the insider - november 2010
DESCRIPTION
The Group Inc. Real Estate InsiderTRANSCRIPT
More online, visitwww.thegroupinc.com
Economic indicators
Happy Talk
Historical unemployment rates
Vol. 34, No. 11 November 2010
Seize the day: Right price makes most of early excitement
Many would say that ‘price is everything’ in today’s real estate market. That is not entirely true- the condition of the property and the real estate company’s marketing plan also have a large impact on the outcome for a seller. But one thing is certain- if a seller can properly price their property at the time of initial listing, their odds of a successful transaction will increase dramatically.
Based on the research, a property that never requires a price reduction will sell much quicker, will sell closer to the list price, and will attain a higher sales price compared to properties that require a price reduction to achieve a sale. The data shows that a correct initial price will attract the attention of potential buyers and position the seller in a stronger negotiating position.
The table below demonstrates the effect of proper initial pricing versus overpricing.
Contact me to receive an accurate reflection of today’s market and the price that you could realize for your property.
PROPER INITIAL PRICING VS. OVERPRICING
*Sou
rce
IRE
S.
Stro
nger
N
egot
iatin
g
Pos
ition
Fort Collins 75 98.3% $279,000
Greeley 73 98.2% $164,100
Loveland 83 97.9% $242,300
Windsor 110 97.1% $309,800
159 96.5% $255,200
157 96.2% $147,100
174 96.9% $230,500
198 95.5% $307,900
Hig
her
Pric
e
Days on
Market
Sales Price vs.
List Price
Average Sales Price
Shor
ter
Tim
e To
Sel
l
Wea
ker
Neg
otia
ting
P
ositi
on
Low
er
Pric
e
Days on
Market
Average Sales Price
Long
er T
ime
To
Sel
l
Priced Right On Day One Price Reductions Required
Sales Price vs.
List Price
Real estateReal estateInsiderInsider
A PublicAtion of the GrouP, inc.
Matt ThompsonBroker Associate/Partner
5401 Stone Creek CirCle
loveland, Co 80538(970) 443-9910
Matt ThompsonBroker Associate/Partner
Housing market tracks to employment conditions
You are what you eat. The clothes make the man. And jobs make the real estate market.
The latter statement isn’t a popular maxim, but it should be. Look at cities like Washington, D.C., and Houston, TX, which are defying the national trend and experiencing healthy home demand in recent months. It happens that both cities are enjoying job growth, according to Lawrence Yun, chief economist of the National Association of REALTORS®. Subsequently, “pending contracts also remained healthy in August” in both cities, even after the expiration of the home buyers tax credit, Yun said.
It’s no coincidence that Northern Colorado’s housing market has outperformed state and national markets. Since 1994, unemployment rates in Larimer County are consistently below the state and national figures, and Weld County rates steadily run below national unemployment figures.
HISTORICAL UNEMPLOYMENT RATES
Sou
rces
: U.S
. Bur
eau
of L
abor
S
tatis
tics,
Col
orad
o D
epar
tmen
t of
Labo
r and
Em
ploy
men
t
A spread with a view
A 2,175-acre ranch with an ocean view? If you think it sounds expensive, you’d be right. Rancho Dos Pueblos, located along the Gaviota Coast near Santa Barbara, California, is priced for sale at $90 million, making it the most expensive piece of private rural real estate currently on the market. The latest issue of The Land Report showed 10 farms or ranches are priced at $50 million or more, including the just-sold Bell Ranch in New Mexico, a 290,100-acre property that was acquired by Denver-based media mogul John Malone.
Also on the list are two Colorado properties: the 800-acre Aspen Valley Ranch, $59 million, and the 245-acre Flying Dog Ranch near Aspen, priced at $56 million.
Group-affiliated builders on the upswing
Home builders in Colorado have been defying conventional wisdom and breaking ground on houses, according to the latest edition of ColoradoBuilder Forum. In an article titled “Builders are building homes again; some never stopped,” the magazine highlighted four builders that are successfully finding buyers. Two of those builders – Ryland Homes and Village Homes – are partnering with The Group, Inc. Real Estate on Northern Colorado communities.
The article described Ryland, which is building at Timnath Ranch and Pioneer Ridge in Johnstown, as a company that’s re-entering the Colorado market in select communities that meet the needs of buyers who are “ripe to move up into a new property…” Village Homes, which is building in Observatory Village in southeast Fort Collins, is also appealing to “first-time and first-time move up buyers.”
’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10U.S. 6.1 5.6 5.4 4.9 4.5 4.2 4.0 4.7 5.8 6.0 5.5 5.1 4.6 4.6 5.8 9.3 9.6Colorado 4.2 4.2 4.2 3.3 3.8 2.9 2.7 3.8 5.7 6.1 5.6 5.1 4.4 3.9 4.9 7.7 8.2Larimer 3.6 3.9 3.8 3.2 3.8 3.1 2.5 3.2 4.7 5.1 4.7 4.5 4.0 3.5 4.2 6.6 6.4Weld 4.4 4.7 4.7 3.9 4.5 3.6 2.7 3.5 5.2 5.9 5.7 5.6 4.8 4.2 5.2 8.7 8.9
Real estate by the numbers
• $2.5 million – The amount Vestas Wind Systems paid for approximately 80 acres in west Greeley. The land will be used for future expansion of the Vestas turbine blade plant in Windsor.
• 600 – The number of students who would be housed in a proposed 12-building, 30-acre apartment complex near the Colorado State University campus.
• 500 – Potential employment at a new call center planned in Evans. Afni Inc., based in Illinois, plans to open the call center in early December.
Numerous reasons for Happy Talk
Economist Jeff Thredgold semi-annually focuses on the favorable developments in the U.S. economy.
Highlights of October’s Happy Talk include:
• Economic output of the average American worker is 10 times that in China. Americans won 30 Nobel prizes in science and economics during the past five years. China?…just one.
• Roughly half of the 50 states have added jobs during the most recent 12-month period. Formerly, every state had dealt with recession at some point during the past three years.
• Conventional 30-year fixed-rate mortgages have averaged 4.26% in recent weeks, the lowest level in nearly 50 years.
• The value of a university education for American men and women in terms of future earnings power is nearly twice that of those in the average rich nation.
• The U.S. accounted for nearly one-third of the $1.1 trillion spent globally on research and development in the latest data available.
• Roughly 47% of science and engineering degrees of those ages 25 to 39 are held by women, compared with 21% among those 65 and older.
• U.S. exports to China have risen roughly 24% per year since 2001, making China the fastest growing market for U.S. goods.
• Women now make up a record 46% of global MBA candidates. More than 70% of students surveyed name the U.S. as the top MBA study destination.
• Average U.S. life expectancy has reached 78 years (men 75, women 80), the highest ever. This compares to 76 years in 1995, 68 years in 1950, and 47 years in 1900.
• A record 30% of men and 29% of women have earned a bachelor’s degree or higher. This compares to a combined 7.7% in 1960. A record 85% of adults over age 25 now have at least a high school diploma, versus 24% in 1940.
• The U.S. role of dominance in the global economy during the past decade was as clear-cut as at any time since the 1950s.
“Anger is not a strategy. Anger does not create growth. Only optimism creates growth. Be the contrarian. So many people are mad today. Be happy!” Jeff Immelt, Chairman, General Electric Company
A monthly snapshot of Northern Colorado’s economic activity
Likely Direction in Next 6 Months Forecast
Mortgage Rates
Commercial Vacancy Rates
Average Existing Single-Family Sales Price
Single-Family Home Inventory
Existing Single-Family Home Sales
Sources: Sperry Van Ness/The Group Commercial, The Group Guaranteed Mortgage, IRES.
September ’10 September ’09
Oct. ’10 4.22% Oct. ’09 4.95% Oct. ’08 6.20%Rates will remain at historic lows
Commercial vacancy rates should remain relatively constant
Industrial Retail Office
Fort Collins Area
7% 9% 12%
Greeley Area
12% 10% 8%
Loveland Area
19% 5% 10%
WindsorArea
6% 18% 7%
Fort Collins Area
7% 8% 14%
Greeley Area
10% 10% 9%
Loveland Area
19% 6% 14%
WindsorArea
2% 11% 7%
Prices should remain flat
3Q 2010 3Q 2009 3Q 2008
Fort Collins Area$272,696$263,829$278,118
Greeley Area$158,485$108,507$174,326
Loveland Area$244,634$230,966$254,660
Windsor Area$343,977$289,007$312,365
Inventory levels traditionally decline
in the winter
3Q 2010 3Q 2009 3Q 2008
Fort Collins Area1,3971,5221,442
Greeley Area1,0651,0331,315
Loveland Area919889967
Windsor Area377421481
Sales activity tends to decrease in the 4Q
3Q 2010 3Q 2009 3Q 2008
Fort Collins Area542683734
Greeley Area443563603
Loveland Area290384342
Windsor Area124128146
Harmony Office 970.229.0700 2803 E. Harmony Road, Fort Collins, CO 80528 PRSRTSTD
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Horsetooth Office 970.223.0700
Mulberry Office 970.221.0700
Greeley Office 970.392.0700
Loveland Office 970.663.0700
Centerra Office 970.613.0700
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Matt ThompsonBroker Associate/Partner
5401 Stone Creek CirCle
loveland, Co 80538(970) 443-9910
Matt ThompsonBroker Associate/Partner