Keeping you informed on market statistics, real estate news, and events around town

Tuesday, September 20, 2011

Rate on 30-year mortgage falls to record 4.09 pct.

From the Denver Post

WASHINGTON—Fixed mortgage rates fell to the lowest level in six decades for the second straight week. But few Americans can take advantage of the historically low rates.
Freddie Mac said Thursday that the average rate on the 30-year fixed mortgage fell to 4.09 percent this week, down from 4.12 percent. That's the lowest rate seen since 1951.

The average rate on the 15-year mortgage, a popular refinancing option, fell to 3.30 percent from 3.33 percent. Economists say it is likely the lowest rate on the 15-year ever.

Mortgage rates tend to track the yield on the 10-year Treasury note. Worries over Europe's debt crisis are pushing investors to shift money into safe Treasurys, forcing the yield lower.

Over the past year, the average rate on the 30-year fixed mortgage has been below 5 percent for all but two weeks. That compares with five years ago, when the average 30-year fixed rate was near 6.5 percent. A decade ago, it exceeded 8 percent.

Still, cheap mortgage rates haven't helped home sales. Sales of new homes are on pace for the worst year on records dating back a half-century. The pace of re-sales is shaping up to be the worst in 14 years.

Many Americans are in no position to buy or refinance. High unemployment, scant wage gains and large debt loads have kept them away.

Others can't qualify. Banks are insisting on higher credit scores and 20 percent down payments for first-time buyers. Some homeowners have too little equity invested in their homes to meet loan requirements.

Most people must also pay extra fees to get the low mortgage rates. Those fees are known as points, with one point equaling 1 percent of the total loan amount.

The average fees for the 30-year held steady at 0.7 point. Fees paid on 15-year fixed loans and both 5-year and one-year adjustable rate loans were all at 0.6 point.

Once fees are factored in, the average rate on the 30-year loan rises from 4.09 percent to 4.25 percent, Freddie Mac said.

A drop in mortgage rates could provide some help to the economy if more people could refinance. The Obama administration is looking at expanding a government program to help more eligible homeowners refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend.

But many homeowners with good jobs and stable finances have already refinanced in the past year. The average rate on the 30-year fixed loan fell to 4.17 percent last November, and to 4.15 percent last month. Both were previous lows.

Homeowners typically pay a few thousand dollars in closing costs when they refinance. To refinance again, most experts say rates would need to fall an additional 1 percentage point to make it worthwhile.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.

The average rate on a five-year adjustable-rate mortgage rose to 2.99 percent. That's higher than last week's 2.96 percent, the lowest records dating to January 2005 and the sixth straight week of record lows for this type of loan.

The average rate for the one-year adjustable-rate mortgage fell to 2.81 percent from 2.84 percent. That's the lowest on records going back to 1984.

Wednesday, September 7, 2011

Ever Vail approaches key step

From the Vail Daily

The economy hasn't magically turned around enough for Vail Resorts to break ground on its $1 billion Ever Vail project, but the company hasn't changed its intent to move the project forward as quickly as possible.

About 50 town of Vail meetings later, Vail Resorts Development Co. is still trucking along with its five development applications relating to the proposed Ever Vail project. The applications include rezoning and master plan amendments.

The company and the town of Vail will reach an important milestone Sept. 20 when discussions are scheduled to begin about the development agreement, a time when negotiations between the town and the resort company are expected to heat up around issues like parking and economic impacts.

The town isn't likely to approve any of the five applications without first working on the development agreement.

“I think getting into the (development agreement) discussions sooner than later will facilitate the entire approval process,” Councilman Andy Daly said at the council's Aug. 16 meeting. The town of Vail first saw the Ever Vail project in 2007, proving that the time it takes for a development of this size and scale to move through town approvals is lengthy.

Vail Resorts knew it would be time consuming but the company never backed down, even as the national economy crashed in 2008 and local construction and real estate industries took a nose dive along with it.

The resort company wants to get its approvals in place, even as the stock market continues on the roller coaster ride of recent weeks and local real estate inventory remains high.

Kristin Kenney Williams, spokeswoman for Vail Resorts Development Co., said the company's confidence in an economic turnaround lies in the fact that the company remains committed to getting its town of Vail approvals for the project.

“The economy will turn around some day; the real estate market will come back,” Kenney Williams said. “And when you see how long and how challenging it is, especially with a project the size of Ever Vail, to get your entitlements — we're already in year three — we could be behind the curve of other resort communities that also heavily depend on redevelopment.”

Economic recovery needed
The Ever Vail application includes plans to build a gondola from West Lionshead to Eagle's Nest, an underground mountain operations facility, 670 public parking spaces, 102 hotel rooms, on-site employee housing, a specialty grocery store, a live music venue, a transit center, deed-restricted and free-market condominiums, and Vail Recreation District space. The project would be built on a 12-acre site in West Lionshead and would require the demolition of the office buildings there now.

The project would also mean the South Frontage Road, which curves through West Lionshead between the Ritz Carlton Residences and the current Vail shop yard, would be realigned so it remains straight and parallel to Interstate 70 all the way through the town of Vail from west to east.

That important step would be the first phase of the project, Chief Operating Officer and Senior Vice President for Vail Resorts Development Co. Alex Iskenderian told the Vail Town Council at its last meeting.

At this point, that phase wouldn't happen until the spring of 2013 at the earliest, he said.

“It's very much reliant on what the economy does, what the real estate market does, how quickly we can sell through the existing inventory that exists in Vail right now — the significant, high-end real estate inventory that exists in Vail right now,” Iskenderian said.

The Colorado Department of Transportation hasn't officially approved the South Frontage Road realignment as of yet, either, but Kenney Williams said the indication is that the department will support it.

Town of Vail Community Development Director George Ruther said the relocation of the Frontage Road will be a major milestone in the eyes of the town. That step would be the indicator that the company is ready to break ground on the next phase of the project, also signifying the company's confidence in the overall economy, he said.

If the Frontage Road is realigned in the spring of 2013, the earliest the company would begin building other phases of the project, such as the underground maintenance facility or the hotel and parking components, would be the spring of 2014, Iskenderian said. The reason the company hasn't pursued the final CDOT approvals is because there's a two-year life span on the Frontage Road realignment approval and Vail Resorts isn't ready for that clock to start ticking, he said.

With the development agreement process about to begin, the clock will begin ticking on the project's five application approvals, however. Kenney Williams is still hopeful the approvals could happen before the end of the year, and Ruther said he can't foresee anymore delays.

“I think everyone is getting a good understanding of what the project is,” Ruther said. “Now it really comes down to discussions in the developer agreement.”

She points to the success of Solaris, the Ritz-Carlton Residences in Vail and the Four Seasons as proof that Vail visitors want what's new — the town had record sales tax revenues at times throughout the winter and the resort broke skier visit records, too.

“That idea of continuing to reinvent and reinvest in ourselves is key to a successful resort community like Vail,” Kenney Williams said. “The market certainly isn't back and the economy is still where it is, and that's why we can't commit to when this will break ground — we're committing to get this project approved so that we're ready.”