Denver Homebuyer Tax Credit

First Time Homebuyer Tax Credit Extended Into 2010!
Plus…A New Tax Credit for Certain Existing Home Owners!

It’s official. President Obama has signed a bill that extends the tax credit for first-time homebuyers (FTHBs) into the first half of 2010. This program had been scheduled to expire on November 30, 2009.

In addition to extending the tax credit of up to $8,000 through June 30, 2010, the extension measure also opens up opportunities for others who are not buying a home for the first time.

So Who Gets What?
The program that has existed for FTHBs remains intact with the one exception that more people are now eligible based on an increase in the amount of income someone may now earn.

Additionally, the program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Deadlines
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

Higher Income Caps in Effect
The amount of income someone can earn and qualify for the full amount of the credit has been increased.

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible.

Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sales price of $800,000.

First-Time Homebuyer Tax Credit – Frequently Asked Questions
Here are answers to some commonly asked questions about the tax credit.

What is a tax credit?
A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence.

What is the tax credit for first-time homebuyers (FTHBs)?
An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.

Who is eligible for the FTHB tax credit?
Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible. This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.

As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.

How do I claim the credit?
For those taking advantage of the tax credit in 2009, you may choose to either apply for the credit with your 2009 tax return or you may apply for the credit sooner by filing an amended 2008 tax return with Form 5405 (http://www.irs.gov/pub/irs-pdf/f5405.pdf).

Can you claim the tax credit in advance of purchasing a property?
No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.

Can a taxpayer claim a credit if the property is purchased from a seller with seller financing and the seller retains title to the property?
Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Examples of this would include a land contract, contract for deed, etc. According to the IRS, factors that would demonstrate the ownership of the property would include: 1. the right of possession, 2. the right to obtain legal title upon full payment of the purchase price, 3. the right to construct improvements, 4. the obligation to pay property taxes, 5. the risk of loss, 6. the responsibility to insure the property and 7. the duty to maintain the property.

Are there other restrictions to taking the credit?
Yes. According to the IRS, if any of the following describe your situation, a credit would not be due.

• You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild.
• You do not use the home as your principal residence.
• You sell your home before the end of the year.
• You are a nonresident alien.
• You are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
• Your home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
• You owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2009, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2006, through July 1, 2009.

Can you buy a home from a step-relative and be eligible for the credit?
Yes. Provided the person you are buying a home from is not a direct blood relative, the purchase would be allowed.

Can parent(s) who will not live in the property cosign for a mortgage for their child and the child that is a qualifying FTHB still be eligible for the credit?
Yes.

Can a separated spouse who has not owned a home for four years qualify for the FTHB tax credit if the spouse has owned a property anytime in the last three years?
No. However, the spouse may be eligible for the repeat buyer credit. The best path to take in any situation regarding income taxes is to speak with a professional tax preparer or CPA.

If you have any questions that fall outside the situations here, give me a call and if you do not have an accountant to speak with, I can refer you to one.

November Sales stats for the Denver Housing Market

Single Family (Res + Cond)

• Active listing inventory was 18,061 at the end of Nov 09
o Down 5% versus prior month
o Compared with Oct 08, this represents an 17% decrease
• Under contract listings were at 3,444 units
o Down 30% compared with prior month
o Down 5% compared with same month year ago
• Sales volume (units) totaled 3,599
o Down 6% compared to last month
o Up 23% compared to Nov 08
• Year-to-date (YTD) sales are down 12%
o 44,603 units sold YTD 08 vs 39,111 units sold YTD 09
• Average sales price was $238,852, even compared to prior month
o 5% increase from Nov 08, $226,895 avg price

Residential

• Available inventory was at 13,575 active listings, down 6% compared to prior month
o This represents a 19% decrease from same month year ago
• Under contract listings decreased 28% to 2,727 from Oct 09 figures, and were down 7% compared to Nov 08
• Sales were down 10% from month ago to 2,751 units sold
o Compared with Nov 08, units sold increased 17%
• YTD sales (units) were down 13%
o 35,403 units sold YTD 08 vs 30,786 units sold YTD 09
• Average sales price was $265,498
o Even compared with Oct 09, $261,771 avg price
o Up 9% versus Nov 08, $242,557 avg price
• Median sales price was $218,000, down 2% versus prior month, and up 12% from Nov 08

Condo

• At close of Sep 09, there were 4,486 available units
o Down 2% compared to prior month and down 10% compared to Nov 08
• There was a 35% drop in under contract units compared with Oct 09
o Under contract listings were even versus same month year ago
• 848 units sold in Oct 09, down 6% compared to prior month and up 50% from Nov 08
• YTD there were 8,325 units sold, down 10% compared with 9,200 units sold YTD 08
• Average sales price was $152,409, down 6% versus Oct 09 and down 6% compared to Nov 08
• Median price was up even at $135,900 compared with prior month
o Median price increased 5% from $130,000 in Nov 08

the real deal with the first-time home buyer tax credit

This is from my colleague Aaron Lebovic.
I found the news reports to be a little confusing regarding the agreed continuation and modification of the first-time homebuyer tax credit, so I contacted NAR to get clarification.

Here are the results of my conversation with Linda Goold. Linda Goold serves as the Director of Federal Tax Programs for the National Association of REALTORS® and works for the NAR in Washington, DC. She is an advocate for NAR tax policies that protect and enhance ownership and investment in both residential and commercial real estate.

I’m paraphrasing her comments:

The current news reports are misleading. Senate has agreed to the content of the home buyer tax credit extension with some modifications, BUT senate not taken vote on final passage. It will be GOING UP FOR VOTE MONDAY EVENING at 5:30pm. Then it would have to go back to the house, but expectation is that the House will take it up the next day and approve it without amendment, and then it will go to President.

When I asked how long it might take to go before the President, Linda said that sometimes it takes a while, and sometimes it will occur the next day – it has to be printed on parchment and go through an administrative process. This bill extension of home buyer tax credit is included in an extension of unemployment insurance benefits, which Linda says she has “to think the president will want to sign it as soon as possible. Hopefully it’ll be accomplished a week from now, but no guarantees.”

Should I short Sale My Home???

This is a wonderful overview of Short sale questions I get everyday. Much of this information is the same info I provided in my presentation at the Kaplan school last week to over 90 realtors and investors. This information was provided by Methner and Associates, P.C. Their contact information can be found in this article. I just closed another short sale and prevented the homeowners from a foreclosure. We have many short sales listed right now and banks are willing to negotiate. Contact me if you have any questions about the article or short sales in general.

Should I Short Sale My Home?
A common question we receive from our Clients is whether they should short sell their home. The question is more complex than it may initially seem and the Client should weigh the pros and cons of a short sale before making a decision.
This report is for informational purposes and is not meant to provide legal advice. Terminology has been changed or substituted for ease of reading and in order to get broad concepts across simply. It is a general overview and may not contain all nuances.
The following topics in regards to short sales are discussed:
• Definition of Short Sale
• Process of Short Sale
• Result of Short Sale
• Effect of Short Sale On Credit and Purchasing a Home
• Conclusion: Short Sale, Foreclosure, and Bankruptcy
Definition of Short Sale
A short sale is when you sell your home for less than what is owed. A short sale may also be referred to as a preforeclosure sale.
For example, you owe your mortgage company $200,000 and you sell your house for $150,000. You are short (i.e. deficient) $50,000 in the sale.
Process of Short Sale
The process of a short sale is similar to a regular home sale. You are selling and a buyer is purchasing your home. All of the usual home sale processes are followed.
The main difference is that you or a representative for you, such as a realtor or an attorney, will negotiate how much you will owe the lender after the closing of the sale.
The amount owed and the terms agreed upon for payback will be formalized in a contract. If you have multiple mortgages receiving less than full payment, then more than one contract with separate terms may need to be negotiated.
The payback terms of each contract are going to define your benefits and detriments from the short sale. The contracts are written legal documents that bind you to the negotiated terms.
Additionally, a standard real estate transaction is generally completed through a realtor on state approved real estate forms. A short sale contract is not completed on state approved forms.
The short sale contract is often created by the mortgage company, through their attorney or staff, and written to the mortgage company’s benefit. It is advisable an attorney review your contract prior to agreeing to the short sale.
There are other perils to short sales depending upon the terms of the contract that is negotiated. These range from possible fraud if you agree to make payment on some of the debt and never do, to later litigation to collect the debt, and other contract issues that may arise. You should weigh all the factors and make the decision you believe will be best for you.
IMPORTANT NOTE: The contract agreed to before the sale defines what benefit you hope to receive from the short sale. Not all realtors understand what the terms of a contract mean or can adequately explain the consequences of the contract as this is a legal document. Consider seeking legal counsel from an attorney before agreeing on contract terms.
Result of Short Sale
A short sale results in a deficiency owed to the mortgage company. The deficiency may result in collection of the debt owed, tax consequences, or both. The terms of your agreed upon short sale contract determine how the deficiency will be handled. Generally, you will have agreed that the deficiency will be handled by one or a combination of the options below:
1. Lump sum payment at closing
2. Payment plan
3. Forgiveness of debt

The first 2 options require money to be paid on the remaining debt. The final option, forgiveness of debt, is when the mortgage company discharges the debt (26 U.S.C. § 6050P) and may no longer collect the debt or does not discharge the debt and may continue to collect the forgiven amount (Debt Buyers Association V. John W. Snow).
The lender must issue a 1099-C if over $600 of the forgiven debt is discharged by the lender (26 U.S.C. § 6050P and IRS 2008 Instructions Form 1099 A-C) or a triggering event, as determined by the IRS, has occurred (26 C.F.R. § 1.6050P-2).
Discharge of the debt precludes further collection activity, but a triggering event does not. A 1099-C may be required to be issued by your lender regardless of whether they plan on collecting in the future or not (Debt Buyers Association V. John W. Snow)..
Also, if your lender sends a 1099-C or specifies in the short sale documents that there will be a charge-off this does not mean they have discharged the debt. A charge-off may still be collected for applicable state and federal time periods.
You, as an individual, must generally report income from forgiven debt (26 U.S.C. § 61(a)(12)). The 1099-C is sent to you and the IRS (Form 1099-C). The amount shown on the 1099-C in Box 2 is the amount you generally must include as gross income on your taxes (IRS Publication 908).
You may request the Company not report the debt forgiveness as income on a 1099-C provided it is not taxable for such reasons as the debt is contested, the settlement is a non-taxable purchase price reduction, or you are insolvent.
Your short sale contract should include a provision stating debt forgiveness should not be reported as income if it is not taxable and a follow-up letter should be sent stating the reasons the debt forgiveness is not income and that the letter itself serves to show that failure of the company to file the 1099-C “is due to reasonable cause and not to willful neglect” (26 U.S.C. Section 6651).
Even if your lender issues the 1099-C, you may not have to include the forgiven amount listed on the 1099-C as gross income if you meet one of the following:
• The debt was discharged in bankruptcy (26 U.S.C. 108; IRS Form 982);
• You can demonstrate insolvency at the time the 1099-C was issued (26 U.S.C. 108; IRS Form 982); or
• You fall within the narrow provisions of The Mortgage Forgiveness Debt Relief Act of 2007 (The Mortgage Forgiveness Debt Relief Act of 2007; IRS Form 982).
• You fall within other exclusions, such as those listed in IRS Form 982.
There are a few other tax issues of concern. You may no longer have mortgage interest to deduct on your taxes and may need to change your tax withholding, the forgiven debt may send you into a higher tax bracket, and if your house sells for more than you purchased or forgiven debt reduces the tax basis, then you may owe capital gains taxes on the sale.
IMPORTANT NOTE: Forgiveness of debt is often the selling point to get you to agree to a short sale. A 1099-C will generally be issued for forgiven debt over $600 regardless of what someone may promise you and you still may be collected upon for the forgiven amount if it is not discharged. Speak to a tax professional to estimate the amount you may owe to the IRS. A filed bankruptcy in the year of the short sale will eliminate any tax consequences due to 1099-C income.
Effect of Short Sale On Credit and Purchasing a Home
Foreclosures are often assumed to be worse than a short sale on your credit and for purchasing a future home. The differences are subtle and arguably a short sale is no better for you than a foreclosure in the long term.
Three of the main components on your credit report are your payment history, balance owed, and your public records. Each of these components may have an impact on your creditworthiness and ability to purchase a home in the future.  Both short sales and foreclosures may show such negative facts as a delinquent payment history, a balance remaining owed on an unpaid mortgage, or charge-off. The main difference between short sale and foreclosure is that a foreclosure will be a public record on the credit report that lasts for 7 years, while the short sale is not listed as a public record.
Despite the difference in listing the foreclosure as a public record, the result is often the same whether you have a short sale or foreclosure when purchasing a future home for most mortgage underwriters. In both scenarios you have lost your home and you have negative credit reporting evidencing the loss. However, Fannie Mae as of June 25, 2008 has an updated guideline, which states that a short sale will be viewed as less of a negative than a foreclosure (Fannie Mae Selling Guidelines Announcement 08-16).
Based on discussions with Colorado Mortgage Broker James Spray (Bankruptcy Mortgage Specialist Since 1993; Mortgage Lending since 1976) you may qualify for:
• HUD/FHA insured mortgage 3 years post short sale or foreclosure (FHA Web Site);
• Fannie Mae 2 years post short sale and 5 years post foreclosure (Fannie Mae Selling Guidelines Announcement 08-16); and
• Freddie Mac underwritten mortgages 5 years post short sale or foreclosure.
You may qualify earlier than the time periods listed above, if you are able to show mitigating circumstances beyond your control that created the short sale or foreclosure and meet other credit requirements, such as not incurring further negative reporting on your credit and establishing new positive credit.
Continued collections may plague your credit report and keep you from purchasing another home. If you are still collected
upon after the short sale and it shows as a charge-off or if you end-up with IRS debt on your credit report you may not receive the benefit of reduced time to purchasing another home. The short sale contract and actions of the lender will determine this.
If you did not stop the reporting of negative information with your short sale or have other debt problems, then a bankruptcy may get you into a house faster than a short sale alone. You may stop further collections and create a point for a fresh start to rebuild credit by filing a bankruptcy.
IMPORTANT NOTE: The main differences between a short sale and foreclosure is that in a short sale you negotiated your own deficiency, foreclosure shows on your credit report for 7 years, and except in the case of a Fannie Mae underwritten loan, the difference between a short sale and a foreclosure is currently viewed the same by most underwriters.
Conclusion: Short Sale, Foreclosure, and Bankruptcy
A short sale or foreclosure may result in a deficiency you may have to pay back, tax consequences, or both; you will not have to pay back the debt if the lender forgives and discharges the amount; you may be able to limit or eliminate the taxes owed if you meet certain requirements; a short sale may not allow you to purchase another home faster than a foreclosure; and a well prepared short sale contract reduces your risks, but does not eliminate them, and is the key to your best short sale deal.
Additionally, there are benefits to foreclosure you should consider, such as the ability to live mortgage and rent free through the foreclosure process. Even after the foreclosure process you would be able to stay in the premises until an eviction. If you short sale then you generally will leave upon the completion of the sale.
A bankruptcy may extend your time in the house beyond the foreclosure date, so you may live mortgage and rent free longer. During all of this time you may be able to save thousands of dollars you would be paying in rent in order to stabilize your financial life, aggregate a down payment, plan your move, and buy necessities.
If your goal is to purchase a new home as quickly as possible a bankruptcy may be more effective as it stops further collection activity, discharges debt, and eliminates tax issues if filed in the year of the short sale.
If a bankruptcy is not filed or you cannot pay back the short sale deficiency, then any amount that was being collected may continue to plague your credit report and keep you from purchasing another home.
Keep in mind that people who can afford to pay their mortgage, but not other unsecured debts, such as credit cards, may qualify to save their home with their current lender through a Chapter13 bankruptcy.
Also, in certain circumstances a bankruptcy may allow you to get rid of your 2nd or higher mortgage in order to bring your home loans closer to the houses real value. Speak to a bankruptcy attorney for more information.
Another avenue to consider is a mortgage workout. Many lenders are working with individuals directly to modify their mortgages and help them stay in their homes. Contact your lender to see if they can help.
IMPORTANT NOTE: Many people may have a financial interest in your actions. A realtor stands to make thousands of dollars in commissions and fees off a short sale and may desire to pursue this avenue even if your best interest is to live mortgage and rent free until foreclosure. Choose the option you believe is best for your situation and pursue all possible options as soon as possible, so you do not lose them.

© Methner and Associates, P.C.
Brian G. Methner, Esq.
December 2008
www.MethnerLaw.com

September Denver area Home/Condo sales information

The details are below but here is the quick analysis. 

Number of sold houses and condos are down dramatically if you compare us to this time last year.

Average price for both homes and condos are up from this time last year.

Number of foreclosure filings are up this year compared to last year.  Number of foreclosure sales are down as compared to last year.  I have two thoughts on this.  First, many more houses are selling as short sales, so the actual foreclosure sales at the counties are down.  Second, many of the foreclosures this year are in a different price bracket.  So, all of the great deals we got on homes last year under under $120,000 are few and far between.  The new foreclosures are occurning more in the suburbs and the prices of those homes are much higher. 

 

Single Family (Res + Cond)

.         Active listing inventory was 19,834 at the end of Sep 2009 

o       Down 2% versus prior month 

o        Compared with Sep 08, this represents a 17% decrease 

.         Under contract listings were even at 5,228 units compared with prior month 

.         Sales volume (units) totaled 3,846

o        Down 2% compared to last month 

o        Down 10% compared to June 08 

.         Year-to-date (YTD) sales are down 16% 

o        37,401 units sold YTD 08 vs 31,554 units sold YTD 09 

.         Average sales price was $251,112, even compared to prior month 

o        5% increase from Sep 08, $239,428 avg price 

Residential 

.       Available inventory was at 15,046 active listings, down 2% compared to prior month 

o        This represents a 19% decrease from same month year ago 

.         Under contract listings decreased 2% to 4,029 from Aug 09 figures, and were down 5% compared to Sep 08 

.         Sales were down 2% from month ago to 3,001 units sold 

o        Compared with Sep 08, units sold dropped 11% 

.         YTD sales (units) were down 16% 

o        29,662 units sold YTD 08 vs 24,983 units sold YTD 09 

.         Average sales price was $274,433 

o        Even compared with Aug 09, $273,972 avg price 

o        Up 6% versus Sep 08, $260,118 avg price 

.         Median sales price was $225,000, even versus prior month, and up 4% from Sep 08 

Condo

.         At close of Sep 09, there were 4,788 available units 

o        Down 2% compared to prior month and down 12% compared to Sep 08 

.         There was a 5% increase in under contract units compared with Aug 09 

o        Under contract listings were up 17% versus same month year ago 

.         845 units sold in Sep 09, even compared to prior month and down 6% from Sep 08 

.         YTD there were 6,571 units sold, down 15% compared with 7,739 units sold YTD 08 

.         Average sales price was $168,288, even versus Aug 09 and up 4% compared to Sep 08 

.         Median price was up even at $145,000 compared with prior month 

o        Median price increased 4% from $140,000 in Sep 08

Developing Real Estate: How to Price Land for Profit

Developing Real Estate: How to Price Land for Profit

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Baker Neighborhood Home Price Trends

If you were to compare the house price trends with Baker compared to the rest of Denver you would be very happy with the results.  If you just look at the information on its own you may be a little disappointed. Let me quickly describe what is going on in the neighborhood and tell you why there is very good reason to be optimistic.  If you were to compare home prices year on year you would see that prices have declined 3%.  Average price for homes in the neighborhood are at $247,000.  The percentage of distressed sales (foreclosure or short sale) is right at 28%.  This means that of all sales in Baker last quarter 28% of the sales were either short sales or foreclosures.   One of the best determining factors on the viability of a market is the average days on market, Baker is currently at 70 days.  So, now that you have the data let’s quickly go over why this is actually very good news.  Over the last 3 quarters prices have seen virtually no change, and that remains the same this quarter even though 28% of the sales are distressed properties.  In many parts of Denver higher percentages of distressed sales have meant double digit declines in property values.  The average Days on Market (DOM) for the Denver area is right around five months right now, Baker is only at just over 2 months.  It is somewhat a sellers market.  If the house is in good shape and priced under $325,000 I can testify that the house is on the market much less than 70 days.  There are some homes that have been seasoned on the market for a very long time and I believe they are skewing some of the DOM data.  Baker has not experienced the huge price increases that many other Denver neighborhoods have.  I believe that also contributes to why Baker has not seen the dramatic declines as well.  So, if you live in Baker, don’t worry things are fine and I expect price to increase throughout 2010.  If you are looking to buy in Baker, now may be the time.  Prices are still relatively low if you were to compare price per square foot with other neighborhoods with similar characteristics.  Please post below with comments and questions.

Thanks, Ben

Denver Home price change map

Here is the most recent Denver Home price trends map.

Denver home price trends

The different colors in the map reflect the changes in price trends, basically green is appreciation and red is depreciation.  Many of the areas with lower price points have seen some decent appreciation over the last quarter.  As you can also see neighborhoods with higher price points have seen some depreciation.  However, many areas were not hit as hard as first predicted.  We will see what trends we see over the next quarter.  However, with the first time home buyer credit going to expire soon it will be interesting to see if the lower end of the market keeps up with the current rate of sales.  Call 303 882 0480 for a more detailed analysis or for more areas/neighborhoods.

New Mortgage Credit Certificate Program benefits first time homebuyers

By now most people that are first time home buyers have heard of the federal tax credit program that credits $8,000 for people that have not owned a primary residence for the past three years.  If you would like more information please comment below or contact me at 303 882 0480.  Today I ran across a very little known tax credit that first time homebuyers can take advantage of as well.  The program is named the Mortgage Credit Certificate Program (MCC).  A Mortgage Credit Certificate (MCC) allows the homebuyer to claim a tax credit for 20 percent of the mortgage interest paid per year. It is a dollar-for-dollar reduction against their federal tax liability.  Eligible participants are as follows:

The program is open to those individuals and families who:

• meet income and home purchase price limits;
• meet the qualifying requirements of the mortgage loan;
• will use the home as their principal/primary residence; and
• have not owned a home as primary residence in the past three (3) years (first time homebuyers), are current homeowners looking to refinance certain qualified subprime mortgages, or are eligible veterans*

So, in addition to the $8,000 credit you can also claim 20% of your mortgage interest as a tax credit.  This is for the life of your loan!!  Also, it is TRANSFERABLE!!  Please contact me with questions.

My “dirt”y values proposition

What is a lot worth in today’s market?  That is the ongoing question in today’s up and down housing market.  With the values continuing to increase in the lower end of the market and decreasing in the higher end of the market the value of the land has come in to play in many of my recent transactions.   A couple of years ago when I was buying houses for 60k I would look at the assessed value and essentially be purchasing the lot with a house attached.  Although in today’s market it is becoming increasingly harder to do this with homes under $200,000.  The new value proposition for homeowners and investors alike is to purchase the homes in higher price points that may have the potential to double or even triple in the next five years after home values rebound.  A case in point is in the hilltop neighborhood in Denver.  Two years ago builders were purchasing lots for around 500k.  The builder would then scrape and build and place the new house on the market for around 1.5 million.  I am of course speaking in generalities but this type of example can be seen over and over.  The Hilltop market is now flooded with those spec homes that have absolutely no hope of selling at current list prices for the foreseeable future.  So, the builder is now either going to lose their investment or rent out for significantly less than their payment and wait it out.  With approximately 7 years of inventory the prospects of things moving quickly are grim over there.  However, there are still some great investment opportunities in the area.  The same home that sold 2 years ago for 550 are now going for 300.  If you can live in the home or rent it out and enjoy the beautiful amenities without the luxury build for a while you may make a bundle of money.  Opportunities do abound in this market, although the market changes every couple of months right now, there are some people making serious money.   If you are buying a house whose “dirt” value has gone down 250k, you can expect that to recover very quickly when the market changes.  Another example of buying for “dirt” value is a project I am working on near Denver University.  Unfortunately for the builders, the timing of their project coming to market could not have been worse.  Now that funds are locked up and the partners have moved on the new investor that decides to step in will gain significant equity and wealth if they can finish the project and rent out for a couple of years.  Many projects like this can be bought for half or less than half of what the builder has put into the project for acquisition and materials.  Money will be made, it just takes the right kind of buyers to make serious money in this market.