Top Tips for Buying Real Estate in Colorado

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The process of buying a new home can be difficult and stressful if you are not prepared. Follow these simple tips to ensure that your new home buying process will be as stress-free as possible!

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1. Use a qualified Realtor. The hunt for a new home starts simply enough. Before you know it, though, the process can get very tricky and involved. Having a realtor on your side will help immensely.

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2. Don't speak to the seller or the other realtor until the contract has been signed. Leave all communications to the professionals. You don't want to unintentionally give too much information away that might end up costing you money.

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3. Be ready to purchase your new home. Getting pre-qualified, or even better pre-approved, will strengthen your negotiating position and help you get a better price on your new Colorado home.

4. Look at houses in your price range. If you look at homes that are just above your price range, you can get emotionally involved in a house that you will end up being able to not afford. By restricting your house hunt to homes you can afford, you avoid this potential problem.

5. Write your contract so that it will be accepted and not simply countered. This will help you avoid the emotional blow ups and losing a deal. Think of negotiations as an art form rather than being extremely ego-involved. Respect all involved parties.

If you follow these tips, you will be well on your way to enjoying not only your new Colorado home, but also the entire sales process. Buying a Colorado house doesn't have to be painful and stressful, if you are prepared!

Top Tips for Buying Real Estate in Colorado

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How to Handle Decreasing Home Value

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We don't like to think of home values declining. But like any investment, there are ups and downs. The truth is that your home can increase in value, and it can decrease.

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You may be worried. You don't want your biggest investment to go down the drain. Well, don't get too worked up.

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If you can afford your monthly payments and aren't planning on moving soon, you have nothing to fear. You have a roof over your head and it is worth a lot to you.

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The equity in your home is something that grows over time. The ideal situation has it grow until you sell, then you use it to help purchase your next home. But it is also there for emergencies if you need it or for improvements. We take comfort in it being there.

If you have a good mortgage, bought at a good time and didn't overspend on your home, you shouldn't have too much to fret about. The biggest fear is that your house will decrease in value so that you owe more than it is worth. Many recent homeowners who bought at the peak of the hot housing market are now facing that situation.

But you don't need to worry about it unless you need to sell. If you can make your payments, you shouldn't have any problems. Just as prices go up and down, they will go up again. By staying in your home, you are able to wait until there is another seller's market to put your home up for sale. By continuing your payments you are countering the decrease in equity by paying off what you owe.

If you have an adjustable rate home equity line of credit and you think interest rates are going to rise and your home value will go down, you might want to go ahead and get that paid off as soon as possible. By paying off what you owe against your equity, you are freeing up yourself to not owe more than the home is worth.

When home values are on the decline in your area, you don't want to borrow against your equity. You may think that you need to take advantage of your equity as it is now and go ahead and take out the line of credit. That makes sense -- you may be able to get more now than you will later. But you will also be putting yourself at risk for owing more than your home is worth. You don't want to have to write a check at closing, just to get your home sold.

If you really want to take advantage of the equity in your home before it goes down any further, you need to sell and move into a cheaper home. That is the only safe way to cash out your equity in a declining market.

This isn't the time to be making improvements to your home or remodeling with the hopes of bringing up the value. If you are doing it for yourself and plan to stay in the home for a while, then by all means, go ahead. But if you are doing it to have a better selling price in the near future, you need to be very careful. You don't want to put more in than you will get back.

A declining market is simple to understand. When interest rates rise, there are fewer people able to afford your home. With an increase of homes on the market, there is more for people to choose from. This means that you may have a harder time selling your home.

If you are facing a negative equity situation on your home, give it time and don't worry. Markets go up as easily as they go down. And not all areas of the country experience the same real estate climate. You could be in an area where prices are going up. If you are, be careful. If you aren't, hang in there.

How to Handle Decreasing Home Value

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Setting Goals For Your First Home Purchase

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It can seem an insurmountable task sometimes to start saving for your first home. There is always that balance that is needed in life as well, i.e. how to enjoy some of your money while trying to save most of it! We are often told that in order to realize any achievement, as in going on a diet, or training for a marathon, we must break the process down into small steps. Small stages in our goal setting is one way that we can encourage ourselves to succeed.

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The small stages are just a convenient way of stepping nearer to the big goal - hence the term stepping stone. As we pass each stepping - stone we are actually moving nearer to the impossible-to-achieve dream. It is easy to think of setting up goals for running a marathon: you can just add a little more distance or speed each week. However, it is not so obvious to find a system to save up for your first house.

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Generally speaking, stepping - stones need to be specific and they need to be in writing. Writing it out means you really have to think about it, and you can stick a copy in front of your sink/fridge/TV etc wherever you will keep seeing it. This is just to remind you and give you some reinforcement, so that your mind is aware of what you are aiming for. If you draw up the whole list of goals at once, you can draw a thick red line through each one as you succeed!

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Goal setting for most things seem to have different sections to consider. Your stepping-stones must be measurable, they must be written in precise language, they must be achievable but not easy, they must fit in with your life-style and they must have a time limit. Phew! This could be fairly demanding! The first item - measurable - can be difficult, because often we will just think in non-measurable terms, like: I want to run 26 miles, I want to start saving for a house. This is not only an unrealistic challenge, it even makes you want to give up!

If stepping- stones are used, they sound more reachable: I want to be able to run one mile; I want to be able to save two hundred dollars. For the time factor, you could add 'every month'. If you want to be more precise you could add that it must go into a separate account by the 7th of each month. It is a good incentive to open an account specifically for your savings. That type of stepping stone is probably too easily achievable and not a real challenge. You can keep saving the two hundred dollars, but try and add another. Perhaps you want to buy a home while the foreclosure deals are still available. So you want to have a bigger push.

The experts (!) say that you have at least a year for this type of opportunity - most feel it will go well into 2009.You could have an additional stepping stone of planning to work for the summer, while there are more casual jobs around. Most of us will automatically fit the goal into our lifestyle, for instance, we will not plan to earn extra cash offering lessons in piano, if we can't read a word of music etc!

When you have drawn up a schedule it may look something like this:

Measurable: I know I can save 0.00 per month.

Challenging yet achievable: I am going to look for a summer job in 08 and 09 and save an extra 0.00 a month.

Precise: I will have funds automatically transferred to a new savings account by the 7th of each month.

Time specific: I will have ,200 accrued by saving this way.

Lifestyle: I will advertise to baby sit on weekends for extra savings and put it into the savings account.

If you need more incentive, draw up a monthly chart and draw a red line through every successful 'save"! And here's a sneaky thought: sometimes when parents see kids trying so hard, they pitch in a little extra for Christmas and birthdays - so don't keep your savings plan a secret!!

Setting Goals For Your First Home Purchase

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FASB Proposed Lease Accounting Changes - Impacts on Commercial Real Estate

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Introduction:

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The Financial Accounting Standards Board (FASB) on August, 17, 2010 released their "exposure draft" requiring companies to record nearly all leases on their balance sheets as a "right to use" asset, and a corresponding "future lease payment - liability".  What does this mean to your business in layman terms?  This proposal in essence does away with operating leases; all leases (unless immaterial) would be capitalized using the present value of the minimum lease payments.  Therefore, businesses who in the past had off-balance sheet lease obligations, must now record these obligations on their balance sheet.

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A key point to consider with regards to the proposed lease accounting changes is that, in all likelihood, existing operating leases, signed prior to the implementation of the new rules, will require reclassification as capital leases that must be accounted for on the balance sheet. This means that real estate professionals must immediately consider the effect that existing and planned leases will have on financial statements once the proposed rules are implemented. Since operating lease obligations can represent a larger liability than all balance sheet assets combined, lease reclassification can significantly alter the businesses balance sheet.

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The impact of recording these lease obligations on the balance sheet can have multiple impacts, such as: businesses needing to alert their lenders as they will now be non-compliant with their loan covenants, negotiating new loan covenants with the lenders due to the restated financial statements, ratios used to evaluate a businesses potential of credit will be adversely impacted and the restatement of a lessee's financial statement once the change takes effect may result in a lower equity balance, and changes to various accounting ratios

The conceptual basis for lease accounting would change from determining when "substantially all the benefits and risks of ownership" have been transferred, to recognizing "right to use" as an asset and apportioning assets (and obligations) between the lessee and the lessor.

As part of FASB's announcement, the Board stated that in their view "the current accounting in this area does not clearly portray the resources and obligations arising from lease transactions." This suggests that the final result will likely require more leasing activity to be reflected on the balance sheet than is currently the case. In other words, many, perhaps virtually all, leases now considered operating are likely to be considered capital under the new standards. Thus, many companies with large operating lease portfolios are likely to see a material change on their corporate financial statements.

Part of the purpose for this is to coordinate lease accounting standards with the International Accounting Standards Board (IASB), which sets accounting standards for Europe and many other countries. The IASB and FASB currently have substantial differences in their treatment of leases; particularly notable is that the "bright line" tests of FAS 13 (whether the lease term is 75% or more of the economic life, and whether the present value of the rents is 90% or more of the fair value) are not used by the IASB, which prefers a "facts and circumstances" approach that entails more judgment calls. Both, however, have the concept of capital (or finance) and operating leases, however the dividing line is drawn between such leases.

The FASB will accept public comments on this proposed change through December 15, 2010.  If FASB makes a final decision in 2011 regarding this proposed change to lease accounting, the new rules will go into effect in 2013.

Additionally, the staff of the Securities and Exchange Commission reported in a report mandated under Sarbanes-Oxley, that the amount of operating leases which are kept off the balance sheet is estimated at .25 trillion that would be transferred to corporate balance sheets if this proposed accounting change is adopted.

Commercial Real Estate:

The impact on the Commercial Real Estate market would be substantial and will have a significant impact on commercial tenants and landlords.  David Nebiker, Managing Partner of ProTenant (a commercial real estate firm that focuses on assisting Denver and regional companies to strategize, develop, and implement long-term, comprehensive facility solutions) added "this proposed change not only effects the tenants and landlords, but brokers as it increases the complexity of lease agreements and provides a strong impetus for tenants to execute shorter term leases".  

The shorter term leases create financing issues for property owners as lenders and investors prefer longer term leases to secure their investment.  Therefore, landlords should secure financing for purchase or refinance prior to the implementation of this regulation, as financing will be considerably more difficult the future. 

This accounting change will increase the administrative burden on companies and the leasing premium for single tenant buildings will effectively be eliminated.  John McAslan an Associate at ProTenant added "the impact of this proposed change will have a significant impact on leasing behavior. Lessors of single tenant buildings will ask themselves why not just own the building, if I have to record it on my financial statements anyway?" 

Under the proposed rules, tenants would have to capitalize the present value of virtually all "likely" lease obligations on the corporate balance sheets.  FASB views leasing essentially as a form of financing in which the landlord is letting a tenant use a capital asset, in exchange for a lease payment that includes the principal and interest, similar to a mortgage.

David Nebiker said "the regulators have missed the point of why most businesses lease and that is for flexibility as their workforce expands and contracts, as location needs change, and businesses would rather invest their cash in producing revenue growth, rather than owning real estate."

The proposed accounting changes will also impact landlords, especially business that are publically traded or have public debt with audited financial statements.  Mall owners and trusts will required to perform analysis for each tenant located in their buildings or malls, analyzing the terms of occupancy and contingent lease rates.

Proactive landlords, tenants and brokers need to familiarize themselves with the proposed standards that could take effect in 2013 and begin to negotiate leases accordingly.

Conclusion:

The end result of this proposed lease accounting change is a greater compliance burden for the lessee as all leases will have a deferred tax component, will be carried on the balance sheet, will require periodic reassessment and may require more detailed financial statement disclosure.

Therefore, lessors need to know how to structure and sell transactions that will be desirable to lessees in the future. Many lessees will realize that the new rules take away the off balance sheet benefits FASB 13 afforded them in the past, and will determine leasing to be a less beneficial option. They may also see the new standards as being more cumbersome and complicated to account for and disclose. Finally, it will become a challenge for every lessor and commercial real estate broker to find a new approach for marketing commercial real estate leases that make them more attractive than owning.

However, this proposed accounting change to FAS 13 could potentially stimulate a lack luster commercial real estate market in 2011 and 2012 as businesses decided to purchase property rather than deal with the administrative issues of leasing in 2013 and beyond.

In conclusion, it is recommended that landlords and tenants begin preparing for this change by reviewing their leases with their commercial real estate broker and discussing the financial ramifications with their CFO, outside accountant and tax accountant to avoid potential financial surprises if/when the accounting changes are adopted. 

Both David Nebiker and John McAslan of ProTenant indicated their entire corporate team are continually educating themselves and advising their clients about these potential changes on a pro-active basis.  

Addendum - Definition of Capital and Operating Leases:

The basic concept of lease accounting is that some leases are merely rentals, whereas others are effectively purchases. As an example, if a company rents office space for a year, the space is worth nearly as much at the end of the year as when the lease started; the company is simply using it for a short period of time, and this is an example of an operating lease. 

However, if a company leases a computer for five years, and at the end of the lease the computer is nearly worthless. The lessor (the company who receives the lease payments) anticipates this, and charges the lessee (the company who uses the asset) a lease payment that will recover all of the lease's costs, including a profit.  This transaction is called a capital lease, however it is essentially a purchase with a loan, as such an asset and liability must be recorded on the lessee's financial statements. Essentially, the capital lease payments are considered repayments of a loan; depreciation and interest expense, rather than lease expense, are then recorded on the income statement.

Operating leases do not normally affect a company's balance sheet. There is, however, one exception. If a lease has scheduled changes in the lease payment (for instance, a planned increase for inflation, or a lease holiday for the first six months), the rent expense is to be recognized on an equal basis over the life of the lease. The difference between the lease expense recognized and the lease actually paid is considered a deferred liability (for the lessee, if the leases are increasing) or asset (if decreasing).

Whether capital or operating, the future minimum lease commitments must also be disclosed as a footnote in the financial statements. The lease commitment must be broken out by year for the first five years, and then all remaining rents are combined.

 A lease is capital if any one of the following four tests is met:

 1) The lease conveys ownership to the lessee at the end of the lease term;

 2) The lessee has an option to purchase the asset at a bargain price at the end of the lease term

 3) The term of the lease is 75% or more of the economic life of the asset.

 4) The present value of the rents, using the lessee's incremental borrowing rate, is 90% or more of the fair market value of the asset.

Each of these criteria, and their components, are described in more detail in FAS 13 (codified as section L10 of the FASB Current Text or ASC 840 of the Codification).

FASB Proposed Lease Accounting Changes - Impacts on Commercial Real Estate

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10 Common Traits of Real Estate Billionaires

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Did you know that 46 out of the world's 691 billionaires made their fortunes in the real estate industry? Well, according to Forbes magazine's 2005 annual list of "The World's Richest People," this elite group have quite a bit in common between their habits, lifestyles, and business styles. Here are some unifying qualities shared by America's richest real estate moguls.

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1. Go commercial. Billionaires who make their fortunes in real estate don't do it in residential. They are moguls with an empire of owned and operated office buildings, shopping centers, apartment complexes, and luxury hotels. That strategy works particularly well for "America's richest landlord," 73-year-old Newport Beach Resident Donald Bren, the wealthiest man in American real estate. This self-made millionaire, with a net worth of .3 billion, made much of his money as chairman of The Irvine Company, a privately held real estate investment company known for creating balanced, sustainable, quality communities like the 93,000-acre Irvine Ranch in Orange County. Finished plots sell for more than million an acre. The ranch also has 400 office buildings, 35 shopping centers, 80 apartment complexes and 2 luxury hotels. Bren is 6th wealthiest real estate billionaire and the 122nd richest man in the world. He is also one of real estate's great philanthropists.

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2. Do more than invest. Making big money in real estate goes beyond buying property and waiting for it to appreciate in value. It's all about improvements. John Sobrato of Sobrato Development Companies calls Atherton, home, but he made his fortune in Silicon Valley - for more than 40 years, Sobrato's SDC has developed real estate in Silicon Valley - specializing in facilities for high tech and R&D companies. Another self-made man, he began in 1953 with one of the first "tilt-up" buildings in Santa Clara County. Sobrato, who owns and manages the buildings it constructs and maintains single tenant occupancy, boasts a portfolio of .5 billion. His assets include land throughout Silicon Valley, San Jose, Fremont, Newark and Santa Clara and he has developed in excess of 7,000 rental units.

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3. Be able to see the property for what it could be. Just because you buy a shopping complex doesn't mean that's the highest and best use of the property. Know the local zoning codes and be open to the possibilities...Los Angelino Ed Roski did just that. Roski is the founder of Majestic Realty, the largest commercial builder in Los Angeles, boasting an office, retail and industrial portfolio totaling more than 55 million square feet. The USC grad with a net worth of .1 billion saw the highest and best use of the formerly blighted area near the convention center and built the Staples Center with Philip Anschutz. Roski is also a minority owner of the Lakers and the Kings. Headquartered in City of Industry, Majestic Realty also has offices in Atlanta, Dallas, Denver, and Las Vegas - where they have a 400-acre business park and 3 million square feet of casinos.

4. Be tenacious and relentless. Billionaires don't let obstacles or pitfalls keep them from achieving their goals. Newport Beach billionaire George Argyros is the grandson of Greek immigrants. Argyros began by running a Palm Springs grocery. He graduated to buying and selling corner lots at busy intersections for gas stations. Turned to apartments in 1968. Today, as part of Arnel & Affiliates, Argyros manages apartments and commercial properties in southern California. He has a net worth of .2 billion.

5. Have a thick skin. People can be resentful and jealous of successful people. Don't let criticism of your work deter you from your goals. Consider Red Emmerson - the second wealthiest real estate titan in California. Emmerson is the largest private forestland holder in North America - assets include 1.52 million acres in Northern California, timberland stretching more than 350 miles from Mount Shasta to Yosemite National Park. For the last 20 years, while other logging companies retrenched or relocated, Emmerson, and his company - Sierra Pacific Industries - quietly grew into the second-largest private landowner in the United States. Needless to say, Sierra Pacific is a darling of environmental groups.

6. Have superior information. If you do more research than your competitors, you'll have an advantage in any transaction. Self-made billionaire Carl Berg was a loan processor before investing in Silicon Valley commercial real estate with John Sobrato in the 1960s. He struck out on own, forming Mission West Properties, a real estate investment trust (REIT) in Silicon Valley. Berg owns a controlling stake in the REIT, which focuses on single-tenant research and development and office properties in Silicon Valley. Mission West now owns and manages more than 100 properties, major tenants include Microsoft and Apple Computer. Currently, the Atherton-based businessman boasts a portfolio of .2 billion.

7. Don't accept the cards you're dealt. Forbes notes that while one-third of the world's 46 billionaires who make their money in real estate inherited and then grew their fortunes, two-thirds are self-made. Stockton-based A.G. Spanos Companies are known for building, managing, and selling multi-family housing units; constructing master-planned communities, and developing land. Although California based, they have expanded to build more than 100,000 apartments in 18 states since 1960. A.G. Spanos Companies have also developed top-class office space in San Joaquin County. Alex Spanos, owner of the NFL's San Diego Chargers, operates the company with his sons Dean (president and CEO) and Michael Spanos (EVP). Spanos, whose net worth is .1 billion has pledged 0 million to San Diego for a new stadium for their football team.

8. Live in California. Of the 21 U.S. billionaires who made their fortune in real estate, more than one-third live in Atherton, Los Angeles, Newport Beach, Palo Alto, or Stockton.

9. Get, and stay, married. Of the 43 real estate billionaires whose marital status is known, according to Forbes, 37 are married, while only three are divorced and three are widowed.

10. Go back to school. Of the 26 real estate billionaires whose educational attainments are known, 20 have a college degree or higher. Five made it on high school diplomas, and one is a high-school dropout. John Arrillaga is a big donor to alma mater Stanford University. Arrillaga + Richard Peery are two of 2 of Silicon Valley's biggest commercial landlords. In the 1960s, they converted farmland into pricey office space. Peery and Arrillaga are lifelong business partners who avoid debt, and the media. Each has net worth of billion."

10 Common Traits of Real Estate Billionaires

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What's Happening In Real Estate Right Now And Where Is It Going?

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Initial analysis of the current market

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Update 2 on Gold

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House prices in South Florida 3 rd

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4 National Real Estate

5 of the inverted yield curve Is Still

6 What this means to you

Initial analysis of the current market

As an analyst of the economy and the housing market, we must be patient to see what unfolds and to see if the predictions are good or bad. You never know if it's good orevil, they must have a sense of humility about it, so I'm not blind to the reality of the market.

In March 2006, my eBook How to change the place of the Prosper real estate market. Protect yourself from the bubble now! said he wanted to slow down in a short period of time in the housing market considerably and become a real drag on the economy. We see this slowdown in the economy right now and I'm not too far from slowwell. History has repeatedly shown that the slowdown in the housing market and construction almost always leads to an economic downturn in American history.

Let's look at what happens in the following areas to see what we can from them shine like gold, real estate in South Florida, the yield curve National real estate industry / economy and see what this means for you:

Gold 2

If you read thisNewsletter and / or eBook, you know, I am a big fan of investing in gold. Why? Because I think the dollar is in serious financial difficulties. But gold has risen against all currencies, not just the U.S. dollar.

Why gold has risen? Gold is a neutral form of money, can not be printed by a government and so there is a long term hedge against inflation. James Burton, CEO of Gold Council, said recently: "The gold is very important Foreign exchange reserves of central banks, as a reserve currency only, that no liability. So it is a defense against the unknown risks. It is a long term hedge against inflation and as a hedge of dollars when you demonstrated good properties of diversification of a portfolio of assets of central bank reserves a. "

I agree with Mr. Burton to 100%. I think we will have a golden bull again and I have to take advantage of this bubble potential to invest in gold (think real-time>estate prices around the year 2002 - wouldn't you like to have bought more real estate back then?)

I had previously recommended that you buy gold when it was between 0 and 0 an ounce. Currently, gold is trading at around 0 an ounce up more than 10% from the levels I recommended. However, gold has some serious technical resistance at the 0 level and if it fails to break out through that level it might go down in the short-term. If it does go down again to the 0 - 0 level, I like it at these levels as a buy. I believe that gold will go to 0 an ounce before the end of 2007.

3. Real Estate in South Florida

Real estate in South Florida has been hit hard by this slowdown as it was one of the largest advancers during the housing boom. The combination of rising homes for sale on the market, the amazing amount of construction occurring in the area and higher interest rates have been three of the major factors of the slowdown.

For every home that sold in the South Florida area in 2006, an average of 14 did not sell according to the Multiple Listing Service (MLS) data. The number of homes available for sale on the market doubled to around 66,000, as sales slowed to their lowest level in 10 years.

Even though home prices were up for the year of 2006, the average asking price for homes in December was down about 13 percent compared to a year ago. From 2001 to 2005, the price of a single-family home in Miami-Dade increased 120 percent to 1,200. This is also similar to what happened in Broward County. The problem is that wages during that time only increased by 17.6% in Miami-Dade, and 15.9% in Broward, according to federal data. This is the other major factor that is contributing to the slowdown - real estate prices far outpaced incomes of potential buyers of these homes.

Another factor that helped drive the South Florida boom in prices was high growth in population in Florida. From 2002 to 2005, more than a million new residents moved to Florida and Florida also added more jobs than any other state. However, the three largest moving companies reported that 2006 was the first time in years that they had moved more people out of the state of Florida than into it. Also, school enrollment is declining which could be another sign that middle-class families are leaving.

By far though, the area of South Florida real estate that will be hit hardest is and will continue to be the condominium market. Due to their lower prices than homes, condos make financial sense in the South Florida area. However, the supply of available condos has tripled over the past year and it will get worse before it gets better. More than 11,500 new condos are expected this year and 15,000 next year with the majority of them being built in Miami.

As a result of the oversupply, asking prices for condos are down 12% in 2006 in Miami to 2,000. And incentives are substituting for price cuts. These incentives include paying all closing costs to free upgrades and more.

The last point to think about affecting South Florida real estate is the escalating costs of property insurance and property taxes. These increasing costs are putting more downward pressure on real estate prices.

My strong belief is that we are only starting to see the slowdown of the South Florida real estate market and that prices will continue to fall. Due to the fact that many real estate investors are pulling out, where are the next wave of buyers going to come from at these current prices? Unless a serious influx of new, high paying jobs enter the South Florida area, real estate prices, just like any asset that falls out of favor after a large runup only have one way to go... down.

4. Real Estate Nationwide

A report released last week from the National Association of Realtors showed that in the last three months of 2006 home sales fell in 40 states and median home prices dropped in nearly half of the metropolitan areas surveyed. The median price of a previously owned, single family home fell in 73 of the 149 metropolitan areas surveyed in the 4th quarter.

The National Association of Realtors report also said that the states with the biggest declines in the number of sales in October through December compared with the same period in 2005 were:

* Nevada: -36.1% in sales

* Florida: -30.8% in sales

* Arizona: -26.9% in sales

* California: -21.3% in sales

Nationally, sales declined by 10.1% in the 4th quarter compared with the same period a year ago. And the national median price fell to 9,300, down 2.7% from the 4th quarter of 2005.

Slower sales and cancellations of existing orders have caused the number of unsold homes to really increase. The supply of homes at 2006 sales rate averaged 6.4 months worth which was up from 4.4 months worth in 2005 and only 4 months worth in 2004.

Toll Brothers, Inc., the largest US luxury home builder, reported a 33% drop in orders during the quarter ending January 31.

Perhaps most importantly, falling home values will further decrease their use of mortgage equity withdrawal loans. In 2006, mortgage equity withdrawal accounted for 2% of GDP growth. Construction added 1% to last years GDP growth, so the importance of these factors are to the health of the US economy are enormous.

The other concern is sub-prime mortgages. Today, sub-prime mortgages amount to 25% of all mortgages, around 5 billion. Add to this the fact that approximately trillion in adjustable-rate mortgages are eligible to be reset in the next two years and we will continue to see rising foreclosures. For example, foreclosures are up five times in Denver. These foreclosed homes come back onto the market and depress real estate values.

The Center for Responsible Lending estimates that as many as 20% of the subprime mortgages made in the last 2 years could go into foreclosure. This amounts to about 5% of the total homes sold coming back on the market at "fire-sales". Even if only 1/2 of that actually comes back on the market, it would cause overall valuations to go down and the ability to get home mortgage equity loans to decrease further.

Prepare yourself now because you can still get great advice from the eBook. Buy it with this secure link: https://shop.outstandingebooks.com/displayProductDocument.hg?productId=1

5. Yield Curve is still inverted!

The yield curve is still inverted. In a normal market, you get more interest (yield) for longer term investments. But very rarely the short-term rates become higher than long term rates such as now.

History has shown that an inverted yield curve is the best indicator of a future recession. The yield curve has been inverted since last fall, and if history is any judge we should be in a recession by the 3rd quarter of 2007. Throughout history, we have never had an inverted yield curve without a recession within the next 4 quarters.

The inverted yield curve does not cause the recession, it is simply a signal that something is out of whack in the economy.

6. What this means to you

One of two things could happen going forward in the real estate market: real estate prices will go up or they will go down. History has shown us that any asset that runs up, must come down, whether we are talking about the Dutch Tulip Market, the stock market bubble, the gold bubble of the early 1980s, or Japan's run-up in housing in the 1980's and subsequent 15 year decrease in values.

The big picture of the real estate market is that it goes up and down in cycles. It has been in an up cycle for 10 years and it is most likely time for it to face it's down cycle.

This is the natural cycle of assets:

* Markets go up

* Greed and insanity take over

* An excess forms (i.e. overbuilding)

* A downturn corrects the excesses in the market

This natural cycle is the same principle in "the big picture" as crash dieting is in "the little picture". We starve ourselves to lose 15 pounds, which shuts down our body for the short term, only for it to crank up higher when we go back to "normal" eating patterns.

And speaking of diets, I heard from an old high school buddy who has lost weight on a "cookie" diet where he eats one high protein dinner a day and only 6 low fat cookies throughout the day whenever he is hungry. While he has lost weight on this 800 calorie a day diet, I can't see how it is healthy to starve yourself like that. He told me that whenever he breaks his diet and eats any sodium, he immediately gains one and a half pounds. Talk about your body out of whack! I still recommend exercise (www.mattfurey.com) combined with a low white-carb diet (no white bread, white pastas, and limited sugars). It works for me.

Set your portfolio up correctly now by reading the eBook at http://www.myrealestatebubble.com.

***Disclaimer: This information and the corresponding websites do not constitute professional services, including, but not limited to investment advice. Please consult a finance and/or investment professional for services and advice.

What's Happening In Real Estate Right Now And Where Is It Going?

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Tips to Boost Your Real Estate Marketing Campaign

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When you are a real estate dealer you will soon find that you will be faced with a number of different challenges. With today's economy and slow housing market it is not easy to sell your properties, this is especially true due to all the other competition that exists in this tough competitive market. In order to make a decent income on your real estate you need to learn how to outwit and outshine those competitors. In order to do this you are going to want to make sure that you have a powerful marketing campaign. Here are just a few tips that you can use to create one for your own real estate business.

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Probably the most important would be sure that you are being professional. When you are going to meet potential buyers you need to be sure that you are presentable, on time, and extremely credible. In order to achieve this you need to be sure that you build up a very strong and excellent reputation. You need to be especially sure that you are professional when you are sending out flyers to promote the properties that you have available. You need to be sure that you are well detail orientated. If your flyers are unprofessional when you send them out you will stand to lose a lot of potential buyers.

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You also need to be sure that you are adding value to your marketing message. You need the strong ability to prepare speeches, advertisements, and any other marketing propaganda that you can to draw the buyers in. You need to be sure that you give these potential buyers more than enough reason to come to you for all their property needs. Be sure that you always have something great to offer them.

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Next you need to be sure that you are making every offer that you have noticeable. This has been a very critical strategy of any marketing campaign. Also you need to be sure that all of your really good offers stand out so that they will get noticed. When you are sending out your flyers, mailers, and marketing copies you need to be sure that they are professional and impressive. Be sure that you are using fonts that are readable and strong colors. You need to be sure that your marketing copy is above your competition.

All of these are a great way to add power to your marketing value. If you take the time to put forth a great value in your message and appear professional you will be well on your way to rise above your competitors. In this tough housing market beating your competitor will put you well ahead in the game.

Tips to Boost Your Real Estate Marketing Campaign

Denver Estate Real