with the best intentions of paying the balance in full before the zero percent interest term expires, the vast majority of people do not pay off the bill before the offer ends. And what consumers do not realize is if the account is not paid in full, the creditor does not start charging interest from the date the deal expires, the creditor goes back to the day the purchase was made and charges interest on the balance for the entire period.

    Or - back to the Universal Default Clause, if you are late on another credit card payment during the introductory time period with the zero percent rate offer - the card issuer of that sweet deal could prematurely break it off and force a steamed up interest rate, retroactively charged back to the original date of purchase. That smoldering rate could mean paying double or even triple for the purchased merchandise.

    Try your best to only charge what you can afford to pay off in full, on a monthly basis. Beyond being just good advice, here's another little known credit card fact that could cost you.

    If you charge and then pay the account in full, there is no interest due. But if you charge and choose to only pay half of the bill when it arrives, guess what - you get charged interest not just on the remaining balance, but for the entire charged balance, regardless of your paying half the bill in full. If the bill is not paid in full the following month, this game continues until the account is paid in full.

    So although the fine print can be a real snoozer to read, taking the time to become familiar with credit card terms and conditions can save you some serious dollars. Review your current credit card terms and conditions and take the time to find a credit card company that truly matches your spending habits and needs. You will save yourself a few sleepless nights - and more importantly, save yourself a lot of money too!
    The Week's Economic Indicator Calendar

    Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

    Economic Calendar for the Week of April 09 – April 13

    Date
    ET
    Economic Report
    For
    Estimate
    Actual
    Prior
    Impact
    Wed. April 11
    10:30
    		 Crude Inventories
    4/06
    NA
     
    4307K
    Moderate
    Wed. April 11
    02:00
    		 FOMC Minutes
    Mar
     
     
     
    HIGH
    Thu. April 12
    08:30
    		 Jobless Claims (Initial)
    4/07
    NA
     
    NA
    Moderate
    Fri. April 13
    08:30
    		 Core Producer Price Index (PPI)
    Mar
    0.2%
     
    0.4%
    Moderate
    Fri. April 13
    08:30
    		 Producer Price Index (PPI)
    Mar
    0.6%
     
    1.3%
    Moderate
    Fri. April 13
    08:30
    		 Balance of Trade
    Feb
    -$60.5B
     
    -$59.18B
    Moderate
    Fri. April 13
    10:00
    		 Consumer Sentiment Index (UoM)
    Apr
    88.0
     
    88.4
    Moderate

    Colorado Springs Real Estate Market Update - March 2007

    Monday, April 09, 2007
    by Jason Daniels
    LISTING AND SALES SUMMARY
    For the Colorado Springs Area
    March 2007
     
     
    All Sales
    Existing Homes
    MONTHLY SUMMARY
    Mar 2006
    Mar 2007
    % + or -
    Mar 2006
    Mar 2007
    % + or -
    SINGLE FAMILY/
    PATIO HOMES:
     
     
     
     
     
     
    New Listings
    2,020
    2,107
    4.3
    1,848
    1,956
    5.8
    Sales
    1,037
    891
    (14.1)
    922
    787
    (14.6)
    Ave. Sales Price
    $251,192
    $254,809
    1.4
    $236,595
    $240,549
    1.7
    Median Sale Price
    $212,000
    $208,000
    (1.9)
    $201,325
    $199,900
    (0.7)
    Total Active
    4,486
    5,659
    26.1
    3,759
    4,907
    30.5
    CONDO/TOWNHOMES:
     
     
     
     
     
     
    New Listings
    341
    335
    (1.8)
    246
    290
    17.9
    Sales
    148
    123
    (16.9)
    120
    87
    (27.5)
    Ave. Sale Price
    $152,638
    $178,955
    17.2
    $143,250
    $156,424
    9.2
    Median Sale Price
    $142,750
    $157,137
    10.1
    $130,750
    $139,000
    6.3
    Total Active
    794
    1,065
    34.1
    557
    758
    36.1
    CUMULATIVE YTD SUMMARY
    Jan-Mar 2006
    Jan-Mar 2007
    % + or -
    Jan-Mar 2006
    Jan-Mar 2007
    % + or -
    SINGLE FAMILY/
    PATIO HOMES:
     
     
     
     
     
     
    New Listings
    5,063
    $5,350
    5.7
    4,549
    4,885
    7.4
    Sales
    2,463
    $2,235
    (9.3)
    2,144
    1,936
    (9.7)
    Ave. Sales Price
    $250,439
    $254,424
    1.6
    $233,592
    $238,005
    1.9
    CONDO/TOWNHOMES:
     
     
     
     
     
     
    New Listings
    821
    870
    6.0
    649
    717
    10.5
    Sales
    352
    355
    0.9
    291
    269
    (7.6)
    Ave. Sales Price
    $149,345
    $171,406
    14.8
    $137,297
    $152,988
    11.4
     
    What Does This Mean?
     
    We are seeing a 14.1% decrease in the number of sales from this time last year, and there are 26.1% more listings on the market.  The average sales price has only increased 1.4% compared to March 2006.  The statistics show the market has slowed a bit, but is still good compared to the national average.  Buyers now have more choice and can be more selective.  Sellers need to make sure their homes are priced correctly and are in excellent condition to be competitive.  Homes in great condition and great prices are still selling relatively quickly.
     
    Now is still a great time to buy with more selection and interest rates still at historical lows.  It is also a great time to sell before more listings hit the market and increase the competition even more this summer.

     

    Finance 101

    Are you in the market for a home?  This season it really pays to do your homework!  Because of the recent trouble in the subprime mortgage market, a number of lenders are tightening their standards, and some might find loans a little harder to come by.  Here are three tips for getting the most from your next purchase:

    1. Review Your Credit History –  Credit reports are freely available from the credit reporting agencies, and now is a good time to review yours.  Address any blemishes you see and try to improve your score where possible.
    2. Shop Around – Don’t always take the first quote that comes your way.  Take time to shop around, ask your real estate agent for a trusted lender, and do what you can to get the best rate possible.
    3. Negotiate Price – Get the most from your next purchase by negotiating on the purchase price.  Review recent sales with your agent and make sure you aren’t overpaying. 

    By talking with your real estate agent and following these basic steps, you will become a market expert in no time!  A little research can go a long way!

     

    A Tip for Buyers and Sellers!

    New Homes come with warranties to protect the buyer in case of the unexpected?  But what about existing homes?  Fortunately, there are a number of companies today who offer warranties on existing homes.  Sellers can now offer their buyers a level of assurance that was previously reserved for new construction, and buyers can buy with confidence!

    If you are in the market to buy or sell, ask us about the advantages of a home warranty.  You might be surprised at how much protection is offered for a very reasonable fee.

    Mortgage Market Update

    Monday, March 19, 2007
    by Jason Daniels

    "I'M MELTING! MELTING! OH, WHAT A WORLD, WHAT A WORLD..." Wicked Witch, Wizard of Oz 1939 And last week, you couldn't watch the financial news for longer than a few minutes without hearing about the "subprime meltdown", talking about a certain type of home loan experiencing heavy rates of default and foreclosure, and what the potential consequences might be on the US economy. Although subprime lending only represents a very small portion of home loans overall, the doom-and-gloom-loving media was loving it, busy forecasting a financial disaster for the economy. While this is a bit overblown, there certainly will be some ramifications, so be sure to read this week's Mortgage Market View below, to know what you should expect, and what you can do now. Overall, the news and hype did worry investors, and both Stocks and Bonds experienced an increase in volatility...but home loan rates ended up very close to where they started for the week.

    In other news, Retail Sales came in a bit weaker than anticipated last week - but with a freezing cold February across most of the US, it wasn't exactly the best month to go hit the malls. The Producer Price Index (which measures wholesale inflation) and the Consumer Price Index (which measures retail inflation) both came in a bit hotter than had been expected, indicating that inflation has been stubbornly persistent in the economy. What must the Fed think of all this - and what will they do at their upcoming meeting? Read on...

    DON'T MISS THIS WEEK'S MORTGAGE MARKET VIEW, TO LEARN HOW THE ISSUES IN THE SUBPRIME HOME LOAN ARENA MAY IMPACT YOU, WHAT THE FACTS ARE...AND WHAT YOU CAN DO RIGHT NOW.
    Forecast for the Week

    The week ahead holds a few real headliner news items, including a new round of housing data to sift through, including Housing Starts and Building Permits on Tuesday, and Existing Home Sales next Friday. But the financial highlight of the week will be the Fed Meeting and resulting Policy Statement. There has been rumors of a Fed Funds Rate cut to help the housing market or to smooth out the subprime home loan problem...but don't believe it. The Fed's main charge is to control inflation, period. And they will only consider cutting rates if the core rate of inflation, as measured by the Personal Consumption Expenditure (PCE) Index, falls below 2% for a few consecutive months. The latest Core PCE was 2.3%, so don't look for Home Equity Lines of Credit or other adjustable home loan rates that are tied to the Fed's movements to be dropping anytime soon.

    The chart below shows how Bond Prices have been on a nice upward trend for the past six weeks, meaning that home loan rates have been trending lower. But on Friday, Bonds stepped right off that friendly upward sloping trend line, which could mean that Bond prices and home loan rates will worsen over the next few days, at least until some news comes along to drive the action decisively one way or the other. And this will likely be dependent on the flavor of the Fed statement coming up this Wednesday, due to be released at 2:00pm ET.

    Chart: Fannie Mae 5.5% Mortgage Bond (Friday Mar 16, 2007)
    Japanese Candlestick Chart
    The Mortgage Market View...

    The headlines are once again full of news from the mortgage and real estate front...and this time, the "subprime meltdown" is taking center stage. What exactly is going on, and what does it mean to you?

    A "subprime" home loan is a loan where the client has some significant credit issues, or was otherwise unable to qualify for a standard, conventional loan. Due to the fact that these loans tend to be quite risky for the lender...they also bear higher interest rates to match, as well as often being adjustable rates that likely have recently hiked sky high, not to mention the steep prepayment penalties they generally carry.

    These loans have been around for years - so why all the drama now?

    Many subprime and other adjustable home loan rates have moved dramatically higher, due in part to the Federal Reserve Boards recent rate hike cycle. So as these rates are adjusting higher - and the payment right along with it - the homeowners are finding that they are unable to keep up with the dramatic increase in payment.

    In the past, homeowners in this situation would simply throw the house on the market, realize enough of a profit to cover any prepayment penalties, and literally move on. But the soft real estate market isn't making this quite so easy any more - houses are not selling as quickly, and the home appreciation rates enjoyed in the past have moderated.

    So the subprime homeowner is stuck - and many of these homes are falling into foreclosure, causing even more problems. As more and more loans are defaulting, mortgage lenders are forced to tighten up their lending standards across the board in response...making it tougher for a troubled homeowner to even refinance to get out of trouble. Many subprime lenders are feeling the pain, and in some cases, actually being forced to close their doors as they are hit with all the defaulted loans and foreclosed properties coming back home to roost.

    How does this impact you?

    In the short term, home loan rates are benefiting, as the stock market is taking a beating, causing money to flow into Bonds and Mortgage Backed Securities, which benefits home loan rates. But the longer term picture may spell higher interest rates ahead, as lenders have to absorb the cost of the loans that went belly-up, combined with the cost of increased compliance and accountability standards.

    Now in many cases, the advice and loan strategy given to the client was perfectly appropriate for the client at the time they took out the loan...but the "perfect storm" of colliding economic events may have just worked against them. Yet unfortunately, many homeowners are paying a very steep price for what may have been poor advice and counsel given them at the time of their home purchase or refi. Now more than ever before, it is clear that it pays to work with a true professional, especially when your home is on the line. If you've ever thought it's too expensive to work with a real professional...just wait until you work with an amateur. The price paid is clear - and in this case, it's a very painful one.

    Because of these events, credit and lending standards are tightening across the board, so it's a great time to get a "financial check up" - both you personally, as well as your clients, friends, family members and coworkers - even if they are not immediately in need of any home loan financing.

    You know that I want to build relationships for the long run, not just to provide a "transaction" - so although you may not have a need for my home loan services at this time, I'd like to invite you to contact me for a review of your current credit and financial situation. There may be recommendations I can make now, that will ensure you are in the best possible shape to obtain the most favorable financing terms when the need does arise.

    Feel free to forward this newsletter directly, or print out copies for your clients, friends and coworkers who are asking about the headlines. As always, simply give me a call or email - I am always glad to hear from you, and happy to answer any questions regarding this matter or any other way I can be of service to you.
    The Week's Economic Indicator Calendar

    Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

    Economic Calendar for the Week of March 19 – March 23

    Date
    ET
    Economic Report
    For
    Estimate
    Actual
    Prior
    Impact
    Tue. March 20
    08:30
    		 Housing Starts
    Feb
    1440K
     
    1408K
    Moderate
    Tue. March 20
    08:30
    		 Building Permits
    Feb
    1560K
     
    1571K
    Moderate
    Wed. March 21
    10:30
    		 Crude Inventories
    3/16
    NA
     
    1180K
    Moderate
    Wed. March 21
    02:15
    		 FOMC Meeting
     
     
     
     
    HIGH
    Thu. March 22
    08:30
    		 Jobless Claims (Initial)
    3/17
    325K
     
    318K
    Moderate
    Thu. March 22
    10:00
    		 Index of Leading Econ Ind (LEI)
    Feb
    -0.3%
     
    0.1%
    Low
    Fri. March 23
    10:00
    		 Existing Home Sales
    Feb
    6.35M
     
    6.46M
    Moderate

    The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial services and other professionals only and is not intended for consumer distribution. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is not without errors.

    Three Ways to Flip Houses in a Down Market

    Friday, March 16, 2007
    by Jason Daniels

    By Ralph Roberts

    RISMEDIA, March 16, 2007-My team and I flip houses in Michigan, where the housing market is currently experiencing a significant slump. Wherever these dips in the market occur, they often discourage investors, particularly novice investors, from flipping, but you don't need to get discouraged. With the right adjustments, you can flip houses profitably in a depressed market.

    I suggest three strategies for successfully flipping houses in a down market:

    - Focus on foreclosures.
    - Look for deeper discounts.
    - Buy and hold.

    Focusing on foreclosures

    When the housing bubble in a particular area bursts or rapidly deflates, neighborhoods are often littered with homes that have had all the equity stripped out of them. While declining property values erode the equity in the property from one end, homeowners borrow against the equity from the other end, until nothing is left. The market now has a glut of properties with little or no equity.

    In such cases, finding a potentially profitable property is more challenging. You may find yourself having to deal directly with banks and REO departments instead of buying properties at sheriff sales, auctions, and "fire" sales. When buying REO properties from banks, the trick is to have your financing in place and be able to act quickly to solve the bank's problem. You see, banks don't like to own properties. They like to own mortgages. So, if you can lessen the bank's loss and stop the bleeding, you may be able to snag a profitable property for yourself.

    Negotiating with banks can be tricky, but the more homes they end up with in foreclosure, the more they need investors to step in and buy them. I discuss some of the techniques for buying REO properties in my upcoming book, Foreclosure Investing For Dummies, which is due to be released in June.

    Buying at deeper discounts

    When I flip houses in a rising or steady market, my goal is to earn at least a 20% return on my total investment. To determine how much I can invest in a property, I start with the price I think I can sell the property for after fixing it up and I divide by 1.2. For example, if I think I can sell a house for $200,000 after repairs and renovations, I divide $200,000 by 1.2 and come up with something in the range of $167,000. I then subtract what I expect to pay in repairs and renovations, agent commissions (to sell the house), and holding costs (utilities, taxes, and insurance for the duration of the project). This gives me a ballpark idea of how much I can pay for the house to earn a 20% profit. If I add up all my estimated costs and come up with $30,000, for example, I could then afford to pay up to $137,000 for this house I plan to sell for $200,000.

    In a declining market, I might start by dividing what I think I can sell the house for by 1.3 instead of 1.2. In the example of a $200,000 house, then, I would give myself only about $154,000 to invest, so I would have $13,000 less to invest in the project to be fairly certain of earning a 20% profit. In other words, I would be looking to buy the houses for 10% less than I would normally pay. In our example, I would be able to pay $124,000 for the house I plan to sell for $200,000, because I probably wouldn't be able to sell it for $200,000 a month or two after fixing it up.

    Buying and holding-the long-term approach

    Some real estate investors adhere to the long-term, buy-and-hold approach as their core strategy. They buy real estate and lease it out for a steady cash flow. The tenants pay down the mortgage principal while the property increases in value, and when the investor is ready to sell, they can typically cash out a huge amount of equity that's built up in the property over the years. In addition, the property offers some nice tax write-offs.

    Flippers, by definition, are not buy-and-holders, but when the market takes a dive, and you can't immediately sell a property for a profit, a temporary shift to the buy-and-hold strategy can help you ride out the slump. If you can lease the property for enough money to cover your monthly mortgage payments, utilities, insurance, taxes, and maintenance costs, you can hold onto the property without having to sell it at a loss. You can then wait until the market recovers to sell. If your not landlord material, this isn't for you, but if you can wait out the market on someone else's dime…now you're talking.

    Another option is to live in the house yourself for a while, do the renovations over the period of time it takes for the market to rebound, and then flip it. This strategy requires a little more of a commitment on your part and usually is only an option for singles or for adventurous couples and families, but when you're facing the prospect of selling the house at a loss or taking on a little discomfort and inconvenience, discomfort and inconvenience may not seem so bad. If you already have a house, consider putting both houses on the market. If your current residence sells first, move into the investment property!

    Regardless of which method you chose, the flipping process is basically still the same-you're simply stretching it out over a longer period of time. Although flipping is usually an "in- the-moment" investment designed for those who desire quick profits and instant gratification, you may need to adjust your strategy to accommodate shifts in the housing market. To rephrase something I heard recently about the state of Michigan, house flippers who are working in a declining market have two options: change or die. For you evolutionists out there, you can either evolve as a new species of house flipper or you can go extinct. No doubt, some will go extinct, but it doesn't have to be you. Adapt, survive, and thrive.

    For additional tips on flipping in a slow market and other guidance on buying, renovating, and selling houses for a profit, check out Ralph Roberts' recent book Flipping Real Estate For Dummies  (John Wiley & Sons).

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