Monday, March 31, 2008


Vacancies in "for-rent" condos, single-family homes, and other small properties across metro Denver dropped to 3.9 percent at the end of last year, according to a report released by the Colorado Division of Housing.

Vacancies dropped for the fifth quarter in a row, and 3.9 percent is the lowest vacancy rate recorded since the survey was launched in 2001.

The vacancy rate was 4 percent during the third quarter of 2007, and was 6.4 percent during the third quarter of 2006.

The largest declines in vacancies were found in Adams County, where vacancies dropped substantially from 9.3 percent during the third quarter of 2006 to 3.3 percent during the third quarter of 2007. No counties reported increases in vacancies compared with last year's third-quarter rates.

It's undeniable that the effects of 40,000 Colorado foreclosures have caused a significant firming in the rental market over the past 18 months. Much tighter lending standards have also shut the door on home ownership to many previously qualified buyers, all of which bodes well for landlords.

An investor client of mine in Brighton reported last week that his most recent rental posting on Craig's List, a four bedroom, two bath single family home, generated 17 phone calls and 10 showing appointments in three days.

Another investor client in Arvada reported over 15 calls on a three bedroom townhome inside of one week.

If you can get financing, now remains an incredible time to pick up rental property with the ability to cashflow from day one.

Opportunities like this do not cycle through very often... call me if you would like to learn more about investment opportunities in the Denver Metro area.

Friday, March 28, 2008


Radian Guaranty Inc. is the latest private mortgage insurer to tighten underwriting standards, with a moratorium on loans with down payments of less than 3 percent kicking in March 31, and a ban on stated-income and stated-asset loans scheduled to begin April 30.

Like competitors including PMI and MGIC, Radian has also adopted more stringent standards in declining markets where prices are perceived to be falling.

Beginning March 31, Radian said maximum loan-to-value ratios will be increased to 97 percent nationwide. For full-documentation nonconforming loans, a minimum FICO score of 680 will be required to obtain mortgage insurance when loan-to-value ratios fall between 95 percent and 97 percent. Radian will no longer insure negatively amortizing loans after that date, the company said in a March 7 bulletin.

Radian will continue to insure subprime loans, but borrowers must have FICO scores of 660 or better, and minimum 5 percent down-payment requirements instituted Feb. 1 remain in force. Radian will not insure subprime loans on second homes, three- to four-unit properties, or on interest-only or cash-out refinance loans.

Beginning April 30, Radian will no longer insure any limited-documentation "alt-A" loans, including stated-income or state-asset loans.

"While certain forms of alternative documentation used to verify assets and income are appropriate with a disciplined underwriting process, the stated programs will no longer be insurable," the company said in a bulletin issued Thursday.

In Thursday's bulletin, Radian said it will also raise the maximum loan-to-value ratio for condominiums or co-ops in declining markets to 90 percent at the end of April. Radian has required minimum down payments of 5 percent in those markets since Feb. 1. The company has published a 138-page list of declining markets by ZIP code on its Web site. (And, Hallelujah, the Denver Metro Area is NOT on that list!)

Mortgage insurance company PMI has stopped insuring loans with down payments of less than 3 percent, and increased down-payment requirements in distressed markets to 10 percent. PMI will no longer insure pay-option adjustable-rate mortgage (ARM) loans in distressed markets, and requires 15 percent down payments on limited-documentation loans.

MCIG has stopped insuring loans with down payments of less than 5 percent in 30 declining markets, including all of California, Florida, Arizona and Nevada, and requires at least 10 percent down on loans in those markets when borrowers' FICO scores fall below 680. MGIC will no longer insure reduced-documentation alt-A loans, cash-out refinances or loans on investment properties in those markets.

What does is it all mean? The days of financing homes with "easy money" are gone, at least for now. But if you are replacing homeowners who couldn't afford their mortgages with much more tightly screened, qualified buyers, aren't you stabilizing the housing market? Wouldn't now be a great time to buy, since the causes which led to the fire sales and outstanding values of today are being addressed and weeded out of the marketplace?

The value of a qualified buyer has gone up - significantly. That's why we need to take GREAT care of our clients. There's no excuse for anything less.

Tuesday, March 25, 2008


Existing month-over-month home sales posted surprising gains in both California and Arizona last month, according to new articles which appeared this morning in the Orange County Register and Arizona Republic.

California existing home sales rose 9.5% in February, while Arizona home sales improved by 10%. A rebound in some of the harder hit housing markets around the country will almost certainly push interest rates higher as we head toward the summer months.

"We are still bumping along the bottom, but the Valley's housing market is gaining traction again," said Jim Sexton, president of Phoenix-based real-estate firm John Hall & Associates. "Sellers are getting more motivated. Prices are coming down, and there's a lot of activity from first-time home buyers again."

In Orange County, resale inventory has fallen to an 11-month low, as investors and first-time buyers are drawn back into the market by aggressively-priced foreclosure inventory. The number of homes under contract increased by 109% in February, shaving the inventory of homes from an 8.14 month supply to a 6.09 month supply.

While housing markets are local, interest rates are national. Therefore, if market conditions improve in bellweather states like California and Arizona, positively impacting the overall economy, long-term mortgage rates are almost sure to rise in response, including here in Denver.

Thursday, March 20, 2008


Forbes Magazine has ranked Fort Collins as one of its Top Ten Places for Business and Careers in 2008. In 2006, Fort Collins was named the "Best City in America" in which to live by Money Magazine. Last month, Forbes cited Fort Collins on its list of "America's Smartest Cities".

From the current Forbes article, which was published this week:

"Another newcomer to the top 10 is Fort Collins. With a metro area population of 282,000, it is one of the smaller places on our list. Fort Collins is home to Colorado State University, which is the area's largest employer and a big reason why 40% of residents have a college degree, the sixth highest rate in the country. Fort Collins also benefits from strong income growth and business costs well below other Colorado locales like Boulder and Denver."

Fewer than 15% of real estate brokers in the Denver metro area subscribe to the Northern Colorado MLS system. Why do I spend the money to subscribe to both Metrolist (Denver) and IRES (Northern Colorado)? Because, invariably, people coming to the area want to know more about Fort Collins.

With 24,000 students at Colorado State University, the city provides one of the purest rental markets in America, with a recession-proof army of students arriving each year. With a median home price of just over $200,000, Fort Collins offers a great quality of life in a safe and picturesque environment.

(In the name of disclosure, I am a Fort Collins rental owner and someone who has helped investors in that market. If you are interested in learning more about why Fort Collins is a great place for landlords as well as a wonderful place to live, give me a call.)

Saturday, March 15, 2008


Great event yesterday in downtown Denver at Fado's Irish Pub (yes, I took Sherry and my daughters to an Irish pub at nine o'clock on a Friday morning). Fifty-five total shavees showed up, and collectively we raised nearly $70,000 for Pediatric Cancer Research through the St. Baldrick's Foundation. We also had the chance to meet some very brave little kids who are battling pediatric cancer, as well as some local celebrities, members of the Colorado Avalanche hockey club and hundreds of St. Patrick's Day/weekend revelers who really had no idea what was going on, but who thought getting your head shaved in an Irish pub at nine o'clock on a Friday morning was a cool thing to do.

Thanks to everyone for your support... my ears are feeling a little cold this morning, but we definitely warmed the hearts of some amazing families going through a rough time.

(If you want to see more photos from the event, simply email me and I'll let you know where they are posted online - including "shocking" before, during and after pictures! DB)

Friday, March 14, 2008


Interesting article in the Rocky Mountain News this week in the paper's Real Estate Blog.

According the Mortgage Bankers Association, Colorado ranked #24 in the nation in foreclosures during the fourth quarter of 2007.

Realty Trac, a California-based company which compiles and sells foreclosure lists to prospective investors, ranked Colorado #5.

Why the disparity?

There are several reasons, but the MBA methodology ranks foreclosures in terms of the percentage of home loans that are delinquent, while Realty Trac simply reports on the number of foreclosures divided by households (whether they have mortgages or not). Also, because of the way foreclosures are reported in Colorado, Realty Trac often "double reports" foreclosures as they reach the sale date and again as they are finalized.

The numbers do reveal that Colorado homeowners are not as "equity rich" as homeowners in other states (no surprise, given that our market has been flat or down for over five years), but loans in Colorado are outperforming loans in 23 other states, according to MBA.

Bottom line: Are things as bad here as has been reported?

"Certainly, we do have a foreclosure problem," said Chris Holbert, president of the Colorado Mortgage Lenders Association. "But in relation to other states, we are mid-range, not No. 1 or No. 5."

Thursday, March 13, 2008


Active Homes on the Market as of 2/29/08 – 25,037
Active Homes on the Market as of 2/28/07 – 24,910
Change + 0.80%

Homes Under Contract as of 2/29/08 – 5,126
Homes Under Contract as of 2/28/07 – 4,911
Change + 4.00%

Homes SOLD in February 2008 – 3,001
Homes SOLD in February 2007 – 3,089
Change – 2.88%

With all of the foreclosures and all of the challenges we have seen in our market, we're holding together well. In fact, average days on market for sold homes is down nearly 10% from one year ago (a leading indicator) and for the first time in a long time, there has actually been a year over year increase in condo prices.

With much tighter lending standards and so many discounted homes on the market, it would be easy to justify falling values, but our Denver area median home price of $255,363 is just about where it was a year ago... despite all the turmoil.

What will our "spring market" look like? It's anecdotal, but I was previewing a new foreclosure listing yesterday that had three separate showings within an hour. The bottom of the market appears to be showing signs of recovery, which is long overdue and a very welcome development.


After nine consecutive years of record membership growth, the National Association of Realtors is preparing for a loss of up to 300,000 Realtors in 2008, according to a new report.

NAR has seen its Florida membership fall by 14.36% over the past 12 months, with California having lost 13.49% of its Realtors in the past year.

The "hot spot" for a career in real estate these days... Alabama?? Yes, Alabama, which saw its Realtor membership grow by 2.3% last year, the fastest growth rate in the nation.

Colorado's NAR membership held steady at just about 26,000 in 2007, a loss of less than one percent.

NOW, to the point of all this...

From the 1.2 million Realtors in America, less than 35,000 have taken the time and invested the money to earn the CRS designation, the highest professional designation in the business. If more agents had focused on building a business for the long haul instead of the quick buck, you wouldn't see this mass exodus out of the profession.

Monday, March 10, 2008


9:32 a.m. on Friday.

That's not a tee time, that's a shave time. Only four more days until the St. Baldrick's pediatric cancer fundraiser, and last week I hit my personal fundraising goal.

Oops, guess I didn't give you all enough credit!

Thanks to the outpouring of support from friends, family and past clients, I did the only logical thing.

I doubled my goal.

Okay, so now the pressure is back on. There are a total of 21 team members (we're called the "Snow Balds") committed to participating in this event on Friday, and we are all working hard to hit our goal of $20,000 in pledges and donations.

For some team members, this is the third, fourth or fifth year of participation in the St. Baldrick's pediatric cancer research shave-a-thon. For others, like myself, it's our first time in. And I think there are a few people who have been "on the fence" who will come on board by midweek.

If you want to learn more about my involvement, or if you would like to make a donation, go to my website ( and click on the St. Baldrick's link.

And yes, "shocking" before and after pictures will be posted here next week!

Friday, March 7, 2008


The latest changes being implemented by Fannie Mae, which went into effect March 1, placed additional hurdles before consumers with certain credit scores in the process of obtaining a mortgage loan.

In the past, mortgage loan applicants with credit scores between 620 and 850 generally received the same interest rates on conventional loans. The new guidelines specify that a lower LTV must be met for loan applicants with credit scores between 620 and 679, or an interest rate surcharge will be added to the rate. The new LTV is 70.01%.

The interest rate surcharges are staged as follows:

Credit Score / Interest Rate Surcharge To Quoted Rate
680 to 850 ... no increase
660 to 679 ... .125% increase
640 to 659 ... .25% increase
620 to 649 ... .375% increase

The home buyer with a credit score between 620 and 679 can still qualify for a conventional loan; however, they will be required to pay a higher interest rate if they do not have equity or available funds for a higher down payment to achieve the required LTV.

Last week, Freddie Mac announced changes, effective June 1, to their loan policies that will place further restrictions on LTV and credit scores, which will have the effect of increasing the cost of borrowing for a greater number of loan applicants.

Would you benefit from a FREE credit consultation with a Certified Mortgage Planner (CMP)? What if you could find out how to add 50 extra points to your credit score? How much would that save you in financing costs over the next 10, 20 or 30 years?

My team is COMMITTED to helping you attract the best rate and terms for your home purchase.


For the first time since the Federal Reserve started tracking the data in 1945, the amount of debt tied up in American homes now exceeds the equity homeowners have built. The Fed reported this week that homeowner equity slipped below 50 percent in the second quarter of last year and fell to just below 48 percent in the fourth quarter.

In short, more expensive home prices have led to more leveraged home owners. More leveraged home owners have led to more foreclosures. More foreclosures are leading to lower prices in many areas, which leads to more foreclosures. The cycle only stops when the market balance is restored.

What is the equity position for equilibrium in our market? Is it 50%? Have we reached it? Have we passed it? Given the lack of appreciation in our market over the past few years, I would guess we are on the more leveraged end of the scale. That would suggest that banks will continue to work aggressively to price Colorado foreclosures to sell quickly.

Wednesday, March 5, 2008


What's hot in Colorado? Try "The 80007".

The Rocky Mountain News reported today that the 80007 ZIP code in West Arvada ranked as the most expensive area in the Denver Metro region during the 4th quarter of 2007.

Large (huge) lots, big houses, lots of horses and unobstructed views of the Rockies make 80007 a highly sought after locale. Excellent Jefferson County schools and easy access to Denver and the Rocky Mountains also add to the appeal.

The median home price in 80007 was just under $520,000.

There were only three ZIP codes in the region to show both an increase in sales and a move upward in median price during the 4th quarter of 2007. These "double movers" were 80212 (Denver, near the Tennyson/Edgewater area), 80125 (Littleton, down south) and 80439 (Evergreen, up the hill).

To read the full text of the article, click here

Sunday, March 2, 2008


Only 13 days left to total, clean-shaven baldness!

With the St. Baldrick's Pediatric Cancer Fundraiser fast approaching, got word tonight that my "celebrity barber" is going to be Tom Mustin of CBS 4 here in Denver. (Would you be shocked if I told you that Tom is a news anchor?)

Also found out that we're going to have members of the Colorado Avalanche on hand at 8 a.m. for the opening ceremony, which likely will be carried live on the morning news. (Now I'm getting scared!)

My California friends want to know if there will be a live feed on the Internet. (If you make a donation, I'll tell you the answer)

Our team, known as the "Snow Balds", was recognized tonight for being in first place among all fundraisers with just over $7,000 in donations collected to this point. Onward and upward, let's have fun with this - and do something great for some amazing kids!