Consumer Confidence Going Up!

The Consumer Confidence Index has been called a "lagging indicator." This means that most people's confidence depends on what has already happened to them, i.e. expectations are based on past experience. Right now, the Consumer Confidence Index is going up, posting a 70.4 in February, up from 60.6 in January. When times are really good the Index is around 100. During the recession, the Index fell to an all time low of 26.9 in March 2009.

What does this mean for real estate? Well, I continue to believe that consumer confidence is slowly being restored and that the real estate market will normalize when the American consumer feels good about the economy. We are seeing positive signs, including the Consumer Confidence Index, and are hopeful that the Spring market in the Durango, Colorado area may show a correlation to this increasing confidence level.

If you have any questions, please do not hesitate to call me. You can reach me, Don Ricedorff, at The Wells Group 970-375-7014, don@frontier.net, or at my website at durangorealproperty.com.

Don Ricedorff is a licensed real estate broker in the State of Colorado, with 18+ years of experience, and he resides in Durango Colorado.He has numerous real estate designations, which have provided him with an unparalleled education to assist his clients. The designations include:

CRS, Certified Residential Specialist
CRB, Certified Residential Broker
CCIM, Certified Commercial Investment Member
CDPE, Certified Distressed Property Expert
ABR, Accredited Buyer Representation
GRI, Graduate of Realtor Institute
RSPS, Resort and Second Home Property Specialist
CIPS, Certified International Property Specialist
SRES, Senior Real Estate Specialist


He is also an active volunteer in the community and his church. His highest aspiration is spending time with his wife, Janet, and his three children Kelly, Katie, and Kyle. His other interests include playing tennis, fly fishing, hiking, boating, and water skiing.

COST VS PRICE ANALYSIS

As you are aware, some of what we try to do in marketing properties is educate potential buyers. The following information is especially relevant as we try to communicate that NOW continues to be, in our opinion, an extremely good time to get into this market. Many people seem to still be on the sidelines waiting for prices to drop further. The below analysis shows that once interest rates go up, which most all economists see coming, the monthly COST of a property will go up, even if the PRICE stays the same. Higher interest rates also will mean that Buying Power, reflected in what a Buyer can afford in a monthly payment, will deflate the purchase price that that Buyer can afford.

Cost versus Price

On big ticket items like homes, it is not about price. It is about cost.

Price/Cost Example: If the price of a property is $300,000, the down payment is $60,000 and the loan amount is $240,000, here is what happens to the Monthly Cost depending on the interest rate:

If the rate is 4.17% then the monthly payment is $1,169.44

If the rate is 4.77% then the monthly payment is $1,254.84

If the rate is 5.50% then the monthly payment is $1,362.69

Price Increase = 0

Cost Increase = +16.5%

Buying Power Example: If the amount of the monthly payment a Buyer can afford is $1,169.44, then the loan/buying power looks like this depending on the interest rate:

If the interest rate is 4.17% then the buyer can afford a $240,000 loan

If the interest rate is 4.77% then the buyer can afford a $223,666 loan

If the interest rate is 5.50% then the buyer can afford a $205,964 loan

Cost of waiting 11/15/2010 – 12/31/2010 = $16,335

Projected cost of waiting 11/15/2010 – 6/30/2011 = $34,036

Durango, CO Latest Economic Indicators

The latest economic indicators were just released from the Durango Chamber of Commerce. It is our pleasure to be able to share them with you.

Finding Harmony: Ceilings

Every home is as unique as the people who dwell in it, but have you ever wondered how the two of you could be a better match? One of the most effective ways to incorporate the design principle of harmony is to fuse your home’s architecture with your personal décor. Let’s take a look up: Ceilings. They not only serve as a structural mainstay, but they also create permanent line drawings within the home. These are just a few suggestions for finding harmony between your home’s aesthetic and architecture.

Exposed beams are like bold patterns that beg for attention. Stain them. Show them off. Choose furniture fabrics in like pattern to create an awing effect of mirrored floor and ceiling space.

Roof lines make a room dynamic; to maximize this effect, match ceiling shape by hanging art in direction of line. Play with a symmetrical grid or an amorphous shape to highlight the architectural line of the room.