March 01, 2011
March 2011 Summit County Real Estate.Net Notices
NAR Sends Letter to FHA On Condo Financing
In a letter dated January 4th to FHA Commissioner David Stevens, NAR President Ron Phipps asked the FHA to relax standards for condominium financing. In the letter, Phipps noted that, "Condominium loans are performing even more strongly than other purchase loans. According to the most recent data, condominium purchases had a delinquent/claims rate of 1.1 percent, which is more than 50 percent lower than the overall claims rate. To that end, we urge you to loosen restrictions on purchase condominiums, which for many families remain the most affordable option". NAR President Phipps has also had face-to face discussions with Fannie Mae and Freddie Mac on the restrictive condo policies.
Make Plans to Attend REALTOR Day At the Capitol on February 17th!
This is it! Make your plans to attend the REALTOR® day at the Capitol on Thursday, February 17th. This popular event is your opportunity to meet with state legislators and learn about legislation that affects your business- and your bottom line.
Last week, the housing market received some food and fire for the mind, but not everyone was at home with the news.
First, the good news. The housing market received a serving of good news last week, as New Home Sales reportedly rose 17.5% in December to come in better than expectations. Overall, the report demonstrated that housing continues to recover - albeit slowly. Despite that good news though, the markets were keyed in on another more important event last week: the release of the Fed’s Interest Rate Decision and Monetary Policy Statement.
As expected, the Fed made no change to the Fed Funds Rate and even the Policy Statement was pretty much the same. But that didn’t stop the markets from getting a little fired up about the release. Let’s take a look at why.
It’s important to understand that the Fed has to be very careful with how bullish their economic comments are, as they don't want to see long-term rates move higher. Well, the Fed's comments certainly were not bullish as they said "employers remain reluctant to add to payrolls" and "the housing sector remains depressed."
So why did Bonds initially improve nicely on the news and then crumble later in the day? The answer is, not everyone in the trading pits is buying what the Fed is saying. Instead, some people believe the Fed is talking down the true underlying strength of the economy, so that it can justify injecting the full $600 Billion of Quantitative Easing into the economy.
President Obama delivered his State of the Union Address to members of Congress last week. Although the President’s call for a freeze on discretionary spending for 5 years may appear to be Bond bullish in that any reduction in the deficit would be good for Bonds, the reality is that so much more has to be done to really get our long-term debt in check. And some of last week’s weakness in Bonds was likely attributed to the feeling that the speech came and went without any real sense that the deficit is going to be reduced in a meaningful way, especially in the near term. The Bond market probably would have liked the word "cut" in spending rather than "freeze," since a "freeze" suggests only a temporary halt in spending at current levels.
In the end, the news last week demonstrated that economic conditions are improving, but they are doing so gradually. As a result, the market remains volatile, as Bonds and home loan rates move up and down depending on what reports or speeches hit the news wires. The good news is that despite the volatility, home loan rates remain extremely low for now and present a tremendous opportunity for buyers who lock in at the opportune moment.
To learn more about the volatility and how you or someone you know can benefit from a knowledgeable advisor like myself, please call or email today. I’ll be happy to discuss the current economic climate and what it means to your unique situation.
The markets will continue to watch the political unrest in Egypt closely this week. In addition, a number of high-impact reports will hit this week with the big news coming this Friday!
We start off right away Monday morning with reports on Personal Spending and Personal Income, as well as the Personal Consumption Expenditures (PCE) Index, which is the Fed's favorite gauge of inflation.
Manufacturing will also be in the news this week. On Monday, we’ll see the Chicago PMI, which surveys more than 200 Chicago purchasing managers about the manufacturing industry and is a good indicator of overall economic activity. Then on Tuesday, the ISM Index will be released. This is the king of all manufacturing indices and is considered the single best snapshot of the factory sector.
The big topic of the week will be employment. First up is the ADP National Employment Report on Wednesday, which measures non-farm private employment.
The ADP report will be followed by another round of Initial Jobless Claims on Thursday. In last week’s report, Initial Jobless Claims came in well above expectations. We shouldn’t read too much into that spike, since weather could have played a sizable role in the jump. However, if readings over the next couple weeks don't settle back down closer to the 400,000 level, there may be reason for concern.
Finally, the busy week culminates in the all-important Jobs Report on Friday. This report features new data regarding Non-Farm Payrolls, the Average Work Week, Hourly Earnings and the Unemployment Rate. Needless to say, this report can be a big market mover!
Bonds received a bit of a bump at the end of last week, helping home loan rates recover from losses earlier in the week. This boost was prompted by political turmoil in Egypt that had investors seeking the safety of Bonds. As a result, home loan rates are still near historic lows.
There’s a quiet week ahead on the economic report front, though with all the news happening around the world, there’s plenty of action that could impact the markets. Be sure to also look for:
Thursday’s weekly Initial and Continuing Jobless Claims Report. Last week Initial Jobless Claims declined to 415,000, which was below the 425,000 expected, and reversed most of the increase from the previous week. Will this week’s number also show a decline, and move us closer to that 400,000 mark, which shows the labor market is continuing to improve?
Incorrect Rumors About 3.8% Transfer Tax Persist
Misleading communications about the 3.8% Medicare tax in the health care reform law continue to circulate. The messages usually say that the 3.8% tax is imposed on unearned income that includes the sale of a principle residence. However, the tax that's being referenced is far narrower and only has the potential to impact a small sliver of high income households who receive investment income. The $250,000-$500,000 capital gains exclusion remains in place.
This week in March will start off more like a lamb than a lion, at least on the economic report front, with no reports scheduled for Monday through Wednesday. But that doesn’t mean world events may not cause some rumbles in the markets any day ahead. Be sure to also look for:
Thursday will bring another weekly Initial and Continuing Jobless Claims Report. Last week’s Initial Jobless Claims were reported at 368,000, also great news for the labor market as this is the lowest reading since May 2008. Will this week’s report follow suit?
Friday will bring the Consumer Sentiment Index - will it show consumers are feeling better about our economy? Friday will also bring the Retail Sales Report for February, which is considered a timely indicator of broad consumer spending patterns.
This week includes a full load of economic reports ranging from housing and the economy - but the big event will be the Fed Meeting.
We’ll start the week with a read on consumer attitudes with the Consumer Confidence report on Tuesday. That report will be followed by the Consumer Sentiment Index on Friday.
We’ll also see additional housing news this week, with a report on New Home Sales in December due out Wednesday and the Pending Home Sales report for December due out Thursday.
The Federal Reserve will also hold its FOMC meeting this Tuesday and Wednesday, with the Fed’s Policy Statement due for release Wednesday afternoon. There’s no chance for an interest rate hike at this meeting - but what the Fed says about the economy, inflation, and its Quantitative Easing program could have an impact on rates.
Thursday’s weekly Initial and Continuing Jobless Claims Report will be important, as always. Last week Initial Jobless Claims came in below expectations and the 4-week moving average fell from the previous week. Those readings tell us the trend in the labor market is continuing to improve...albeit at a slower pace than historically seen at this stage within an economic recovery.
We’ll also get a read on the economic recovery with Durable Good Orders on Thursday. This report gives us an update on consumer and business buying behavior on big-ticket items that are designed to last for an extended period of time, like furniture, televisions, appliances, vehicles, copy machines, and so on. It’s an interesting report, as people tend to hold back on these types of purchases when they are feeling a need to be extra conservative with their finances or feel insecure about their employment.
The GDP report will be followed on Friday with reports on Gross Domestic Product (GDP) - which is the broadest measure of economic activity - and the Employment Cost Index (ECI). The ECI is one way to evaluate wage trends and the risk of wage inflation, as well as possible price pressures. This is important to the housing industry because if wage inflation threatens, it is possible home loan rates will rise through Bond prices dropping.
State Seller Financing Bill Will Allow Owner Carries on Second Home, Residential Investment Properties
The Colorado Association of REALTORS has put forth a bill at the state legislature that would bring Colorado's law on seller financing compliant with federal law. HB-1022 - Seller Financing of Real Property - by Rep. Ray Scott (R-Grand Junction) and Sen. John Morse (D-Colorado Springs) seeks to allow Colorado property owners the ability to finance up to three transactions in any twelve month period without obtaining a mortgage origination license. Current Colorado law only allows one owner carry in a twelve month period solely for a property that is the owners residence. The Glenwood Steamboat, Summit and Vail REALTOR associations have been concerned that the state bill did not specifically provide for second-home and investment properties, and have actively worked to ensure transactions other than primary residences were included. However, the bill now addresses all residential transactions, so that second homes and investment properties will be allowed three owner carries in a year. The bill passed out of committee last week, and will now move to the House Floor for 2nd reading before heading to the Senate.
"Bet your bottom Dollar?" These days the more appropriate question is: Where is the bottom of the Dollar? That’s because the US Dollar is starting 2011 in very poor fashion, with its value dropping relative to other currencies.
Let’s take a look at why... and what this could mean for home loan rates!
1. Some of the Dollar’s drop is attributed to the recent strength in the Euro, which has gotten a boost from some positive stories of late, like Spain and Portugal's ability to sell debt in the Bond market without crisis. But the question is...have Europe's problems gone away? No - there will be more problems ahead for the region and as they emerge, we should see a reversal in the Euro's strength along with improvement in the US Dollar.
2. Another reason for the Dollar's weakness is the Fed’s Quantitative Easing (known as QE2). Remember, while it would never be officially stated, one of the implicit aims of QE2 is to devalue the US Dollar in order to boost our exports and thus GDP.
At this point, the weakening US Dollar hasn't had a big negative effect on the US Bond market, but should the Dollar materially weaken, it could make US denominated assets like US Bonds less valuable and desirable amongst global investors...and it has been these foreign investors, like China, who have supported the US Bond market for years by purchasing our debt.
In housing news last week, Existing Home Sales for December were reported much better than expected. The jump in sales is likely attributed in part to the recent trend of rising home loan rates, which has prompted many homebuyers to take advantage of the still low home loan rates. Building Permits - which signal future construction - also came in better than expected last week, surging 17% in December.
Relatively speaking, 2011 looks to be a good year for the housing industry. There will still be some areas that suffer price declines and those will be where foreclosure backlogs overhang and where unemployment rates are even higher than the national average. But housing has bottomed out in many areas and should see more of a pick up in the second half of 2011. And although home loan rates will likely rise slightly as the year progresses, they are still near all-time lows right now. That means homebuyers still have a tremendous opportunity in front of them.
If you or someone you know is considering purchasing a home, the combination of low home loan rates and affordable home prices make this an ideal time. Call or email today to discuss how you can benefit from the current situation.
CAR Legislative Policy Committee Meets for First Time
REALTORS can be assured that the CAR Legislative Policy Committee will work tirelessly to promote the protection of private property rights, real estate transactions, and our state's economic vitality. The committee, consisting of over 40 REALTORS across the state, reviews each bill of interest to the industry and takes a position on those that are most important to be lobbied at the state capitol.
Although the legislative session is a mere 10 days old, almost 200 bills have been introduced; to-date, CAR is tracking more than ten bills and has taken a position on seven. We will update you on the critical legislation impacting our industry throughout the session.
Should you read an article in the paper or wonder what CAR is doing at the capitol on a specific bill, please be sure to contact your CAR Government Affairs Division staff.
Governor Hickenlooper to speak at REALTOR Day at the Capitol
Governor Hickenlooper is scheduled to speak at the 2011 REALTOR Day at the Capitol on Thursday, February 17th in Denver. Attendees will also hear from Henry Sobanet, the Governor's Planning and Budget Director, legislative leaders in the House and Senate, and will receive legislative updates from NAR and CAR lobbyists. Don't miss this unique opportunity to learn about and discuss the important policy issues affecting the real estate industry.
Seller Financing Bill Clears First Hurdle
HB 1022 - Seller Financing of Real Property - by Rep. Ray Scott (R-Grand Junction) and Sen. John Morse (D-Colorado Springs) passed unanimously out of the House Committee on Economic and Business Development yesterday afternoon. In 2008, Congress passed the SAFE Act, which regulates mortgage loan originators. Subsequently, when HUD wrote their proposed rule to implement the SAFE Act, they exempted seller finance only to the extent that the property being conveyed serves as the seller's residence. Colorado mirrored the seller financing exemption language in the proposed HUD rule. And currently state law permits seller financing only if the property being conveyed serves as the seller's residence. HB-1022, proposed by CAR, seeks to allow Colorado property owners the ability to seller finance up to three transactions in any twelve month period before they are required to be licensed as a mortgage loan originator.
CAR would like to thank Immediate Past-President, George Harvey (Telluride), for testifying in support of the legislation while it was heard in Committee. George advocated very well for the REALTOR® position and was able to convey to the committee why the bill is needed to help strengthen Colorado real estate. The bill's next stop will be the House floor for 2nd reading.
Energy Rating Legislation on the Horizon
Sen. Michael Johnston (D-Denver) has stated his intention to introduce legislation that would require both residential and commercial properties to obtain an energy rating before being sold or leased. CAR had an opportunity this week to sit down with Sen. Johnston to express ongoing concerns with mandatory energy rating programs. We are happy to report that during our conversation, Sen. Johnston informed us that he would no longer pursue a residential energy rating program. CAR will continue to remain vigilant on behalf of our commercial members, and in the coming days ask our commercial members for their input about the possible impacts a commercial energy rating program may have on the industry.
Help Save the Dome!
Over the past several weeks you may have seen or read news reports on the detraining condition of the dome on our state capitol building. The structure is over 100 years old and it is estimated that the cost to make the necessary repairs and maintenance is upwards of $16 million. Colorado Preservation, Inc. has launched a campaign to contribute to the effort. You can also make a $5 tax deductible donation from your cell phone if you would like to contribute to the project by texting the word "dome" to 50555. Learn more about the project.
There are over 20 legislators new to the General Assembly this year. We will introduce you to them over the next several weeks. This week: Representatives Deb Gardner, Matt Jones, Janak Joshi, Mark Barker, Pete Lee & Libby Szabo
Rep. Deb Gardner, Democrat: HD 11 (Boulder, Longmont) Gardner, a long time Boulder accountant, will represent the district that term-limited Democrat Jack Pommer held for eight years. Gardner currently works at Eco-Cycle and is a former chair of the Boulder County Democrats. Committee Assignments: Transportation, Econ. & Business Development, Legislative Audit
Rep. Matt Jones, Democrat: HD 12 (Louisville, Lafayette, Longmont) Jones served previously in the Colorado House from 1986-1993, including a stint as Assistant Minority Leader. He also has public experience as an open space planner and community volunteer. Jones, a Wyoming native, and his wife Shari reside in Louisville and have a daughter in college. Jones is also a cancer survivor. Committee Assignments: Ag, Livestock & Natural Resources, Transportation
Rep. Janak Joshi, Republican: HD 14 (N. Colorado Springs) Joshi, a retired physician, ran unopposed to the Republican seat formerly held by Kent Lambert. Joshi has traveled to all seven continents and more than 50 countries; he also enjoys reading and gardening in his spare time. He and his wife Anjana have called Colorado Springs home for more than 31 years. They have two daughters. Committee Assignments: Education, Finance, Health & Environment
Rep. Mark Barker, Republican: HD 17 (El Paso County) Barker defeated one-term incumbent Dennis Apuan in HD 17. Barker served in the National Guard and the U.S. Navy. He then served on the Colorado Springs Police Department for nearly 25 years. Barker earned a law degree in 2004 and worked briefly in the District Attorney's office before moving into private practice. He and his wife Teresa have two grown daughters. Committee Assignments: Transportation, Judiciary
Rep. Pete Lee, Democrat: HD 18 (Colorado Springs, Manitou Springs) Lee defeated Karen Cullen in the open seat vacated by term-limited Democrat Michael Merrifield. Lee has practiced law for 25 years, representing individuals and small business owners in commercial and real estate transactions, employment, equal employment opportunity, franchising and litigation matters. He and his wife Lynn have lived in Colorado Springs for over 34 years and have three children. Committee Assignments: Judiciary, Local Gov't
Rep. Libby Szabo, Republican: HD 27 (Arvada) Szabo unseated two-term Democrat incumbent Sara Gagliardi. Szabo is a Colorado native and long-time resident in Jefferson County. She has experience working in the mortgage lending and financial services industry and has been involved in grassroots politics for over 20 years. Szabo and her husband Denes have four children. Committee Assignments: Local Government, Econ. & Business Development
REALTOR Day at the Capitol: February 17th
The 2011 REALTOR Day at the Capitol will be held on Thursday, February 17th. Don't miss this unique opportunity learn and discuss the important policy issues affecting the real estate industry and to network with your legislators. We'll once again be hearing from key leadership in the House and Senate, as well as members from the Hickenlooper administration. Pre-registration deadline is February 3rd.
There are over 20 legislators new to the General Assembly this year. We will introduce you to them over the next several weeks. This week: Senators Kevin Grantham, Angela Giron & Jenne Nicholson; Representatives Dan Pabon, Crisanta Duran & Angela Williams
Sen. Kevin Grantham, Republican: SD 2 (Southeast Colorado) Grantham defeated Gloria Stultz in the seat vacated by term-limited Republican Ken Kester. Grantham is a native of southeastern Colorado and resides in Canon City, where he has worked as an appraiser since 1998. He also recently served on the city's Board of Adjustments and on city council. Kevin and his wife Caroline have two children. Committee Assignments: State Veterans and Military Affairs, Ag and Natural Resources, Appropriations
Sen. Angela Giron, Democrat: SD 3 (Pueblo) Grion won the open seat over Vera Ortegon. Incumbent Abel Tapia, a Democrat, was term-limited. Giron has worked for nearly 30 years serving children, youth and families the Boys and Girls Clubs both nationally and in Southeastern Colorado. She is married and resides in Pueblo. Committee Assignments: Finance, Judiciary, Ag and Natural Resources, Appropriations
Sen. Jeanne Nicholson, Democrat: SD 16 (Boulder, Clear Creek, Gilpin, Grand, Jefferson & Summit Counties) Nicholson was declared the winner in a close race over Tim Leonard; incumbent Dan Gibbs previously elected to run for another office. Ms. Nicholson, a former public health nurse, has served on a number of public boards and commissions including the Gilpin County Board of Commissioners. She and her husband Craig have two sons and one daughter. Committee Assignments: Local Gov't & Energy, Judiciary, Education, Appropriations, Legislative Council
Rep. Dan Pabon, Democrat: HD 4 (Northwest Denver) Pabon defeated Rick Nevin in an open contest. Pabon is a native of northwest Denver and has practiced both engineering and law in the metro area. He is an active member of the West Highlands Neighborhood Association, loves jogging, and enjoys teaching and mentoring at North High School. Committee Assignments: Finance, Appropriations, Congressional Redistricting
Rep. Crisanta Duran, Democrat: HD 5 (Denver) Duran is a Colorado native and attended high school in Arvada. She holds degrees in Public Policy and Spanish from the University of Denver and a law degree from the University of Colorado; she is an Attorney in Denver. Duran has worked on a number of successful statewide political campaigns and is actively involved with community advocacy groups. Committee Assignments: Finance, Judiciary
Rep. Angela Williams, Democrat: HD 7 (Northeast Denver) Williams was elected to the seat formally held by House Speaker Terrance Carroll, who was term-limited. Williams has a diverse business background; among them, she oversaw Organizational Management and Operations with US West/Qwest Communications. She is currently a resident and business owner in the Stapleton community. Williams has one daughter. Committee Assignments: Transportation, Econ. & Business Development, House Services
There’s a holiday shortened week ahead, as both the Stock and Bond Markets are closed Monday in honor of the Martin Luther King, Jr. holiday. But the rest of the week has plenty of news in store, including a read on the housing market:
There’s a double dose of real estate news with Wednesday’s Housing Starts and Building Permits Report and Thursday’s Existing Home Sales Report. Analysts are expecting to see a bump higher in Existing Home Sales to a 4.80M pace, and some moderate improvement on the new construction side as well.
There’s also a double dose of manufacturing news. Tuesday’s Empire State Index looks at New York State’s manufacturing sector and is a good gauge of manufacturing overall, while on Thursday we’ll also see the Philadelphia Fed Index, another important report.
Thursday’s weekly Initial and Continuing Jobless Claims Report will be an important one to watch this week. Last week Initial Jobless Claims came in at 445,000, well above expectations of 415,000 and the highest reading in two months. Was this spike just a paperwork backlog because of the holidays... and will this week’s claims be close to that 400,000 mark that will show the labor market is continuing to improve?
Also, earnings season continues, with reports from Citigroup, Apple, Google, GE, Goldman Sachs, and more.
Bonds and home loan rates ended the week about the same place as where they began.
Lately many of the economic reports we have seen have been very good news, as they show signs that our economy continues to improve.
Stocks just enjoyed their seventh straight week of gains, due to the positive economic reports that have been streaming in. While this is certainly cause for celebration, an important question we need to consider is what does this mean for home loan rates in the short and long term?
On the one hand, improvement in the economy is good news on the housing front, as once people feel better about keeping their job or getting a new job, home purchasing activity will rise, and values will follow. But on the other side of the coin, as the labor market and economy improve, home loan rates will have to gradually rise as well. And remember, this all ties in with the Fed’s plan to inject the full $600 Billion into our economy as part of their latest round of Quantitative Easing, known as "QE2."
Remember, the three part goal of QE2 is to create inflation, lower unemployment, and boost Stock prices - and we are seeing evidence of these goals occurring. Not only have Stock prices improved over the last seven weeks as we discussed above, but December’s Jobs Report posted the lowest unemployment rate since May of 2009. And last week, we saw some evidence of inflation as the Producer Price Index (PPI), which measures inflation at the wholesale or producer level, came in higher than expected. While December’s Consumer Price Index wasn’t quite as hot as the PPI, going forward our increasing budget deficit could cause inflation to spike down the road.
So what’s the bottom line if you have been thinking about purchasing or refinancing a home? Home loan rates are still very attractive...
Governor Hickenlooper Takes Office; delivers State of the State Address
John Hickenlooper was officially installed as Colorado's 42nd Governor on Tuesday and delivered his first State of the State Address at the Capitol yesterday morning. He addressed a variety of topics including the state budget, jobs, healthcare, the functioning of state agencies, Congressional redistricting, education reform, as well as water and the environment.
CAR proposes seller financing legislation
CAR has proposed a measure with regard to seller financing of real property. Congress passed financial reform legislation this summer, referred to as Dodd-Frank, which included a provision to allow a seller up to three transactions in any twelve month period before they're required to be licensed as a mortgage loan originator. Currently, Colorado law permits seller financing only if the property being conveyed serves as the seller's residence.
CAR would like to thank Rep. Ray Scott (R-Grand Junction) and Senate Majority Leader John Morse (D-Colorado Springs) for their sponsorship of HB 1022, which seeks to address this issue. Please stay tuned on its progress.
SAR To Host Breakfast With Mayors, Commissioners & Vail Resorts
On Wednesday, March 30th, the Summit Association of REALTORS will host a "meeting of the minds" of sorts, to discuss the state of the local towns & Summit County, budgets, and economic development. Vail Resorts will also attend the event to provide an update on the ski season, and future development by Vail Resorts. The panel will include Mayor Ron Holland from Dillon, Mayor Dave Koop from Silverthorne, Mayor Bill Pelham from Frisco, Town Manager Tim Gagen and Planner Julia Puester from Breckenridge, County Manager Gary Martinez, County Commissioner Dan Gibbs, and Alex Iksendrian, Sr. VP, and COO, Vail Resorts Development Company. The event will be held on Wednesday, March 30th from 8:30-10:30 a.m. at the Frisco Senior Center.
On FHA Loan limits in Garfield County, Bennet had a lengthy discussion with the FHA's congressional liaison on the unlevel playing field for FHA loan limits in Carbondale and Glenwood Springs.
The loan limits in Glenwood and Carbondale are in the low $400,000's, while just across Highway 82, the loan limits in El Jebel (Eagle County), and Basalt (Pitkin County) are at the maximum $729,750. This discrepancy has artificially caused a significant decrease in sales and home prices in Carbondale and Glenwood, because buyers are going across hwy 82 buying similarly priced homes at lower interest rates.
Bennet's staff said he and the FHA staff looked at maps together, and talked about the possibility of doing a "sub-area" that would enable high loan limits in Carbondale and Glenwood, but not the rest of Garfield County. This option has never been used because of FHA concerns of spillover- such as then what happens to Silt, New Castle and Rifle if Carbondale and Glenwood have higher loan limits. The FHA staff was going to make an exception and have a conversation directly with FHA Commissioner Stevens, who once lived in El Jebel and knows the area well, to see if he has ideas on how to address the loan limits in the area.
The FHA also indicated that it is their opinion, not preference, that the higher FHA loan limits will not be extended by Congress when they expire later this year. If this is the case, the loan limits will be closer all along the Roaring Fork Valley, but will cause bigger problems in the entire mountain resort areas.
Glenwood Springs Council Member Shelley Kaup Won't Seek Re-election
Ward 3 Council member Shelley Kaup has announced she will not seek a second term for her seat as City Council member this spring. Kaup said she wants to focus more on her career as a civil engineer. Four Council seats are up for the April 5 elections. Kaup's seat, Russ Arensman's and Dave Sturges seat, as well as the seat held by Mayor Bruce Christensen are all up this spring. Nominating petitions became available on January 4th and are due back to the City Clerks office by 5pm January 24th. Both Arensman and Sturges have picked up petitions.
Make Plans to Attend REALTOR Day At the Capitol on February 17th!
This is it! Make your plans to attend the REALTOR day at the Capitol on Thursday, February 17th. This popular event is your opportunity to meet with state legislators and learn about legislation that affects your business- and your bottom line. You can register at www.coloradorealtors.com. The event is on $45 for lunch at the Marriot in Denver with your state legislators and an afternoon filled with legislative speakers at the State Capitol. Never been? You won't believe how neat this event is, even if you think you're not interested in politics!
VBR to Hold Economic Summit on Monday, February 7th with Eagle County Mayors and County Commissioners
On Monday, February 7th, VBR's general membership meeting will focus on how to get the local and county economies going again with reduced budgets due to significant property tax reductions. To date, the mayors confirmed are Dick Cleveland, Vail; Rich Carroll, Avon; Ed Woodland, Eagle; Steve Carver, Gypsum. The event will be from 8-10 am at the Westin in Avon.
2011 Legislative Session Begins
The 2011 session of the Colorado Legislature convened this week and there is cause for optimism, both in the substance of issues affecting the real estate profession likely to be taken up, and in the need for a more moderate, compromising atmosphere driven by the split control of the House and Senate by the two parties.
A new Governor means a new set of cabinet officers with potentially some new views. Governor Hickenlooper has demonstrated his support for the real estate community throughout his political career. Even so, his agenda will likely include items not yet on the table and which Colorado REALTORS will evaluate and react to as they become known. It would be surprising if the state budget were not the single most dominant issue that the new administration will struggle with throughout the session.
There is one more important factor that will have significant impact on CAR's work at the legislature this year. Twenty-four freshmen lawmakers means that CAR's governmental affairs staff and leadership will have a great opportunity to share our vision of the future of real estate in Colorado as we build strong relationships with these new members.
A new legislative session, a new administration and many fresh faces at our Capitol fill this time of year with optimism and energy that we know can deliver great results for Colorado REALTORS and the industry as a whole.
Deadline For Public Comment on New Castle Sign Code Update January 12th
This Wednesday, January 12th, the New Castle Planning and Zoning Commission will hold a meeting on the final draft of the Town's new sign code. The town undertook the update to allow for more flexibility with signs in town, and also to help promote New Castle. GSAR provided input into the sign code specifically on the open house sign policy. Open house signs were not previously allowed in the town, but under the P & Z draft, REALTORS® will be allowed to use 3 directional open house signs to a property. REALTORS® are encouraged to attend the meeting to show your support for the new sign policy. The meeting is at 7pm on Wednesday at the New Castle Town Hall.
Bennet Going To Bat On Condo Financing in Resort Areas, FHA Loan Limits In Garfield County
On behalf of the Glenwood Steamboat, Summit and Vail REALTOR® associations, Senator Michael Bennet's Legislative Counsel has been holding meetings with high-level staff at the FHA, Fannie Mae, and Freddie Mac on issues with overly restrictive condo financing guidelines that are making financed condo sales few and far between. The FHA reiterated that they are not in the business of second home financing, but are issued a mortgagee letter dated January 5th that reduces the pre-sale requirement for new projects from 50% to 30%. On a call with Fannie Mae on Friday morning, Bennet's staff quickly realized there is a huge discrepancy at the agency in what is perceived and what is really happening. For example, on short term rentals, REALTORS® have long argued that underwriters are "googling" a project to determine if there are short term rentals in a condo project. If there are, projects are automatically denied. Fannie told Bennet that in fact, a nightly rental should not be the source of disqualification by itself. Similarly, if there is a front desk, or the name "lodge" in a project, those shouldn't be the sole reason to disqualify loans. Bennet's staff will be meeting with Freddie Mac this week and will contact the local associations to discuss options to address the issues upon conclusion of the meetings with the GSE's (Government Sponsored Entities: Fannie, Freddie).
The latter half of the week ahead will hold the heavyweight economic reports. Be watching for:
... a double dose of inflation news, including Thursday’s Producer Price Index Report, which highlights inflation at the wholesale level, and Friday’s Consumer Price Index Report, measuring inflation for consumers... that’s you and me! Remember: The Fed is intent on creating inflation, which is unfriendly to home loan rates, and signs of inflation from these reports could be unfavorable for rates.
...Thursday’s weekly Initial and Continuing Jobless Claims Report. Last week, Initial Jobless Claims came in at 409,000, part of an encouraging overall trend that shows claims are getting closer to that important 400,000 mark, which represents a sign of continuing improvement in the labor market.
...Friday’s Retails Sales Report for December, as well as the Consumer Sentiment Index. Will they show that the Fed’s plans to stimulate the economy are working?
New State Legislators Meet with Summit and Vail REALTORS & Builders
REALTORS on the SAR and VBR Government Affairs Committees, along with government affairs committee members from the Summit County Builders Association met with State Senator Elect Jeanne Nicholson(SD-16) and appointed State Representative Millie Hamner(HD-56) at the SAR office in Dillon last week. The group talked about CAR's legislative priorities for 2011, including seller financing, private transfer fees, and energy audits. The builders priorities include impact fee transparency, lien law noticing, and are wary of any construction defects bills. They would like to run legislation that would chip away at the 2008 construction defect law. Senator Nicholson indicated her priorities will include 2 child welfare bills, standardizing criteria for controlled burns on private properties, possible legislation to create opportunities to create more demand for beetle kill trees, a bill that would remove term limits for water and wastewater treatment boards, and a fire safety bill regarding fireworks. Representative Hamner will has three bills identified, including a state income tax check off for the Round Up River Ranch in Eagle County, a bill that would make the harming of police and peace dogs a criminal act, and a bill that would give counties more control over business licensing. She has two other bills slots that she will be able to indentify issues important to the state.
GSAR REALTORS Meet With State Representative-elect Roger Wilson
In an effort to educate State Representative-elect Roger Wilson (HD-61) on REALTOR® issues, the GSAR government affairs committee met with the representative last week. The committee talked to Wilson about state issues including Seller Financing, buyer choice for title companies in foreclosed properties, and tenants rights issues as they relate to security deposits on foreclosed properties. Wilson understood the issues very well, and knew the importance of the real estate community in Garfield County. He is going to talk to his colleagues about the title and security deposit issues to determine if there is an opportunity to run bills on GSAR's behalf during the 2011 legislative session. Wilson also talked to the committee about the bills he will be carrying during the legislative session which begins on January 12th. he made it clear that his priority is to defend the state budget in terms of the district he represents to ensure the district is not negatively affect by budget cuts. Two of the more interesting ideas Wilson has involve energy and the environment. Using his experience in technology, Wilson will introduce a bill that will set up state demonstration projects to continuously monitor water quality as it relates to oil and gas drilling and "produced" water from frac'ing operations around well sites using sensor technology that will identify if frac'ing fluids have leaked into ground water. Wilson is also working on legislation that will encourage the use of electric cars for tourism around Colorado by providing a link on CDOT's website called "Connect Colorado" that will identify electric charging stations around Colorado.
Jean White Selected as Replacement for SD-08, Spurring Controversy
State Senator Al White has been chosen by Governor-elect Hickenlooper to head the State Tourism office, and his wife Jean, was chosen last week to be his replacement in his SD-08 seat. The controversy is not in her experience, but in the fact that voters were unable to choose the replacement for SD-08. There have been a flurry of editorials and letters to the Editors across Eagle, Routt, and Garfield County about the fact that voters were not allowed to choose the replacement, instead, a select committee made up of county GOP leadership made the decision for the people. SD-08 Chair Phil Vaughn said he was just following state laws in the selection process. A similar process, and voter backlash occurred in the selection of HD-56, when State representative Christine Scanlan stepped down to become Hickenlooper's Chief Lobbyist. Summit Schools Superintendent Millie Hamner was chosen to Scanlan. While not popular, this policy is common across the U.S.. When a seat is vacated, the selection for the seat is made by the party in power, or the party who held the seat at the time the seat was vacated. In other cities, including Denver, the replacement for the seat is held with special elections where the people are allowed to vote.
Routt County Shelves TDR Program
The Routt County Commissioners tabled a plan for the transfer of development rights (TDR's) last week , a tool intended to concentrate development closer to urban areas, but viewed by some as a way to encourage urban sprawl. The county program would have conserved outlying rural parcels by shifting development potential to designated areas close to the city limits through a private sale of development rights between landowners. The county held several public work sessions during 2008-2009, and the program could have created 250 5 acre home sites to the north and west of Steamboat. The county finally determined that they really did not want to be in the development business, especially in the current economy. The voters rejection of the Steamboat 700 project also affected the County's decision to table the program.
Glenwood Springs Continues Work on Comp Plan update; P & Z favorable to GSAR Concerns
The Glenwood Springs Planning and Zoning Commission will hold a meeting on January 18th to finalize the City's Comprehensive Plan Update, with final approval by the P & Z on January 25th. The plan could go to the City Council as early as February 17th. GSAR submitted a lengthy letter to the P & Z during the public comment period in December that outlined appreciation for a well-thought out Comp Plan that encourages growth in Glenwood Springs. GSAR used NAR's free Land Use Initiative to contract Land Use Attorney's to review the document from the real estate industry perspective. The attorneys commented that this was one of the better Comprehensive Plans nationwide that the attorneys have seen. The City is currently working on changing language related to affordable housing and inclusionary zoning policies, at GSAR's suggest. GSAR encourages REALTORS® to attend the P & Z meeting to voice your support for the plan.