Archive for January, 2013

Vail Board of REALTORS® Vail Valley 4th Quarter Update and Statistics – Signs Pointing in the Right Direction

Fireworks Cropped (2)The fourth quarter of 2012 was especially active and encouraging.  While many potential threats to the economy lingered, the housing market clearly showed strong and continuing signs of recovery.  Colorado is pointing the nation in the right direction.

Inventory is improving, prices continue to rise and days on market show consistent downward trends.  New Listings decreased 19.4 percent to 340.  Pending Sales were up 26.6 percent to 271.  Inventory levels shrank 26.2 percent to 938 units. Prices softened somewhat.  The Median Sales Price decreased 17.6 percent to $445,000. Days on Market was down 24.5 percent to 154 days.  Absorption rates improved as Months Supply of Inventory was down 43.3 percent to 9.7 months.

Economists list three primary avenues to housing recovery: better market fundamentals, improved market composition and more jobs.  Many areas of Colorado are enjoying better fundamentals and less distressed activity.  If job growth continues in 2013, housing should lead the way to economic recovery in our state, and our REALTOR® members will enjoy a robust market with increased opportunities.

Click here to view the 4th quarter statistics:  4th Quarter 2012 Statistics

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Housing starts jump in December – MarketWatch

By Ruth Mantell, MarketWatch

WASHINGTON (MarketWatch) — Construction on new U.S. homes jumped in December to the highest rate in more than four years, with gains across the country, as well as in single-family homes and buildings, the U.S. Department of Commerce reported Thursday.

In the freshest data signaling a strengthening housing market, starts rose 12.1% in December to a seasonally adjusted annual rate of 954,000 — the highest level since June 2008.

“Overall, this report reinforces the current narrative of a positive growth momentum in the housing sector,” said Millan Mulraine, a macro strategist at TD Securities.

Economists polled by MarketWatch had expected U.S. housing starts to increase to a rate of 883,000 from an original estimate of 861,000 for November, on factors such as rising building permits and confidence among home builders, as well as relatively mild weather for the season. See economic calendar.

On Thursday, the government revised November’s rate to 851,000.

Starts rose 24.7% in the Midwest, 21.4% in the Northeast, 18.7% in the West and 3.8% in the South. By structure size, starts for single-family homes rose 8.1%, and increased 20.3% in buildings with at least two units.

While starts in December were up 37% from a year earlier, rates remain far below a bubble peak of almost 2.3 million in 2006.

Meanwhile, building permits, a sign of future demand, rose 0.3% in December to a rate of 903,000 — the highest rate since July 2008. Permits for single-family homes rose 1.8% to a rate of 578,000, while permits for structures with at least two units declined 2.1% to a rate of 325,000. The lower growth in permits means that starts could slow down in coming months.

For all of 2012, the government estimated that there were 780,000 housing starts, the highest level since 2008 and up 28% from 2011.

Meanwhile, permits rose 30% to 813,000 in 2012, also the highest level since 2008. Housing completions rose 11% to 651,000 in 2012, the highest level since 2010.

An improving trend for housing starts echoes other recent housing data. Confidence among home builders is holding at a more-than-six-year peak, with more markets showing signs of recovery, a trade group said Wednesday. Read more about builder confidence.

Given gains in the housing market, analysts expect this component of the economy to increase its contribution to overall gross-domestic-product growth. “Housing is poised to provide a meaningful (and critical) lift to overall economic activity at a time when other growth drivers, like exports, are slowing,” Deutsche Bank analysts wrote in a Wednesday note.

An exchange-traded fund of home builders ITB +0.22%  has increased 68% over the past 12 months. Indeed, home prices have been rising year-over-year, and the rate of price reductions in the U.S. is falling. Read more about home markdowns.

Mortgage rates hovering near record lows is supporting demand. However, analysts remain concerned about overly stringent lending standards, as well as fallout from ongoing fiscal uncertainty. Looking to spur lending, federal regulators have issued new rules on mortgages and servicing that they hope will provide some certainty to industry and borrowers.

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“There is magic in that little word, home.” Robert Sotheby. And last week, there were more signs that the housing sector continues to improve. Read on for details.

  Housing Starts surged by 12.1% in December to 954,000 units on an annualized basis. This was above expectations and the highest level since June 2008. Building Permits, a sign of future construction, also increased, coming in slightly higher than the November reading.

In addition, research firm CoreLogic reported that home prices rose by 7.4% in the year ended in November. This figure, which includes the sales of distressed properties, was the largest year-over-year increase since 2006 and it has been positive for nine straight months. Also, the Obama Administration’s December Housing Report showed that home prices had solid annual gains for the year ended in October, with the Federal Housing Finance Agency (FHFA) and Case-Shiller housing price indices up 5.6% percent and 4.3%, respectively, from one year ago.

It’s also important to note that RealtyTrac’s year-end 2012 foreclosure report showed that foreclosure activity increased in 25 states. However, median home prices also increased in 25 states, which pulled 1.6 million homeowners out of negative equity in 2012.

So what’s the takeaway? Goldman Sachs has reported that the fundamentals are pointing towards larger gains for housing prices in the next couple of years. And with home loan rates remaining near record lows, great opportunities are available.

As always, one thing that’s important to monitor is inflation. Since inflation reduces the value of fixed investments, inflation is considered the arch enemy of Bonds–and, therefore, of home loan rates, which are tied to Mortgage Bonds. However, last week’s wholesale-measuring Producer Price Index and the Consumer Price Index showed that inflation remains tame, meaning inflation is not a factor at this time.

The bottom line is that now remains a great time to consider a home purchase or refinance, as home loan rates remain near historic lows. Let me know if I can answer any questions at all for you or your clients.

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Interest Rates Continue at Historic Lows

Interest Rates

The chart above tracks interest rates over the past 200 years.  We are experiencing interest rates nearly as low as anytime over that period of time.  Our challenge is making those rates available for the average home purchaser.  We continue to see underwriting guidelines that penalize the home buyer with relatively solid credit, good income, and sufficient cash for a down payment.  Lenders obviously got burned during the recession but they are turning away good business.  It makes no sense.  I don’t see the housing market making a strong recovery until lenders change their lending practices.

In the meantime, those buyers who can qualify for a mortgage will get an incredible deal.  Kim and I are considering refinancing again after refinancing just last year.  I’m a firm believer in the quote “It’s not the price but the terms” and the terms are pretty good at the moment.

Thanks to Devon DeCrausaz, Branch Manager & Vice President at MegaStar Financial Corp for use of the chart.  MegaStar is one of the few lenders with common sense lending practices.

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Mikaela Shiffrin Wins Again!


17 year-old Mikaela Shiffrin won another World Cup Slalom race in Flachau on Tuesday night, 1/15/13.  Mikaela was 2nd after the 1st run.  Starting 2nd to last, she put down the 3rd fastest time in the 2nd run.  Maria Hoefl-Riesch, starting last after skiing the fastest 1st run, was well ahead after the 2nd split but crashed out before finishing.  Mikaela won by 0.85 seconds over Frida Hansdotter and 1.10 seconds ahead of Tanja Poutiainen who was third.

This is Michaela’s third slalom win of the season and extended her lead in the slalom standings to 81 points over Tina Maze, who finished 5th in today’s race.  Michaela moved up to 5th in the overall world cup standings.  She is now the top American in the overall world cup race.

Congratulations to Mikaela!

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Mikaela Shiffrin wins World Cup slalom

Associated Press

ZAGREB, Croatia — American teenager Mikaela Shiffrin earned her second World Cup title Friday by winning a slalom by a massive 1.19-second margin to regain the lead in the discipline standings.

The 17-year-old Shiffrin built on her first-run lead to finish in a combined time of 2 minutes, 1.73 seconds — living up to her billing as American skiing’s next big star following her first career World Cup win last month in Are, Sweden.

Frida Hansdotter of Sweden came second, and Erin Mielzynski of Canada was 1.76 behind in third. The rest of the field finished more than 2 seconds off Shiffrin’s winning time.

Tina Maze of Slovenia, who was second after the opening run, straddled a gate and failed to finish. Maze lost her lead in the slalom standings to Shiffrin but remained atop the overall World Cup standings.

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International firm will manage Club at Cordillera

Daily staff report
Vail, CO Colorado

EDWARDS, Colorado — An international golf management company will run the Club at Cordillera, the club’s CEO announced Thursday afternoon.

Troon Golf manages golf properties in 29 states and 29 countries in North and South America, Asia, Australia, Europe, the Middle East and Africa. Add the Club at Cordillera to that list, said CEO Dan Fitchett in making the announcement.

Troon’s hiring follows David Wilhelm and Wind Rose Properties, which he partially owns, winning the bankruptcy auction with a $14.2 million bid.

The Club at Cordillera fits right in with the rest of Troon, said Dana Garmany, Troon’s chairman and chief executive officer.

“We are honored to have been selected to manage and market what is arguably one of the premier mountain golf club communities in America, and we fully expect that The Club at Cordillera will become one of the flagship properties in our private club collection,” Garmany said.

Former Cordillera Club members resigned by the dozen and sued Wilhelm after he refused to open three of Cordillera’s four golf courses after he promised in writing that he would.

Fitchett said Cordillera property owners and past members who rejoin will gain access at more than 30 private clubs through the Troon Privé Privilege program, as well as the Troon Advantage program, which provides preferred rates at more than 85 of Troon Golf’s properties around the world.

The class action settlement requires former members to pay $3,500. Cordillera cannot raise the $12,500 annual dues for two years.

Jim McLaughlin, senior vice president of Troon Privé Operations, is leading the Club at Cordillera relaunch efforts.

“In our work, we draw from our collective, intellectual and physical resources to provide creative solutions to each club we manage,” McLaughlin said.

Fitchett said it’s time for Cordillera to move forward.

“This is my commitment to our members, and we’ve put the right people and structure in place to make that happen,” Fitchett said.

Troon is headquartered in Scottsdale, Ariz. It’s one of the world’s largest golf management companies and also specializes in property association management, private residence clubs, estate management and hospitality venues.

Forty-eight Troon facilities are ranked in the Top 100 by national or international publications.

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