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Economic indicators

Real estate by the numbers

Opportunity knocks - mortgage rates

Vol. 34, No. 8 August 2010

Hot spots: Area neighborhoods with high demand, low supplyBased on research just completed by The Group, certain single-family neighborhoods are clearly outperforming others over the last 90 days. On average, there is a 6.5 month supply of homes in our market.

The Group found a number of hot neighborhoods across the region, where inventory is at three months or less. These are indications that the right combination of location and price range are attracting homebuyers and putting sellers in positions of opportunity.

Call me for a detailed snapshot of the activity in your neighborhood. This would include the months of inventory for your area, the average price, and your home’s odds of selling in this market.

HOT NEIGHBORHOODS - ACTIVITY OVER PAST 90 DAYS

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Monthsof AverageDays AverageFortCollins Sold ForSale Inventory onMarket SalesPrice

Willow Park 12 3 .75 77 $219,975 Larkborough 5 2 1.20 58 $188,800 Parkwood East 8 6 2.25 91 $200,487 Woodlands 6 5 2.50 58 $204,400 English Ranch 8 7 2.63 58 $275,031

Greeley

East Meadows 11 6 1.64 59 $91,983 Wilshire 5 3 1.80 63 $120,553 Mountain Shadows 23 14 1.83 70 $174,474 Fox Run 12 8 2.00 68 $204,675 Parkview 7 6 2.57 77 $78,400

Loveland

Arbor Meadows 3 1 1.00 93 $184,166 Prairie Trails 2 1 1.50 4 $438,500 Ridgeview North 2 1 1.50 149 $173,900 Woodmere 8 5 1.88 62 $168,735 Mariana Glen 3 2 2.00 64 $249,300

Real estateReal estateInsiderInsider

A PublicAtion of the GrouP, inc.

James Welch MitchellBroker Associate/Partner

401 West Mulberry street

Fort Collins, Co 80521(970) 419-2316

James Welch MitchellBroker Associate/Partner

Interest rates defy predictions, delight homebuyersBack in February, many predicted that mortgage rates would be increasing in the second half of the year. Throughout 2009 and the first quarter of 2010, the Federal Reserve purchased over $1 trillion in mortgage-backed securities. This commitment artificially lowered mortgage rates by one-half to one full percentage point (100 basis points). When this program ended in April, it was expected to stimulate a hike in rates – but the impact proved to be slight and very temporary.

In fact, rates on 30-year fixed rates have declined in recent weeks, falling to an average of 4.724 percent as of July 20 – a drop of 12 basis points over one month. Why? With recent economic problems in Europe, we have seen a flight to quality from investors around the world who want to purchase U.S. treasury bonds and mortgage-backed securities. Coupled with continued uncertainty in the U.S. economy, investors continue to look for safe investments, a condition that has driven mortgage rates to historic lows. As long as inflation remains at bay and the strength of the national economy is yet to be determined, we expect rates to remain at historic lows.

Opportunity knocks with declining jumbo mortgage rates Rates on jumbo loans have ebbed to their lowest level since 2003, dipping to 5.32 percent as of July 20 for 30-year fixed loans. Jumbo loans are mortgages that exceed $417,000 and are not backed by Fannie Mae or Freddie Mac. The rates are a full 150 basis points below the same time last year, when jumbos registered at 6.86 percent. For perspective, the monthly mortgage for an $800,000 loan at 6.86 percent is $5,247 per month. By comparison, payments on the same loan at 5 percent would be approximately $950 less.

At a time when selection is robust in the upper-end market in Northern Colorado, such attractive rates make it an ideal time for move-up buyers to find affordability in the high-end market, or for current high-end owners to look for upgrade opportunities.

There is a great selection on homes over $500,000. Call me to learn how you can take advantage of this significant decline in jumbo rates.

Northern Colorado towns lead state in population growth Tiny Timnath is standing tall. The town that sits right off Fort Collins’ southeast shoulder has lately been adding to its own physique, with 27.2 percent population growth between July 2008 and July 2009, according to the latest U.S. Census Bureau data. Timnath, which led the state in percentage growth, grew to 631 people over the 12-month period, up from 496. Lochbuie in Weld County came in a close second, with 26.2 percent growth, while Johnstown was No. 3 at 18.6 percent growth.

Fort Collins, Northern Colorado’s biggest city at a population of 138,736, experienced 2.1 percent growth during the period; Greeley continued to inch closer to the 100,000 plateau, reaching 92,625 people with 1.7 percent growth, and Loveland added 1.7 percent to reach 66,215. Statewide, population grew 1.8 percent; Larimer County increased by 1.9 percent and Weld County added 2.4 percent.

30-YEAR FIXED INTEREST RATE OVER PAST 90 DAYS

TodayMay2010

5.20%

5.07%

4.93%

4.80%

4.67%

4.53%

Real estate by the numbers• 36 – The median age of the American home, according to HUD’s 2009 American Housing Survey.

The survey also found that the median size of a U.S. home was 1,800 square feet, up from 1,610 in 1985, and the median size of new homes constructed since 2007 is 2,300 square feet.

• $27.5 million – The asking price for a 324-acre ranch near Aspen, which is owned by music-industry mogul Tommy Mottola. Mottola, former chairman and CEO of Sony Music Entertainment, bought the ranch in 2003 for $14.7 million.

• 4,587 – The total acreage of the real estate portfolio that’s been placed on the market by Loveland-based Harrison Resource Corporation. The property, which spans a collection of five sub-portfolios covering residential, commercial, retail and industrial properties, has a collective price tag of $177 million.

• 6 – Where Fort Collins ranked in the latest Money magazine ranking of Best Places to Live. Loveland ranked No. 33.

• 600 – The number of suites in the proposed Great Wolf Lodge development near Disneyland, which will be developed by Loveland-based McWhinney.

Utility with style: Kitchen and bath projects in the spotlightThe National Kitchen & Bath Association recently bestowed honors for its annual design competition. Among the winning entries, as reported in Builder Magazine, featured:

Concealed kitchens - Incorporating the kitchen into a home’s primary living and entertainment areas.

Beverage stations - Located in the kitchen, can include an undercounter refrigerator, wine refrigerator and coffee maker.

Scaling of elements - Utilizing shapes and textures to create focal points, functionality and visual appeal.

Color with energy - Bold colors such as purples, greens and citric yellow for countertops and walls.

Soft geometry - Rounded counter or island tops for a smooth-flowing traffic pattern throughout the room.

The full report is available at www.builderonline.com.

U.S. home market gaining international appeal With a convergence of factors – a strong dollar, an emerging economic recovery and opportunities for value in attractive locales – international homebuyers are increasingly drawn to the U.S. real estate market, according to the recent National Association of REALTORS® 2010 Profile of International Home Buying Activity.

The report showed that 28 percent of REALTORS® said they worked with at least one international client over the past year, up from 23 percent in the 2009 profile. Overall, international buyers came from 53 countries, led by Canada, Mexico, the U.K. and China/Hong Kong. Canadians represented 23 percent of all international buyers, while Mexico was second at 10 percent. Florida is a lure for European, Canadian and South American shoppers; the East Coast is popular for Europeans, the West Coast is attractive for Asians, and the Southwest is popular for Mexicans.

A monthly snapshot of Northern Colorado’s economic activity

LikelyDirectioninNext6Months Forecast

MortgageRates

CommercialVacancyRates

AverageExistingSingle-FamilySalesPrice

Single-FamilyHomeInventory

ExistingSingle-FamilyHomeSales

Sources: Sperry Van Ness/The Group Commercial, The Group Guaranteed Mortgage, IRES.

June’10 June’09

June ’10 4.74% June ’09 5.42% June ’08 6.32%Rates will remain at historic lows

Commercial vacancy rates should remain relatively constant

Industrial Retail Office

Fort Collins Area

7% 9% 11%

Greeley Area

11% 11% 8%

Loveland Area

19% 6% 10%

WindsorArea

3% 20% 8%

Fort Collins Area

7% 7% 12%

Greeley Area

11% 10% 9%

Loveland Area

6% 6% 14%

WindsorArea

1% 10% 3%

Prices should remain flat

2Q 2010 2Q 2009 2Q 2008

Fort Collins Area$268,348$268,993$275,192

Greeley Area$164,059$155,463$174,747

Loveland Area$241,678$229,100$255,114

Windsor Area$309,720$284,750$341,098

Inventory levels traditionally decline

in the fall

2Q 2010 2Q 2009 2Q 2008

Fort Collins Area1,5751,6331,655

Greeley Area1,0921,1241,504

Loveland Area966958

1,082

Windsor Area395443525

Sales will decrease after the tax credit

2Q 2010 2Q 2009 2Q 2008

Fort Collins Area832654798

Greeley Area627528605

Loveland Area422331406

Windsor Area151130114

HarmonyOffice970.229.07002803 E. Harmony Road, Fort Collins, CO 80528 PRSRT STD

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James Welch MitchellBroker Associate/Partner

401 West Mulberry street

Fort Collins, Co 80521(970) 419-2316

James Welch MitchellBroker Associate/Partner