It seems that what Breckenridge Colorado and Summit County are currently experiencing is a wide separation in price between sellers & buyers in regards to the market value of real estate.  The majority of sellers in the Breckenridge and Summit county area don’t have to sell and the majority of buyers don’t have to buy.  This puts buyers and sellers at an odd impasse when trying to negotiate a transaction.  Sellers are beginning to realize and accept that selling their property in this market means having to negotiate on their bottom price (something they have not had to do in years). But the sellers’ idea of negotiating and the buyers’ idea that we are in a Florida market price is just not matching up.  Breckenridge Realtors are trying to prepare their sellers for low-offers but sellers have been pretty clear that although they will negotiate, they will not “give” their property away.  This still leaves buyers in a good position.  All in all they are getting a good discount.

Inventory has started to climbed second quarter. There have been about half the numbers of buyers in the market our first quarter, but buyers seem to be coming out of the woodwork. With our market inventory high, investors have a great choice of fine ski area properties to choose from and have the buyer’s market for negotiating.  There really are some great deals out there—these are some of the best deals our market has seen in years.  After experiencing this type of market over the  past 30 years, it has been my experience that buyers aren’t sure they want to purchase a second home—  In a couple of years they will be saying “I should have bought something in 2009.”  I realize some buyers are trying to wait for the bottom of the market but how do you determine where and when that is? You may miss it. I believe with all types of investments it is about time in the market instead of timing the market. With prices down, and interest rates at a fantastic rate (all time low) my opinion is if you are searching for a second home purchase for your family…NOW IS THE TIME TO CONSIDER A PURCHASE IN BRECKENRIDGE OR THE SUMMIT COUNTY AREA.

Please contact:  An experienced real estate professional, Jonna Beardsley 970-390-2533 “I am only a phone call away.”jonna@breckenridgeassociates.com

Although the new no-nonsense loans for Breckenridge, Keystone, and Silverthorne CO homes require tighter controls, they seem to be better for all parties—especially the borrowers’ situations.  Borrowers must produce documentation for income, assets, and debt load.  Applicants must qualify and underwriters are determining if the applicants are actually able to make their monthly payments, and then some.

Some buyers pay cash for Summit County CO real estate (primary residences, vacation homes in Breckenridge and Keystone, and second homes in Colorado’s playground).  Others shop around.  It is worth investigating products available through FHA-insured mortgages, credit unions, rural home loans, and local and state agencies.

With new loan limits as high as $625,500, FHA loans will account for ¼ of the mortgages in 2009.  Between 2003 and 2006, only 4% of loans involved the FHA.  The new model for FHA loans is more lenient with credit scores, requires as little as 3% down, may finance the closing costs, limits closing costs to 1% of the mortgage, has no prepayment penalties, and has relaxed the debt-to-income ratios.

However, the Federal Housing Administration (FHA) must approve lenders and appraisals.  Buyers with less than 20% down payments must pay Mortgage Insurance fees and monthly Mortgage Insurance premiums that together may increase the loan by 2.25%.  If buyers have financial reserves, savings, or investments worth two months of mortgage payments, they will get better rates.  Buyers with a 30 to 33% debt-to-income ratio also best rates.

More buyers are turning to credit unions these days.  Most credit unions never got involved in the subprime loan industry.  Nor did they sell and repackage their loans as investments.  Unions normally offer fixed rate, 30-year mortgages, many times at rates lower than the banks.  If a buyer banks with a credit union, they generally receive preferential treatment.

Other buyers may find a good deal for “rural” home loans.  These loans are for people in designated rural areas where the population is less than 20,000.  Backed by the USDA Rural Development Housing and Community Facilities Program, they do not require borrowers to grow crops or raise livestock.  These loans are limited to buyers with incomes less than 115% of the household median income for the area.  The USDA programs include loans with no money down, construction loans, and more.

For low- to moderate-income families, it is also worth checking into options offered by the city, the county, and the state.  Jonna Beardsley of Breckenridge Associates offers a wealth of information about Colorado Rocky Mountain real estate.  Call Jonna at (970) 453-2200 for friendly, professional assistance.

If you own Breckenridge CO real estate with a market value of $500,000, in 2007 you paid $241.59 in property taxes.

That money feeds into a variety of funds including the following:

• $39.80 Repay financing for recreation facilities
• $36.93 Public safety
• $20.46 Street maintenance including snow removal
• $25.91 Recreation
• $19.17 Transit operations
• $99.32 General governmental operations

Sales tax collected during shopping sprees is similarly distributed.  For every $100 of merchandise that you purchase, $8.28 is paid to sales taxes.  And that money goes to the following:

• $3.72 State and County
• $0.50 Open space
• $0.12 Attainable housing
• $0.07 Marketing
• $0.71 Public safety
• $0.50 Recreation
• $0.39 Street maintenance
• $0.37 Transit operations
• $1.90 General governmental operations

High in the Rocky Mountains of Colorado, the Town is a remnant of the 1800s Gold Rush.  The Town’s historic Victorian-style real estate and modern luxury homes reach out from the pedestrian-friendly Main Street.  Vail Resorts opened a world-class ski resort here, creating just the right mix of charm and excitement.  There is a population of 3,300 full-time residents and it swells to 35,000 during the winter season.  Festivals, concerts, competitions, symphonies, boutiques and fine dining, art shows and theater contrast to the outdoor adventures of mountain bikers, hikers, hunters, mountaineers, kayakers, skiers, and fly fishers. 

Contact Jonna Beardsley at (970) 453-2200 or (800) 774-7970 for friendly and professional real-estate assistance in the area.

Thirty-year fixed loans up to $417,000 are available in the 6 percent range.  FHA loans for single-family homes in Summit County require 3 percent down and that will increase in 2009 to 3.5 percent.  These loans are readily available up to a maximum of $402,500.  For larger loans, the Jumbo loans are available for sums over $417,000.  They are generally available in the high 5 percent to low 6 percent range with balloons for 5-10 years.

Another option for buyers of luxury resort properties is a combination of a fixed-rate loan and a second loan.  With this arrangement, the loan to value ratio normally cannot exceed 80 percent.

Summit County is located high in the Colorado Rockies and is known as Colorado’s playground for the numerous outdoor recreational activities available in the area.  In addition to 4 major ski areas, the County also has 2 popular reservoirs, Dillon and Green Mountain, and features miles of White River National Forest, Eagles Nest Wilderness, American Discovery Trail, Colorado Trail, Continental Divide National Scenic Trail, Vail Pass National Recreation Trail, Wheeler Ten Mile National Recreation Trail, Great Parks Bicycle Route, TransAmerica Trail Bicycle Route, and the Top of the Rockies National Scenic Byway.

Park County boasts many wonderful areas for hunting, fishing, horseback riding, hiking, and mountain biking in the Eleven Mile State Park, Spinney Mountain State Park, Pike National Forest, Roosevelt National Forest, San Isabel National Forest, Buffalo Peaks Wilderness, Lost Creek Wilderness, American Discovery Trail, Colorado Trail, Continental Divide National Scenic Trail, Great Parks Bicycle Route, TransAmerica Trail Bicycle Route, and Guanella Pass Scenic Byway.  Many portions of the County are located within 30 minutes of the ski areas.

Contact Jonna Beardsley at (970) 453-2200 or (800) 774-7970 for friendly and professional real-estate assistance in the area.

And then, too, the ski resort communities such as Breckenridge, Keystone, Copper Mountain, and the surrounding towns of Frisco, Dillon, and Silverthorne benefit from having higher land values and, therefore, the new higher limits for government backed loans.  So, first-time buyers are more readily able to get into a condominium for family vacation and others may find it a good time to land that retirement home in the Breckenridge area.

Before shopping, you’ll do well to go to a lender in Summit County to apply for mortgage approval.  Our experienced real-estate agents are able to refer you to reputable companies and individuals.  When you have a written loan approval for the amount that you want to spend on a property, then you have bargaining power.  This paper will allow you to walk into the second home that is just right for your family and immediately take action.  Make an offer.

Now, you may want to know that although we do have some bargain properties, the average deviation from actual listing price is only 3 percent.  When you make an offer, be respectful of the owner’s selling price, which may already have been reduced.  You probably won’t get very far if you offer 50 percent just because the home has been on the market for several months.  Keep your maximum offer to yourself and make a reasonable offer for the property. 

Your local real-estate agent is very familiar with the negation table and able to help you if the seller counters your offer.  Your agent can guide you through possible conditions that may benefit your offer although it is best to keep the offer(s) uncomplicated and to minimize your demands on the seller.  The agent can also find out if there are other offers competing with your offer. 

Contact Jonna Beardsley at (970) 453-2200 or (800) 774-7970 for friendly and professional real-estate assistance in the area.

A reverse mortgage offers immediate money to homeowners 62 year old and over based on the equity built up on their homes.  Payments are deferred until the owner dies or sells the home or permanently moves on.  That means extra cash to pick up a parcel or fractional portion of Summit County real estate.  Putting money into Breckenridge Colorado real estate, seniors will now that if circumstances warrant pulling out the equity, the reverse mortgage is a better tool today than it was 2 months ago. 

The complicated Housing and Economic Recovery Act of 2008 includes a cap on the amount of origination fees that lenders can charge for reverse mortgages.  The new cap goes like this.  Pay only 2 percent on the first $200,000 of your home’s value and 1 percent on the remaining balance.  There are limits to these loans, albeit that amount is not yet determined because of some ambiguity in the legislation.

Traditionally, reverse mortgage lenders heaped on hefty upfront fees.  Some contracts were even flawed and contained huge appreciation shares for the lender.  Even so, the use of reverse mortgages has been on the rise.  The Home Equity Conversion Mortgages (HSCM) handles 85 percent of the reverse mortgage market.  HECM says that in 2005, they handled 43,131 reverse mortgages and by 2007 the number had more than doubled to 107,367.

Why not?  Owners who use this vehicle to pull equity out of their homes do not have to prove income or credit worthiness and do not have to move, give up title, or make monthly payments.  If a retired homeowner sees that his or her social security, IRAs, pensions, investments, and savings are not providing sufficient income to cover their current needs, the reverse mortgage provides the plus factor.  Monies can taken is a lump sum, fixed monthly payments, a line of credit, or a combination. 

The money can be used however you’d like:  for medical bills, to retire an old mortgage, or to invest in a fractional in our beautiful mountain resort to be visited by family and friends for years.  Contact Jonna Beardsley at (970) 453-2200 at Breckenridge Associates for friendly and professional real-estate assistance in the area.

Although Summit County real-estate professionals see quite a few 1031 exchanges of second homes and vacation homes in Breckenridge area, it is important to note that the IRS does not allow taxpayers to claim a property as an investment if it is actually used more than 14 days a year for personal use.  The rules are strict.

In March 2008, the IRS issued new guidelines for these “like-kind” or “Starker” exchanges to clear up previous confusion about Section 1031.  Primarily used by real estate investors to defer taxes, if these criteria are not met, the sale will be subject to capital gains taxes.

The way the exchange works is this.  An investor chooses to “relinquish” one investment property (the relinquished property) and to “replace” it with another investment property (the replacement property).  All properties must be investment properties.  The currently owned property, or the “relinquished property,” must be owned by the taxpayer for at least 24 months prior to the exchange (the qualifying use period).  Qualified properties include a house, apartment, condominium, mobile home, boat or any like property that according to Section 1031 “provides basic living accommodations including sleeping space, bathroom and cooking facilities.”

Now is the kicker.  During the qualifying use period, the owner must have rented the property at a fair rental for at least 14 days.  The property owner may not have used the property for personal use for more than ten percent of the number of days that it was rented at fair value or for than 14 days, whichever is greater.  For example, if a resort condo is rented out 100 percent of the time during five months of ski season (150 days), 10 percent of 150 days is 15 days.  The owner cannot have used it for more than 15 days but may be present to check on the property and maintain it.  The same is true for the second property.

All proceeds from the relinquished property must be used for the purchase of the replacement property to defer steep capital gains taxes.  Swap them and the government transfers the basis of the old properties to the new ones.

Timing is also important.  Investors must identify the replacement property within 45 days of closing of the first property and have 180 days to buy the new property.  Section 1031 is a great boon if followed to the nth detail.

For answers to investment-property questions, contact Jonna Beardsley of Breckenridge Associates at 970-390-2533.

Although the movement of real estate in these Breckenridge environs will inevitably be affected by this month’s bailout, it is only a Band-aid.  Scenarios that reflect the national market are generally modified in the resort areas where buyers tend to have better credit ratings and financial stability.

The Victorian Town of Breckenridge and Breckenridge Ski Resort are top destinations for skiers and vacationers visiting the Rocky Mountains in Central Colorado.  The former mining town features interesting historic elements including museums and gold dredging equipment, a quaint downtown with Main Street restaurants, shops, and events, and, of course, skiing on Peak 6, Peak 7, Peak 8, and Peak 9, and infinite recreational possibilities in the Gore Range, Continental Divide, and national forests and rivers in the surrounding areas.

Real estate coach Jeff Scislow of Minnesota suggests that the emphasis now be put on selling down the high levels of housing inventory across the nation.  Scislow recommends that the U.S. Government stop agreeing to hard-to-swallow bailouts.  Instead, he proposed that the government subsidize interest rates, temporarily taking them down to unprecedented levels.  

According to Scislow, subsidizing very low interest rates will immediately take the pressure off of the banks and the economy.  The progression of positive results includes:
     1. The inventory levels will drop.
     2. As inventory levels drop, prices will stop falling.
     3. As prices stop falling, less people will foreclose on their homes when they see market values firming up.
     4. Consumer confidence will return.

Bailing out banks is expensive considering that the average foreclosure costs the banks about $70,000.  However, the cost for the U.S. Government to subsidize interest rates at levels like 3.5 to 4 percent for 30-year fixed mortgages would only be $25,000.  Buyers and investors will see that it is a great time to purchase properties and to keep those properties for longer periods of time, locked into the low interest rates that are available for a limited time only.

Sounds like an exciting piece of the puzzle.  For answers to your resort real-estate questions, call Jonna Beardsley at 970-390-2533.

Not only do buyers of vacation homes in Summit County have a greater selection of properties right now but, according to the Breckenridge Associates Newsletter, sellers are generally more willing to negotiate with prices and concessions.   First-time buyers are able to take advantage of the climate, too.  A $7,500 credit is available for the purchase of a principal residence between April 9, 2008 and July 1, 2009.

And, those who are looking to someday retire to a dream home in the Rocky Mountains have a little squiggle room in the current market.  Matter of fact, Breckenridge Associates has been on the leading edge of luxury real estate in Breckenridge for almost 20 years.  They have represented a third of the transactions of $1M or more.  In January 1995, they were involved in the sale of the first $1M home ever sold in Breck.  By 2000, nineteen homes sold for more than $1M and in 2001 a condominium sold for $1M.

The first $2M home sold in 1997 and the first $2M condo sold in 2007.  Also in 2007 records kept breaking, including the sale of a home for $4M, $4.7M, and $5M.  Breckenridge Associates was involved in the sale of three quarters of the homes selling for over $3M.  In 2008, the real estate team listed the highest-selling home of all time in Summit County at $5.5M.

Whether buyers are looking for “entry level” vacation properties in the outlying areas of “Colorado’s playground” or luxury ski-in/ski-out accommodations right on Peak 7 or Peak 8, this is the time to act.  Our investment properties are only improving in value, trumped by the incredible beauty in the surrounding national forests, crystal clear mountain waters, unlimited recreational activities, and a wonderful cosmopolitan small-town feel.  Buyers, this is truly a time to take advantage of opportunity.

Contact Jonna Beardsley of Breckenridge Associates at (970) 390-2533 for friendly and professional real-estate assistance.