Prices are also very flat with a 0.6% decrease in the average selling price for June and the $249,273 for the year to date is a slight 1.1% improvement.

Fort Collins Home Sales

As we stated in an earlier column, the reduced inventory of homes for sale is probably helping to maintain the average selling price. There were 2,315 active listings at the end of June, a big decrease from the 2,912 offered a year ago. With an expected demand over the next six months of perhaps 1,850 to 1,900 homes there is a current 7.5 month supply compared to a 9.3 month supply a year ago. The reduced inventory is also helping marketing times as the average closed sale in June was on the market for112 days, the same as May and an improvement from the 126 days in June last year.

In other areas, June sales in Loveland were down 8.2% and are off 8.5% for the year to date. The average selling price is $275,070, an increase of less than 0.1%. In the Greeley / Windsor / Weld County area sales were down 15.3% in June and are 1.5% lower for the year. The average price is down 2.2% to $211,744. For the region, sales for the year to date total 4,833 homes, down 2.9%, the average price is $238,023, down 0.7% and the median price is $204,900, down 0.8%.

Nationally, 2007 home sales are now projected at 6.965 million units, down 8.4% from 2006. The median price of a resale home is expected to drop 1.4% to $218,800 and new construction is forecasted to decline 2.6% to $240,100. This current slump is the worst since the 1989 – 1992 downturn.

Obviously all the news about foreclosures, higher mortgage rates, tougher credit requirements, a decline in consumer confidence and surplus inventory in most areas of the country are putting pressure on the housing market. Locally, we have our heads above water, but just barely.

The local real estate sales for June, the second quarter and year to date will be available for our July 15, 2007 column. We are hopeful, given the reports of good showing activity over the last couple of months that sales will remain slightly ahead of last year, in spite of a lot of negative reports on the national home sales. Most recently, the National Association of Realtors released the “Pending Home Sales Index”. This index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing. The national index stood at 97.7 in May, down 3.5% from the April index of 101.2 and is 13.3% lower than May 2006 when the reading was 112.7. This 13.2% year to year decline is a significant drop and Lawrence Yun, NAR senior economist said “housing activity continues to be impacted by tighter lending criteria and a lack of buyer confidence”. 

One important difference in our market compared to most others is the inventory of homes for sale. The national inventory, expressed in months supply, has almost doubled in the last year from a four to five month supply to a recent 8.9 month supply, the highest in fifteen years and putting buyers firmly in control in most areas of the country. Locally the supply has decreased 20% from 2,912 homes listed for sale a year ago to 2,315 active listings at the end of June 2007. A year ago the inventory represented a 9.3 month supply and we expect the existing inventory is about a 7.0 month supply. A balanced market between supply and demand is generally referred to as a six month supply. Seven months or more equals a buyers market, five months or less, a sellers market so while we are still tilting to a buyers market, sellers are in a much better position than they were a year ago.

Surprisingly, the new home inventory is well in line with sales so, at least in this market, builders don’t seem to have a lot of surplus inventory. Of the current inventory 16% are new homes and new homes typically represent about 16% of the total housing market.

Of the total seven month supply there are major differences by price range as follows:

Price

Inventory

Expected Demand (6 mtns)

Months Supply

In the price range up to $300,000 we have a fairly balanced market but in the “fine home” category, the top 5 -10% of the market, there is a bona fide buyers market. In our market homes priced above $400,000 are in the top 10% of the market and above $500,000, the top 5%. There are 305 active listings of homes priced above $500,000 and with an expected demand of just 116 sales over the next six months there is a 16 month supply. Above $750,000 it gets much worse with 115 listings competing for five buyers a month but it is above $1,000,000 that is throwing everything out of form. In the last five and one half years, from January 2002 to June 2007, there have been 58 properties sold above $1 million in this market and we currently have 55 active listings. How we are ever going to work through this supply is beyond me but it would seem like there will have to be some very aggressive marketing and pricing to absorb a chunk of this inventory. Other than relocation, most of the sales in this price range have come from the local move up buyer who will sell a home in one price range and move to a higher price range generally about a 30% spread. The biggest difficulty in this sector, other than lagging consumer confidence, is the dilemma with selling the existing home to move to the higher priced home. Even with a deal of a lifetime on a $1,000,000 home, no one wants to own both the $million property and a $750,000 one that they can’t sell.

This is the same problem new home builders are having with numerous builders reporting as many as 20% cancellations because prospective buyers can’t sell their existing home and the days of the builder trading one problem for another are long gone.

It will be interesting to see the June sales and year to date report next week to see what the prospects are for making further improvement in the current supply versus demand ratio. Slower sales equal a higher inventory which equals problems for sellers and opportunity for buyers.

The pricing and marketing of a “fine home” requires a different strategy from normal real estate practices. Fine homes are usually those which will be priced in the top five to ten percent of the market. In some markets, this will value a home at above $1 million while in other markets a home in the top 5% may be priced below $200,000. In this area homes priced above $400,000 are in the top 10% of the market and homes priced above $500,000 make up the top 5%. Naturally, as the average price increases over time, so does the entry level for the fine home market. Five years ago 10% of the homes sold were priced above $325,000 and the top 5% were priced at $400,000 and above. In higher price ranges, there were 46 homes sold in 2006 priced at more than $750,000, representing 1.2% of the total market compared to 18 homes in 2002 which was 0.4% of the market.

A couple of the major differences in the fine home market locally are the time it takes to sell and the competition. A home priced above $400,000 is currently on the market 50% longer than the average for all homes and there is a thirteen month supply, twice as much inventory as the average market.

Another item to consider is that with around 1,000 real estate agents active in this area and just 375 sales last year in the top 10% of the market, most agents don’t participate in fine home sales and don’t have the experience to list and market homes in this price range.

The temptation for sellers to overprice a fine home can cause disappointment, particularly in a buyer’s market. Pricing dramatically impacts the results you will receive in marketing a distinguished home. Establishing the right value for a luxury property in the current market conditions we are experiencing requires careful consideration of a range of options.

Inflated prices. The likelihood of receiving acceptable offers increases dramatically when you start with a fair asking price. Homes receive the most attention when they first go on the market. Sellers who test the waters with inflated prices run the risk of turning away qualified buyers. Lowering the price months later may not work as buyers begin to question the marketability of the home in light of its long history on the market. Bargain hunters making offers on a property that has been on the market a long time often feel justified making an offer much lower than the asking price.

Aggressive prices. It is true that aggressive pricing can be an effective strategy to maximize the number of offers and generate interest but in this market there are probably not enough buyers right now to produce multiple offers so this tactic is best left for a different market. Plus, ending up with multiple offers does not always mean you will receive offers for much more than the asking price. And there is not much point in generating interest from buyers who are under-qualified to offer the amount you truly seek. An overly aggressive price can mean lost value in the transaction. Inexperienced real estate professionals can make the “rookie mistake” of encouraging sellers to list their upscale properties at prices below fair market value in the hope that competing offers will bid the price back to within an acceptable range.

Owners of fine homes should be especially careful to work with real estate professionals accustomed to pricing strategies in the upper-tier market. A comparative market analysis will assist you in selecting a listing price but typically each home in this price range is unique and comparable sales only serve as a guide. The best-qualified real estate professional is one who understands this and can estimate the added market value for the distinctive features of your home. This can only come from experience in working with other sellers and buyers of fine homes and through extensive knowledge of other properties “both active listings and those that have sold” or not sold.

The pricing strategy ultimately selected will play a key role in the satisfactory marketing of a fine home.

Marketing a Fine Home. Regardless of how you price the home, where and how it is advertised and how the home and price is marketed has a big impact. In addition to local advertising, you should look for a real estate firm that can drive interest from across the country and even internationally. Most importantly, buyers in this price range have certain expectations about everything from the marketing materials and photography to how the home is staged and presented A lot of buyers in this price range are relocating from other areas of the country and a national real estate brokerage franchise will be connected to a network of real estate professional across the country as well as receiving referrals from national relocation companies. In addition, several real estate firms have a “fine home” marketing courses and designations that qualify agents for the challenge of marketing homes at the top of the price range.

And while the price of an upper-tier property is a central part of the strategy, the distinctiveness of the home may never be noticed if it is marketed haphazardly or in an undignified manner. A qualified fine homes specialist will have special tools available to market a luxury property in the most appealing fashion. Working with a skilled real estate professional, you should be able to establish a listing price and marketing plan that proves most effective for you.

The Contract to Buy and Sell Real Estate which is approved by the Colorado Real Estate Commission contains a number of contingencies that have to be removed or resolved prior to the closing. Most importantly the contract is contingent upon the buyer being able to finance the purchase and the home appraising for the contract price. Other contingencies relate to the survey, title, common interest community documentation and property insurance and any one of them can defeat a contract. However, the contingency that usually causes the most problems in a contract is the one relating to the home inspection. The contract states that the “Buyer shall have the right to have inspections of the physical condition of the property and inclusions, at Buyer’s expense. If the physical condition of the property or inclusions is unsatisfactory in Buyer’s subjective discretion, Buyer shall, on or before the Inspection Objection Deadline (1) notify the Seller in writing that this contract is terminated or (2) deliver to Seller a written description of any unsatisfactory physical condition which Buyer requires Seller to correct.”

Obviously, it can be difficult to negotiate or resolve “subjective discretion” and that is why most sellers want to see the inspection contingency dealt with early in the process. If you are a buyer, it is strongly recommended that you obtain a home inspection. Normally, even if a home is being sold “as is”, you still have the right to do a home inspection to give you the information about the condition of the property and to help you determine if you want to proceed to closing the purchase.

Following are some commonly asked questions that buyers ask about home inspections:

What exactly does a home inspection provide?
A home inspection provides an impartial, in-depth, evaluation of the physical condition of the property. The inspector also identifies items that need replacement or repair. Good inspections include things like cost estimates of repairs and the life expectancy of the equipment and components in the house. For example, the report could tell you the roof currently looks OK and should last another 3-5 years but it has three layers of shingles. So, the next time the roof is re-shingled, it will have to be stripped of the other layers and that will cost more money than if new shingles were laid on top of those already there. Thus, a well-done inspection will aid the buyer in planning and budgeting for future home repairs.

How does the inspector know how long something in the house will last?
A home inspector determines the remaining economic life or useful life of major systems, equipment, structural and cosmetic items. Because of the training and experience a good inspector has, he or she will know the general length of time the various components and equipment of the house will last. For example, the inspector knows that a water heater will generally last 10-12 years. The inspector will look at the date labels on a water heater to estimate the remaining expected life of the equipment. If not labeled, the inspector’s experience helps her or him estimate when a manufacturer sold specific types of units

Can I, the homebuyer, inspect the house myself?
Obtaining the services of a qualified home inspector is better than doing it yourself. A qualified home inspector is familiar with home construction, the proper installation of construction materials and their maintenance. A qualified home inspector has also performed hundreds or even thousands of home inspections. Inspectors know what to look for and have seen a range of situations. They investigate areas of the house and its components that the average homebuyer would not think about. Education, training, and experience are important.

How do I know if someone is a good home inspector?
Ask the inspector if they belong to a home inspection organization such as the American Society of Home Inspectors (www.ashi.com). Qualified home inspectors must past tests and meet minimum qualifications to be accepted for membership.

Are home inspections worth the money? How much do they cost?>
Home inspections are a good value. The average cost ranges from $200-$500. The cost depends on how far the inspector has to travel, how big the house is, the type of house, its age, the location of the property, how many other inspectors are competing for the job, and many other factors. Call several inspectors for their qualifications and get an estimate on the price.

How do you find a home inspector?
Many real estate sales professionals will be able to recommend inspectors. Request 2, 3, or 4 names of inspectors and call them all to decide which one YOU want to use. You can also find qualified home inspection services by using the Internet or the Yellow Pages under “Home & Building Inspection”.

Does the government help with the cost of inspections?
Paying for the inspection is your expense. However, FHA believes inspections are a very good idea and therefore will allow up to $300 of the cost of the inspection to be used to satisfy FHA cash investment requirements when buying the house using FHA mortgage insurance. Your lender can explain further about the cash requirements.

Does FHA or the lender REQUIRE that I get a home inspection?
No, a home inspection is not required but most real estate professionals will recommend that you obtain one and the inspection details are an important part of the new Colorado real estate contract. The FHA also requires that you sign a form when applying for an FHA backed mortgage that is entitled “For Your Protection: Get a Home Inspection”. It’s not mandatory but since a home purchase is the largest financial transaction of your life, are you prepared to go into closing without one?

Is a home inspection a guarantee or warranty that there is nothing wrong with the house?
No, an inspection is just an inspection. It is information about the conditions of the house as discovered by the inspector at the time of the inspection. Remember that the inspector will not open walls or dig up sewer lines. The inspector will generally specify in their contract what is and is not covered. Don’t expect an inspector to be responsible for replacing a furnace which malfunctions a month after you buy the house if the inspector reported that it looked OK and should last another 3 years. Inspectors report on current conditions and expected events or life cycles of equipment and components. If, for some reason, the furnace does malfunction before the normal time period, the inspector is not liable. Similarly, sometimes equipment lasts much longer than expected and reported by the inspector. However, if the inspector simply did a bad job and should have seen an obvious problem, you might have grounds for a lawsuit. That, however, is between you and the inspector you choose.

SUMMARY:
You should get a home inspection before you close on the purchase of your home. It may save many thousands of dollars and a lot of worry. If problems are found, you can negotiate with the seller about having the problems fixed, having the price of the home reduced or even decide not to buy the house. Even if no major problems are found, you will better understand what repairs can be expected in the future.

The inventory of homes for sale is still benefiting sellers, At the end of May there were 2,233 homes on the market compared to 2,890 at the end of May last year and up just slightly from the 2,188 active listings at the end of April. With an expected demand over the next six months of 2,150 homes there is a six month supply compared to an 8.5 month supply at this time last year. The days on market is also improving with an average of 112 days for the May closings compared to 124 days in May last year and 139 days last month. There certainly seems to be a welcome increase in showing activity over the last few weeks and we are even hearing stories of multiple offers on a few properties. Obviously rising mortgage interest rates are prompting some of this activity as the average for a thirty year fixed rate mortgage has shot up more than a half point in the last thirty days and is now at 6.36% according to BankRate.com.

In the rest of the region, Loveland had a 12.6% decrease in closings in May and a 1.5% decline in the average price and Weld county experienced a welcome 5.7% increase in sales and a 5.1% improvement in average price. For the region in total, sales are down 1.3% for the year to date, the average price is down 1.4% and the median price is down 1.4%. This is about as close to a flat market as we will ever see.

Denver reports sales placed under contract and sales in the metro area were down 1.6% from May 2006 and the average price was up 1.3%. The biggest problem in Denver continues to be the inventory with 29,100 unsold homes on the market at the end of May compared to 30,457 on the market last year. This slight improvement of 5% compares to the 25% reduction made in our area inventory.

Nationally, the National Association of Realtors keeps revising their home sales forecast down, down, down. They started off at the beginning of the year with a forecast of 6.42 million existing home sales for the year compared to 6.50 million in 2006, a decrease of 1.2% and the median price was predicted to increase 1.5%. The most recent forecast predicts a 4.6% decline in home sales and a 1.3% drop in the average price, the first price drop on record. The inventory of existing homes for sale at the end of April is equivalent to an 8.4 month supply, the highest since August 1992. This 14 year supply of homes for sale is sapping consumer confidence in the housing market at a time of year that traditionally is the strongest for real estate, said Lawrence Yun, an NAR economist. A “sluggish” spring selling season will help shave more than a percentage point off the U.S economic growth in 2007, he said. “People are looking, but they’re not buying.” Yun said. Agents report an increase in traffic at open houses, but people are taking their time because inventory is so plentiful.

As we know so well in this market “been there” done that! Thankfully we seem to have managed the situation well by bringing the inventory down significantly, keeping pricing in line and presenting homes in good showing condition resulting in a very sustainable level of activity. We never experienced the big ups but it also appears that we are not stuck with a big bubble of unsold properties and declining prices.

The report for the first quarter of 2007 has just been released and nationally, prices in the first quarter were 4.3% higher compared to the first quarter of 2006 but this 4.3% represents the lowest quarterly increase in ten years. The eight state Mountain Region led all of the nine regions for the second quarter in a row with a 7.5% increase and the four states with the highest rate of appreciation were all in our neighborhood: Utah 17.0%, Idaho 12.3%, Montana 11.7% and Wyoming 11.7%, followed closely by New Mexico in sixth spot at 11.2%. The only other two states in the country to register double digit appreciation are Washington 11.6% and Oregon 10.8%. The other three states in the mountain region and the first quarter appreciation are Arizona 5.2%, Colorado 3.3% and Nevada 0.6%. 

It is obvious that there is a correction going on when some of the recent high flyers are near the bottom in the current report, like Massachusetts -0.6%, Nevada 0.6%, California 1.2% and New York 3.0%

The five year national appreciation rate is now at 53.5% and a look at the Mountain Region price appreciation for the last five years really shows how far behind Colorado is:

	Nevada	95.8%
	Arizona	93.8%
	Idaho	64.3%
	Montana	62.2%
	Wyoming	61.0%
	New Mexico	57.1%
	Utah	48.3%
	Colorado	21.2%

By individual MSA areas, the top five in the first quarter are Wenatchee, WA 25.6%, Provo-Orem, UT 19.7%, Salt Lake City, UT 19.1%, Grand Junction, CO 16.8% and Ogden, UT 15.7%. The bottom five are very surprising: Punta Gorda, FL -4.6%, Sacramento, CA -4.4%, Modesto, CA -4.4%, Merced, CA -4.2% and Reno, NV -4.0%.Nine other areas of California are in the bottom twenty, all with negative increases.

Closer to home, here are the seven MSA’s in Colorado with the first quarter appreciation and the five year appreciation compared to the national figure and to Colorado:

	Grand Junction	16.8%	60.1%
	United States	4.3%	53.5%
	Colorado Springs	4.2%	27.3%
	Pueblo	4.1%	22.4%
	Colorado	3.3%	21.2%
	Boulder	1.6%	13.9%
	Denver	1.1%	14.8%
	Fort Collins-Loveland	0.6%	16.7%
	Greeley	-1.6%	11.5%

This 0.6% for the Fort Collins “Loveland area is a very slight drop from the last quarter of 2006 when the figure was a slim 0.85% increase but with the rest of the country slowing we actually improved from 240 on the list to 226 of the 285 areas.

This 0.6% figure for the Fort Collins “Loveland MSA compares to the first quarter average selling price we reported in April which showed a 4.3% decrease on resale homes in Fort Collins and a 4.1% decrease in Loveland. The median price showed a 0.5% decrease in Fort Collins and a 2.5% increase in Loveland. Interestingly, if these two median prices are combined using the number of homes sold “which is heavily weighted to Fort Collins ” the median price for the first quarter of 2007 is $204,719 compared to $203,459 last year ” an increase of exactly the same 0.6%. Obviously there are minor differences between all the figures but they show what we know too well “we experienced a very flat market in the first quarter of 2007.

Things seem to have improved since March with 10% jump in closed sales and a 10% price increase in April. This will be tough to match in May but we are hopeful that our local sales report due next week will continue to show modest improvement in sales and pricing.

During the year, we have the opportunity to visit hundreds of homes, working with buyers and sellers, previewing properties, participating in office tours or attending open houses and model homes. This is a big and important part of our job – knowing the market – and it can also be the most interesting. Obviously we get to see homes in all price ranges, in all locations and in all conditions- from good to better and from bad to worse.

One thing we have noticed recently is the number of vacant homes on the market and herein lays one of the biggest challenges facing the owners and their agent – the marketing of a property with a vacant home. This occurs most often when a seller has accepted a job in another area and must relocate prior to the home being sold or when the seller’s new home across town is ready and the present home is still on the market. Unfortunately, it also happens after the foreclosure period, but these homes are typically sold as is.

Sellers do not like to leave a vacant home for good reason:

• A vacant house may imply that the owner is carrying two mortgage payments and may be desperate for a fast sale.
• A vacant home can be a target for vandalism.
• A properly furnished and well decorated home will be more attractive and show better than a vacant home.

 

What can be done? A vacant home presents certain challenges but it does not need to be difficult to sell and it certainly shouldn’t imply that the seller is desperate. Sellers should employ some or all of these strategies to hasten the sale of a vacant property and protect it during the process.

• Give the house a lived-in look to thwart any unwelcome visits. Set a couple of lamps on timers, and have a neighbor or friend check on the house often to take in mail, park a car in the driveway, and close and open drapes and windows.
• Continue using a gardening service or hire someone to cut the grass regularly. During the winter months, arrange to have snow shoveled from the walks and driveway.
• If you remove the furniture, have the house cleaned and painted. Furniture, rugs and decorations tend to hide or minimize imperfections. When furniture and artwork have been removed, every blemish and bruise becomes accentuated, faded paint and wallpaper become more noticeable and scratches and nicks stand out.
• Repaint brightly and boldly colored rooms to a neutral tone. What was an eye-popping room when fully furnished may appear stark and small when empty.
• Leave the utilities connected. Depending on the season, make sure the thermostat in the house is set at a comfortable level. You don’t want a potential buyer to run through the home because it is too hot or cold.
• Arrange with a maid service to dust, vacuum and clean on a regular basis. A clean, spotless home is much more attractive than a dirty, tired property.
• Leave behind a few select pieces of furniture and keep the window treatments in place. Instead of producing a spacious appearance, an empty room tends to look smaller than a furnished room. A chair or lamp on a small table will confer a sense of scale and help potential buyers gauge whether their furniture will fit the space.
• Review your homeowner’s insurance policy with your insurance agent to find out what the stipulations and coverage are for your vacant home.
• If available in your area, consider employing a home manager or house sitter. At little or no cost to homeowners, the house is furnished and decorated for show-to-sell condition. Most companies require home managers to mow the lawn, shovel snow, and even pay pool maintenance and utilities. Having someone living on site discourages vandalism, protects against deterioration and weather hazards and may even reduce insurance costs. (Check with your insurance carrier.) Using a service of this kind may help you sell the house faster and at a better price, while relieving you of property management duties. Search the Internet for professional house sitters in your area.
• Consider hiring a professional home staging company. These people will work to stage your home and can supply furniture, pictures and other decor items and amenities to show your home in the best possible way.
• Find a real estate professional with experience selling vacant houses. Very often, these sales professionals specialize in relocation. You want to make sure that you are comfortable with your lines of communication. If you will be residing in another town, come up with an agreement on how often your representative will check on the home and what should be done if a problem develops.

Properly presented, your vacant home can compete with most any other property on the market.

Flat and feeble and their many synonyms were words to describe the activity (or lack or same in the local 2006 residential housing market ) low lighted by a 7.6% drop in sales – the biggest drop in twenty-five years. Selling prices have now languished for five years and the 17.1% price increase since 2001 ranks the area way below the 55.2% national increase and near the bottom of 283 metropolitan statistical districts reported by OFHEO (The Office of Federal Housing Enterprise Oversight). 

The only good news in this is that the tax man agrees and, according to Steve Miller, the Larimer County Assessor, the average assessment for single family residential homes for the two year period ending June 30, 2006 has increased a meager 4.0%.

The graph shown above is a chart used by the County Assessor on the web site at www.larimer.org/assessor that demonstrates the calculation of the 4% increase. The basic information was taken from Zillow.com. The top line shows the value change for a particular home in zip code 80526 during a five year period from April 2002 to April 2007, as estimated by Zillow. The bottom line tracks the estimated average value of all homes in 80526 during the same time frame, again using Zillow figures. The straight line represents a 0.17% per month (2.0% per year) market trend line used for valuing homes in the Fort Collins area in the 2007 reappraisal.

We have reported sales statistics and average selling prices to you on a regular basis and to review; the median single family home price in the Fort Collins area for 2002 was $214,400 and the average price was $243,681. By the end of 2006 the median selling price was $230,000 and the average price was $271,620. These increases of 7.3% and 11.5% average 2% to 3% per year so the 4% used for the two year period seems to be in line with the sales reports.

Reappraisal notices (Notice of Value) for real property were mailed May 1, 2007 to all property owners in Larimer County. Real property is reappraised every two years and the assessor has normally used an eighteen month period to compare market data ending in June of the previous year. However, Colorado property tax law allows the assessor to use up to sixty months of data and because of a sluggish market, the current assessment used four years of transaction data ending in June 2006.

Naturally, while the average increase in the assessed value for single family homes is in the range of 4%, the rate for any individual property will vary widely. Also, we would expect that the increase is greater for newer neighborhoods compared to older neighborhoods. Great care is taken and cost, market and income approaches are all considered and up to four years of market data have been analyzed but the assessor can still make a mistake in estimating the value of any particular property. Obviously if you think the value of your assessment is too low, that’s probably as far as it goes. But, if you think the value is too high, there is an appeal process that is outlined on the reverse of your “Real Property Notice of Value”. To appeal you need to mail a protest postmarked by June 1, 2007 or send a fax or appear in person at the County Assessor’s Office on or before June 1, 2007. As for the research into your appeal, remember that you have to deal with comparable sales and market information during the four year period from July 2002 to June 30, 2006. Unfortunately more recent information may not be considered in your appeal. To assist you there is sales information on display at the Assessor’s office or on line at their web site www.larimer.org/assessor. You can also call a real estate professional to help you with comparable sales information.

The other two factors that influence your property tax bill are the “Assessment Percentage” and the “Mill Levy”. The assessment percentage is currently 7.96% of the assessed value and the assessor expects the new mill levy for Fort Collins to be in the range of 90. The property tax calculation on a property with an assessed value of $280,000 would then be:
$280,000 x 7.96 / $1,000 x 90 = $2,006.

Remember that the County Assessor is only responsible for assessed values; they are not responsible for taxes and are only charged with spreading the tax burden as fairly as possible. We would like to thank Steve Miller, the Larimer County Assessor for the time he spent with us in researching this information and we think you will find his department very helpful with any questions or concerns you may have.

The national real estate market was the subject of a number of alarming headlines last week after the National Association of Realtors (NAR) released their report on March sales of existing homes. In the April 24, 2007 report, March existing home sales, including single and multi-family, totaled 482,000 units, 13% less than the 554,000 in March of 2006 and fell 8.4% to a seasonally adjusted annual rate of 6.12 million units, compared to 6.68 million units at the end of February. This 8.4% drop is the biggest one month decline since January 1989 and the 6.12 million annual sales pace is the slowest since June 2003. 

David Lereah, NAR’s chief economist, expected the drop and served notice that all was not as bad as it might seem. For the last couple of months we’ve been expecting a weather hit on existing home sales finalized in March, but looking at overall activity in the first quarter we see that existing home sales averaged 6.41 million a figure that is moderately higher than the sales pace during the second half of 2006, he said. We also may be seeing some losses as a result of the subprime fallout. However, this is masking improved fundamentals in the housing market, lower mortgage interest rates and motivated sellers.

It’s too early to measure a significant impact from tighter lending standards, which should moderately dampen activity, but we’re still looking for existing home sales to gradually improve during the last half of 2007, Lereah said.

The national median home price fell for the eighth straight month, the longest period of falling prices on record. The median price in March fell to $217,000, a drop of 0.3% from the price a year ago. The inventory of homes for sale declined 1.6% to 3.745 million units but the drop in sales actually increased the months supply from 6.8 at the end of February to 7.3 months at the end of March. NAR President Pat Vredevoogd Combs summed up by saying that market conditions are clearly favoring buyers. Its a good time to buy, in part, because home buyers are not pressured to make quick decisions, Combs said. We’re in a window of low interest rates with a plentiful supply of homes on the market and flat prices in most areas. First time buyers now have more power to negotiate with sellers for help on down payment or closing costs.

In other national news, the Commerce Department released their March report on new home construction starts, which rose for a second straight month and new home sales which rose 2.6% in March compared with February. Unfortunately the March improvement was just half of what was expected by analysts and the pace is still 23.5% lower than a year ago.

The government figures also showed that new building permit applications increased by 0.8% in March, the first advance in three months, and viewed as possibly signaling that the worst of the severe slump in housing may be coming to an end.

Locally, we reported on March sales in our April 8, 2007 column and the local real estate market appear to be in better shape than the national scene. We suffered through a significant decline in home sales last year and expect that home sales this year will be slightly better. Sales in March 2006 were 14.9% less than the previous year but sales in March 2007 were 2.9% higher than in 2006. The average selling price in March was also up 4.7% compared to a year ago and the inventory is nearly balanced with 1,995 homes on the market at the end of March, about a six month supply.

And, as Combs said, it’s a good time to buy with low interest rates, flat prices and a good supply of homes.