What Are YOUR Opportunities in Today’s Housing Market?
by Marie de Espinosa, Real Estate Broker
Nouriel Roubini, Professor of Economics at NYU, claimed the current downturn is “the worst housing recession since the days of the Great Depression” at a Real Estate conference in New York City on January 9th. Citing a “systemic financial crisis”, Roubini believes the US economy and housing markets will take “years to adjust.”
While no one can deny that selling mortgage risk as securities of undetermined value has shaken the credit markets, with effects seen on Main Street and Wall Street, some believe that the impact will be localized: market reaction to banking fallout and regulatory changes for lending practices and securitization of mortgage debt.
Meanwhile, NAR Chief Economist Lawrence Yun is looking forward to a recovery. Announcing a National drop in pending home sales, Yun stated that “A meaningful recovery in existing-home sales could occur as early as this Spring, or it may be further delayed toward late 2008.”
Whether you consider yourself a Bull or a Bear, stability in sectors of the economy outside of the housing market and banking indicate that wide-spread recession is not immediately upon us. Reductions in interest rates by the Federal Reserve Bank, the stimulus package passed by Congress, and reports of increases in oil reserves are encouraging signs for many sectors of the economy. In light of this, the question of whether the housing downturn will bring down the wider economy becomes “How the significant is the local downturn and how will it affect you personally?”
I’m finding that Buyers I work with directly are writing lower offers, but that they are rarely accepted without compromise. That is to say, there is no fire sale is taking place in the Denver Housing Market. What I do see is that the liberal lending practices which allowed many to become homeowners has slowed dramatically, thereby reducing demand. This decrease in demand is seen across the board but most especially at the median price point and below. Sellers may be uncomfortable about the price cuts they are forced to accept in order to sell – but as I said, their Buyers are not calling all the shots.
Denver’s Seller disappointment is not the desperation seen elsewhere. Denver’s Real Estate market did not experience the “bubble” seen in other markets. Jeff Thredgold, an Economist with Vectra Bank Colorado points out that “In California, Arizona, Nevada and Florida, the average price of a home increased 84 percent during the past four years. Nationally, the average price rose 47 percent, and in Colorado, the average price increased between 15 and 18 percent.”
This means local Sellers more often must reduce the appreciation they expect to realize rather than slash their bottom line. Sellers are not bringing money to closing in order to sell their homes unless they purchased in the last couple years, with little down; or have over-improved a recent purchase with the expectation of terrific profit. We can all rest assured that over time the historical trend of property appreciation will continue.
Last, the foreclosure trend here in the Denver Metro area is impacting our Rental Market. Turned out of their homes and faced with tighter lending standards, many families are looking for a home to settle in and rent while they repair their credit. Look for ways to take advantage of the lower prices in the local market, gain passive income as landlords, and sell in a few years when a wave of wiser, credit-worthy renters look to become homeowners once again.
Friday, February 29, 2008
Is Housing Market Pessimism Overdone?
From the Wall Street Journal Online
Just how bad off is the housing market? That’s the controversy brewing in Washington. Some economists, Democrats, bankers and consumer advocates are pushing for a rescue program for struggling homeowners as foreclosures mount. Meanwhile, as the Journal reports today, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson seem to believe that concerns about the housing market are overblown.
The housing market should be able to self-correct itself, Mr. Bernanke says in the article, with falling prices spurring buyers to jump in. He predicts that housing may bottom out sometime next year. Mr. Paulson adds this: “I don’t think I’ve seen any scenario where the American taxpayer needs to be stepping in with more taxpayer dollars.”
In his remarks today at a news conference at the White House, President Bush seemed to agree. Taking aim at Congressional proposals to help struggling homeowners, he said that a Senate bill would provide a needless bailout for speculators and lenders.
Meanwhile, Senate Majority Leader Harry Reid of Nevada is saying that government intervention is required to stabilize the housing market. “In my view, the enormity of the foreclosure crisis requires a much more aggressive approach,” he says in the Journal.
Just how bad off is the housing market? That’s the controversy brewing in Washington. Some economists, Democrats, bankers and consumer advocates are pushing for a rescue program for struggling homeowners as foreclosures mount. Meanwhile, as the Journal reports today, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson seem to believe that concerns about the housing market are overblown.
The housing market should be able to self-correct itself, Mr. Bernanke says in the article, with falling prices spurring buyers to jump in. He predicts that housing may bottom out sometime next year. Mr. Paulson adds this: “I don’t think I’ve seen any scenario where the American taxpayer needs to be stepping in with more taxpayer dollars.”
In his remarks today at a news conference at the White House, President Bush seemed to agree. Taking aim at Congressional proposals to help struggling homeowners, he said that a Senate bill would provide a needless bailout for speculators and lenders.
Meanwhile, Senate Majority Leader Harry Reid of Nevada is saying that government intervention is required to stabilize the housing market. “In my view, the enormity of the foreclosure crisis requires a much more aggressive approach,” he says in the Journal.
Tuesday, February 26, 2008
Home Is Where Green Can Start
By Amy Hoak From MarketWatch
Consumers are bombarded these days with a multitude of suggestions to make their lives "greener." Many proposed changes start at home.
That's not a bad idea: The government estimates that the energy Americans use just to run their homes makes up 21% of total energy use throughout the country. And that statistic doesn't even touch on the other environmental issues that can be addressed in a home, including water conservation and indoor air quality.
To make homes friendlier to the environment and cleaner to the people who live in them, manufacturers have been busy refining their home products. At the recent International Builders' Show, green products were everywhere.
"When you go shopping now, it's not even a buzzword anymore -- it's expected," says Calli Schmidt, a spokeswoman for the National Association of Home Builders, referring to the "green" labeling of products. The NAHB sponsored the show.
Despite the many substantial investments that can make a home greener, smaller incremental changes often do count, Ms. Schmidt says.
For example, the federal Energy Star program claims that the country would save $600 million in energy costs annually -- or enough to light three million homes for a year -- if every household in the U.S. changed one light bulb to an Energy Star compact fluorescent light bulb.
Properly insulating a home is another way to increase its energy efficiency.
Those interested in doing more might consider upgrading their homes with these five products:
• Washers that save energy and water. The newest washers are front loading, with features that use less water to clean clothes. Whirlpool, for example, has a washer that uses steam technology to save 73% of the water and 77% of the energy used by top-load washers manufactured only four years ago. A spin speed cycle is able to extract more water from clothes, cutting down on dryer time. Dishwashers are benefiting from steam technology too. The KitchenAid Steam Option dishwasher saves about 2,400 gallons of water over the life of the appliance.
• Toilets that conserve water. In many homes, toilets are the biggest water users. To save water in the bathroom, manufactures are developing toilets that use less per flush.
Kohler has a Dual Force model under its Sterling brand that has two buttons on its tank: One allows 1.6 gallons for a "bulk" flush and another allows 0.8 gallons for "light waste" and liquid. Other single-flush toilets manage to use 20% less water than a traditional toilet, says Rob Zimmerman, senior staff engineer of water conservation initiatives at Kohler.
• No-VOC paints. Typically paints have contained some amount of volatile organic compounds. Today's paints often have low amounts of the gasses that hurt a home's indoor air quality, but a new product introduced at the builders' show contains no VOCs at all.
The Freshaire Choice line of paints is being offered at Home Depot stores. It claims to have no VOCs in the base or the tint, and the paint comes in recycled packaging. Generally, there has been an increasing awareness that poor indoor air quality can affect a family's health, says Deborah Jones Barrow, founder of TheDailyGreen.com, a Web site that offers suggestions for green living.
• Smart thermostat applications. Programmable thermostats are often touted as a way to keep energy costs down. The only problem is, many times consumers use them incorrectly.
But online computer programs, such as a new system from In2 Networks that works with Honeywell thermostats, allow consumers to monitor heating and cooling consumption and control settings from their computers. The In2 Networks system can show homeowners the difference a couple of degrees could make, both in terms of dollars and the home's carbon footprint.
• Low-flow faucets and showerheads. The latest versions of low-flow faucets and showerheads perform a lot better than their older counterparts, and homeowners who wouldn't sacrifice their hand washing or shower experiences for water conservation are giving these products a second look. Delta says it has a Water-Efficient Showerhead with H20kinetic Technology, a product that creates larger water droplets and provides a more drenching spray.
Consumers are bombarded these days with a multitude of suggestions to make their lives "greener." Many proposed changes start at home.
That's not a bad idea: The government estimates that the energy Americans use just to run their homes makes up 21% of total energy use throughout the country. And that statistic doesn't even touch on the other environmental issues that can be addressed in a home, including water conservation and indoor air quality.
To make homes friendlier to the environment and cleaner to the people who live in them, manufacturers have been busy refining their home products. At the recent International Builders' Show, green products were everywhere.
"When you go shopping now, it's not even a buzzword anymore -- it's expected," says Calli Schmidt, a spokeswoman for the National Association of Home Builders, referring to the "green" labeling of products. The NAHB sponsored the show.
Despite the many substantial investments that can make a home greener, smaller incremental changes often do count, Ms. Schmidt says.
For example, the federal Energy Star program claims that the country would save $600 million in energy costs annually -- or enough to light three million homes for a year -- if every household in the U.S. changed one light bulb to an Energy Star compact fluorescent light bulb.
Properly insulating a home is another way to increase its energy efficiency.
Those interested in doing more might consider upgrading their homes with these five products:
• Washers that save energy and water. The newest washers are front loading, with features that use less water to clean clothes. Whirlpool, for example, has a washer that uses steam technology to save 73% of the water and 77% of the energy used by top-load washers manufactured only four years ago. A spin speed cycle is able to extract more water from clothes, cutting down on dryer time. Dishwashers are benefiting from steam technology too. The KitchenAid Steam Option dishwasher saves about 2,400 gallons of water over the life of the appliance.
• Toilets that conserve water. In many homes, toilets are the biggest water users. To save water in the bathroom, manufactures are developing toilets that use less per flush.
Kohler has a Dual Force model under its Sterling brand that has two buttons on its tank: One allows 1.6 gallons for a "bulk" flush and another allows 0.8 gallons for "light waste" and liquid. Other single-flush toilets manage to use 20% less water than a traditional toilet, says Rob Zimmerman, senior staff engineer of water conservation initiatives at Kohler.
• No-VOC paints. Typically paints have contained some amount of volatile organic compounds. Today's paints often have low amounts of the gasses that hurt a home's indoor air quality, but a new product introduced at the builders' show contains no VOCs at all.
The Freshaire Choice line of paints is being offered at Home Depot stores. It claims to have no VOCs in the base or the tint, and the paint comes in recycled packaging. Generally, there has been an increasing awareness that poor indoor air quality can affect a family's health, says Deborah Jones Barrow, founder of TheDailyGreen.com, a Web site that offers suggestions for green living.
• Smart thermostat applications. Programmable thermostats are often touted as a way to keep energy costs down. The only problem is, many times consumers use them incorrectly.
But online computer programs, such as a new system from In2 Networks that works with Honeywell thermostats, allow consumers to monitor heating and cooling consumption and control settings from their computers. The In2 Networks system can show homeowners the difference a couple of degrees could make, both in terms of dollars and the home's carbon footprint.
• Low-flow faucets and showerheads. The latest versions of low-flow faucets and showerheads perform a lot better than their older counterparts, and homeowners who wouldn't sacrifice their hand washing or shower experiences for water conservation are giving these products a second look. Delta says it has a Water-Efficient Showerhead with H20kinetic Technology, a product that creates larger water droplets and provides a more drenching spray.
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