BOULDER - It's a clichÇ phrase in the real estate world, but experts at the Boulder Valley Real Estate Conference & Forecast told audience members that "now is the time to buy."

Giving their views for 2010, local and national real estate experts said they expect the economy to slowly recover, and along with it interest rates likely will rise.

About 500 people attended the conference presented by the Boulder County Business Report on Nov. 19 at the Millennium Harvest House Boulder. Lead sponsors were Re/Max of Boulder and The Colorado Group.

Brad Blackwell, retail national sales manager of Wells Fargo Home Mortgage, said the U.S. Federal Reserve plans to slowly withdraw its emergency support from the mortgage markets, which likely will raise rates starting in January.

While housing prices may still fall in 2010, today's low interest rates are a better deal in the long run.

"It's important for people to move off the fence now," Blackwell said "It's a great time to buy."

On the commercial side of real estate, Scot Smith with The Colorado Group Inc. said local vacancy rates were holding up stronger than expected as many landlords lowered rates and offered deals to keep tenants.

"Tenants can expect some lease concessions, but they should also be prepared to give some form of personal financial assurance that they will pay the lease," Smith said. "For landlords, it's important that they sell the value of their product - 'you can get a good deal from me, but it's not slash and burn time.'"

In the buying and selling real estate market, Smith said things likely will remain stagnant. While there will be good deals to buy, loans will be difficult to obtain, he said.

On the residential side of real estate, D.B. Wilson with Re/Max of Boulder said homes of less than $500,000 continue to see improvements in sales, but the high-end home market is still facing challenges. Much of that is tied to higher jumbo mortgage rates, although those have come down from 8 percent last year to about 5.75 percent today.

Wilson also noted that foreclosures were back on the rise, and that would be something to watch out for.

From a macro-economic viewpoint, Patti Silverstein, chief economist for the Metro Denver Economic Development Corp., and Paul Bishop, managing director of Real Estate Research at the National Association of Realtors, said the economy likely had hit bottom in the third quarter of 2009 and would start to make a slow recovery.

Bishop said raising consumer confidence would be a key factor in getting the economy back on track. Silverstein said while residential real estate will continue to recover in 2010, commercial real estate will likely face troubles as short-term loans from the boom come due in midst of a tough credit market.

- David Clucas


Green still a hard sell

The question of whether or not the green movement is benefiting the real estate industry does not have a clear answer, according to a panel at the conference discussing Green Machine or Green Bubble.

Hugh Morris, director of smart growth and housing opportunities at the National Association of Realtors, said momentum exists nationally because 20 percent of new homes built this year include energy-efficient materials and appliances compared with only 10 percent in 2006.

But a comment from a builder in the audience said "green" plans are often discarded when the cost is mentioned. "Consumers don't see value in green-building techniques," the builder said. And a Realtor in the audience echoed the sentiment saying "green add-ons" to homes generally don't equate to a higher asking price because appraisers, and buyers, don't see much added value.

Panelist and former mayor of Boulder Bob Greenlee said the only reason he had a photovoltaic system installed in his home was because of incentives. "It was not affordable without incentives provided through the government using money from taxpayers," he said.

Morris, calling the green movement the "big green cosmic kabang," said incentives come from the federal level, with $17 billion in stimulus funds earmarked for residential properties. Tax incentives are available at every level of government, he said.

Panelist Ben Griffin of NamastÇ Solar Electric Inc. in Boulder, said the green movement creates "well-paying, career-building, fulfilling jobs." He said the upfront cost for a photovoltaic system is still $10,000 to $15,000 even after rebates from Xcel Energy.

Panelist John Shaw of Bella Energy Inc. in Louisville said per solar panel costs have dropped from $4 to $2 per watt, indicating that the green movement is "more of a machine than a bubble.

"A benefit is fixed costs," he said. "Right now you can break even in six to seven years and still provide energy for 30 years. Plus a solar electric system can add value to a residential home"

Another audience member commented that many people respond to surveys saying energy-efficiency and green building are important to them, "But when it's time to pull out the wallet, they balk."

- Doug Storum

Perception is reality

Whether its perception or reality, the real estate market in 2010 won't be much better than in 2009, some panelists said.

Perception and reality are one in the same in this recession, and the short-term outlook is grim, but it doesn't mean deals aren't being finalized.

Patrick Dolan, a Re/Max of Boulder Inc. Realtor, thinks the housing market is near the bottom considering the inventory, loan rates and sellers' willingness to make deals.

Dolan was joined by William Graff, a commercial appraiser; Kyle Heckman, Flatirons Bank president; Craig Ockers, The Colorado Group realtor; and Beat Steiner, Holland & Hart LLP administrative partner during a Perception vs. Reality panel discussion Thursday afternoon at the Millennium Harvest House Boulder.

One perception is that it's hard to get a loan. And it is, the panelists said.

Whether commercial or residential real estate, lenders are keeping a tight grip on their money.

But Steiner said many banks are restricted as to what they can do with their money, which in turn limits what borrowers can work with.

In today's environment, buyers are picky, sellers are desperate, lenders are hesitant and brokers are trying to bring everyone together to make a deal, the panelists said.

And even with interest rates low, buyers still aren't happy. Buyers who were formerly happy with a 13 percent interest rate for the majority of their loan now complain if they can only get an interest rate of 5 percent.

And the day of lenders competing for loans is gone, Ockers said. Now people are lucky if they can get money for a deal.

Despite the tough times, Dolan thinks people will look back in five years and think about how 2009 was a great year to buy real estate.

But in the present, times will remain tough.

Many people are currently white-knuckled, and some developers, contractors and bankers are bound to fall off the cliff in 2010, Steiner said.

- Ryan Dionne

Market has hit bottom

Paul Bishop, managing director of Real Estate Research at the National Association of Realtors, said the group sees a U-shaped recovery ahead - but it will be a longer-bottomed U.

"It will take two-and-a-half to three years to recover jobs, if we were to start recovering next month, but that (job recovery) likely isn't the case until late 2010 and into 2011," Bishop said.

He said some sectors of the economy, such as retail and construction, will likely never fully recover. He added that the geographic distribution of the recovery will also be diverse, with the areas such as the upper Midwest recovering first, because they never saw much of an upswing, followed by the coasts and then the hardest hit markets like California, Nevada and Florida.

Lenders on the panel - John Yarberry, manager of Wells Fargo's Denver commercial real estate group, and Brad Blackwell, retail national sales manager of Wells Fargo Home Mortgage - stressed that they want to make good loans for good projects to credit worthy borrowers, but admitted that banks have lowered their outstanding loans due to regulators.

"That's something we don't want to see," Blackwell said.

Tensions between Realtors and lenders were evident during the question-and-answer period of the session, as some asked what they could do to speed up loan modifications.

Lou Barnes, a mortgage broker himself, said he's stopped telling people to contact lenders for modifications because "there is no point to it." That drew applause from Realtors in the crowd who expressed similar frustrations.

Blackwell urged patience, saying that loan modifications guidelines from the government took a long time to get to the banks, who are just now starting to feel comfortable about executing the programs.

"I would completely disagree with the give-up advice," Blackwell said.

- David Clucas