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 “Stimulus Package,” signed into law on February 17, 2009, enhances that tax shelter in several ways.  Several noteworthy provisions pertain to Breckenridge CO real estate and Summit County homes, including the Homebuyer Tax Credit, FHA, Fannie Mae and Freddie Mac Loan Limits, Neighborhood Stabilization, Low Income Housing Grants, Tax-Exempt Housing Bonds, Energy Efficient Housing Tax Credits and Grants, Transportation Investments, and Broadband Deployment.

First-time homebuyers, as well as buyers who have not owned real estate in the last three years, may take advantage of up to $8,000 of tax credits for purchasing a principal residence between January 1, 2009 and November 30, 2009.  The credit reduces the purchaser’s income tax liability.

The combined FHA, Fannie Mae, and Freddie Mac loan limits cap at $729,750, which is more reasonable for our area.  The amount equals 125 percent of the 2008 local area median home price; it may be higher in a few regions of the nation.  These 2009 limits expire on December 31, 2009. 
Our resort area mostly likely will not benefit from the Neighborhood Stabilization monies.  This $2 billion fund is set aside to assist entire neighborhoods that have seen rampant foreclosures.  However, a quarter of the funds go to households with incomes at or below 50 percent of area median income and many in the hospitality workforce are in that category.  The legislation also allows states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance low-income housing.

The Energy Efficient Tax Credits and Grants are welcome news for our mountain luxury homeowners.  Through 2010, homeowners may claim a 30 percent tax credit for purchases of new furnaces, windows, and insulation.  Although our specific resorts now have excellent broadband capabilities, the Broadband Deployment clause may help more of our neighboring mountain regions to connect with better communication services and wireless.  Imagine taking that waterproof laptop on a whitewater excursion! 

Many of the improvements and tax incentives offered in the Stimulus Bill, including Transportation Investments, will help bolster the value of real estate and benefit our mountain communities.

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.

The Mountain Pine Beetle attacks the Rocky Mountains in cycles every 20 to 30 years.  They swept through the area in the 1970s and returned in recent years.  Both forest stand conditions and weather patterns affect the outbreaks.  Primary targets are Ponderosa, Lodgepole, Scotch, and Limber pines.  Bristlecone and Pinion pine are less commonly attacked.  MPB normally do not attack seedlings, saplings, or pole-sized trees. 

During the early stages of an outbreak, the insects attack trees that are weakened through stress.  Stress can be caused by construction damage, over-crowded stands, fire damage, lightening, soil compaction, mistletoe infection, and old age.  Once they reach epidemic levels, they strike any favorite tree but prefer those that are larger in diameter.

Natives used fire to promote desired plants for food and medicine, to clear land, and to provide forage for game.  European settlers also cleared the land.  Fur trappers hunted beaver, greatly impacting the streams and forests in the region.  Enter the miners, cattlemen, loggers, and the railroad—all industries that thinned out forests. 

Modern tools have been used to reconstruct the image of what forests looked like in the past.  Photographs help collaborate information. Additionally, dendrochronology studies tree rings to calculate the rate of growth, weather patterns, insect outbreaks, and fire intervals.  Layers of ash at varying depths in the soil can also determine ancient fire regimes.  The beetle itself thinned forests, allowing for new and healthy growth. 

They have a one-year life cycle.  From July 15 through September 15, the new generation sets out to claim territory.  Using their highly developed sensors, they attack green trees, enter the bark, mate, and lay eggs that hatch the next year.  After the invasion, the tree is effectually dead, although it retains its green color throughout the winter before turning yellow, beige, and red. 

To deter them, pine stands can be thinned before the insects get to the area.  A wide range of techniques includes horse logging, tractor skidding, and helicopter logging.  Of course, fire is not a good method to use near homes.

Most property owners seek professional assistance through a tree service, which sprays individual targets every year or two.  Some people spray their own trees with Carbaryl or the recommended deterrent.  In fact, it is helpful to organize the neighborhood to treat an entire subdivision at the same time.  The Forest Service can help owners to identify infested or weak trees. 
Jonna Beardsley of Breckenridge Associates offers a wealth of information about real estate in the Rocky Mountain region.  Call Jonna at (970) 453-2200 for friendly, professional assistance.