August, 2006

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Mortgage Rates Hit 5-Month Low

Friday, August 25th, 2006

Good morning readers,

Good news today from Bankrate.com. Mortgage rates continue to drop, reaching a 5-month low this week. These decreases have caused a spike in mortgage applications and real estate purchases nationwide. We’re seeing great rate packages on 30 year fixed loans, 30 year jumbo loans and short-term ARMs.

Interestingly, as the Crested Butte real estate market goes through it’s recent value corrections and huge price reductions now is the time to start looking hard at investment property opportunities in our local market.

Thanks for visiting today!

Channing Boucher
Visit My Site

Daily Real Estate News  |  August 24, 2006

Mortgage Rates Decline to 5-Month Low
 
Last week’s better-than-expected reading on the Consumer Price Index helped to push mortgage rates down to a five-month low, according to Bankrate.com’s weekly mortgage survey of large lenders.

The average 30-year, fixed-rate mortgage fell to 6.48 percent, the lowest since March 29, while the average 15-year, fixed-rate mortgage, popular for refinancing, dropped by a similar amount to 6.19 percent.

On larger loans, the average jumbo 30- year, fixed-rate declined to 6.74 percent. Adjustable-rate mortgages also backtracked. The average 5/1 ARM slid to 6.24 percent, and the average one-year ARM retreated to 6 percent.

Slower economic growth has helped bring fixed mortgage rates to a five-month low, along with the Federal Reserve Board hitting the pause button on rate increases. Although inflation remains a threat, bond investors are confident in the Fed’s forecast that inflation will recede as the economy cools, Bankrate.com says in its report.

Fixed mortgage rates have fallen nearly one-half of a percentage point since the Fed last hiked rates at the end of June. At the time, the average 30-year fixed mortgage rate was 6.93 percent, meaning that the monthly payment on a loan of $165,000 was $1,090.

With the average 30-year fixed rate now 6.48 percent, the same loan originated today would carry a monthly payment of $1,040.74. With the recent pullback, fixed mortgage rates remain an attractive refinancing alternative for adjustable-rate borrowers facing sharp payment adjustments.

Source: Bankrate.com (08/24/06)

16 years, 736% Rise in Home Prices

Monday, August 14th, 2006

Good morning readers,

Good article in the Gunnison Country Times recently regarding Gunnison County’s 16 year, 736% rise in real estate values and the impacts, issues and recent policy decisions this community now faces from such a dramatic climb in home prices.

The overarching problem (the same problem Aspen, Telluride, Jackson Hole and other exclusive Western resort communities face) is the fact that the average median income for locals has not grown anywhere near what it needs to keep pace with the skyrocketing property values. Like our other destination resort community counterparts in Colorado and Wyoming, local workers are being forced farther away for their housing, requiring longer commutes to get to where the jobs exist.

Interestingly, the article does not mention the most recent Stallion Park affordable housing development that EagleBrooke Realty represents in Crested Butte. Today, a local making 80% of their income in Gunnison County can purchase a 1 bedroom, $160,000, 2 bedroom, $200,000 or 3 bedroom, $ 235,000 brand new condominium that includes a garage, located only 5 minutes from Crested Butte. Stallion Park represents 32 new units for locals only at a price that is comensurate with local’s salaries. (shameless, honorable plug for what our company has accomplished in this community)

Read on and learn!
Thanks for visiting today!

Channing Boucher
Learn about Stallion Park at EagleBrooke Realty

August 14, 2006

Behind the housing eight-ball
Are government regulations, more free market supply – or both – the answer?

Chris Dickey

The prices of homes and land in the resort community have jumped so astronomically over the years that government intervention in the housing arena has become a common, and accepted, practice.

"In 1990, the median sales price of a single family home in Crested Butte was $104,000," explained that town’s planner, John Hess. "In 2003, that figure rose to $375,000. In 2005, it was $873,000.

"That’s a 736 percent increase in the cost of a single family home." Comparatively, to say that income levels haven’t risen at the same pace is an understatement. In 1990, the average household earned about $27,000 annually. In 2003, median household income was in the $50,000 range, Hess said.

As a result of this glaring disparity, town governments in Crested Butte and Mt. Crested Butte have had regulations on the books for about a decade aimed at making home-buying or renting a possibility for locals living off of local wages.

The community is "very accepting" to regulations that make developers contribute to the affordable housing pool – generally either by donating land, contributing impact fees or selling a percentage of their units at below market prices.

Nonetheless, Crested Butte Mayor Alan Bernholtz said it’s not enough.

"We’re 10 years into it and still can’t catch up," he said. Bernholtz was one of the invited speakers at a county-hosted meeting last week that brought together government leaders and major employers throughout the valley to discuss the housing issue. Those present relayed similar problems that they’ve experienced – difficulty attracting and retaining employees chief among them – but there was also acknowledgment that solutions aren’t easy to come by. The Gunnison County Commissioners recently adopted their first affordable housing regulation – a "linkage fee" that taps residential and commercial builders for money that goes into an affordable housing pot – but not before receiving a substantial amount of resistance from the real estate community. The City of Gunnison currently has no regulations pertaining to affordable housing on the books, but community leaders are in the early stages of exploring the possibilities.

Bernholtz believes it’s past time for the government to intervene in order to "preserve the diversity of the community." He was among those at the meeting who spoke in favor of a variety of affordable housing regulations, valley-wide.

"I feel like Gunnison looks to Crested Butte like Crested Butte looks to Aspen," he said. "We’re not that far away. In eight to 10 years, we’re going to be like Telluride. "And Gunnison, I’m afraid, is going to be not that far (in housing costs) from the north end of the valley." To this point, the City of Gunnison generally has taken on an "open for business" stance regarding the issue, explained City Manager Ken Coleman. The thinking is that if they could attract more residential development, supply would catch up with demand and prices would stabilize, said city councilman Bill Nesbitt.

But the city has also begun looking for support from the north end of the
valley to address escalating home prices here. City councilman Rick Miller relayed at the meeting the story being told with increasing frequency of the up-valley resident who sold his home – most likely as a vacation home or rental to someone living elsewhere – and bought a place in Gunnison with the excess profits.

"That pushes our real estate up," Miller said.

What happened when Gunnison Mayor Stu Ferguson approached his Mt. Crested Butte counterpart, Chris Morgan, about an affordable housing partnership? The resort town mayor said that if Gunnison had a specific set of affordable housing plans – i.e. regulations – on the books, they could talk.

"Until you do that, I don’t think we’re going to be willing to spend any money down in Gunnison," Morgan said.

Mt. Crested Butte, where only half of the town employees live in the town and the rest are pushed down valley because of affordability, has a multi-layered affordable housing plan. They have an inclusionary rule, where 15 percent (or cash in lieu) of all new units must be set aside for affordable housing. And they have a job generation schedule that dictates how many "employee" units a new development must provide.

More and more government controlled units are going on-line in Mt. Crested Butte, plus the town’s affordable housing pot will exceed $2 million in the next few months, Morgan explained. Still, he echoed Bernholtz’ opinion that they are playing a game of catch-up at this point.

"We are the last emerging resort community in the state," Morgan said. "And every single one of them says the same thing (regarding affordable housing) – we should have done more and should have done it sooner."

A few employers are taking matters into their own hands. Crested Butte Mountain Resort has had housing for its temporary, seasonal employees for years. But its needs are changing, partly because a more diverse range of employees need assistance with housing, explained CEO Randy Barrett. A new 40-unit employee housing project at its Prospect development will reflect that change and others.

Sixteen of CBMR’s Prospect units will be allocated to the Town of Mt. CB. The remaining will be earmarked for a variety of CBMR employees – from those seasonal lift-operators to year-round, mid-level managers. The units will have qualifying restrictions to ensure that the people renting and owning homes there will meet tiered income guidelines for affordable housing units with various pricing levels.

Gunnison County Electric Association has implemented a couple of home-buying assistance programs for its employees. One offers a zero-percent down payment loan, in the other the employer will basically team with the employee – up to $100,000 – and become an equity-holding partner in purchasing a home.

More and more small business owners in Gunnison are beginning to look into purchasing housing to then rent out to employees before prices grow even higher here, city officials noted.

John Sowell, longtime professor and administrator at Western State College, said high housing costs are "very much an issue" with both recruiting new professors and other campus professionals – and with retaining students.

"We can pay professors comparatively to our peer institutions," he said. "But when they start to compare the costs of living, that’s where we start losing candidates.

"And, the most commonly cited reason for students leaving Western is financial."

Sowell explained that the affordability conundrum is also changing the make-up of Western’s staff. More and more of the campus’ new professionals are "mid to late career individuals" who have built up enough equity elsewhere to be able to afford buying a home here.

That means that fewer of Westerns’ 200 or so professional staff members have children still in the home, which helps explain RE1J School District’s continued drop in enrollment.

So while the problem of local employees struggling to meet the seemingly ever-increasing cost of local housing is fairly well established, finding solutions is anything but simple. And the reluctance to any type of government intervention is palpable, especially in Gunnison.

One Gunnison realtor recently faxed a copy of the county’s new linkage fee ordinance to dozens of his colleagues with the words "read it and weep" written in bold letters on the cover page.

Some think today’s situation is simply a continuation of the struggles this community has always faced.

"There’s been a housing problem in Gunnison since the ’70s when I was in college," Nesbitt said. "It’s not going to go away over night."

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New Conservation Easement Law in Colorado

Sunday, August 13th, 2006

Good morning readers,

Colorado Governor Bill Owens has officially signed House Bill 06-1354 into law. The bill contains major improvements to Colorado’s conservation easement tax credit program. The bill creates incentives for landowners with larger tracts, who will be rewarded for protecting more land per donation. This will help larger land conservation transactions sunset in a shorter period of time.

This new law will remove two-tiered structure with a single rate structure, which will allow up to 50% of the fair market value of the conservation easement to be claimed as a state tax credit. In order for the new legislation to be revenue neutral, the bill increases the maximum amount of the credit to be claimed to a higher maximum: $375,000. The first $100,000 will now be subject to 50% of the fair market value allowance for the state tax credit, which means less incentives for smaller tracts or those tracts with lesser market value. The new law will apply to conservation easements donations made after January 1, 2007.

Thanks for visiting today!

Channing Boucher
Visit My Web Site

Mortgage Rates are Dropping Again!

Wednesday, August 9th, 2006

Great news for home buyers today!

Mortgage rates are moving in the right direction - lower. This has ignited a surge in mortgage applications across the United States. Read the article below.

Channing Boucher

Daily Real Estate News  |  August 9, 2006

Lower Rates Fuel Mortgage Applications

The number of applications for U.S. mortgages rose last week for the first time in four weeks as interest rates slipped to their lowest level since March.

The Mortgage Bankers Association reported that its seasonally adjusted index of mortgage application activity for the week ended Aug. 4 rose 4.9 percent to 553.3, from the previous week’s 527.6.

"The worst of the housing market is behind us," Richard Yamarone, chief economist at Argus Research in New York, told Reuters News. "That’s simply because the two primary drivers of housing — interest rates and demographics — are improving."

Borrowing costs on 30-year, fixed-rate mortgages last week averaged 6.45 percent, down from 6.62 percent in the previous week. The rate on 15-year, fixed-rate mortgages decreased to 6.10 percent from 6.28 percent. The average rate on a one-year ARM declined to 5.96 percent last week from 6.18 percent.

The refinance share of mortgage activity increased to 38 percent of total applications from 37 percent the previous week.

Source: Reuters News, Al Yoon (08/09/06)

Renewable Energy for Vail Resorts!

Wednesday, August 2nd, 2006
Published: August 2, 2006

DENVER, Aug. 1 — Vail Resorts, the big Colorado ski and recreation company, said Tuesday that it would make a huge investment in wind power, buying enough credits to offset all the power needed for its resorts, retail stores and office buildings.

Toni Axelrod for The New York Times

Skiers on Vail Mountain in the winter. Vail Resorts will offer incentives for customers who want to buy wind power credits for their homes.

The announcement makes Vail the second-largest corporate buyer of wind energy in the nation, according to the Environmental Protection Agency, after Whole Foods Market Inc., the big supermarket chain that went to all wind power earlier this year.

Buying wind, though, will not mean building mountain windmills. Rather, Vail officials said they would buy the equivalent amount of their energy needs in wind power credits from a Boulder company called Renewable Choice Energy. Renewable Choice will then buy wind power from producers — mainly in Minnesota, Kansas, North Dakota and South Dakota — and inject the amount of power Vail uses into the national electric grid.

Tourism industry experts said Vail’s clout — its resorts accounted for more than 10 percent of all skier visits in the nation last year — took alternative energy in the West’s recreation economy a big step closer to the mainstream. The Aspen Skiing Company, a resort operator in Colorado, said in March that it would buy only wind power.

Recent climate studies have suggested that winter tourism in the West could be especially hard hit in years to come by global warming, which could reduce mountain snowpack. But the chief executive officer at Vail, Robert A. Katz, said at a news conference that an equally important motive in embracing renewable energy was to establish and maintain relationships with visitors, who Mr. Katz said increasingly expected high environmental standards as they decided where to spend money.

“It’s a way to get closer to our guests,” he said.

Company officials would not estimate the program’s cost, but said that total energy use was about 152,000 megawatt hours a year — about as much as is used by 14,000 average homes. The company said it would also create a promotional incentive plan to encourage employees and visitors to convert to wind power at home, with a free day ski pass to anyone who signed up.

Vail’s wind packages, for itself and its guests, also illuminate how the embrace of alternative energy these days is as much about complex financial deals as environmental concerns.

The idea of wind power credits, said the chief executive and founder of Renewable Choice Energy, Quayle Hodek, is to displace fossil fuel generation nationally, if not quite locally. The day-to-day supply for Vail’s chairlifts, lights and machinery will still be generated as it is now by local suppliers. In Colorado, that means mostly coal-fired generation.

Similarly, visitors to a Vail resort who sign up for wind power would not change utility providers either. Rather they would pay $15 a month for a family, or $5 for an individual, to Mr. Hodek’s company to buy credits for the amount of wind used by their household, which would then be fed into the national grid. The buyer would pay the same old electric bill as before, just as Vail will do here in Colorado.

Vail’s environmental image has been deeply mixed over the years. It became the target of eco-terrorist arsonists in 1998 over an expansion plan that impinged on the habitat of the lynx, a high-mountain cat in Colorado. Further expansion goals are also increasingly at odds with groups that are trying to preserve public lands.

But Tuesday’s announcement was greeted with applause by environmentalists who said that Vail’s actions would go a long way toward inspiring others — if only in competition — and that it would give further impetus to renewable energy investment of all sorts.

Colorado voters approved an amendment to the State Constitution in 2004 that requires big utility companies to provide 10 percent of their energy from renewable sources, especially wind, by 2015. The amendment requires much new production to be within the state’s borders.

Jake Meffley, an energy advocate at Environment Colorado, a conservation group based in Denver, said the Vail plan “says to the economy that people are interested in renewal.” It did not matter, Mr. Meffley said, that the increased wind production from the deal, or the decreased burning of coal, might not occur in Colorado.

“For the greater good it doesn’t matter where it comes from,” he said.