2013년 11월 25일 월요일

About 'boulder outlook'|Live From Boulder, It's Moni!







About 'boulder outlook'|Live From Boulder, It's Moni!








Common               sense               tells               us               to               buy               low,               sell               high               and               that               applies               not               only               to               the               stock               market               but               to               real               estate.

What               separates               an               investment               in               stocks               from               an               investment               in               real               estate               is               that               real               estate               has               "utility".

Utility               means               that               your               home               is               more               than               an               asset               that               may               increase               in               value,               it               provides               shelter               (assuming               it               is               not               an               investment               property).

Everything               is               in               place               to               spark               a               real               estate               boom               ...

mortgage               interest               rates               are               low,               sellers               are               motivated,               housing               inventory               is               available.

Everything               is               in               place               ...

everything               except               buyers.
               So,               should               you               buy               now?
               Mortgage               interest               rates               are               at               historic               lows               and               the               Fed               has               announced               that               it               will               continue               to               intervene               in               the               markets,               buying               mortgage-backed               bonds,               in               order               to               keep               mortgage               rates               low               for               some               time.

That               tends               to               tell               buyers               that               they               have               time               ...

and               can               wait.
               The               availability               of               mortgage               loans               is               not               great               right               now,               but               if               you               are               a               conforming               "buyer"               -               i.e.,               a               buyer               with               20%               down,               looking               for               30-year               fixed               rate               financing,               most               financial               institutions               can               get               you               financed               through               Fannie               Mae               or               Freddie               Mac,               taking               no               real               risk               on               their               balance               sheet.

Financial               institutions               should               be               willing               to               do               this               all               day,               all               night.

They               sell               the               loan               to               the               agency               and               maintain               liquidity               and               take               no               credit               risk.
               Now,               if               you               are               a               buyer               who               is               "outside               the               guidelines",               good               luck.

Jumbo               mortgage               financing               is               tough               to               come               by.

If               you               do               not               have               money               down,               you               might               look               at               FHA,               if               you               qualify.

You               might               also               try               a               credit               union               in               your               area.

Many               are               lending,               though               most               like               conforming               mortgages               too.

Most               mortgage               companies               went               out               of               business               over               the               past               2               years               so               there's               not               a               lot               out               there               for               you.

No               stated               income               products,               no               subprime               mortgage               products.
               The               availability               of               housing               inventory               is               very               high,               particularly               in               areas               where               there               have               been               a               number               of               foreclosures.

And               despite               the               media,               housing               is               regional               and               some               regions               have               suffered               more               housing               loss               than               others.

The               CA               and               FL               markets               have               suffered               the               most,               along               with               markets               in               and               around               Atlanta,               Washington               DC,               Phoenix,               and               Las               Vegas.

And               that               inventory               is               cheap.

Check               the               weekend               newspapers               (or               their               online               sites)               for               public               sale               notices               and               go               to               a               couple               of               auctions.

You               will               get               the               flavor               for               how               an               auction               works               and               for               the               distressed               prices               for               homes               in               your               desired               area.

You               can               also               search               websites               that               list               foreclosed               properties.

You               might               also               choose               to               work               with               a               real               estate               agent               who               can               advise               you               on               home               values               (normal               and               current)               and               can               give               you               good               advice               on               the               best               neighborhoods,               the               best               schools,               the               best               resale               values               (normal),               etc.

Do               your               homework.

This               downturn               in               housing               is               not               likely               to               resolve               itself               in               the               near               term.

You               have               time.
               Which               brings               me               to               the               problem               with               buying               now               ...

and               the               hesitancy               of               many               to               jump               into               the               market.

The               housing               cycle               is               not               due               to               recover               in               the               near               term.

So               why               jump               in               now?

Why               hurry?
               Deutsche               Bank               Global               Markets               Research               and               its               Research               Team,               including               analyst               Karen               Weaver,               published               at               the               end               of               March               2009               a               round-up               on               the               housing               outlook               across               the               US               including               a               breakdown               of               the               various               regions               of               the               country.

Using               affordability,               Deutsche               Bank               had               put               together               many               publications               on               housing               (Ms.

Weaver               called               the               housing               bubble               about               2               years               before               it               burst)               calling               the               continued               rise               in               values               unsustainable.

Now,               Deutsche               Bank               has               augmented               its               analysis               to               include               additional               variables:               unemployment,               unemployment               change,               distressed               inventory               levels,               and               momentum.
               Based               on               their               analysis,               a               number               of               housing               markets               are               ripe               for               a               return               to               positive               values.

Markets               like               Dallas,               Santa               Barbara,               Fort               Worth,               Kansas               City,               Nashville,               Columbus,               San               Antonio,               Pittsburgh,               Louisville,               Boulder,               and               Fort               Collins               show               signs               that               real               estate               values               are               at               or               near               a               bottom,               show               signs               that               distressed               inventories               of               housing               are               manageable,               and               show               signs               that               job               losses               are               flat.

If               you               are               looking               at               these               markets,               now               might               be               the               time               to               buy.

Sure,               values               could               go               lower,               but               housing               affordability               measures               tell               us               from               the               Deutsche               Bank               analysis               that               an               equilibrium               has               been               restored               where               a               historic               average               number               of               homeowners               in               that               market               can               afford               a               mortgage.

Now,               there               are               no               guarantees               but               ...
               It               is               also               conceivable               in               markets               with               a               large               inventory               of               distressed               housing,               that               it               might               also               be               a               great               time               to               buy.

On               www.cnbc.com               on               4/9/09,               there               was               an               article               featuring               stories               of               new               homeowners               snapping               up               Miami               condominiums.

The               report               shows               that               there               are               bargains               in               many               of               these               distressed               markets.

To               buy               these               homes,               you               need               to               secure               financing               (and               the               cnbc.com               article               did               a               good               job               talking               about               the               condo               financing               challenges)               and               you               need               to               have               a               longer               time               horizon.

If               you               think               that               the               condo               you               bought               for               $85,000               that               was               $410,000               4               years               ago               will               be               $410,000               again,               any               time               soon,               you               may               need               your               head               examined.

But,               if               you               love               the               place               (and               can               put               in               a               little               or               a               lot               of               work)               and               plan               to               stay               put               for               3-5               years,               buying               a               foreclosure               is               a               great               idea.

It               might               also               be               a               great               idea               if               you               are               shopping               for               a               second               home.

Many               distressed               properties               are               in               traditional               vacation               locales               -               Miami,               Ft.

Lauderdale,               Naples,               Ft.

Myers,               San               Diego,               Hilton               Head.

Again,               if               you               are               looking               for               a               second               home               that               you               might               rent               out               for               the               next               5               years               and               perhaps               move               to               in               retirement,               why               not               get               a               great               deal               today.
               So,               why               are               buyers               still               on               the               sidelines?

Fear               ...

fear               that               they               will               lose               their               job               in               the               near               term.

That               tends               to               keep               buyers'               hands               in               their               pockets               and               their               hands               holding               tightly               on               their               pocketbook.

Fear               that               "things               will               get               worse".

A               record               level               of               cash               is               on               the               balance               sheet               of               financial               institutions               right               now.

They               are               fearful               to               lend.

A               record               amount               of               cash               was               pulled               out               of               the               stock               market               last               fall               and               remains               on               the               sidelines.

Yes,               a               stock               can               go               to               $0               -               you               can               lose               all               of               your               money.

Housing               will               never               go               to               zero               as               long               as               there               is               a               piece               of               land,               but               recent               history               has               shown               that               you               can               lose               part               of               your               investment.

What               if               I               buy               a               house               and               lose               my               job?

What               if               I               have               to               move               to               take               a               new               job?

What               if               I               can't               sell               my               house               for               what               I               paid               for               it               when               I               have               to               move?

These               are               real               fears.
               What               will               restore               housing?

In               some               markets,               there               is               stability.

There               are               buyers               because               the               employment               picture               is               relatively               stable.

The               other               pieces               are               generally               there               ...

mortgage               rates,               housing               inventory,               desirable               neighborhoods.

We               need               to               end               the               cycle               of               fear.
               Buy               a               house.






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