Although in most markets, home prices continue their downward spiral, some areas have seen an increase in market activity; for those who are interested in purchasing a home, affordability continues to be the most important issue. According to a recent article in the Los Angeles Times, activity has increased in some markets, like Phoenix, where bidding wars have occurred over foreclosures and short sales. According to reports, Phoenix has more homes for sale than at any time after 2006, and prices seem to be on the way to firming up. Buyers are coming back, attracted by the large sale discounts offered by foreclosed and distressed properties. However, home prices continue to drop in most parts of the country, but signs like those in Phoenix are a cause for optimism in the national real estate market.

The main concept is the affordability of homes in multiple locations. “Affordability is a huge topic of conversation today. And affordability has improved quite a bit in the past several years all around the country. In Phoenix and similar markets, there is no better time than now,” says Wayne Yamano, John Burns Real Estate Consulting’s Senior Manager.” The ratio between housing costs and income is currently at it’s best. In certain markets, like Phoenix, it can be more cost effective to buy a home (if you take into account the money saved by the tax advantages) than it is to rent the average price apartment”, he says. “When the peak selling period occurred, the prices were too high and the gap was huge.”

“But now,” he continued, “in many markets, we’ve crossed that threshold, so it’s cheaper to own a home than to rent.” Since interest rates on home loans are still quite low, this opportunity is even more attractive. Yamano says it’s quite hard to time the market. Consider your home to be a shelter rather than an investment. Don’t try to time the market; just make the leap and buy the house, especially if it suits the needs of your growing family. If you wait, you may find that even if real estate prices drop, interest rates may rise! “Interest rates are especially low now and we doubt that they’ll remain there for too long. In fact, in the last two weeks, we were looking at a considerable increase. Yamano mentions that, while it is possible that prices could decrease a little more, if you see interest rates begin to go up, then it won’t matter because you’re home payment would end up being the same.

Jonna Beardsley – Breckenridge Associates “Home town Team – World Class Service” is one of the many industry inside sources that have been put together to create Breckenride Real Estate More Affordable. For almost thirty years now in Breckenridge and Summit County, Jonna has been assisting investors with their real estate requirements. You can get in touch with Jonna through e-mail; jonna@breckenridgeassociates.com or cell 970-390-2533. Be sure to check out her web site: jonnabeardsley.com.

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.

The market for our Summit County real estate in these communities, as well as in Silverthorne, Dillon, Frisco, Copper Mountain, and Montezuma, and recreational real estate in Park County has slowed down over the last two years.  According to the National Association of Realtors® (NAR), this local trend is in line with research about national statistics for the sales of vacation and investment homes in 2008. 

In the U.S., 30 percent of all existing- and new-home transactions in 2008 involved vacation and investment properties.  Twenty-one percent of sales in 2008 were investments and 9 percent were vacation homes.

However, that is a significant drop from the previous year.  In 2007, 740,000 vacation homes sold.  By 2008, the number of vacation homes sold dropped 30.8 percent to 512,000.  These sales had peaked in 2005 when second homes comprised 40 percent of sales.  In a recent news release, NAR chief economist Lawrence Yun addressed the issue.  “We expected vacation-home sales to fall given the impact of a declining economy on discretionary purchases.” 

Investment home sales dropped 17.2 percent, from 1.35M in 2007 to 1.12M in 2008.  Yun explained that investment-home sales are more stable as buyers are taking advantage of deeply discounted prices in some areas.

Interestingly, with people shifting their portfolios around trying to adjust to the throes of the national economy, a substantial number of sales are cash transactions.  Thirty percent of vacation-home buyers paid cash and 40 percent of investment-home buyers paid cash.

Yun explained that in the long term, with almost 40M potential buyers in the 50-to-59 age bracket on track to buy second homes and 45M more in their forties, middle-aged buyers will most likely lead the second home market into many successful years ahead.

Nationwide in 2008, 70 percent of vacation homes were single-family homes, 18 percent condos, 5 percent townhouses. Similarly, 64 percent of the investment homes purchased were single-family homes, 22 percent condos, and 8 percent townhouses.

Jonna Beardsley of Breckenridge Associates offers a wealth of information about real estate in the Rocky Mountains.  Call Jonna at (970) 453-2200 for friendly, professional assistance.

Factors such as our dramatic mountain weather, high rental rates, and radon build up do affect Summit County properties.  New homes likewise need inspections as well as more susceptible older and historic properties in Breckenridge, Frisco, and Dillon.

Unbiased non-invasive visual inspections are performed by trained professionals.  There are Buyers Inspections, Sellers Inspections, New Construction Inspections, Health Hazard Inspections, and tests for specific problems such as radon.

In the Rocky Mountains, we have become more aware of the radioactive gas that emanates from natural substances in our surroundings:  rocks, soil, and water.  Outdoors, the gases are assimilated into the atmosphere every day.  Indoors, gases can be trapped.  They can seep in through cracks in the foundation and through other openings.  If not checked by internal ventilation systems, radon can cause lung cancer.  As this new danger has surfaced, the green-building programs offered through the National Association of Home Builders are promoting mitigating features during construction.

An independent Buyers Inspection identifies the strengths and weaknesses of a potential home.  It may reveal problem areas that need attention including those that need immediate attention.  During the process, the inspectors operate all of the home’s systems including electrical, heating, and plumbing and the appliances.  They also inspect the foundations, attics, crawlspaces, roofs, kitchens, and bathrooms. 

To avoid last-minute surprises and deal killers, Sellers Inspections are performed before homes are listed.  Likewise, builders are smart to have their new projects inspected before sale to reveal any problems that were overlooked during the building process.

Reputable professional home inspectors make it their business to reveal any unknown problems and environmental hazards.  The information can be invaluable for both buyers and sellers.  For added peace of mind, long-term homeowners can also stand to have their properties inspected every ten years.

Jonna Beardsley of Breckenridge Associates offers a wealth of information about real estate in the Rocky Mountains.  Call Jonna at (970) 453-2200 for friendly, professional assistance.

Investment real estate can be folded into a special IRA or 401(k) vehicle.  For some people, this can be a valuable option for retirement savings.  And Breckenridge, Keystone, and Copper Mountain real estate in Summit County is presently poised to offer a jumpstart on these savings.  As local residents use the current climate to upsize, better deals are becoming available for investors. 

How does the real-estate investment work into a retirement plan?  The option to purchase real estate in a retirement plan has been around since IRAs were developed in the 1970s.  It allows the purchaser to buy real estate and without paying taxes on the profits and gains until retirement age.  It can be woven into an IRA or in a 401(k).  The type of IRA used determines whether the profits are tax deferred or tax free.

There are several intricate guidelines for retirement plans.  Retirement investments are structured by rules that must be followed precisely.  The buyer may not personally use or benefit from the real estate being purchased by the IRA or 401(k).  It must be owned solely as an investment and the owner and his/her family may not vacation on the premises.  In order to avoid any potential issues in the future, it is best for each investor to consult a tax attorney or CPA for tax, legal, and financial advice.

While our recent market has been going through a typical correction, prices have been leveling out allowing buyers to lock in 2007 prices during 2008 and into 2009.  Nonetheless, our resort market values have been steadily increasing over the past 25 years with the exception of a similar plateau in 2001. 

These good prices coupled with great rental potential make Summit County a perfect place to purchase a retirement investment.  As a world-class destination for skiers, snowboarders, and for year-round recreation, rental-property owners and property management companies continue to thrive. 

Jonna Beardsley of Breckenridge Associates offers a wealth of information about real estate in the Rocky Mountains.  Call Jonna at (970) 453-2200 for friendly, professional assistance.

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.

Summit County real-estate brokers are not seeing foreclosures that are prevalent in some areas of the nation.  But there are still some bargains for real estate in Breckenridge, Keystone, Frisco, Dillon, Silverthorne, and real estate in Park County.  A down market is a great time to buy up, especially this time when interest rates are so low.  Another perk in the resort market may be negotiable extras.  Buyers of Breckenridge CO homes are seeing that some sellers throw in free timeshares or tickets to a Broncos game. 

Buyers who have been putting off the entire idea of buying Rocky Mountain vacation homes, second homes, and/or retirement homes need to balance the “wait and see” approach with the rising price tags in the Colorado resort areas.  According to the Summit Daily News, “August 2008 had the highest transaction activity Summit county has seen all year and the average prices for single-family, multi-family and vacant land continues to surpass the years of 2006 and 2007 average.”

Now, if you are selling a property, be sure to ask your realtor to help you correctly price it for the market.  Then make the price sound like a bargain, i.e.  $989,900 sounds like much less than $1,000,000.  The rule of thumb is to list the real estate ten percent under what you expect people to pay, spurring more interest and more offers. 

Present the home in its best light.  That may mean professionally staging it, adding an expensive feature, replacing carpet, adding ambience through lighting, etc.  Curb appeal and first impressions are important to making buyers feel right at home.  Accenting the positive points of the real estate, sellers can put their best foot forward—or the property’s best features forward.

So, buying low and keeping real estate moving at the right price will keep you on track to achieving your real-estate goals.  Contact Jonna Beardsley at (970) 453-2200 or (800) 774-7970 for friendly and professional real-estate assistance in the area.