Do you think it would be a good idea for a first time homebuyer to purchase his first home in Boulder, CO?

Question

Concerned about real estate values going down throughout the country and specifically in this area.

Answer 1

Hello -

Colorado currently has an unemployment rate of 4.6% which right around the country average.

The job growth rate for 2006 is rated strong and one of the best for the nation.

When it comes to your finances, predictability would be the equivalent of a dream come true. Knowing the amount of money you'd earn, spend, and save over any given amount of time would be useful to say the least. Think about how that information would positively influence your financial decisions and, in turn, bring you complete peace of mind. The good news is this type of predictability is possible, especially when you're talking about the earning potential of a home's equity.

Over the last ten years, the world of real estate has been an exciting one. The corresponding booms have been unprecedented in terms of low interest rates, the number of homes purchased, and overall appreciation in home values. The current sticker price on homes in major cities may be a shock to the system, but you may be even more surprised to learn how well some of the smaller markets have fared.

We've seen a few scenarios develop as a result of the overall growth in the real estate market. One is that homeowners in larger cities are purchasing smaller market homes not only as investments but for future retirement living. Another is longtime homeowners with major equity are cashing out of their home in the city and exchanging the shorter drive to work for a bigger house. And a third trend worth noting is that first-time homeowners are carefully seeking out purchase areas based on specific features as well as affordability. If there is one thing all of these people have in common, it's a greater need to know that they are making the right decision.

Fortunately for all of us, accompanying the booms has been a lot of research as to why, when, and where they take place. This research has shown several societal trends which have had a positive impact on the appreciation of homes in certain areas. If for any reason you, a family member, or someone you know is considering relocating to another city or state, purchasing investment property, or simply buying outside of their comfort zone, here are some things to consider when making such a decision.

Jobs

A city's ability to create as well as keep jobs has a major influence on the appreciation in price of its surrounding homes. The Milken Institute does a yearly study on this subject and recently came out with its ranking of best performing cities for 2005. One state which did remarkably well was Florida, boasting 9 cities in the top 25. Of those 9, Orlando, Ocala, Tampa, Sarasota and Daytona all cracked the top 10 in cities which saw the greatest appreciation in the price of homes. For a complete list of best "job cities", visit the
Milken Institute's website.

Tourism

This factor comes into play when a city experiences newfound tourism or a resurgence in tourism. Two good examples of this would be the boom in Nevada, mainly around Las Vegas and Reno, and the boom in Honolulu. Las Vegas has cooled down somewhat from its staggering 2004 increase of 52%; but home prices in Hawaii's capitol are up 26.5% from last year, with a median price of $620,000.

Retirement

An influx of retirees has a huge impact on the appreciation of homes within a city. In the last few years, a state which has experienced this significantly is Arizona. Both Phoenix and Tucson made last year's top 10 in home appreciation with the former occupying the number one spot. The areas of Phoenix-Mesa-Scottsdale saw a whopping increase of 48.9% in the value of their homes with a median price of $268,000. This means it wasn't only a good investment, it was also affordable.

Population Increase

It's a pretty simple concept, when the demand for houses grows so do their prices. Southern California residents know this scenario very well. The population of SoCal grows on a yearly basis and in return, the populations of surrounding cities also grow. Two such areas in the midst of both a population and home appreciation increase are Riverside-San Bernardino-Ontario (also known as the Inland Empire) and Los Angeles-Long Beach-Santa Ana. In the case of the Inland Empire, some experts claim that over the next 15 years its population will grow at a rate higher than that of most states.

The Rolling Boom

Whenever a major city begins to experience a boom, there's a reasonable chance that the surrounding areas will follow suit. Eventually, potential home buyers get priced out of the most desirable neighborhoods and end up looking at more moderately priced homes in neighboring cities. It's important to know that the rolling boom never happens right away. It takes a while for people to realize the disparity in prices before they start acting on it. This "rolling boom" trend is currently taking place in South Florida.

West Palm Beach, a city experiencing a big boom, has reached a median home price of over $390,000. North of West Palm Beach is Port St. Lucie, a city with a median home price of $254,000. Port St. Lucie actually ranks slightly higher than WPB on the job growth chart but is just now starting to boom. It's safe to say that Port St. Lucie is experiencing positive fallout from its booming big city neighbor to the south.

Schools and Demographics

Other factors which exert an influence on home appreciation include schools and general demographics. It probably doesn't require much explanation, but good school districts equal rising home prices. People not only like the idea of sending their children to better schools, they are willing to pay for it.

With demographics, it's a numbers game. Baby Boomers, this nation's largest generation, bought a lot of homes in the 1980s. They've now hit their peak earning years and are either trading up or purchasing vacation homes and investment properties in other locations. The children of the Baby Boomers are now preparing to make their mark, especially in the area of starter homes. Don't be surprised if prices of homes start rising in cities with a large Generation Y demographic.

While predicting a home's appreciation is never a sure thing, the aforementioned trends may be used as strong indicators. When buying a home in a new city, it's important to do your research, both on the Internet and through your real estate agent and mortgage professional. By examining these trends as they pertain to the cities you're considering, you'll be better able to make the right decision. The bottom line is that all of these trends are indicative of other, very positive characteristics. If you don't end up buying in an area that eventually booms, at least you'll wind up in a great city.

Boulder is a great city, and I lived thier for six months on assignment. In my opinion there is not a true housing bubble. The media's job is to sell fear to increase it's ratings. The market had been oversold and the double digit yearly appreciation may cool to a more modest number.

If you wish to create wealth, move forward with your financial plan and do your due diligience.

I'd also visit http://freerealestatesecretssoutherncalifornia.com

Answer 2

There are a few questions to ask yourself. Would you be happy there? Is your job located in Boulder CO? Are you needing 100 percent financing? Have you check out the chamber of commerce in Boulder CO, looked at areas you are wanting to move into?

www.zillow.com This site will give you home values, need to add aprox 10-15 percent to the values that are listed there. Have found that some of the values are off.

http://www.boulderchamber.com/

http://www.bouldercoloradousa.com/

http://www.boulder.com/

http://www.bouldercoloradousa.com/lodging.html

http://www.nederlandchamber.org/members/BoulderChamber.htm

http://www.lyons-colorado.com/

Now if you are looking to purchase - there are a few things to consider.

When you Decide to buy, decide on how much you want to spend, if you want to escrow the taxes and insurance. Say the taxes are 1200 a YR and insurance 800 a year (just an estimate, ok) That is 2,000 a year divided by 12 = 166.66 If you paid 1,000 a month now - (166.66) your P/I Principle and Interest would be 833.34. Now you decided on the price range you are looking into. If you have great credit, a 1 loan at 130,000 at a rate of 7 percent over a 30 year time would be 864.89 - This is just a estimate - ok -

It greatly depends if you need help with closing cost, (The seller could do Seller Help toward your closing cost). If that is the case, I normally tell my clients NOT to hackle over the price, since you are asking for closing cost help - especially if the home is thru a realitor, and the seller has to pay the realitor their fee which runs from 3-6 percent of the selling price, and you ask for 3-5 percent toward closing cost -assistance) Follow me so far??

Talk with a broker, a broker underwrites for many company's (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a "hard" pull and it drags down your credit score. When looking for a home, please do not apply for a credit card, Department Charge Card, Gasoline Card or make any major purchases, like a auto, etc. This will pull your credit down.


Try to find someone (broker) that will pull your credit one time, and submit your loan application to company's that will go off his credit report. By the way, a loan application is called a 1003, and they will issue you a GFE (Good Faith estimate, with-in 3 days, that is per the RESPA laws, and the TIL (Truth in Lending). The GFE will tell you the up-front closing cost associated with your loan. The TIL will tell you the terms, rate associated with your loan. This is a estimate only - not the final - but it does help you figure things out.


Good Luck, and if I can help in any way check out my web site, for links to all the credit reporting agency's and other useful information. This is not an advertisement - just helpful information for you

Decided on the type of program (loan ) you are wanting. A 30 yr fix is still roughly at a 6.5 rate right now - but if you are needing a 90 percent ltv the rate is around 7 percent and a 95 ltv is 7.375 and a 100 percent rate is 7.5 ( This is a estimate only, since I do not know what your credit score's are....There are also, interest only loans - adjustable loans, option arms (where you pick the payment, from 4 payments, including interest only). Interest only are lower payments, but nothing is being paid on your home. Some self-employed ppl like the payment options, in a lean month when money is tight., they can pay a lesser amount.

Go to these websites

http://www.nehemiahcorp.org/

http://www.fanniemaefoundation.org/...

http://www.fha-home-loans.com/

http://www.freddiemac.com/

If you go with a FHA loan, FHA has MI included. (With a 580 + you will be going sub-prime the rates are higher by about a 1 percent, but you have no MI. (MI is mortgage insurance in case you default on the loan, it is a way for lenders to have added insurance. It is not the same as Home Owners insurance, ok)

Conforming A+ borrower's loans have MI included, but the rates are better starting in the mid to high 6's (with rates going up.) The more money you borrow - the higher the rate normally. There are a lot of factors involved.

With a government loan - collections and judgements will have to be paid (most ppl do not know that) but for FHA it is true....

Answer 3

You need to find a good realtor in that area and ask them details about that city, if you are new.

If you alrady know the area you may make a decission your self.

Try to find good REALTOR

Answer 4

If you are renting. I would lean towards buying.