Local Realtors say that Loveland, Colorado is at the peak of its beauty, pardon the pun.

"AARP described Loveland as number one of 'The 15 Best Places to Reinvent Your Life,' says Realtor Kenneth Lavertu. "They also found Loveland's Outdoor Urban Paradise an attractive quality of the town. Loveland was ranked eight in the '100 Best Small Art Towns' in America. The 'Gateway to the Rockies,' Loveland is nestled in a valley at the mouth of the beautiful Big Thompson Canyon. Rocky Mountain National Park is just 30 miles west of town."

About the market, Lavertu says, "The Loveland area has experienced an increase in listings over the last 12 months. However, at the same time we are showing an increase in sales and a slight increase in median price. Days on market are remaining about the same at 99 days."

"While the sales volume of resale homes is up quite dramatically," says Realtor B.J. Johanningmeier, "due, in large part, to 'fence jumpers' who are buying in large numbers nationwide while mortgage rates are relatively low, the median single-family home price continues to decline in Northern Colorado, while the median condo price is rising. Mortgage interest rates rose almost weekly for three months in anticipation of the rate increase of one-quarter percent by the Federal Reserve Bank announced on June 30th, even though mortgage interest rates are not tied directly to the federal funds rate, but rather are inversely related to expected yields in long-term (10-year) Treasury bonds. A recent rally in the Treasuries market has pushed down interest rates, and potential new buyers turned their focus to fixed-rate mortgages from ARMs. Rates could be increased again at the next meeting of the Fed on August 10th, since short-term rates are expected to rise to at least 4 percent 'in measured steps' by the end of next year, which will result in a very significant increase in monthly mortgage payments for new buyers, and for any homeowners with adjustable-rate mortgages (ARMs)."

He adds, "In his report to the Senate Banking Committee on July 20th, Mr. Greenspan cautioned investors against thinking that the Fed might feel less constrained in unwinding its cheap-money policies of the last three years. However, the Fed is really 'walking on eggs' these days, since they are only too aware that, lurking in the background, is the very considerable danger of a deflationary collapse of credit."

Johanningmeier advises, "Sellers are likely to be able to get a much better price for their property if sold within the next three months than at any future time in at least the next five years! Buyers will need to weigh the pros and cons of buying now at a higher price but low mortgage interest rates, or waiting for perhaps much lower prices in a year or so but with a much higher mortgage interest rate (and much more difficulty in qualifying for a loan than at present! Last year only 56 percent of available properties in Northern Colorado sold.

"With a large inventory of available homes still on the market," he says, "sellers will need to have their property in excellent showing condition and very competitively priced, if they wish to sell this year over the competition. To us, it looks as though there is now a relatively small 'window of opportunity' for sellers to get a good price for their property before the housing bubble bursts, in our judgment likely within six months after the election, no matter who wins, but those who have not sold by the end of summer may rue the day when they decided to postpone selling or when they decided to hold out for a higher price."

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Published: July 26, 2004

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