Broomfield's master-planned community to include 'Science City' and bee-friendly parks

BROOMFIELD, Colo. — Amazon may have scrapped Broomfield from its plans but don’t think city leaders didn’t have a backup plan. It’s called “Science City,” and Broomfield's leaders believe this development will rival downtown Denver.

Amazon who? The city of Broomfield has already moved on and started building on the 1.5 million square feet available for commercial development. It’s all in plans for the master-planned Baseline community bound by Highway 7 and I-25 and includes 6,000 residential multi-family units and a research park for science-based businesses.

There will be a new STEM K-12 school, shops and restaurants, a new location for the Butterfly Pavilion, parks, trails 
not to mention places for the bees and other pollinators.

"So it will be an example of how do you create a pollinator-friendly environment," said Broomfield City and County Manager Charles Ozaki.

Ozaki told Denver7 development plans have been in the works for 10 years, and now with the growth moving north of the metro along with the supporting infrastructure, the time is now. But that is a big change for people who moved up here to get away from the hustle and bustle, like Tom Lahouse left Houston to retire in Broomfield a year and a half ago.

"A little bit of rural and city all kind of mixed together," said Lahouse.

Lahouse’s view of the mountains is intact, but on the other side, the cranes are popping up one by one.

"It’s got positives and negatives, and it’s just part of life," said Lahouse.

He's looking forward to the shopping, the restaurants, the more vibrant community but that comes with downsides.

“Traffic, noise, light pollution," said Lahouse.

It depends on how you look at the next thirty years, and for these neighbors, it’s glass half-full.

"More jobs for people and it helps Denver grow. I think it's a good thing," said Broomfield resident Thuy Baker.

Lahouse doesn’t plan on going anywhere.

"If I reach a stage where I need some help, I can move into the assisted living facility they're gonna be building right there, cus I hope to spend the rest of my life here,” said Lahouse.

Written by Jackie Crea

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Denver Council Approves Grocery Store and 200 Apartments in Cole Neighborhood

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A local developer got the green light on Monday for a project that will put hundreds of apartments, including some rent-limited units, at the edge of the River North district in the Cole neighborhood.

Buildings on the site will be allowed to rise up to five floors, but its eastern side will be only three stories. A rezoning for the site was approved in a 10-0 council vote. Councilman Albus Brooks abstained, while council members Robin Kniech and Debbie Ortega were absent.

The plan is to build a 30,000-square-foot grocery store and more than 200 apartments. About 10 percent of the units would be designated for people making 60 percent of the area median income, or $49,000 for a family of three, the developers say.

That exceeds city requirements on the land, which is near the 38th and Blake transit station. The extra affordability won’t be legally required by the rezoning, but it will be cemented in a later agreement with the Office of Economic Development, according to developer Andrew Feinstein.

“Not only are we offering to do more units, we’re offering to do it at a lower AMI,” said Feinstein, referring to the income limit for residents.

The site is mostly between 37th Avenue, 36th Avenue, Downing Street and Marion Street.

The plan will eliminate the “Lawrence Swoop,” a curving section of Lawrence Street that cuts across the properties. Instead, drivers will use the existing street grid. The developer bought that section of the road from the Colorado Department of Transportation.

“We’re going to wrap this entire site with a substantial tree lawn, with three times as many trees as are already there, and we’re hoping to have a 17-foot-wide tree lawn on Marion,” Feinstein said.

The developers also are paying to convert Marion and Downing streets from one-way to two-way along the project’s edges, which may slow traffic speeds and improve pedestrian safety.

The Cole Neighborhood Association supports the plan, in part because the developers signed a memorandum about their intent to provide affordable housing, a grocery store and better sidewalks. The project also has support from the adjacent Curtis Park Neighbors and the River North Art District, which overlays the area.

The project is about a half-mile from the new Natural Grocers on Brighton Boulevard and just north of the Downing Supermarket. Mayoral candidate Lisa Calderón has suggested that the city should do more for those existing businesses.

Councilman Rafael Espinoza asked why it took so long. “The city could have helped address this problem sooner,” he said, pointing out that the “food desert” is only changing as gentrification arrives.

But Councilman Brooks said it wasn’t so simple. “Since Day One that I got into office, we’ve been working on grocery stores in our community,” he said. “It doesn’t matter how much money we as a government put into grocery stores, it’s their decision to come into a neighborhood.”

The developers haven’t named a grocery store for the new development. Brooks initiated the zoning and helped to coordinate the project but isn’t financially involved. The project’s being run by EXDO Properties, Elevation Development Group and Kentro Group.

Written by Andrew Kenney

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Denver's Real Estate Market is the Most Competitive in the U.S.

Photo by Bernard Spragg. NZ. Flickr via Creative Commons.

Photo by Bernard Spragg. NZ. Flickr via Creative Commons.

What cool down?

Denver real estate may be evening out (relatively speaking) in the suburbs, but in the city proper, it’s as competitive as ever.

Even though Denver’s real estate market is cooling relative to last year, it’s still hot. That’s the message Jill Schafer, chair of the market trends committee of the Denver Metro Association of Realtors, had to share about DMAR’s latest prognosis on the Denver metro area’s real estate market.

DMAR last week released a report examining home sales data from 11 counties that encompass Denver, Boulder, and their suburbs. Year-over-year, the report found the number of homes sold in February decreased 10.9 percent and the median price of homes also decreased slightly, down 1.2 percent year-over-year. The Denver Post noted this was the first February-over-February drop in seven years, but Schafer says buyers and sellers shouldn’t put any stock in that observation.

“The first six months of last year were just kind of an anomaly,” Schafer says. “We were crazy busy.”

Schafer says high-demand neighborhoods like RiNo, Sloan’s Lake, and Highland are as competitive as ever. The market is cooling (relatively speaking) in the suburbs, but even that doesn’t mean much. In Denver’s highly competitive real estate market (the most competitive in the nation, according to Forbes), the market can stand to cool a little and still be quite hot. Sellers have an advantage across the non-luxury market (that means—if you have the money—it’s easier to buy single-family homes selling above $1 million or condos at $750,000).

Overall, homes priced for the rest of us are now selling at a median of 39 days on the market. That’s up 21 percent from this time last year. This means buyers are gaining a little ground, but they’re still far from having the upper hand in this real estate market. Schafer says when homes are selling quickly (less than five months on the market), sellers have the advantage—they can hold out for a better price. Anything longer than six months on the market, she says, shifts the market advantage to buyers. Prices fall and buyers have more leverage to negotiate.

“We’re still in a strong sellers market,” Schafer says. “And, I don’t think it’s really slowing down in the suburbs. It’s just a little slower.”

Housing inventory on the Front Range is increasing relative to demand, contributing to the slowing market. DMAR’s March report found single-family home inventory increased 36 percent over last year and condo inventory increased 79 percent over last year. Nationwide, the report says Denver ranked sixth for the number of apartments added since last year (11,700).

But this isn’t driving down the average price—that’s increased (less than one percent) across single-family and attached units.

So, if average price is your thermometer, Denver’s not cooling at all.

Advice from a Real Estate Agent

Schafer shares her advice for buyers and sellers in the Denver-metro market.

Moving on up
“If you’re looking at moving up in price range, now is a great time to sell and move up to a higher price-point, because you’ll have a little more [buying] power there, and your [non-luxury] house will sell at its peak.”

Moving in (for the first time)
“If you’re looking to get into the market for the first time, you’re probably going to be further out from the city, and you may want to look at some new construction. Some of the big builders have move-in-ready properties, and there’s not as much stress for first-time homebuyers if they can find something in their price point, because they don’t [always] do competing offers on new construction.”

Empty-nester’s nightmare
“It’s a little tougher if [homeowners] want to go down in price.” That is, if you want to sell your home and move into something more affordable to save money or downsize. There’s scant inventory of nice, smaller houses priced below luxury levels (that’s where sellers are retaining their advantage), so good luck finding a moderately priced third-act abode.

The takeaway
If you can pay to play, Denver’s real estate game is excellent. “Sellers don’t have to have their home on the market forever. Prices are still strong. Interest rates are incredibly low and they’re probably going to stay there—so to me, it’s the perfect time for people to be buying and selling.”

Written by Haley Gray

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Tips on Buying a Home in Denver

Do's and don'ts

  • Don’t discuss your journey specifics on social media. Sellers can see the info and it could be used against you.

  • Don’t take on any new debt before or during your home-buying process.

  • Don’t spend too much time on algorithm-based valuations versus local experts.

  • Don’t be of the mindset that you’ll make the money when you sell. “You make your money in real estate when you buy, not when you sell.” Buy wisely.

  • Do make sure that your most recent taxes are complete or ready to be complete

  • Do begin and get as far through the financing legwork as you can. A buyer who is simply awaiting an appraisal and final verifications will always have a leg up.

  • Do hire a broker who understands the importance of establishing relationships with brokers on your behalf. Do they know how to communicate in many different ways?

  • Do have your general ideas of what you want but let your realtor take you out to other ideas that may also be of interest – especially if you are on the newer side of residency.

  • Do have a list of your must-haves, your negotiables and your non-negotiables. These will change during the process but staying focused, at least at the beginning of your truest desires, is key to the long-term success of the investment.

  • Do be conscientious of your timeframe. If you plan to be in the home short-term, look at how quickly your down payment could be absorbed by a market value decrease. If you put 3.5 percent down, what happens if your market falls 5 percent? Much safer if you plan to be in the home for 10 years instead of two.

Best ways to save money

  • Sweat equity can mean long-term gains. Be conscientious of the timeframe though. We are entering a cooling in the market. Are you looking to make your money in 2, 3, 5 years?

  • Be open to your areas. Really focus on what is important to you today and what could be important to you in 3-5 years. Will you care as much about the walkability and prefer a larger lot? If you’re looking at condos, which amenities are really worth it to you to pay for in your HOA?

  • Choose a lender who is able to present you with multiple options. If you need more cash for rehab, is accepting a higher interest rate in lieu of cash at closing or “closing costs” worth it to you?

  • Look at your lot and it’s zoning. Is it zoned for an ADU? Could you build one and create a secondary source of income on your own home?

How much to put down

  • The first question any buyers should ask themselves is how much do they feel comfortable paying for their mortgage. Start there and not at the house price. Build your comfort zone in pricing around that number so you don’t dangle the carrot in front of your own nose.

  • Do you qualify for VA? Use your benefits!

  • Know that anything less than 20 percent down requires mortgage insurance. That is an add-on to your base mortgage, so weigh the benefits that this added cost would mean to you versus putting more down if you can.

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Metro Denver Housing Market Rebounds in October after September Correction

After hitting severe turbulence and taking a dive in September, metro Denver’s housing market stabilized at a lower altitude in October, according to a monthly update Monday from the Denver Metro Association of Realtors.

Buyers purchased 4,181 single-family homes and condos sold last month, a decline of 3.89 percent from the number of sales in September and 15.9 percent below the number of sales a year earlier.

That monthly decline was more in line with usual fall slowing than the alarming 30.5 percent drop in home sales measured between August and September.

The pendulum of market power can shift quickly after long stretches of favoring either buyers or sellers. That was the case in 2008 when the financial crisis put buyers firmly in the driver’s seat and again in 2013, when the oversupply of homes evaporated and sellers took over.

Jill Schafer, the new chairwoman of DMAR’s Market Trends Committee, said in the report that sellers are still in the driver’s seat in metro Denver.

“It appears we still have a ways to go before we get to a buyer’s market. And that’s not just my opinion, that’s the story the statistics tell as well,” Schafer said.

Sellers had 8,539 listings on the market at the end of October, down 3.04 percent from September and up 35.28 percent from a year earlier. The inventory of homes for sale dipped below 4,000 late last year and has more than doubled since. Historically the inventory for metro Denver has averaged around 16,000 homes, so the market remains tight.

But home price gains are slowing in metro Denver and median prices remain below the peaks hit last spring.

The median price of a single-family home sold in October was $435,000, up 1.17 percent from September and 5.45 percent from October 2017. The average price rose 4.9 percent from September to $526,092, and is up 8.43 percent over the year.

The median price for a condo sold was $299,250, down 1.24 percent from September, and up 8.84 percent from October 2017. The average price of a condo sold came in at $341,418, a decline of 2.3 percent monthly and a gain of 3.49 percent year-over-year.

Agents report more sellers are dropping their asking price, more buyers are backing out of contracts and listings are taking longer to sell. New listings took 29 days to sell last month, up from a fast 19 days measured in June.

Higher interest rates this year have boosted borrowing costs and made mortgage payments less affordable than they were last year. And while home price gains are slowing, they haven’t declined in response to a higher cost of money.

“Interest rates are starting to affect affordability,” said Nicole Rueth, a lender with Fairview Mortgage and member of the markets trend committee.


Buyers face the dilemma of buying now to get ahead of future increases in mortgage rates or waiting for home prices to soften and more inventory to hit the market. Reuth said that indecision is contributing to a “stagnant” market.


Concerns are also mounting about whether rising interest rates and global trade disputes could usher in the next recession. Out of the last six recessions, four were accompanied by home price declines, although the 19-percent decline in the last recession was extreme, according to a separate report from Meyers Research.

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Cold Feet? Try Before You Buy

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Not too long after Tom Porth sold his business this year, he went to Colorado for a ski vacation. He had worked in different capacities for the Village Inn restaurant chain for four decades, ultimately owning nine restaurants, and he was eager for retirement.

After a trip to Steamboat Springs, Colo., Mr. Porth returned to his home in Waterloo, Iowa, intent on buying a mountainside condominium. So he did what anyone would do: He found a realtor in Steamboat who arranged for him to rent a condo in the place he thought he’d like.

“The price was more than what my Iowa blood was used to seeing, but it seemed to be what you’d pay for something of that caliber,” said Mr. Porth, 62.

But on that visit, his agent suggested a newer, amenity-filled development up the hill — One Steamboat Place. It offered select people the opportunity to stay in a condo before buying it. Those condos cost even more, so he picked the least expensive unit. Still, it was double what the other one cost.

In a real estate market that has been strong, fueled by stock market gains and low interest rates, such programs would seem unnecessary. If one person doesn’t want the condo another will. But a combination of changes to the tax code, which limit the deductions for mortgage interest and property taxes, rising interest rates and a general feeling that increases in home prices are set to cool are making some people anxious about the luxury real estate market.

“We’re a long way into the cycle,” said Christopher Mayer, co-director of the Paul Milstein Center for Real Estate at Columbia Business School. “It’s not surprising to see things slow down relative to where they were.” This sense of uncertainty is causing some buyers, particularly at the high end, to be more discerning. Expensive real estate is staying on the market longer.

“In markets where there is plenty of inventory, buyers are not afraid to take their time, do their research and ensure they feel they are making a good decision,” said Stephanie Anton, president of the Luxury Portfolio International, a luxury real estate firm. “People are not going to overpay or make an emotional decision.”

Sensing this, some high-end developers have begun building their marketing plans around a concept meant to get people past that uncertainty: test live in a house or condo before you buy it. And this concept is spreading not just in the second home market but to urban condominium developers.

“If you look at the real estate markets, it’s unbelievable that people tour homes five, six times and make a $10-million investment, but they’ve never stayed there,” said Greg Spencer, the chief executive officer for Timbers Resorts, which developed One Steamboat Place, where Mr. Porth stayed for his tryout. “We say, if we have available inventory, why not give people the opportunity to try it out?”

Dan Scott, president and general manager of The Whitetail Club, a development in McCall, Idaho, said the movement toward “try before you buy” is an outgrowth of the housing crash and recession 10 years ago, which left many buyers skittish about making a big investment too quickly.

“In the old days you did a real estate tour and drove people around for a few hours, but it didn’t give people a sense of what it was like to be there,” Mr. Scott said. “Coming out of the recession, what the buyer wanted has changed.”

Mr. Porth said the tryout got him hooked — and more comfortable with spending a lot more money than he’d planned. “I don’t think I’d do it any other way now,” he said. “I need to spend time in that resort but also that unit. By staying, you can learn to love something; you can also learn something you may not like.”

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After staying in the lowest priced condo, which was about $2 million, he realized he didn’t want to buy that one — it overlooked the parking lot, not the slopes. But by that point he’d been taken in by the amenities and location so he asked to try one on the fifth floor — which cost 20 percent more than the already pricey base unit.

In April, he closed. Mr. Porth would not disclose the exact price of his home, but the average cost of a condominium in the development is $3 million to $3.5 million.

In some ways the hook would seem to be the home, but the real selling point is the experience.

Developers can sometimes get away with less than a full home. Clear Creek Tahoe is a mountain community on the Nevada side of Lake Tahoe with golf, water sports, skiing and hiking. It is also right next to California.

The marketing of the development started before the real estate crash and essentially went into hibernation until a new group took over in 2015. With the majority of the infrastructure built — but none of the homes — they needed a way to start selling half-acre to five-acre plots that were priced from $300,000 to $1.7 million.

So they built cottages with the same high-end finishes the eventual homes would have, but designed each one to evoke why people should buy there. One reflected the style of the designers of the golf course, another the boating on Lake Tahoe.

Lori Brooks and her husband, David, who live in San Diego, had been looking for a home around the lake because it ticked many of the boxes they wanted in what would eventually be a retirement home: near a college town and airport, good health care, plenty of outdoor activities.

In the spring, on their second visit to the Tahoe area, they stayed in one of the Clear Creek cottages — no charge — and ended up buying a lot. They’re planning on constructing a 4,500-square-foot home with both mountain and golf course views.

“We walked to our lot every night,” she said. “We envisioned what we were going to do.”

Others at the highest end are selling the escape from an uncertain world. Las Ventanas al Paraiso has been a successful resort in San Jose del Cabo, Mexico, for 20 years. It is now marketing the final 30 homes in the property, which range from $2.7 million to over $7 million.


“The question in the beginning was how do we sell them?” said Frederic Vidal, the managing director of the property who joined four years ago to run the property.

Unlike other program managers, he knew he couldn’t offer a free stay to look at a home. A lot of people knew the resort and he was concerned there would be guests simply looking for a free luxury stay for a few days.

So while he decided to charge for the stay, there was a caveat: the money would be refundable if the guest bought a house. The costs per night are $3,000 to $11,000 depending on the size of the home, and only those who are deemed serious buyers are eligible to stay.

The try before you buy system works with resorts because people are buying experiences as much or more than a place to sleep and eat. But buying your permanent residence is a bit different: it’s a practical purchase.

Letting your children try out bedrooms and play in the yard, while you test out the morning commute and figure out where you’d put the television would yield a lot of valuable information. Chances are, however, there is a family living in the house who would object — or other buyers who would be traipsing through at dinnertime.

A few apartment buildings are trying out a service that allows them to turn units they’re waiting to lease — without flooding the market with too much inventory — into temporary hotel rooms, and it has yielded people interested in living there full time.

Jason Fudin, co-founder and chief executive of WhyHotel, which creates these pop-up hotels, said the setup provides interim cash flow for the developers but also made a new building more attractive for people looking to move in.

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“In a 300-unit building everything is designed for full occupancy,” Mr. Fudin said. “When you’re all alone in a big building something is off. It’s not like being in “Home Alone” — you’re in a zombie building.”

At their first project last year, The Bartlett in Arlington, Va., Mr. Fudin found that every 1,000 room stays yielded a tenant for the building, although there are limitations. He said the tryout concept worked better for rental apartments. “A condo is like a car — it has a never-lived-in premium,” he said.

Some experts say the try before you buy concept is perfect for a risky time — it allows potential homeowners the chance to be sure that they’re making the right choice.

While buying a house may be about your personality, Ms. Anton of Luxury Portfolio International said, “It’s also a financial decision.” In uncertain times, it may be best to wade carefully into that kind of big choice.

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Top 20 Tech Towns: Denver, Boulder, Colorado Springs

Three Colorado communities made a list of the best 20 areas for tech workers in a new report by a national technology industry association.

CompTIA’s report, released Tuesday, ranks the Denver-Lakewood-Aurora area as eighth-best in the country for tech workers based on salaries, job availability and growth and cost of living. The report, “Top 20 Tech Towns,”lists Boulder as No. 19 and Colorado Springs as No. 20.

Colorado and North Carolina are the only states with three cities on the list. The Charlotte, N.C.-metro area tops the rankings, followed by Raleigh, N.C., at No. 2. The top 20 cities are spread across 14 states.

“The geographic diversity of the index is something we’re very excited to see and demonstrates the positive impact the technology industry is having on regional economies,” Nancy Hammervik, CompTIA’s executive vice president of industry relations, said in a statement.

The inclusion of university communities, like Boulder, shows that an abundance of well-educated talent has helped the cities grow into “full-on innovation hubs,” said Spencer Bone, a director of marketing with CompTIA.

“This shows IT is a lot more than just coding. Everywhere you look now tech jobs are popping up,” Bone said.

The report, the first of what the association plans to be an annual release, comes as the technology industry is experiencing significant growth. The industry expanded by nearly 200,000 jobs in 2017 to an estimated 11.5 million workers, according to the association. Additionally, at $1.6 trillion, the tech sector is one of the largest components in the nation’s economy and is a top-five economic contributor in 22 states.

“The idea behind the report is that there are different rankings of different tech towns, but we thought we would bring in a more well-rounded picture. We decided to bring in other factors,” including projected job growth, Spencer said.

Making the Top 10 list speaks to the focus the past several years in Denver on helping entrepreneurs get started, scale up and grow, said Deborah Cameron, chief business development officer with the Denver Office of Economic Development.

“It also reflects our intentional approach of really cultivating and nurturing the sector,” Cameron said.

The inclusion of Colorado Springs on the Top 20 list wasn’t a surprise, said Tammy Fields, chief economic development officer for the Colorado Springs Chamber and Economic Development Corp.

“The IT sector has definitely seen growth over the last 10 years, from software to data centers to cyber-security operations and everything in between,” Fields said.

The educated workforce and sophisticated information networks associated with the strong military presence in Colorado Springs have helped expand the industry, Fields added. “And we have amazing outdoor recreation with extreme ease of access that’s attractive to workers who can work anywhere they want.”

The report includes profiles of the ranked cities’ tech community. Below are some of the highlights for the three Colorado communities and comments from the report:

The Denver-Aurora-Lakewood area — Employers posted 50,897 IT jobs between August 2017 and July 2018; the number of jobs is expected to grow another 11 percent the next five years; and the median salary is $90,958.

“Colorado has one of the nation’s lowest unemployment rates, especially in IT, which has resulted in huge shortages for in-demand roles like IT engineers and software developers.”

Boulder — Employers posted 5,821 IT jobs between August 2017 and July 2018; the number of jobs is expected to grow 5 percent the next five years; and the median salary is $88,899.

“There is a high concentration of employment here in several industry clusters, including aerospace, bioscience and information technology.”

Colorado Springs — Employers posted 8,356 IT jobs between August 2017 and July 2018; the number of jobs is expected to grow by 5 percent in the next five years; and the median salary is $90,438.

“With a median tech talent salary of $90,438 a year, Colorado Springs IT pros are making similar salaries to those in other Colorado cities on our list, but the cost of living is lower than both Boulder and Denver.”

The report notes the cost of living in the Colorado communities ranges from 7 percent to about 15 percent higher the national average, but points to amenities and outdoor lifestyle that have made the state among the fastest-growing.

CompTIA compiled job posting data over a 12-month period focusing on 20 metropolitan areas with populations greater than 250,000, where demand for tech workers is greatest. CompTIA then ranked the cities based on cost of living, number of open tech positions, and projected job growth over the next 12 months and the next five years.

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September's Home Sales Slump

Home sales aren’t just slumping big in metro Denver, they are dropping across much of Colorado and in what were some of the hottest markets in the country.

Existing home sales in the United States fell 3.4 percent in August from September to a seasonally adjusted annual rate of 5.15 million. Year-over-year, they are down 4.1 percent, according to an update Friday from the National Association of Realtors.

“A decade’s high mortgage rates are preventing consumers from making quick decisions on home purchases,” Lawrence Yun, chief economist, said in the report.

Those national declines look tame compared to what is going on in states like Colorado, Washington and California. Real estate brokerage Redfin, in a different report, estimates that sales in 50 of the 71 largest metros it tracks are now falling.

“Last year and earlier this year, Seattle, San Jose and Denver were the hottest markets with homes selling in days, not weeks. These metros have now been replaced by Grand Rapids (Mich.), Omaha, Neb., and Indianapolis as the fastest markets in the country,” noted Daryl Fairweather, Redfin’s chief economist.

Last week, the Colorado Association of Realtors reported that the number of single-family home listings sold in Colorado dropped 14.6 percent in September compared to the same month a year earlier. Sales of townhouses and condos dropped 15.2 percent.

Metro Denver definitely skews the numbers. Year-over-year single-family home sales in September were down 15.8 percent in Adams County, 17.8 percent in Arapahoe County, 10.3 percent in Boulder County, 11.9 percent in Denver, 16.4 percent in Douglas County and 25.6 percent in Jefferson County, according to the CAR report.

But the state’s other metro areas weren’t immune. Single-family home sales fell 26.7 percent in Pueblo County, 17.2 percent in El Paso County and 18.8 percent in Mesa County. Fort Collins and Greeley held up better, with a smaller 4.4-percent drop in Larimer County and 7-percent drop in Weld County.

“Sold listings –- down. New listings –- down. Affordability –- down. Inventory supply –- down. Days on market -– down. Interest rates –- up. Median price –- up and down,” said Chris Hardy, a Fort Collins area Realtor, in comments accompanying last week’s report of his home turf.

Even the mountain counties are getting caught in the down draft. Home sales fell in Summit, Grand, Routt, Gunnison and San Miguel counties. The picture was more mixed picture in Eagle, Pitkin and La Plata counties. Garfield County, home to Glenwood Springs, represented a rare pocket of strength, with home and condo sales both up more than 5 percent last month.

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Mortgage Rates are Rising...Here are a few tips for getting the best rate possible

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Mortgage rates have escalated recently. The 30-year fixed-rate average, the most popular mortgage product on the market, is nearing 5 percent, according to the latest Freddie Mac data. The last time the 30-year fixed was that high was 2011.

Indications are that they will continue to move higher, leaving many homeowners and buyers wondering what rising rates mean for them. I spoke to Craig Strent, CEO of Rockville-based Apex Home Loans, to ask him for some practical advice for anyone considering buying a home or refinancing a mortgage. Our conversation has been edited for clarity and length.

Q: Mortgage rates are higher than they’ve been in seven years. Did I miss my chance to get a low rate?

Strent: No. Rates are not at historic lows anymore, but they’re still historically low in general. And if you’ve been in your home for a while, you might still be overpaying. When people talk about quote-unquote rates they’re referring to the 30-year fixed, which is essentially the most expensive mortgage you can get. You may not need a 30-year fixed.

[Mortgage rates soar to seven-year highs]

Rates in general are up, but maybe your rates wouldn't be up. For example, maybe you bought your first home five or six years ago and your family is now expanding and you're thinking about moving in the next three to five years. Well maybe it's time to come out of that 30-year fixed and go into something like a 5/1 [adjustable rate mortgage].

People talk about this word “rates.” But rates typically means the 30-year fixed. Historically the 30-year fixed has been 7, 8, 9 percent depending on the year. Just remember 6 percent was a gift in ’06, 7 percent was awesome in the ‘90s and 9 percent was unimaginably good in the ‘80s. Don’t forget 5 [percent] is not 5 [percent]. The rate is not the rate because you’re deducting the interest. So the actual cost is lower.

Q: Why are mortgage rates rising?

Strent: I’m not an economist but basically the recent jump in rates is because of low unemployment, which is indicative of a strong job market, which is indicative of a strong economy. A strong economy generally results in higher rates. What I often say to people is mortgage rates like small doses of bad economic news. When we get small doses of bad economic news, rates go down. When the economy is roaring, money often comes out of bonds into stocks and rates move in the opposite direction. Last week was a little messy because of the jobs report, the lowest unemployment in 49 years, and rates really did bounce up. It doesn’t always move in lockstep but generally speaking a strong economy means rates will be rising.

Q: This is an unfair question because I’m asking you to look into a crystal ball and tell me how high the rates are going to go.

Strent: If I knew that. . . . The last time we saw short-term rates rise over a few years, long-term rates [mortgage rates] actually stayed stable. The truth is I’m not going to even try to answer how they’re going to go other than to say macroeconomically as the economy does better, rates tend to rise.

Q: All these people have been sitting on the sidelines trying to time their refinance. Did they miss their chance?

Strent: Ok, so . . .

Q: You may have already answered this question in your first response.

Strent: I did. I don’t think you missed your chance to refinance. If you’ve been in your home for a while and you have not refinanced yet, you could probably still save money by doing so, depending on what your plans for the house are.

Q: How can I get the best interest rate for my mortgage?

Strent: The first thing I would say to people is that we make our mortgage payments in dollars, not in rates. The question you want to be asking yourself is how can I get the lowest cost for the time in which I’m going to live in the house. A lot of first-time buyers live in the house five to seven years and they take 30-year fixed-rate mortgages. So by definition they’re overpaying because you’re taking a 30-year fixed and that’s the most expensive mortgage. You’re paying a premium. If you’re only using the money for five, seven, eight, nine years, then you just overpaid. You paid for 20 years of fixed-rate protection that you didn’t need, and nobody likes to overpay for anything, particularly a mortgage.

I would reposition it to say the lowest cost versus the lowest rate, and then align your mortgage not with the time in which you're going to live in the house but with the time in which you're going to need the mortgage. If you're paying [private mortgage insurance] or you're going to take two loans, you may wind up refinancing when you have some appreciation. Match the mortgage type up for the period in which you need the mortgage.

You should tell your readers that right now there are a lot of options. There's five, seven, 10 and 15 ARMs. The 15-year ARM is becoming more and more popular. It is not the 15-year fixed. But [an adjustable rate] mortgage has a rate that cannot change for five, seven, 10 or 15 years. Most 30-year fixed-rate mortgages do not even make it to year 15. A 15/1 ARM, which is a 30-year mortgage with a fixed rate for the first 15 years, with no balloon but it can change after 15 years. Those are typically priced about a quarter-percent better than a 30-year and they're worth looking at.

Q: A lot of home buyers are scared of ARMs because of what happened during the housing crisis. How are ARMs today different than the ones back then?

Strent: I love this question. The people who got in trouble with ARMs, for the most part, had interest-only ARMs. They weren’t paying any principal. They didn’t have equity. They put zero to very little down and then their home value went the other way. That option no longer exists. You can’t even get in trouble that way if you wanted to. Now, can you get in trouble on an ARM? Sure, you could. But generally speaking people who can get the best types of ARMs generally have some equity in their home. Now the only thing that can be dangerous about an ARM is the rate adjusting to payments you cannot afford. But that should be moot. Because if you said I’m going to live in this house seven years and then I’m moving, I would say let’s get you a 7/1 ARM or even a 10/1 ARM. The rate should be fixed for the entire period of time you live there and you should be done with the mortgage before you even have the adjustment. If you’re worried about ARMs, opt for an ARM where the rate is fixed for a period of time that is longer than you believe you’ll live in the home.

Q: Do I need a really good credit score to get a good rate?

Strent: This is one of the biggest myths. You don’t need a great score to qualify for a mortgage these days. But the better the score, the better the rate.

If I can digress a little, one of the things I wanted to go into is what I think is the biggest myth out there right now, that you need a big down payment. Well, it’s just not true. D.C. Open Doors is a zero-down program. You’ve got FHA at 3½ percent down, and Fannie Mae and Freddie Mac conventional are 3 percent down now. VA is zero down. There are so many programs out there that require very little money down and a lot of these can be done with some damaged credit.

[More veterans and military members are putting VA loans into service to buy homes]

Q: How many first-time buyers put down 20 percent?

Strent: It’s rare. It’s more like 3 to 10 [percent] down. And what people also need to know is that PMI, private mortgage insurance, has become much more affordable in recent years. [If you put] less than 20 percent down, you have to deal with [PMI] in some way, meaning you either have to take two mortgages or pay a higher rate or pay PMI. But what I would say to your readers is the monthly carrying cost of PMI has decreased. If you’re buying with less than 20 percent down, from a financing standpoint, it’s not as expensive as it used to be. There’s a lot of creative ways to pay PMI these days. It used to be you just paid it monthly. Now you can opt for a higher rate. You can finance it on top of the loan. You could buy it out in a lump sum. You could split the premium. You could pay part of it upfront and in a reduced monthly amount. They’ve gotten really creative with PMI.

Credit guidelines have loosened to allow people to get into homes for the first time with smaller down payments, and a little more flexible credit guidelines are currently in existence. Where there is not much change and where it is still pretty tight — and it should be — is debt-to-income ratio, which I would translate as your ability to repay. So, if you’re not putting a lot down and your credit’s good but not excellent and if you can demonstrate your ability to repay, you can get a loan.

Q: Will higher mortgage rates help bring down housing prices?

Strent: So there are two parts to this. In the short term, it might actually push them higher because those people that have been waiting to buy or been shopping for a while they may feel some pressure to get in before rates go up further. And then you have sort of an influx of offers that could, short term, push values up especially going into the fourth quarter where there’s less inventory that could exacerbate it even more.

Longer term, I don't think it's going to have that much pressure in terms of bringing down home prices because we're already short on inventory in general in our region. So I don't really think it's going to have that much of an impact.

Rates are only one factor in the decision to buy. Buying because rates are here or there is not the right [decision] if your plans are longer term, meaning you’re going to live there at least five years or more. The proper way to make a buying decision is to do a detailed rent-versus-own analysis and see what the cost of renting for you is over time versus the cost of homeownership. Every single one of your readers who is thinking about buying should have a rent-versus-own analysis specific to them, their income, their tax bracket, their plan, because there’s no broad answer for everybody.


(source: https://www.washingtonpost.com/business/2018/10/15/mortgage-rates-are-rise-here-are-some-tips-getting-lowest-rate/?utm_term=.3a16935af89d)