Archive for March, 2010
Monday, March 29th, 2010
By Susana
A client of mine receives our automatic listing alerts. She’s hoping to buy a two-bedroom condominium in the $200,000 – $300,000 price range close to the Steamboat Springs ski area, and one came up that she expressed interest in. She wanted to know what the HOA fee was, as well as the average rental income for 2009.
Built in 1974, the 834 square foot condominium has HOA fees of $1016 quarterly. These are low, especially considering the HOA pays for the gas heat, cable, high-speed internet, water, sewer, shuttle service, landscaping, insurance, snow plowing and shoveling, trash, building maintenance, capital reserves and the clubhouse with its two hot tubs: one indoors and one out.
Why it’s so low is that a communications company pays the homewoner’s association about $20,000 a year to keep a small tower on the buildings’ roof. That income helps out considerably, especially since it is a small, one-building complex.
Rental Income? Well, in 2009 the Gross Revenue average for their two-bedroom units was approximately $10,576.
This amount is before the management company takes its split – which for this particular complex is 42% to the management company, 58% to the homeowner. So, had my client been the owner she would have made roughly $6134 in 2009, which would’ve paid for her annual HOA fees ($1016 x 4 quarters = $4064), her property taxes ($721.72), and probably her electric bill ($1348.28), which is the only other bill she’d have.
Still, the management company told me this is quite a change from the heyday of 2007, when the same unit would have had a Gross Revenue roughly in the $30,000s. A few things have happened since 2007: the recession has brought businesses down by 40-50%, and there are a number of new luxury condominiums which have come on the market to compete for the fewer visitors.
We advise clients to buy vacation homes for their personal enjoyment. And they can also still be beneficial for tax purposes should their accountant so advise. Cash flow and appreciation, on the owther hand, may or may not happen depending on one’s lenght of time in the market, amount of money down, etc.
Talk to your accountant. Talk to your loved ones – those that will likewise be enjoying the vacation home and their vacation time there with you. And then talk to us, and we’ll go out of our way to help you find the best property for you, at the best price.
Posted in Buying Tips, Market Trends, Steamboat Condominiums | No Comments »
Friday, March 26th, 2010
The following article was supplied by Joe Birkinbine of ATP Financial Services in Steamboat Springs: We’ve become accustomed to low consumer interest rates, and many people may be conditioned to see higher rates as something to fear. But it’s difficult to see much of a downside to the Fed’s move. The interest rate in question, the discount rate, is what the Fed charges banks for emergency loans. It’s not directly related to the interest charged on consumer loans, so the rates you pay for credit cards, auto loans, and adjustable mortgages aren’t likely to be affected. In announcing in February 2010 that it would raise the discount rate 25 basis points to 0.75%, the Fed also made it clear that it would not soon raise the federal funds rate, which has a tremendous influence over interest rates paid by consumers. When the Fed adjusts interest rates, the earliest and most visible effects tend to be psychological. By raising the discount rate, largely a symbolic gesture, the Fed managed to send a message without potentially dampening the prospects of economic recovery, some analysts say. Higher interest rates are indeed a concern for consumers, but they are also a good sign for the economy Signs of RecoveryIn 2007, the Fed began lowering the discount rate from a high of 6% to address problems in the credit markets that began to surface that year. Fear had gripped the credit markets, and lenders were reluctant to make loans. The Federal Reserve, working with other central banks, undertook several extraordinary measures designed to restore confidence. One of the measures was to lower the discount rate to assure lenders that they would continue to have access to marketable funds if other sources dried up. Raising the discount rate is the Fed’s first step toward removing some of the nearly $1 trillion in emergency stimulus that it pumped into the financial system. It is an indication that the Fed is confident lending conditions are stable enough that extraordinary measures are no longer necessary. Heading Off InflationOne of the common criticisms of the Fed’s trillion-dollar emergency intervention was that flooding the financial system with so much money was eventually going to spark inflation. Although this is a valid criticism, inflation is likely to remain low until the nation’s employment situation begins to improve. Indeed, weak employment, tepid consumer spending, and other challenges facing the economy are among the reasons why the Fed hasn’t yet moved to raise the federal funds rate. Nevertheless, the Fed faces a tricky task in removing its emergency stimulus from the system soon enough to avoid inflation but not so quickly as to stifle the recovery or frighten the financial markets, which closely watch the Fed for signs of confidence or fear. By raising the discount rate now, the Fed is helping to reduce the risk of future high inflation, which is good news for investors and consumers. Rates Will Eventually RiseThe Fed has signaled that it is likely to increase the federal funds rate as soon as economic conditions allow, which will likely cause consumer interest rates to increase. Most analysts don’t expect this to happen until late 2010 or sometime in 2011. What will that mean for your finances? Higher interest rates are generally a sign that economic activity is picking up, so although you may no longer be able to buy a car with zero interest, there are other benefits to living in a growing economy. Please call if you have questions about how to prepare for higher interest rates.
Posted in Financing | No Comments »
Thursday, March 25th, 2010
Calling all first-time homebuyers – deadlines are approaching, and there has been no talk of extending them.
Deadline # 1: April 30th
This is the deadline by which you will need to have a property Under Contract. “Under Contract” means that all negotiations will have been ironed out and the final sales price and terms of the contract will have been agreed to, and there will be a signed contract by both parties in hand. Typically negotiations will take a couple of days, and maybe even up to four days if buyers and sellers are going back and forth with the price or the dates, etc. If we allow four days of negotiations that means you’d have to make an offer on a property by Monday April 26th.
You should allow several hours to review the contract with your real estate agent. And it’s best to have a pre-approval letter from your lender to submit with the offer. To create that letter your lender will need to have met with you and had time to review your tax returns and run a credit check, so you’ll need to have had an appointment and gotten your initial paperwork together.
If not with the offer, at least within a couple of days of submitting the offer you will need to have an Earnest Money check ready to be handed over to the listing agent’s office or the title company. The check will almost immediately get deposited into a trust account, so you will need time to get the cash together for the Earnest Money deposit.
And of course before that you will have had to find the property you would like to buy. This can take awhile. You will also need time to decide on the price you want to offer. Your real estate agent can help you by running comparative market analysis of similar properties which have sold recently, but this too will take a little while.
The good news is that after you get Under Contract you will have time for due diligence, which means you’ll have time to have the home inspected, to review the HOA minutes and bylaws, to get a survey done, etc., so you don’t need to have that done beforehand.
Deadline #2: June 30th
This is the deadline by which you will need to have Closed on the property. “Closing” is the term used for when the title of the property actually changes hands from the previous owner to you. In Colorado Closings take place at Title companies, and that is when and where monies are also distributed. You’ll need to have your down payment money in the form of a Cashier’s check, and your lender will need to have their money to the Title Company by then too.
Since it typically takes two months for a loan to go through, and since you won’t be the only one trying to get a loan during that period (read: lenders will be swamped), I think April 30th may even be too late to get Under Contract if you need to close by June 30th.
Bottom line: Procrastinators the time has come! We need to look at properties this weekend.
Tags: , buying steamboat springs real estate, first-time homebuyer credit, tax credit deadlines
Posted in Buying Tips, Financing, Real Estate Opportunities, Taxes | No Comments »
Friday, March 19th, 2010
We are quite fortunate in the Yampa Valley to have not experienced the volume of short sales and foreclosures that so many have experienced across the nation. Total short sales and foreclosures constitute less than 2% of our market. The name short sale is definitely an oxymoron since nothing about the process is short.
Land Title Company has just released the February sales numbers and found that total sales volume for the month of February 2010 is 267% over the volume from February 2009. Year to date volume is up 228% compared to the same period in 2009. Units Sold are up 165% from February 2010 compared to February 2009.
While Volume and Units are up over last year, the number of loans recorded is down. Year to date in 2010 there have been 283 loans compared to 487 through the same period in 2009, once again proving that cash is king.
This points out that there are still significant issues with current lending. The problem started when, as a knee jerk reaction, Congress bailed out financial institutions toward the end of 2008 with billions of dollars (the taxpayers) of interest free money. The hope was to inject this money into the economy via a variety of loans. Because there were no regulations in place as to how the bail out money was to be spent, the financial institutions simply took the money and deposited them into government backed bonds paying 3% interest.
Although many of these institutions have paid back some or most of the funds we, the consumer, are still feeling the effects of the unavailable money. In the Steamboat Springs Condominium market we are seeing a real catch 22. This is a product that, in our market, is the only housing available for first time homebuyer’s who are trying to take advantage of the tax credit. However, since they cannot get financing they also cannot take advantage of the tax credit.
As with most of life, the good news is balanced by reality and as my Mother always used to say “This too shall pass”.
Posted in Uncategorized | No Comments »
Monday, March 15th, 2010
By Doug
Recently I was asked by the Steamboat Springs Resort Chamber Association to give a presentation to a group of business people for a Chamber Breakfast as to the state of the real estate market and outlook to the future. Also asked to give their perspectives in their appropriate fields were a banker, lodging manager, ski area official and contractor. I thought I would share with you the notes I gave to the group.
2009 was a challenging year for the SBS real estate market. Only 467 sales occurred, which was the lowest total since my records date back to 1995. $267 million in dollar volume was the second lowest since 1995. The lowest was in 2001 (9/11). The 2,100 listings was the highest number of listings we have ever had.
But there is some good news.
The $571,000 average sales price for 2009 was the 3rd highest the MLS has recorded for a single year, and although the 1st quarter of ’09 only posted 62 sales, we’ve had three straight quarters of increasing sales.
Listings have dropped from 2,100 to around 1,900 over the past few months.
We’re about half way through q1 of 2010 and already have 37 sales closed and 70 pending, so we should show a better q1 than last year. Brokers are seeing an increase in traffic and showings.
I find it interesting and beneficial to not only like to look at what’s happening in the Yampa Valley, but also see how we’re doing compared to other resort markets.
Comparing the 10 resort areas who are members of the Western Mountain Resort Alliance, which consist of Park City, McCall, Jackson Hole, Sun Valley, Telluride, Vail, Summit County, Winter Park, Whistler and Steamboat, we’re not alone in our decrease in activity.
I compared 2006 numbers to 2009 in regards to transactions, dollar volume and to add a human element in the study, broker attrition.
Of the 10 resort areas, the greatest decrease in sales occurred in Summit County, which declined by 290%, from 3,845 sales to 985. Steamboat was 3rd with a 233% drop, and Whistler had the least amount of decline of only 33%.
Jackson Hole saw the greatest dollar volume decline of 235%; Steamboat was in the middle of the pack with a 155% decline, and Whistler was the least amount of drop at 58%.
Looking at Broker Casualties, the McCall Idaho market (home to the ski area formerly known as Tamarack) had the greatest number of brokers leaving the market at 55%, or from 310 to 200. Steamboat actually increased 1% from 373 to 376 (we were up to 425 at one time, however), to the resort with the least amount of casualties, which was….Whistler at a 4% increase.
Looking into the future, if you’re a seller you’re going to have a lot of competition to sell your property. It’s going to need to be competitively priced for a buyer to want to look at it.
If you’re a buyer, you’ve got a lot more selection than ever before. Although interest rates are still very favorable, you may find yourself needing to put more down than before, and there are very few options with condo and timeshare financing.
To make a deal happen in today’s market, there has to be a seller willing to take much less than what he could have in 2007. Buyers are looking at a price that may be 10 to 20% below even today’s market to feel comfortable about making a commitment.
As more sellers are adjusting their expectations, I’d look for a slow but steady recovery through this year, and provided more rather than less financing options become available, a 10 to 20% increase in activity over last year could happen in 2010.
The Baby Boomer population is what fueled our market over the past ten years, and they didn’t go away, just decided to sit on the sidelines for a while, but for those who are in the game, there are some great opportunities right now.
Tags: real estate market, steamboat springs real estate
Posted in Steamboat Springs Real Estate - General Information | No Comments »
Friday, March 12th, 2010
The Colorado Association of Realtors –CAR recently completed a phone survey of their members to see, among other items, what their thoughts were about the current state of the economy and how they felt about Real Estate in the next year.
The demographics were particularly interesting to me. 31% of the respondents work less than 20 hours per week as a Realtor. 57% of these have another occupation. Only 47% worked a minimum of 40 hours per week at their Real Estate craft.
23% reported that they earned less than$15,000 in 2009. 53% earned $50,000 or less. I guess that might answer the perception that all Realtors are rich and drive BMW’s. 24% say they were involved in 5 or fewer transactions in the past year. 33% say they were involved in 16 or more transactions. How much do you wish to bet that this last group is the group that works a minimum of 40 hours per week?
30% of Realtors surveyed have less than 5 years of tenure as a licensed Real Estate Agent. 82% are optimistic about the upcoming year in their local markets. The biggest issue that they report to face is the current state of lending.
As a member of the National Association of Exclusive Buyer’s Agents I can comfortably state that these demographics would simply not fit our profiles. Most EBA’s have been in the Real Estate business for decades and are dedicated to full time dedication to their craft. Along the way they saw too many examples of poor or no representation for the Buyer and decided that this end of a Real Estate Transaction needed proper representation also.
Buyer’s Resource Real estate of Steamboat is the only Exclusive Buyer’s Agency in the Yampa Valley. We are a small office of three agents yet are respected amongst our 386 peers in Steamboat. In the past 5 years two of the Presidents of the Steamboat Springs Board of Realtors have come from our office. Doug Labor was the Board President in 2004-05 and I am the current President. In addition Doug remains the Board statistician. It’s this type of leadership and dedication that separates us, and our business model.
Posted in Exclusive Buyer Agency & Consumer Protection | No Comments »
Friday, March 5th, 2010
What would happen to Steamboat if there wasn’t a little controversy every now and then? As you can imagine a housing development of 487 acres that will, over the next 20 to 30 years provide an additional 2,500 housing units of varied types is likely to stir some debate.
This master-planned project based on “New Urbanism” will integrate apartments, condos, townhomes and single family homes into a community setting that will also offer an area of commercial including a grocery store. No residence is more that a 1/8th mile from the nearest free to rider city bus stop. Included in the project are over 148 acres of parks and open space. Hiking and bike trails throughout the community will link to Silver Spur as well as the Steamboat Core trail via a tunnel under US 40 that will be built by the developer.
In cooperation with the School district there will eventually be a K-8th grade school built on a nearby exiting site already owned by the school district. A new fire station is also incorporated into the development along with significant highway improvements for that area.
Steamboat 700 has been endorsed by the City of Steamboat Springs as well as the County Commissioners, School district, Steamboat Pilot and Today, Yampa Valley Medical Center and many local civic leaders. All ballots for this City wide election are due by March 9th and tabulation has already begun.
We at Buyer’s Resource feel that this project has been well planned and fits within our West Steamboat area plan that was revised in 1998. This project allows for an affordable housing component but more importantly provides our workers with an attainable housing alternative within the Steamboat City limits. The developer has worked diligently to listen to the needs and wants of the community and has obliged with this plan. We endorse this project and hope that you will take the time and effort to fully understand the dynamics and scope of Steamboat 700.
Posted in Uncategorized | No Comments »
Monday, March 1st, 2010
If you were watching the Olympics this year you probably caught some of the buzz about Steamboat Springs’s Johnny Spillane winning two individual Silver Medals, Billy Demong who lived and trained in Steamboat winning a Gold Medal, and the Olympic 4-man team made up of Johnny, Billy, Todd Lodwick (of Steamboat) and Brett Camerota (trained in Steamboat) winning a Silver Medal. US Nordic combiners winning even one medal broke an Olympic draught.
Residents of Steamboat could be found at Olympian Hall, watching the events on a big screen. Residents and visitors alike congregated near Gondola Square, in front of One Steamboat Place to watch on the big screen there. And others, like Ulrich and Doug in our office, watched on their computers at their work desk. Me, I was home with my husband John, each of us with a computer in our lap in case either of us lost the Live Feed.
During the last individual event, when Billy won Gold and Johnny the Silver, our son Cliff, who is a Nordic combined athlete himself and trains with these guys was sitting in front of the computer at the library of his High School. He was making up school work he’d missed during his recent three week trip to Europe where he competed in the World Junior Championships in Germany and a Continental Cup in Austria. As the Olympic event got underway, Cliff called and we gave him the website for the Live Feed. Ten minutes before the end of the race Cliff’s computer lost the Live Feed and he called us up again. There, holding the phone between me and John, we screamed out blow-by-blow, how Johnny and Billy were in the lead, how the Austrian with them was successfully holding on, and then getting ahead, and then falling back, and Billy sprints ahead and Johnny follows and the Austrian is dropped and Billy and Johnny cross the finish line in first and second. OMG OMG OMG! Cliff says “okay,” hangs up and gets back to his school work.
After all, that was last week, and this week is the 2010 Ski Jumping and Nordic combined Junior Olympics, which this year happens to be held here in Steamboat. For Cliff to compete and defend his two previous Ski Jumping and Nordic combined championships, school and ski club policy says he has to be caught up with his schoolwork. As of this writing I still don’t know if he academically qualifies or not.
But with or without Cliff, the Junior Olympics of course will go on. There won’t be a computer feed, but it will be LIVE in downtown Steamboat Springs at Howelsen Hill. Thirteen athletes (or 12) from the Rocky Mountain Division, 10 from the Intermountain Division which trains in Park City, 10 from Eastern Division, 31 from the Central Division and possibly some from Alaska and Canada, will attend Opening Ceremonies Tuesday Night before their three days of competition.
Billy, Johnny, Todd and Brett may all be retiring between now and the next Olympic Games. Come see for yourself first-hand then, the future Olympians who will now be following in their extraordinary wake. Catch the buzz. And if you see Cliff Field competing, shake his hand and congratulate him on getting his schoolwork done!
Tags: 2010 Ski Jumping and Nordic combined Junior Olympics, Billy Demong, Brett Camerota, Johnny Spillane, Living in Steamboat Springs Colorado, Todd Lodwick, US Nordic combined Olympic medals
Posted in The Steamboat Lifestyle | No Comments »
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