Finding a loan to buy, build a home will take more caution and creativity

The meltdown of the U.S. financial markets likely will result in a slowing of home sales and appreciation in the Grand Valley, but a continuing demand for land and a resilient regional economy should help the area avoid the brunt of the economic fallout, local real-estate and mortgage experts say.

Officials in the commercial and residential markets said developers and home buyers will need to exercise more caution and creativity in obtaining loans but emphasized money remains available, particularly through government-backed loans.

“To me it’s a half-full market right now,” said Dale Beede, a commercial real estate broker with Coldwell Banker Commercial. “We can be half-empty or half-full in the way of our thinking. If we’re half-empty, that’s our own fault. This is a half-full market.”

Beede said loan guidelines have tightened up, and lenders are requiring larger down payments. But, he said, “the people that are coming in are people who are well-capitalized. A lot of them don’t need financing.”

Beede said the economic spiral could slow local retail developments, but not industrial projects.

“We still have (industrial) demand here,” he said. “Even if we’re creating buildings for cattle and chickens, we’re going to be selling real estate.”

Overall, Beede believes, the “hyper” real-estate market that has defined western Colorado the last few years will retreat to a “normal” market.

Carol Gerber, a broker associate with Bray Real Estate, said home values will not appreciate as quickly as in years past, and homes may take several months to sell, rather than a few weeks. But she doesn’t believe homeowners who sell will lose money.

She said recent events may lead some prospective home buyers to hesitate and think they won’t be able to obtain a mortgage. She said, though, as long as people have good credit scores, there are several government-supported programs people can use, including those that don’t require any money down.

But Gerber and Deanna Martin, owner of Affordable Mortgage of Colorado, said they think the days of buyers obtaining conventional, 100-percent interest loans or adjustable-rate mortgages — hallmarks of the housing crisis — are over.

“I don’t touch adjustable-rate mortgages right now because it’s too volatile,” Gerber said.

“If you can’t come in with 20 percent down or you can’t come in with a fixed-rate mortgage, you shouldn’t buy a house,” Martin said. “We’ll have to learn to do what our parents and grandparents did.

You’re going to have to save your money.”

Martin said the banking crisis shouldn’t affect homeowners who have fixed-rate mortgages and are spending less than 50 percent of their net income on their housing payments. People whose mortgages are consuming more than 50 percent of their income, however, “need to shave off (their) fun.”

Gerber said a worst-case scenario would involve a spike in foreclosures caused by a drop in jobs or homeowners who find themselves in a bad loan and can’t sell their homes. But she doesn’t believe that will happen here.

“I just think it’s a time to be really careful to make sure when you’re buying a house ... that you know that you’re not overpaying, know you’re in a good place,” she said. “I think people, if they’re just a little bit cautious and educate themselves on what’s going on, they’ll be fine.”


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