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Home as Investment: A thoughtful letter from Dana Horinek, owner Custom Homes by Dana

2012-01-30T18:37:08Z

Dear Marie,

I recently read an article in which a builder told his sales staff to not sell homes as an investment. I totally disagree!

While housing is not the speculative darling of a few years ago, your home is an investment. All elements of life require an investment of capital, or time , or of your spirit, and we all seek a return on that expenditure. A home is the perfect embodiment of return on investment in that all three can be realized. Quality real estate will still provide a return on capital, perhaps more slowly at times, but over a period the dollar value is there. But, the most exciting gain from home ownership is about your time and spirit. The time you spend with family and friends at a new place that is so inviting the kids pals always want to hang out at your house. Room to entertain or just be private and enjoy some solitude. Revitalization of your spirit. This is truly your profit, an ideal yield on investment. For most families the home is the largest expense, so why not make it the source of greatest compensation. Isn't that what it's all about?

Dana
D.R.H. Builders Inc.

Housing Industry Rebounds

2011-12-14T05:20:57Z

Bob Buch shared this excellent article with me, I just had to pass it along.
Author: Bryan McNee, MBS Authority
Source: Bob Buch, Envoy Mortgage as provided by MBS Authority, all rights reserved.

After half a decade of withering sales and slumping prices, there are strong and diverse signs that the single-family housing market is poised for a rebound. In some metropolitan areas, the market has bottomed, with both sales and prices on the rise and foreclosures on the decline.

This contrarian — and largely overlooked — thesis flies in the face of the persistent gloom that has nagged the industry since 2007, when the subprime crisis flared. Industry analysts and players cite a number of reasons — some traditional (employment), others unique to the post-credit bubble era (foreclosures) — for the long-awaited sea change. An analysis of industry and government data also support the forecast. “It has become increasingly apparent to us that the pieces for a housing rebound next year are beginning to fall into place,” declared Barclays Capital analyst Stephen Kim in a recent note to investors.

Proponents admit that the nascent rebound could easily be derailed, but stress that after years of government efforts to support sales and prices as well as the volatile impact of foreclosures, the market has regained a measure of normalcy.

“With the exception of really hard-hit markets, the vast majority is ready to turn around,” adds Jerry Howard, president and CEO of the National Association of Home Builders, NAHB. "The Washington, D.C., area is not only ripe for recovery, they need to start building units.”

There’s been little conventional, however, about this housing slump, which is one reason it's had so many false bottoms. Among its many firsts — housing starts fell through 1 million annual units, foreclosures topped 2 million in three consecutive years, and home prices declined on a national basis.

The catalysts to recovery are mostly the same: for potential buyers, residential rents have now risen enough to consider buying; existing-home inventory is the lowest in five years, while that of new homes is at a 40-year low; affordability is at a record high; delinquencies have peaked; consumer confidence is on the rise; and job growth is accelerating. For investors, with a continuation of the gold rally in question, real estate is beginning to look like a viable inflation hedge alternative, while rising rents mean greater profits.

Finally, there’s the intangible fatigue with bad news, and a desire to end the negative feedback loop. “We believe there is sizable housing demand that could be released into the market," says Lawrence Yun, chief economist of the national Association of Realtors, NAR. The NAR is forecasting existing home sales will rise 5 percent in both 2012 and 2013; prices will edge up 2 percent in each of those two years, then 4 percent in 2014. The NAHB is forecasting a 5.1-percent increase in new home sales and a 10-percent increase for new home starts in 2012.

Jobs, Jobs, Jobs

A turnaround in the housing market will require continued improvement in the job market. The economy has created jobs 13 months in a row for a total of almost 1.9 million. Weekly jobless claims have been routinely below the key level of 400,000, and the national jobless rate is down to 8.6 percent. There are already signs in some markets that an improving emploment picture is boosting housing demand and sale prices.

In cities such as Tampa, Fla., South Bend, Ind., Grand Rapids, Mich., Raleigh, N.C., Wichita, Kan., and Green Bay, Wis.., the median sales price of an existing single family home increased 1-2 percent in the third quarter, during which time the jobless rate and/or payrolls growth improved dramatically.

Even in the Cape Coral-Fort Myers, Fla. metropolitan area — considered the epicenter of the foreclosure crisis a few years ago — prices were just 1.4 percent lower in the third quarter than the previous year. A new index by the NAHB and First American, the Improving Markets Index, IMI launched in September, tracks housing markets throughout the country that are showing signs of improving economic health. Thirty cities – including San Jose, Pittsburgh, New Orleans and Winston-Salem, N.C. – are showing growth in permits, sales and employment. In San Diego — where in the last year the jobless rate has fallen from 10.4 percent to 9.7 percent and 24,000 jobs have been added — home inventory is down to two months; in some areas of San Francisco (9.4 vs. 10.3 percent), it is one month. More broadly, 40 percent of all states showed existing home sale increases on both a quarterly and annual basis in the third quarter, according to national Assocatio of Realtors data. That includes high foreclosure-rate states, such as California, Georgia, Michigan and Utah. All but six states showed double-digit gains year over year.

What Happened to Rates Last Week:

Mortgage backed securities (MBS) lost -20 basis points from last Friday to the prior Friday which moved mortgage rates higher. MBS traded in a very tight range for the week. We received much better than expected economic data which normally pressures mortgage rates. ISM Services, Initial Jobless Claims, Wholesale Inventories and Consumer Sentiment all came in stronger than market expectations.
MBS sold off on Friday (causing rates to increase) after the European Union Summit released details of their new agreement with Eurozone countries. This removed some of the "flight to safety" premium that has kept mortgage rates low.

What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:

Date	Time	Economic Release
12-Dec	14:00	Monthly Budget Statement
13-Dec	8:30	Retail Sales (MoM)
13-Dec	8:30	Retail Sales ex Autos (MoM)
13-Dec	10:00	Business Inventories
13-Dec	10:00	IBD/TIPP Economic Optimism (MoM)
13-Dec	14:15	Fed Interest Rate Decision
14-Dec	7:00	MBA Mortgage Applications
14-Dec	8:30	Import Price Index (MoM)
14-Dec	8:30	Import Price Index (YoY)
14-Dec	10:30	EIA Crude Oil Stocks change
15-Dec	8:30	Continuing Jobless Claims
15-Dec	8:30	Current Account
15-Dec	8:30	Initial Jobless Claims
15-Dec	8:30	NY Empire State Manufacturing Index
15-Dec	8:30	Producer Price Index (MoM)
15-Dec	8:30	Producer Price Index (YoY)
15-Dec	8:30	Producer Price Index ex Food & Energy (MoM)
15-Dec	8:30	Producer Price Index ex Food & Energy (YoY)
15-Dec	9:00	Net Long-Term TIC Flows
15-Dec	9:00	Total Net TIC Flows
15-Dec	9:15	Capacity Utilization
15-Dec	9:15	Industrial Production (MoM)
15-Dec	10:00	Philadelphia Fed Manufacturing Survey
16-Dec	8:30	Consumer Price Index (MoM)
16-Dec	8:30	Consumer Price Index (YoY)
16-Dec	8:30	Consumer Price Index Ex Food & Energy (MoM)
16-Dec	8:30	Consumer Price Index Ex Food & Energy (YoY)

It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.

Still leading the way at Huntington Trails Estates!

2011-08-31T20:37:13Z

While I have recently joined Coldwell Banker Residential Brokerage, I am still available on location at The Estates at Huntington Trails, working with two of the best custom builers around in Custom Homes by Dana and CSI Construction, Inc. Both locations are open daily and both are located on West 141st Circle. A visit to the model homes is the best way to see the quality and craftsmanship that go in to a home by these outstanding builders.

Marie Callaway Joins Coldwell Banker Premier

2011-08-19T21:38:13Z

WESTMINSTER, Colo. - Marie Callaway, a leading real estate professional, has joined Coldwell Banker Residential Brokerage's North Metro office in Westminster as a broker associate. Callaway is now serving the diverse real estate needs of clients throughout the north metro Denver area.

"We are pleased to welcome Marie to our top-producing team of real estate brokers," said Sally Scaman, managing broker for Coldwell Banker Residential Brokerage in Westminster. "Marie is a Previews Property Specialist with outstanding expertise in the luxury home segment of the business, and she has posted more than $75 million in sales volume in the north metro Denver area alone."

Callaway earned her real estate license in 1996 and is a member of the Boulder Area Board of Realtors. She joined Coldwell Banker Residential Brokerage because of the company's agent support and training, leadership, and proven marketing programs.

"In order to have effective marketing, you have to have velocity of sales to produce the marketing dollars to drive the marketing," said Callaway. "Then, you have to have a very qualified team of marketing people who can get you the biggest bang for your dollar. I interviewed with several real estate firms for their cohesiveness in effective, high velocity marketing. I know it when I see it. Remarkably, of all the firms I interviewed with, I didn't see this anywhere except at Coldwell Banker."

Callaway earned her bachelor's degree from the University of Alberta in Canada. She was an interior decorator in Canada for 10 years and a high-end custom home builder for six years in north metro Denver and in Longmont.

The Coldwell Banker Residential Brokerage office in Westminster is located at 2861 W. 120th Avenue, Suite 200, and can be reached at 303.235.0400. Callaway may be reached directly at 303.437.6999 or via e-mail at marie@coloradofinerealestate.com.

About Coldwell Banker Residential Brokerage Coldwell Banker Residential Brokerage, a leading residential real estate brokerage company in Colorado, operates 14 offices with 1,040 sales associates serving the communities of the Denver area. The company offers residential and commercial brokerage, corporate relocation and mortgage services. Through its internationally renowned Coldwell Banker Previews® program, the company is widely recognized for its expertise in the luxury hosing market. Coldwell Banker Residential Brokerage, online at www.ColoradoHomes.com, is part of NRT LLC, the nation's largest residential real estate brokerage company. NRT, a subsidiary of Realogy Corporation, operates Realogy's company-owned real estate brokerage offices. For more information please visit www.ColoradoHomes.com or call 925.275.3085.

SOLD by Marie (thus far) in 2010

2010-11-23T19:55:00Z

There is a reason why people are building custom homes!

Since the finance industry put a stop to new spec loans in 2007, inventory levels of completed new homes have been declining. We are now at such low levels of standing inventory homes, people are often not finding what they are looking for. So, the great opportunity is available to design a new custom home from scratch or to modify an already designed home that is 80% perfect.

And if you’ve never built a custom home, let me tell you how easy it is at Huntington Trails Estates. Start with your wish list of things you’d like to have in your new home; bedroom count, size, formal living areas or not, large lot or small lot, 2 story or ranch, hardwood floors, slab granite countertops, and price range. From there, our custom builders can design to your budget and specification. The pre-build process can take as little as a few weeks, with the construction time as quick as 5 to 7 months.

This year is the year to start your custom home. Of the ten homes I’ve sold in the Estates this year (See Map below), seven homebuyers voted with their dollars on the value of the design build process. Westminster is a great city to live in and Huntington Trails Estates is a friendly place to call home.

Click here for a larger map

Which comes first? The chicken? Or the egg?

2010-08-13T22:35:00Z

I often have buyers ask me whether or not to shop for and secure the new house now or after their existing home has sold? This is how the age-old 'chicken or egg' question comes about.

The market conditions that make it difficult to sell your home right now are due mostly to just very little velocity – too few buyers buying. This is the same market condition that makes a new home builder interested in doing a very low margin deal.

As the market improves for the prospect of selling your existing home, so too does the market improve for the new home builder – the person you are buying your home from. With this improvement, the new home builder becomes less interested in doing love, low margin deals.

So, it is my recommendation that you secure a fixed price as well as a price lock for 3 to 6 months with the builder. It gives him assurance that when your home sells, the builder can start construction on the new one. Without doing the upfront work to secure the great deal on the new start now, when your house does sell, you’ll be that much further behind and may, in fact you may end up with less house for the same price in the long run.

Most builders are willing to lock a price on a new start for a period of time while you get your existing home sold – that is, if your existing home is priced appropriately to sell. This lock puts you in a great position – no risk either way. If you sell your house, you know you’ve got the low price secured on the new one. If your home doesn’t sell , you’re still not out anything since you’re not obligated unless your house is sold. Many clients I work with are faced with exactly the same dilemma and have chosen to proceed with the pre-construction work while they are selling their existing home. They are then ready to dig a hole the moment their home is sold. It works out quite smoothly.

Never thought you'd ever do a short sale on your home? Consider this...

2010-06-08T21:10:00Z

Your home value is less than the amount owing on your mortgage loan. You still have a job, but have been falling further and further behind on payments since your company ‘right-sized’ you. You’re getting to the stage where there may be no catching up.

A short sale may be appropriate for you. New rules governing short sales are designed to make the process faster and less difficult.

The Treasury’s Home Affordable Foreclosure Alternatives – “HAFA” program is aimed at speeding up the lender’s decisions on short sales and to make life a whole lot easier for you, the seller. Before this program came to being, the period for a short sale could take anywhere from 3 to 18 months with plenty of anguish through the middle.

A short sale can only be done with the lender’s permission. If the lender takes forever to decide, you as seller, may have lost opportunities to sell the home when a prospective buyer just doesn’t have the time or patience to wait through such an uncertain process.

Under the HAFA program, the lender decides up front the minimum price it will accept. Then there are tight deadlines for the lender and homeowner to meet. In the end the seller gets $3,000 in moving expenses for leaving the home in good condition.

Those who qualify for HAFA and request a short sale receive a 7 page document called a “Short sale Agreement” from their lender. The borrower has 2 weeks to respond and then has 4 months to sell their home.

Step 1: borrower hires a real estate agent while lender obtains a market valuation

Step 2: borrower continues to make mortgage payments but they are reduced to no more than 31% of their monthly income. The lender tracks the shortfall between what is owed and what is paid

Step 3: borrower waits for prospective buyers to make offers. The lender decides the minimum acceptable net proceeds. This amount is impacted by the presence and amount of the second mortgage; amount owed on first mortgage; unpaid interest owed, closing expenses & real estate agent commissions.

The lender established the acceptable net amount, although they are not obliged to tell the borrower this bottom line amount.

The Seller and buyer send the lender a “request for approval of short sale” or RASS to which the lender will provide a yes or no answer within 10 days. If the offer meets the minimum acceptable net proceeds, the required answer from the lender is “Yes”.

It doesn’t pay for an expensive move, but the $3,000 paid to the seller as a ‘relocation incentive’ is very useful as it allows the seller breathing room to find other accommodations.

Before there was HAFA, there was HAMP – the “Home Affordable Modification Program”. Though well intended, HAMP failures are in the 70% range since HAMP focused upon modification of the terms and rates for the mortgage loan instead of addressing the core issue – that the value of the note exceeded the market value of the home. Both programs are specifically designed to help homeowners stay out of foreclosure.

Although this new HAFA program definitely streamlines the previously very cumbersome process of short sale, there are circumstances where it can get more complicated. Lenders holding a home equity line of credit may block the short sale if they don’t get paid in some manner.

Faced with the all too ugly prospect of having to sell your home in a short sale, there never has been a better time to do it. The process is much easier with the HAFA program and, the process is a much less public experience than a foreclosure. As well, there is less damage to your credit with a HAFA short sale. If I can be of any assistance with this or other real estate needs, please feel free to call.

Building From Scratch - A better deal than buying a spec home?

2010-05-28T17:09:00Z

We’ve never been here before. In principle, we would all agree that purchasing a spec home that’s been on the market for a long time and has had price reductions is a better deal than starting a new home from scratch right?? Well, I personally would have agreed with this as late as 5 months ago. But we are in a Brave New World these days in real estate. Can we still make the same assumptions?? Not necessarily.

A standing inventory home may have a builder who has walked away from BOTH profit and his/her invested capital. And, there is no builder in the world that is going to build you a home from scratch with no profit and loses capital. So, at face value, it makes sense that the dirt start cannot be as good a value as the standing inventory RIGHT??

Well hold up here. All the above is true. And, what else is true is this:

• Most builders wrote down the value of their vacant lots in 2009 in order to take a loss on their tax return and put themselves in a much better position going forward.

• Standing inventory homes presently on the market were started at least 3 years ago when labor and materials costs were much, much higher than present.

• Standing inventory homes have the burden of interest carry adding to the underlying price. A new home built specifically for you has no additional interest carry burden. The builder doesn’t have to build in a padding of interest & tax carry because it will not languish on the market waiting for a buyer. The buyer is already here. Plus, since most custom builders are much smaller now, they are far more nimble and can build your home faster than in the past. Faster means a shorter construction time. A shorter construction time means less interest paid during construction, which means savings for you.

So, as unlikely as it seems, a new dirt start has as many pricing advantages as the standing inventory home and a few advantages a spec doesn’t have:

• Many builders are willing to build at little to no profit to move substantial inventory of vacant lots. Banks are pressuring builders carrying large inventories of vacant lots at an unprecedented level, motivating them to move inventories through build out at no or low margins.Spec inventory is largely picked over at this time. It is likely that you’re not finding the floor plan that suits your needs. Starting a custom home from scratch resolves that problem.

• Choose the best location for you and your family

• Interior finish selections are all yours – not something someone else thought you should have and you need to tear out once you move into your brand new home.

• Most Denver real estate professionals agree that prices are firming up right now and look to be increasing in the future. Starting a home now gives you tomorrow’s house at today’s price – helping you build equity before you actually move into the home.

• Worried about interest rates rising before the home is finished? Long term rate locks are back, allowing you to safeguard against higher interest rates in the future.

Add it all up. If you can’t find exactly what you’re looking for, don’t dismiss starting a home from scratch. If you don’t, you might miss out on a terrific opportunity!

Time is Money and Time is Running Out!

2010-04-22T21:24:17Z

Check out what Chief Economist of Stewart TItle, Ted C. Jones has to say about it in the following video...
http://www.youtube.com/watch?v=1q0X9aZ18B8

It stands to reason, that the law of supply and demand means that as inventory levels drop and demand levels rise, prices go up. With the current very low and dropping inventory levels, and no lender financing of any new spec homes, we are assured of increases in home prices.

If you have already purchased before prices rise, you are in good shape. If you wait, you'll pay more both in purchase price and in interest rates since experts agree that these artificially low levels cannot last.

Something to consider,
Marie

Welcome

2010-03-28T18:26:14Z

Welcome to Bosch Marketing Group’s new Colorado Fine Real Estate Blog by Marie Callaway. A place to provide valuable information on real estate, in general. To share ideas, highlight homes, neighborhoods, share ideas, enjoy the ‘fun’ of owning a home, and the adventure of moving. To connect.

I have been part of the Bosch Marketing Group team since 1996 as a licensed real estate agent representing multiple new home builders in a wide array of price ranges and locations – see below. My considerable experience in residential lot sales and new home sales has also contributed to handling resale listings and short sale listings on behalf of private sellers over the years, as well. A few from a list of over 10 neighborhoods includes, The Ranch Reserve, The Villas at Ranch Reserve and Huntington Trails Estates, all in the north metro area.

See our website for a list of quality properties available today. www.coloradofinerealestate.com/properties

And did you expect me to say anything EXCEPT that now is a great time to buy?? Suspend your disbelief. And, the truth remains: there has never been a better Buying Opportunity as now. Prices are at an all time low. Interest rates are presently at artificially low levels – I forecast interest rates to increase to 8% within 12 months. Inventory levels are at crazy low levels since there is no bank financing available for speculative building, therefore, no new starts unless you contract a new home for yourself.

With the greatest sincerity,

Marie Callaway

Licensed Real Estate Agent