Boulder Real Estate Blog

Homebuying Demand Continues to Outpace Supply in Many States in September 2017

Homebuying Demand Continues to Outpace Supply in Many States in September 2017

In a monthly survey of REALTORS®, respondents are asked “Compared to the same month last year, how would you rate the past month’s traffic in neighborhood(s) or area(s) where you make most of your sales?” Respondents rate buyer traffic as “Stronger” (100), “Stable” (50), or “Weaker” (0) and the responses are compiled into a diffusion index. An index greater than 50 means that more respondents reported “stronger” than “weaker” conditions.

The chart below shows buyer traffic conditions in July–September 2017 compared to conditions one year ago.  Based on the responses reported in the  September 2017 REALTORS® Confidence Index Survey, buyer conditions were “stable” to “very strong” in all states.[1] Buyer traffic was “very strong” in Washington and Tennessee. Texas and Florida, which were battered by hurricanes Harvey and Irma respectively, still showed “strong” buying activity.

buyer traff

Meanwhile, supply conditions varied from weak to strong across states in July–September 2017 compared to conditions one year ago. Seller conditions were weak in many states where buyer traffic conditions are strong to very strong, such as California, Kansas, Minnesota, Illinois, Kansas, New York, Pennsylvania, Maryland, and North Carolina.

seller traff

Nationally, the REALTORS® Buyer Traffic Index (64) indicates that buyer demand is stronger compared to conditions in the same month last year. Meanwhile, supply remained generally tight, with the REALTORS® Seller Traffic Index remaining below 50 (47).

The inventory of existing and new homes for sale stood at 2.21 million in August 2017, which, at the current level of demand (sales), will be exhausted in 4.3 months. Historical data since January 2000 indicates shows the median price of existing homes tended to appreciate above five percent when months’ supply fell below six months, while home prices fell by at least ten percent when months’ supply rose to ten months or more in 2010.

pcfs


[1] In generating the indices, NAR uses data for the last three surveys to have close to 30 observations. Small states such as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have fewer than 30 observations. For graphical purposes, index values from 25.01 to 45 are labeled “Weak,” values of 45.01 to 55 are labeled “Stable,” values of 55.01 to 75 are labeled “Strong,” and values greater than 75 are labeled “Very Strong.”

 


Source: Economics Research Realtor News feed

September 2017 Existing Home Sales

September 2017 Existing Home Sales

  • NAR released a summary of existing-home sales data showing that housing market activity this September rose modestly 0.7 percent from last month but slipped 1.5 percent from last year. September’s existing home sales reached 5.39 million seasonally adjusted annual rate.
  • The national median existing-home price for all housing types was $245,100 in September, up 4.2 percent from a year ago. This marks the 67th consecutive month of year over year gains.
  • Regionally, all four regions showed growth in prices from a year ago, with the Midwest leading all regions with an incline of 5.4 percent. The West had a gain of 5.0 percent followed by the Northeast with a gain of 4.8 percent. The South had the smallest gain of 4.6 percent from September 2016.

price

  • From August, two of the four regions experienced gains in sales while the Northeast remained flat. The West inclined 3.3 percent. The Midwest rose 1.6 percent. The South had the only drop of 0.9 percent.
  • Three of the four regions showed a decline in sales from a year ago while the West was flat. The Northeast had a drop of 1.4 percent. The Midwest had a decline of 1.5 percent. The South had the biggest drop in sales of 2.3 percent. The South led all regions in percentage of national sales, accounting for 39.5 percent of total, while the Northeast had the smallest share at 13.4 percent.

sales

  • September’s inventory figures are up 1.6 percent from last month to 1.90 million homes for sale. Inventories are down 6.4 percent from a year ago, marking 28 months of year over year declines. It will take 4.2 months to move the current level of inventory at the current sales pace. Transactions are moving faster and it takes approximately 34 days for a home to go from listing to a contract in the current housing market, down from 39 days a year ago.

inventory

  • In September, single-family sales increased 1.1 percent and condominiums sales declined 1.6 percent compared to last month. Single-family home sales dipped 1.2 percent and condominium sales were down 3.2 percent compared to a year ago. Both single-family and condominiums had an increase in price with single-family up 4.2 percent at $246,800 and condominiums up 4.1 percent at $231,300 from September 2016.


Source: Economics Research Realtor News feed

Eliminating Real Estate Tax Deductions, and The Typical Homeowner

The Effect of Eliminating the State and Local Real Estate Tax Deduction on a Typical Homeowner

Undoubtedly, all eyes in Washington are focused on the “Big 6” and the release of the tax reform framework some weeks ago. Under this framework, standard deduction will be doubled while mortgage interest and charitable contributions will be the only remaining deductions. This means that state and local real interest deduction will be eliminated among other existing deductions. But how a typical homeowner will be affected by this elimination?

Most state and local governments charge an annual tax on the value of real property. Statewide, the real estate tax varies between 0.27% and 2.35%. New Jersey has the highest effective rate at 2.35% and is followed closely by Illinois (2.30%), New Hampshire (2.15%), and Connecticut (1.97%). On the other end of the spectrum, Hawaii has the lowest effective rate at 0.27%, and is followed closely by Alabama (0.43%), Louisiana (0.49%), and Delaware (0.54%).

Since all real estate is local, we looked at the median amount of real estate taxes paid at county level in 2016. As the data shows, among 815 counties[1], Passaic County, NJ had the highest median real estate taxes paid ($9,812), followed by Union County, NJ ($9,594) and Putnam County, NJ ($9,447). In contrast, homeowners in Walker County, AL and St. Landry Parish, LA paid less than $300 for real estate taxes in 2016. See below how your county compares to other 815 counties:

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Under the current tax framework, homeowners choose to itemize when the sum of itemized deductions are higher than the standard deduction which is currently at $12,700. If individual deductions like mortgage interest and property tax are less than $12,700, they would take the standard deduction. A deep look into the data above reveals that real estate tax deduction helps homeowners in many counties to itemize while real estate taxes can represent up to 80% of the standard deduction. Especially, homeowners who reside in areas with affordability challenges and high real estate taxes can save money using the mortgage interest and real estate tax deductions.

However, under the proposed framework, the standard deduction is expected to rise to $24,000 and state and local tax deductions to be eliminated. Then, some homeowners will not claim the mortgage interest deduction since mortgage interest deduction will not be enough to make it advantageous for them to continue itemizing. If owners don’t have enough in deductions to exceed the standard deduction amount, it is not worth doing so. As a result, homeowners will stop itemizing and instead take the standard deduction. Because of the large standard deduction, most renters will benefit. The new enlarged benefit for renters also lessen the incentive to become homeowners. It is noteworthy that the new tax reform will hurt new home buyers while mortgage interest is higher during the first years of the mortgage and they would save substantially if they could use the mortgage interest deduction. See below how much mortgage interest[2] a homeowner pays for a typical home at the following counties:

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[1] 2016 American Community Survey, 1-year estimates are available for areas with populations of 65,000+

[2] Mortgage interest was calculated based on the following assumptions:

20% down payment, 30 year-fixed rate, median home price


Source: Economics Research Realtor News feed

Highlights from “Social Benefits of Homeownership and Stable Housing”

Highlights from the full article included in the latest volume of the Journal of the Center for Real Estate Studies. 

Research has consistently shown the importance of the housing sector on the economy and the long-term social and financial benefits to individual homeowners. However, in recent years many have questioned the role of homeownership due to the housing downturn and foreclosure crisis. Thus, a related question is: do the social benefits of homeownership from the past still apply? With respect to the new conditions of the real estate market, the current report provides an updated review of the literature of the social benefits of homeownership. Furthermore, this paper examines not only the ownership of homes, but also the impact of stable housing (as opposed to transitory housing and homelessness) on social outcomes, looking specifically at some outcome measures such as:

Educational achievement

Consistent findings show that homeownership does make a significant positive impact on educational achievement. Less clear, however, is whether homeownership in itself, stable housing or favorable neighborhood characteristics are the main underlying factors contributing to better educational outcomes.

More recently, researchers found that the act of saving has some association with child outcomes and specifically the degree to which children of homeowners are less likely to drop out of school.

Civic participation

The extent of community involvement and the benefits that accrue to society are hard to measure, but several researchers have found that homeowners tend to be more involved in their communities than renters.

After the sharp decline of home prices, recent studies reevaluated the social role of homeownership and found that residential stability increases the likelihood of electoral participation but is unrelated to participation in membership groups. Interestingly, even after controlling for residential stability, homeowners remain more likely to participate in local elections, civic groups and neighborhood compared to renters.

Health benefits

Early studies of homeownership and health outcomes found that homeowners and children of homeowners are generally happier and healthier than non-owners, even after controlling for factors such as income and education levels that are also associated with positive health outcomes and positively correlated with homeownership.

More recent studies have found that the wealth building effect of homeownership and the sense of control it provides to homeowners in a stable housing market affect homeowners’ mental and physical health in a positive way. However, the literature is mixed in times of housing market instability. While some studies showed that homeowners fared better than renters during the recent housing crisis, other studies suggest that areas of high housing distress also had high rates of mental health and stress-related diagnoses. More research is needed on the relationship of health outcomes and homeownership.

Crime

Research on crime and home ownership shows that a lower crime rate among homeowners and people living in a stable housing environment are consistent with theories on social disorganizations. A stable neighborhood, independent of ownership structure, is also likely to reduce crime. It is easier to recognize a perpetrator of crime in a stable neighborhood with extensive social ties.

However, with respect to the housing crisis and the increased foreclosure rates, several studies readdressed the relationship between homeownership and crime examining the effects of foreclosures on neighborhood crime. Most of those studies found some evidence that additional foreclosure leads to an increase of burglary and violent rates.

 

Read the full paper here (PDF) >


Source: Economics Research Realtor News feed

REALTORS® Confidence Index Survey: September 2017 Highlights

REALTORS® Confidence Index Survey: September 2017 Highlights

The REALTORS® Confidence Index (RCI) survey[1]  gathers monthly information from REALTORS® about local real estate market conditions, characteristics of buyers and sellers, and issues affecting homeownership and real estate transactions.[2] This report presents key results about market transactions from September 2017. View and download the full report here.

Market Conditions and Expectations

• The REALTORS® Buyer Traffic Index registered at 61 (59 in September 2016).[3]

• The REALTORS® Seller Traffic Index registered at 45 (44 in September 2016).

• The REALTORS® Confidence Index—Six-Month Outlook Current Conditions registered at 65 for detached single-family, 55 for townhome, and 52 for condominium properties. An index above 50 indicates market conditions are expected to improve.

• Properties were typically on the market for 34 days (38 days in September 2016).

• Eighty-five percent of respondents reported that home prices remained constant or rose in September 2017 compared to levels one year ago (84 percent in September 2016).

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Characteristics of Buyers and Sellers

• First-time buyers accounted for 29 percent of sales (34 percent in September 2016).

• Vacation and investment buyers comprised 15 percent of sales (15 percent in September 2016).

• Sales of distressed properties (foreclosed or sold as a short sale) accounted for four percent of sales (four percent in September 2016).

• Cash sales made up 20 percent of sales (21 percent in September 2016).

• Twenty percent of sellers offered incentives such as paying for closing costs (eight percent), providing a warranty (eight percent), undertaking remodeling (two percent), and providing appliances (one percent).

ft

Issues Affecting Buyers and Sellers

• From July–September 2017, 73 percent of contracts settled on time (63 percent in September 2016).

• Among sales that closed in September 2017, 87 percent had contract contingencies. The most common contingencies pertained to home inspection (27 percent), obtaining financing (22 percent) and getting an acceptable appraisal (20 percent)[4].

• REALTORS® reported “low inventory” as the major issue affecting transactions in September 2017. REALTORS® also reported concerns regarding the hurricanes’ impact in Texas and Florida.

inv

About the RCI Survey

• The RCI Survey gathers information from REALTORS® about local market conditions based on their client interactions and the characteristics of their most recent sales for the month.

• The September 2017 survey was sent to 75,000 REALTORS® who were selected from NAR’s nearly 1.2 million members through simple random sampling and to 5,543 respondents in the previous three surveys who provided their email addresses.

• There were 2,370 respondents to the online survey which ran from October 2‒12, 2017. The survey’s overall margin of error at the 95 percent confidence level is two percent. The margins of error for subgroups and sample proportions of below or above 50 percent are larger.

• NAR weighs the responses by a factor that aligns the sample distribution of responses to the distribution of NAR membership.

The REALTORS® Confidence Index is provided by NAR solely for use as a reference. Resale of any part of this data is prohibited without NAR’s prior written consent. For questions on this report or to purchase the RCI series, please email: Data@realtors.org.


[1] Thanks to George Ratiu, Managing Director, Housing and Commercial Research and Gay Cororaton, Research Economist for their data analysis and comments to the RCI Report.

[2] Respondents report on the most recent characteristics of their most recent sale for the month.

[3] An index greater than 50 means more respondents reported conditions as “strong” compared to one year ago than “weak.” An index of 50 indicates a balance of respondents who viewed conditions as “strong” or “weak.”

[4] The difference in the sum of percentages to the total percentage of sellers who offered incentives is due to rounding.


Source: Economics Research Realtor News feed

Building Permits and Inventory

Did building permit activity rebound at your county?   How many new housing units should be added to the market?

While tight housing inventory pushes home prices upward, we look at building permits to see how many new housing units are expected to come on the market. Building permits are an important leading indicator for developments in the economy. They show how much investment is taking place in the local economy and its overall health.

We compared the number of new housing units[1] authorized by building permits in the following three years:

–         2000 – “healthy” inventory conditions,

–         2005 – “strong” inventory conditions, and

–         2015 – “tight” inventory conditions

While the majority of counties reached the highest number of building permits in 2005, it is interesting to see what number of building permits each had under healthy (2000) and low (2015) inventory conditions. Then, we estimate the number of new housing units that needs to come on the market so that counties have enough inventory to satisfy housing demand.

Descriptive Analysis:

All units

Comparing construction activity in 2000, 2005 and 2015, 28 percent of the counties[2] had the highest number of building permits in 2000 while 60 percent of them had a peak in 2005 and 12 percent in 2015. Most of the counties, which had a peak in 2000 were located in Michigan, Colorado and Indiana. Arizona, Hawaii, Maine and Florida had the highest share of counties which had a peak in 2005, while North Dakota and the District of Columbia issued more building permits in 2015 compared to 2000 and 2005.

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Comparing the number of building permits issued in 2000 and 2015, on a national level, we see that permits in 2015 were 74 percent of the permits issued in 2000. In terms of percentage change, 2015 permits were 26 percent less than their 2000 level. However, at a county level, we see that 25 percent of the counties have rebounded above their year-2000 level of building permits. Lea County, NM,  Vernon Parish, LA, Grant Parish, LA, Hutchinson County, TX and East Feliciana County, LA were the top five counties with the strongest gains in building permits issued in 2015 compared to their 2000 level. It is interesting to mention that single-family homes are typically built in these five counties.

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Single-units

While the American Dream is to own a single-family home, let’s take a closer look at the building permits issued for single-units. Based on 2015 data, single-units monopolized the market in 70 percent of the counties. In these areas, building permits were issued for single-units only. In contrast, 1 percent of the counties did not build any single-family home.

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Comparing the number of single-family permits in 2000 and 2015, on a national level, we see that permits in 2015 were 58 percent of the permits issued in 2000. In terms of percentage change, 2015 single-family permits were 42 percent less than their 2000 level. However, looking at single-family construction by county, we see that 24 percent of the counties rebounded to 2000’s levels of building permits. Lea County, NM,  Vernon Parish, LA, Grant Parish, LA, Hutchinson County, TX and East Feliciana County, LA were again the top five counties with the strongest gains in single-unit building permits issued in 2015 compared to 2000.

Counties with the most “unit-dense” buildings in 2015

We also calculated the number of units per building by simply dividing the total number of units (2+) to the total number of buildings (2+). We found that 11 units were built per building on average in 2015[3]. However, some counties built more than 50 units per building on average while in Prince George County, MD the ratio reached 319 units per building. To meet the growing demand for housing, more multifamily units are built in these areas. Here are the counties with the most “unit-dense” buildings in the U.S.:

–         Prince George County, MD: 319 units per building

–         Arlington County, VA: 136 units per building

–         New York County, NY: 121 units per building

–         Fairfax County, VA: 119 units per building

–         Fulton County, GA: 113 units per building

–         Clearfield County, NY: 108 units per building

Select a State and County and see how many units were built on average per building in 2015:

units/building2015

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How many new units should be added to the market?

One of the main concerns in the housing market right now is the limited housing inventory. The combination of limited homes on the market with high buyer demand for housing pushes prices upward. Indeed, as we already mentioned, three out of four counties issued fewer building permits in 2015 compared to 2000.

The question is how many new units should be added additionally to the market in order that supply meets demand? Assuming that the number of building permits in 2000 was enough to meet people’s[4] demands, we calculated the number of new housing units[5] that should be added additionally if needed based on the population in 2015.

Select a State and County:

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While the latest available annual data refers to 2016, we looked at the most recent activity of the counties, which are requested to report monthly[6]. Comparing the number of new housing units authorized by building permits between January and March of 2017 and the same period in 2016, we found that 54 percent of the counties experienced gains. Thus, new residential construction seems to get better in 2017 and, thus, to slow down home price gains. Based on NAR’s forecast, it is estimated that new home prices will increase 1.9 percent in 2017 while prices rose by 6.7 percent last year. Similarly, existing home price increases are forecast to slow, but only slightly, to 5.0 percent from 5.1 percent in 2016.


[1] Source: U.S. Census Bureau.

[2] 2,138 counties were included in the study. These counties had at least 10 building permits issued in 2015.

[3] Based on the construction activity in 2,138 counties.

[4] Population 16+ years old in 2015.

[5] Permits needed (2015) = ((permits issued in 2000) x (population 16+ in 2015))/(population 16+ in 2000)) – (permits issued in 2015)

[6] Monthly statistics are obtained by directly cumulating the data for all places in the county that

are requested to report monthly (743 counties). Annual statistics are obtained by cumulating data for all places

in the county, both monthly and annual reporters.


Source: Economics Research Realtor News feed


Investor Soundness

Investor Soundness

In the wake of the housing crisis, vacation and investment buyers played an important role in sopping up excess inventory. As their participation wanes, the impact will vary around the country. Furthermore, deception and poor lending practices to some investors played a key role in fomenting the last crisis, so the robustness of their participation in the current environment is worth a closer look.

market share

A Receding Tide

NAR Research recently released the 2017 Investment and Vacation Home Buyers Survey. This survey includes small “mom and pop” investors that will be the focus of this report as opposed to institutional investors. Purchases by vacation buyers in 2016 fell sharply to 15 percent from 19 percent in 2015, while purchases for investment[1] held steady at 19 percent. That decline in part reflects growth in demand by owner occupants. This moderating pattern is important as researchers noted that investors played a key role in the foreclosure crisis. The investor share of home purchases rose sharply at the tail end of the housing boom and drove higher default rates. Researchers pointed to concentrations of investors in bubble areas, deception in holding multiple mortgages, and higher use of riskier loans by investors in driving this latter trend.[2] However, these authors noted a large unexplained element. This element could be owners’ deeper ties to the community including schools and personal relationships as well as the magnified impact of foreclosure on persons unable to spread the shock across other investments or reserves.

financedFinancing for small investors was difficult to come by in the wake of the crisis. As a result, cash purchases surged. Based on data from the Home Mortgage Disclosure Act (HMDA), financing constraints eased over time and the share of financed purchases for non-occupation rose from a low of 10.4 percent in 2009 or 285 thousand purchases to 13.1 percent in 2012 or 352 thousand. That figure grew to 402 thousand by 2015, but their share eased to 11.1 percent as total sales volume increased lead by owner occupants who tend to finance their home purchases. This trend suggests that investors and vacation buyers have increasingly relied on financing.non owner

Where Investor Call Home

Regionally, non-owner financed purchases tend to be in vacation areas including coastal Florida and the Carolinas, as well as New England. However, recreational areas of Michigan, Wisconsin, and Minnesota as well as in the mountain states, Arizona, and West Texas were also heavy users of investor or vacation financing in 2015. Metro areas in Florida dominated the top ten markets including Destin, Punta Gorda, and The Villages.

home purchases2005 All Over Again?

While investors played a role in the market’s crisis, they also played an important role in its recovery. From 2008 through 2011, there was regular discussion of the shadow inventory on banks’ balance sheets that would eventually hit the market. Investors helped the market to absorb this excess and frequently paid cash or provided significant down payments. Since then the shadow inventory has evaporated and a supply shortage has emerged. Are these new investors risky like those during the boom?

Unfortunately, the HMDA dataset does not provide information on the number of properties owned by an investor or their down payments, both indicators of stress. However, it does provide their income and the amount borrowed. This is important since an increasing number of investors are using mortgages to finance their purchase (versus cash) in a similar manor to 2004 and 2005. (See below)

balanceIn 2015, the ratio of the average mortgage balance at origination relative to average income for non-occupant purchases stood 11.7 percent higher than in 2004, while the same ratio was only 2.8 percent higher for owner occupants. This ratio does not account for historically strong affordability through low mortgage rates, but it does highlight the relative decline in affordability for investors compared to owner occupants.

non owner purchaseAnother useful tool in the HMDA dataset is the rate spreads above average prime offer (APOR) for financed purchases. A higher rate spread suggests a riskier loan and likely a lower credit score, smaller down payment, or some other risk factor(s). It is clear from the chart above that the share of loans for non-occupancy that are higher priced remains well below that of the boom period. The share that was 3 percent above the APOR was just 0.7 percent in 2015 compared with 18.2 percent at the markets peak in 2006. The share with a spread of 1.5 percent to 3 percent above was 2.6 percent in 2015. Unfortunately, this variable has changed over time and this category was not collected until 2009. It is still clear that higher priced loans remain well below crisis levels.

NAR’s 2017 Investment and Vacation Home Buyers Survey can add color missing from the HMDA data. Cash purchases by this group fell from 50 percent in 2011 to 32 percent in 2016, but remained well above the 26 percent share during the buildup to the crisis. Furthermore, the share putting down 70 percent or more remains above 2011 levels and those from the period of risky lending. These figures do not include institutional investors whose presence rose dramatically in the wake of the recession.

investment and vacationInvestors played an important role in the market over the last decade and can help support a growing rental population. However, a growing share of small investment and vacation buyers now finance their purchases giving them less “skin in the game” and average mortgage-to-income ratios are on the rise. To date lending to investors appears more robust than during the pre-crisis period, but given past precedence, their participation including institutional investors should be monitored for resilience.


[1] This survey does not include institutional investors

[2] Haughwout, Klaauw, Lee, and Tracy. “Real Estate Investors, the Leverage Cycle, and the Housing Market Crisis.” Sept 2011


Source: Economics Research Realtor News feed


Arn Rasker

Arn Rasker

Luxury Properties Boulder

 Arn Rasker, your source for Luxury Properties in Boulder

 

What does Arn bring to your Real Estate transaction?

 

-Arn adds value to every transaction he is involved with, whether he is on the Buyer side or the Seller side.

- Arn is an Associate Realtor with RE/MAX Alliance on Walnut, a boutique real estate agency specializing in Boulder's select properties.

- Arn's experience in luxury home design, engineering, and construction gives him a different perspective than most professionals in this business. He recognizes, understands, and appreciates the well-executed and well-though-out details of a high quality and well-built home.

- A luxury Home is much more than a beautiful structure. It must be comfortable and satisfying for you, and for the way you live.  Arn is a "match-maker".

-Arn knows the Boulder and close-in mountain market, and will negotiate on your behalf with your best interests in mind. Arn's business background and negotiating skills allow him to effectively look out for you.

- Arn loves Boulder! He moved to Boulder in 1975, to study Mechanical Engineering and Business at CU, and has lived here since. He has have tried to leave three times (Mexico City, New York, and Vancouver), but came back each time for the same reason: Boulder is a great place to live!

- Whether you are buying or selling a home/property, you'll want Arn to be the one working for you! Arn will be the one who, upon waking-up every morning, will be strategizing how to get your property sold and/or how to find the right home for you.

- Arn gets the job done!... in an efficient and professional way, with minimal inconvenience to you, while staying focused on maximizing your profit or equity. Arn's specialty is clearing road blocks, solving problems, and making the transaction easy on you.

- Arn communicates well, throughout the transaction process. He answers phone calls and written communications promptly, informs you on each step of the way, and keeps a solid documentation trail for every transaction. Arn is available!

- Arn knows Boulder! He has lived in Boulder for 40 years, and know it inside and out. He is a wealth of information that extends far beyond Real Estate.

- Education: Bachelor of Science in Mechanical Engineering with minor in Business Administration, Colorado University, Boulder, CO.

- Languages: Dutch, Spanish, and English (With native proficiency)

- Countries I have resided in: Holland, Costa Rica, Mexico, Spain, Canada, USA

 

I appreciate your consideration! I know there are many Realtors in Boulder that you can choose from, and I will be honored if you select me to help you buy or sell your home.

My commitment to you:

I will always do my best,

and

I will not rest until you are happy and satisfied.

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REALTORS® Reported More Contracts Were Settled on Time from January—March 2017 Compared to Past Years

REALTORS® Reported More Contracts Were Settled on Time from January—March 2017 Compared to Past Years

In the monthly REALTORS® Confidence Index Survey, the National Association of REALTORS® asks membersIn the past three months, think of your most recent sales contract that was either settled/closed or terminated. Please explain how the deal concluded (settled, delayed, terminated, sale is pending, no contract signed).”

An increasing share of contracts are settled on time, based on the March 2017 REALTORS® Confidence Index Survey Report. Among respondents who reported they had a contract that went into settlement or was terminated over the period December 2016–March 2017, 70 percent reported that the contracts were settled on time, 23 percent had a delayed settlement, and seven percent reported that the contract was terminated. During the same period in 2015 and 2016, only 65 percent of contracts were settled on time.

sales were settled

Among contracts that had a delayed settlement (23 percent), 30 percent faced issues related to obtaining financing and 21 percent had appraisal issues. While they are still the top cause of delay, issues related to obtaining financing have been cited by fewer respondents than when NAR first tracked this indicator. Forty percent of those reporting a delay cited a financing issue. The decline may reflect the improvement in the economic environment, better credit histories from borrowers, and improvement in the loan evaluation processes of mortgage originators.

appraisal

Regarding appraisal issues, respondents reported facing appraisal delays due to a shortage of appraisers, valuations that are not in line with market conditions, and “out-of-town” appraisers who are not familiar with local conditions. In NAR’s Survey of Mortgage Originators, 55 percent who took part in the survey reported some level of issues getting appraisals.[1] Other specific issues that led to delays involved titling, sale contingencies, problems related to distressed sales, home/hazard/flood insurance issues, and the buyer losing a job.

Among contracts that were terminated (seven percent), 25 percent faced issues related to home inspections and 20 percent had issues related to the buyer’s ability to obtain financing.

problems


[1] Ken Fears, 2016 Survey of Mortgage Originators, Fourth Quarter, Economists Outlook Blog. See http://economistsoutlook.blogs.realtor.org/2017/02/07/survey-of-mortgage-originators/


Source: Economics Research Realtor News feed