Denver, Colorado
Buying a home using a Denver buyer's agent, Denver real estate market conditions, relocation news, mortgage advice, general real estate commentary
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2007
Dec. 29, 2007
I just spent several hours trying to make sense of all the instructions on how to make an InmanWiki for myself. Whew! But it's up now. Take a look (click on the image above)! And if you have any ideas or suggestions, let me know.
Dec. 27, 2007
 The Case-Shiller Price Index, the 20-city composite index of real estate sales of the same house over time, reported a 1.8% price decline from October 2006 to October 2007 for Denver. Most local real estate experts fault the high number of foreclosures as one major cause of the decline, but because of the foreclosures prices in general have been dropping.
The drop from September 2007 to October 2007 was 1.7%. But in the higher price ranges above $322,018 the drop wasn’t as severe, only .7%. In the lower tier of prices under $217,146 the drop is 7.3% which reflects the most common foreclosure price range in Colorado. In the middle tier of prices from $217,146 to $322,018, the drop was 1.2%.
Higher priced homes in the Denver real estate market have stayed steady since June 2007. Middle priced homes rose in July and August of 2007, but then started to decline in September and October. Lower priced homes showed a price incline steadily through the spring and early summer months, but began a precipitous decline in August culminating with the steep decline in October.
Denver’s market remains good for buyers, especially with interest rates staying steady and even declining in the last month. Higher priced homes haven’t increased in price and remain a good buy.
For more information contact me at 303-587-3509 or email Judith@Buyers-Advantage.net.
Dec. 18, 2007
 If you’re thinking of buying a house that needs some remodeling, the top two projects that will recoup at least 75% of your outlay are an attic bedroom remodel (78.9%) and the addition of a wood deck (78.2%). A major upscale kitchen remodel on average will cost you $106,434 and you’ll recoup 69.6% of the cost when you sell. A basement remodel costs $56,476 and will yield $41,656 at sale, a 73.8% recovery.
Recovering remodeling costs isn’t the primary reason homeowners take on a remodeling project. But it’s a factor to be considered in today’s market. If you plan on staying in your home the cost can likely be recovered in a few years with Denver’s appreciation increasing every year from 1988 to 2005.[i] [2006 showed the first price drop in nearly 20 years, but 2007 is expected to show rising values, though slight.] If you’re planning to fix up your house and move within the next year then you probably don’t want to engage in a costly remodeling project. The best projects for resale are remodeling your kitchen or bathrooms, and adding a bathroom as long as it doesn’t reduce the number of bedrooms. In other words, you don’t want to convert a small bedroom into a bathroom. No matter how small the bedroom it’s still a bedroom, and buyers want bedrooms, at least three.
But for those who do want to remodel, which projects will be worthwhile to take on? According to the National Association of REALTORS® annual Profile of Buyers Home Feature Preferences 2007 the addition of whole house air conditioning is a top priority. If the house doesn’t have it, buyers want it. The cost runs about $2,000 to $4,000, depending on the size of the house. If the house doesn’t already have a forced air heating system, the cost to put in ductwork can be prohibitive. In Denver’s climate an acceptable alternative is evaporative cooling (“swamp” cooler).
A minor midrange kitchen remodel will cost $20,512. For a 200 sq. ft. dated kitchen, you’ll be able to reface your cabinets and drawers (30 linear ft.) with new raised wood doors and drawer fronts, replace old hardware, replace laminate countertops and vinyl floors, replace a wall oven and cooktop with energy efficient models, and install a new moderately priced sink and faucet. You’ll be able to paint the trim and add wall covering, which all should make for a modest improvement and a better kitchen.
An in-between midrange major kitchen remodel would give you semi-custom wood cabinets, a 3 by 5 island, laminate countertops, a standard double stainless steel sink with a standard single-lever faucet, an energy efficient wall oven, cooktop, ventilation system, built in microwave, dishwasher, garbage disposal and custom lighting. You’ll get new vinyl flooring and a new paint job, including trim. It will run you $52,816 and you’ll recoup 70.2% when you sell within a year.
If you want to go all out, you can have an upscale major kitchen remodel for $106,434 which will includetop of the line cherry cabinetry with built-in sliding shelves, stone countertops with glass tile backsplash, a built in refrigerator and cooktop and a 36” commercial grade range with a vent above and a built in warming drawer. A trash compactor, built in microwave/convection oven combo, a high end undermount sink with designer faucets and a built in water filtration system are included. New lighting including general, task and under cabinet lighting will be a plus, and the new cork floor will make standing while cooking or cleaning up a dream. The cost will be $106,434 and you’ll be able to recoup 69.6% of the cost if you have to sell within a year.
Other projects have varying rates of cost recovery.[ii] The chart below shows projects many Buyers Advantage clients have expressed interest in. The highest value project across the country for the last few years is a minor kitchen remodel – best for resale and best for comfortable living.
|
Project - All Midrange
|
Cost
|
Cost Recovered
|
|
Basement Remodel
|
$56,476
|
73.8%
|
|
Bathroom Addition
|
35,409
|
56.6%
|
|
Bathroom Remodel
|
15,171
|
67.8%
|
|
Roof Replacement
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14,238
|
55.1%
|
|
Window Replacement (vinyl)
|
9,669
|
72.4%
|
|
Window Replacement (wood)
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10,578
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75.9%
|
[i]THE REAL ESTATE CYCLE IN 2006: Evaluating Market Position, Identifying Turning Points and Constructing Scenarios Christopher L. Cagan, Ph.D., Director of Research and Analytics, First American Real Estate Solutions
[ii]All data from © 2007 Hanley Wood, LLC. Reproduced by permission. Complete city data from the Remodeling 2007 Cost vs. Value Report can be downloaded for free at www.costvsvalue.com
Dec. 6, 2007
 Denver real estate may have hit bottom, which means it's a really good time to buy. Interest rates have been dropping and so have prices. Buyers can virtually write their own ticket for seller concessions -- down payment help, closing cost contributions, buying down the interest rate, and even more creative assistance.
Buyers are getting houses at an average 3% discount, a figure which has stayed pretty steady over the last year. But the discount is much greater when considering the seller's original asking price. In both October and November sellers' original asking prices on average was 79-89% of what they got at closing. What that means is that sellers were having to discount their original asking price by 21 to 31% of what they originally thought they should realize. The year-to-date discount was an average of 10%. By the time sellers realized they had to lower prices their homes (and condos) had been on the market on average 100-103 days.
The median price for single family homes was $229,500, a drop of 4.38% from November 2006, while for condos was $139,000, a 10.8% drop from last November's $155,750. According to one local real estate expert, some homes are priced so high they'll never be sold in today's market, a discouraging thought for sellers. If you're a buyer and you run into one of these houses, don't be discouraged, there are plenty more out there to look at.
Nov. 7, 2007
Denver real estate prices fall in lower priced neighborhoods. High priced neighborhoods hold steady or gain.
Sep. 15, 2007
Try this
article and blog. If you're looking to buy, give me a
call. I don't list homes, only help buyers get the best
deals.
Sep. 7, 2007
 An article in today's Realty
Times makes it plain. Know what you're signing at
the closing table. No -- get that mortgage
broker/banker/lender to tell you in plain English what
"negative amortization" means and whether your loan has any.
And do it as soon as they tell you about the wondrous features of
the loan you're about to get saddled with. And always
remember, if it sounds too good to be true, it probably is.
Sep. 5, 2007
.jpg) If you're planning to buy a
home in Denver in the next 6 months you ought to be able to buy for
at least 97% off list price. If the house has just been listed it
will eventually sell, but on average at a price 93% less than the
original list price. It could take awhile for starry-eyed sellers
to realize their home may be priced too high. On the other hand,
good houses in good condition in good locations may even require an
offer of asking price or more. A good Buyer's Agent can help you
assess the many factors that go into arriving at a good offer
price.
Median prices for
detached single-family homes are up slightly from July by .98%.
(Median price is a better gauge of the market's strength than
average price which can be skewed by a few high priced sales.)
Average days on market has increased from 90 in July to 92 in
August, showing a slight seasonal shift. The highest days on market
was 125 in February, the lowest was 90 in July.
Condos fared worse,
dropping 3.48% in median price in August to $152,500 from $158,000
in July. The average price dropped even more by 5.26%. Days on
market improved to 102 in August from 112 in July. The highest
average days on market was in January with 131.
Percent of sale price
to list price dropped a percent in August to 97% from 98% in July
for detached single-family homes, and rose to 98% in August from
97% in July for condos. Neither shows much of a change. Overall
days on market for both condos and detached single-family homes was
94 for August compared to 120 in January and 125 in February.
Denver's unusually harsh winter took a toll both on how long it
took to sell and prices. Original list price for both condos and
single-family homes during January and February showed high hopes
by sellers, but a grimmer reality. Sellers were getting on average
87% of what they were asking in February. By August that figure had
improved to 93% of list price for both condos and detached
single-family homes.
A high number of short sales (where lenders take less than the
homeowner owes on the mortgage) and foreclosures have impacted the
lower priced neighborhoods. Home prices in higher priced
neighborhoods haven't been as negatively impacted. The Denver Post
cites the Stapleton neighborhood, a new urban retail/residential
area. Average prices in the Stapleton neighborhood are $449,000,
but in the last year only 2% of sales were short sales or
foreclosures. By contrast the Del Mar neighborhood in Aurora where
the average price is $117,000, 71% of all sales were short sales or
foreclosures. This once-attractive neighborhood now is laced with
run-down homes sitting empty either with a For Sale or For Rent
sign in the front yard.
What does it all mean? The Denver market isn't nearly as dismal
as the headlines would have you believe. Compared to the national
scene, Denver prices haven't shown as steep a drop, and in many
cases home values are appreciating significantly. In neighborhoods
where home prices on average are $250,000 or less, overall home
prices are dropping according to a September 4, 2007, article in
the Denver Post. But in higher priced neighborhoods prices are
steady or rising. Some neighborhoods have shown a healthy increase
over the last year. University Park, where the average price is
$718,777, has shown a 23.9% increase. Hilltop, another pricey
Denver neighborhood with an average price of $920,146 experienced a
24.4% increase, but homes in most Denver metro neighborhoods are
flat, either dropping slightly or appreciating slightly.
A single exception is Denver's Jefferson Park neighborhood with
an average price of $247,454. Jefferson Park is a mix of old and
new, an old neighborhood in the process of gentrification, with new
townhomes, new condos, just a few blocks from Invesco Field at Mile
High (to us oldtimers, it's still Mile High Stadium), LoDo,
Elitch's, the Pepsi Center, Coors Field, and other downtown
attractions. River Clay has one of the more interesting projects
going on in the private market in Denver. It's a green condo
building with a mix of affordable housing and luxury units. One of
my clients, returnng to Denver from the Pacific Northwest, bought
one of the nicest units for $543,600. When these condos are resold
(they're under construction now) the neighborhood's value will
increase. Other projects are scheduled for this newest of downtown
Denver's hottest neighborhoods.
Denver's cost of living makes it an easy choice over higher cost
areas like both coasts. It costs 40 percent less to live in Denver
than in San Jose; 34 per cent less than in San Diego; 43 per cent
less than in San Francisco; and 14 per cent less than Seattle. If
you live on the east coast, it will cost 15 per cent less than in
Baltimore; 28 per cent less than in Boston; 50 per cent less than
in New York; 14 percent less than in Miami
For buyers coming from the south and the midwest, Denver could
cost more. It costs 2 per cent more in Denver than in Atlanta; 14
per cent more than in Houston; 7 per cent more than in Dallas; 6
per cent more than in Dayton, Ohio; and 11 per cent more than in
Minneapolis. But living in Denver still costs 3 per cent less than
in Detroit; 20% less than in Philadelphia; 1.5 per cent less than
in Cleveland, and 1.5 per cent less than in Chicago.
You'll need to do your due diligence to compare cost of living
between your city and Denver at websites like
http://www.bestplaces.net,
http://www.bankrate.com/brm/movecalc.asp, or
http://cgi.money.cnn.com/tools/costofliving/costofliving.html.
Having an Exclusive Buyers Agent to find the best buys will
shore up your buying ability by representing your best interests -
finding the best home at the lowest possible price, and saving you
time and hassles. See client references at
http://www.buyers-advantage.net/happy-clients.html. Phone numbers
available upon request. Call Judith Clausen now at 303-587-3509 to
help you find your new home in Denver.
Aug. 20, 2007
Categorized in: Buying a home...
 An article in the Wall Street Journal points out a successful strategy for making a low offer in a stagnant market. During a hot market sellers were used to turning up their noses at lowball offers. But with the real estate slump affecting many parts of the country sellers should learn that a low offer isn't an insult. According to national real estate expert Danielle Kennedy, a low offer is "an expression of interest," and should start the ball rolling to a successful sale.
Making low offers is part of the stock in trade of Exclusive Buyer's Agents (EBAs). Not that it's a standard practice in every market. But we do want to make sure that our clients don't pay more than a property is worth. The secret is knowing market values and being able to demonstrate to a seller that the offer price is reasonable given sale prices of comparable properties in the neighborhood. EBAs have to give the seller strong justification for a low offer.
Denver's real estate market is uneven. Prices in some neighborhoods are stable, even appreciating, while in others are dropping slightly, and in still others are dropping drastically. This kind of a market suggests that buyers should be careful in who they choose to represent them. Buyer's Agents who don't work exclusively with buyers can be affected by their expertise in representing sellers, wanting to be fair to the seller, sometimes to the detriment of their buyer client. Exclusive Buyer's Agents don't have that kind of a mindset. Their mindset is on getting the best price for their buyer clients.
Aug. 14, 2007
 Denver’s market is beginning to show signs of recovery, but not in prices. The median price of a single family home dropped 3.1 percent from June to $255,000 and from $259,500 last July, a 1.8 percent drop. But fewer homes were on the market in July 2007 than in 2006 by 5.4 percent. July was the seventh consecutive month to show a drop in the number of homes left unsold.
5,951 homes were under contract in July, 7.5 percent higher than July 2006 when there were 5,538 under contract, showing growing demand. The number of homes sold and closed also increased, from 4,850 in July 2006 to 4,980.
The number of foreclosures has dropped overall, likely due to high numbers of homes being sold at auction. During the first weekend in August 300 homes were taken off the market from auction activity, reducing the number that had been flooding the market. It will still be some time before foreclosures are fully absorbed. Together with resale homes not under foreclosure, the total number is some 30,000 on the market, a far cry from the 9,000 inventory in 1999 at the height of Denver’s double-digit increases in sales prices. Of course, population increase has contributed to the increase in number of unsold homes on the market, but nowhere near the contribution by foreclosures.
Fewer buyers are looking for homes which impacts inventory and prices, and those who are looking want bargains. Buyers still have many choices of homes available to them, and don’t have to be in a hurry to buy. This week I showed homes in Aurora’s Hoffman Town to a couple relocating from California. This is a neighborhood changing rapidly with a disproportionate amount of “fix and flip” homes emptied by borrowers adversely affected by the sub-prime mortgage meltdown. Investors have stepped in and swooped up these low-priced homes close to the Denver metro area’s newest medical center complex at the former Fitzsimons Army base. Many are still available for sale, so many that I told my buyers if they weren’t quite ready yet to buy, they could be assured of a steady stream of these spacious remodeled homes so close to a major medical redevelopment.
In contrast to single family homes prices, condo sold prices (which include townhomes) rose to $192,885 from $186,328 in June, a 3.6 percent increase, but dropped slightly from last year’s July price of $194,705.
Average prices for single family homes in July 2007 dropped from $334,833 in June and $328,721 in July 2006 to $316,024.
Jul. 10, 2007
 It’s still a terrific buyer’s market in Denver, plenty of homes on the market to choose from. Prices are rising, but slowly. The median price for a single family home in May was $251,155. In June it had risen 4.72% to $263,000. Last year this time the median price was $261,750 for a 4.78% rise in 2007. The average for June was $304,055. A big factor in rising prices is the number of high-priced luxury homes selling for $1+ million. More sold in June than in May.
For condos the price rise was lower, 1.90% over May and a 1.23% drop from last year this time. The median price in June was $157,950, down from $159,900 in 2006. Luxury homes had little impact on the condo market.
Total inventory dropped from June 2006 by 5.2%. Experts speculate that sellers are keeping their homes off the market in order to lessen competition with foreclosures, thus creating a lower supply.
Average days on market for single family homes has dropped to 94 in June from a high of 125 in February. As has been true throughout Denver’s stagnant market, good homes in good locations in good conditions are being snapped up quickly, while overpriced homes and homes in need of routine maintenance are still languishing on the market. Days on market for condos is higher at 108 in June, showing the difficulty of selling condos in a buyer’s market.
Sellers were more realistic in June in terms of list price. Homes sold on average at 97% of list price at the time of sale and at 94% of original list price. Last month it was 97% of list price contrasted with 87% of original price. Maybe agents are more able now to convince sellers to list their homes closer to market value than they had been in past months.
Denver’s economy is predicted to be bright the last half of 2007 according to a mid-year report by the University of Colorado Leeds School of Business published July 5, 2007. Unemployment is low at 3.6% in May. The information and professional and business services sectors are as healthy as they’ve been in years. In December 2006 job growth was predicted to rise by 1.9% in 2007. While growth during the first half of the year is lower than expected spokesman Richard Wobbekind, a Leeds economist, expressed optimism for the last half of 2007, noting strength in the mining, health care, natural resources, and tourism sectors. A cloud over the economy continues to be the low number of new housing starts leading to a lessening number of jobs in the construction sector.
Jun. 5, 2007
|
Courtesy of Denver Metrolist (MLS) 6/5/07
|
Change vs
|
|
May-07
|
Prior Month
|
Year Ago
|
|
%
|
%
|
|
Single Family (Res + Cond)
|
|
Active
|
29,110
|
4.49
|
-4.42
|
|
Under Contract
|
6,353
|
2.92
|
-1.64
|
|
Sold
|
5,081
|
15.5
|
1.42
|
|
Avg DOM
|
102
|
-6.01
|
6.07
|
|
Avg Sold Price
|
$288,905
|
-1.4
|
0.55
|
|
Residential
|
|
Active
|
21,505
|
5.02
|
-2.56
|
|
Under Contract
|
5,045
|
3
|
-1.66
|
|
Sold
|
3,952
|
13.82
|
1.52
|
|
Avg DOM
|
98
|
-9.26
|
10.11
|
|
Avg Sold Price
|
$318,904
|
-1.12
|
1.16
|
|
Condominium
|
|
Active
|
7,605
|
3.03
|
-9.33
|
|
Under Contract
|
1,308
|
2.59
|
-1.58
|
|
Sold
|
1,129
|
21.79
|
1.07
|
|
Avg DOM
|
118
|
0.85
|
-4.07
|
|
Avg Sold Price
|
$183,896
|
0.74
|
-3.21
|
Following on the heels of the OFHEO report a week ago which showed lower values during the first quarter of 2007, average prices for single family residential homes decreased in May slightly (1.12%) from April, but increased slightly over May 2006 by 1.16%. Median prices for single family residential homes (a better indicator of real prices) increased in May by 1.27% over April.
Homes sold for an average of 97% of list price, but 87% of original list price, showing that sellers are having to lower prices to get their houses sold. For too long sellers were setting unrealistic prices, having been used to price rises a decade ago when prices were rising by double digits every month.
For condo/townhomes the increase in median prices was greater, 4.73% from $148,000 in April to $155,000 in May.
Overall the Denver real estate market is stable, showing little growth, but little decline. Numbers of homes for sale has increased from April, but decreased from May last year, showing a lessening of the housing glut.
More houses sold in May than in April by 13.82%, and were up slightly (1.52%) over May a year ago.
Days on market decreased to 98 from 108 in April, but were still higher than in 2006. Values for single family residential homes declined slightly by 1.12% from April, but rose 1.16% from May 2006.
Condominium/townhouse sales were up by 21.79%, a significant jump over April, but just a slight increase over May 2006. Days on market for May were unchanged from April, but down from May of last year. Average price was up just slightly over April, but down 3.21% from last year this time.
What may have an impact on the Denver real estate market is the threat of higher interest rates. Rates increased during May from 6.125% for an “A” borrower to 6.375% at the end of May, limiting buyer affordability. If interest rates rise significantly, as they did in the 1980s, then the pool of buyers will shrink and sellers will experience a longer time on market and a decrease in value. Peter G. Miller, in an article in Realty Times, worries that the increase in foreign ownership of American debt may one day reach a point where foreign investors will be much more cautious, lending at higher rates of return, meaning higher interest rates in the U. S. If that occurs (and it’s more or less likely depending on which economist you read!), then mortgage interest rates like the ones we had in the 1980s could shoot up.
May. 31, 2007
 The Denver metro area ranks 221st out of 285 in rate of appreciation for the first quarter of 2007 at .34%, according to the Office of Federal Housing Enterprise Oversight (OFHEO). The one-year rate is slightly better at 1.09%, and the five-year rate is a mediocre 14.78%. By comparison, the top rated MSA (Metropolitan Statistical Area according to the U. S. Census Bureau) is Wenatchee, Washington, with a first-quarter appreciation rate of 25.6%, a one-year appreciation rate of 5.96% and a five-year increase of 70.56.
The lowest MSA is Punta Gordon, Florida, with a net loss in the first quarter of 4.57%, a one-year loss of 2.81%, but in the last five years Punta Gorda showed a gain of an astonishing 94.81%.
The lowest 20 MSAs show first-quarter losses from 1.93% in the San Diego-Carlsbad-San Marcos, California area to the 4.57% loss in Punta Gorda. Among the lowest 20 MSAs, the range of appreciation for the last five years is Cape Coral-Fort Myers, Florida metro area with a 108.07% gain to an 8.55% gain in the Detroit-Livonia-Dearborn, Michigan metro area. Some areas, like Cape Coral-Fort Myers show the results of the so-called "real estate bubble" bursting in the last year to 18 months, while Detroit shows a slighter decline.
The upshot is that while Denver showed remarkable appreciation in the 90s, there is NO bubble-burst effect from those years with a precipitous loss in market value. Instead the market remains flat but steady. Good news for buyers.
If you want to find out what YOUR house is worth, check out OFHEO's calculator.
And if you'd like to be updated on Denver's market conditions, sign up for the Denver Real Estate Update at the Buyers Advantage website.
May. 16, 2007
Categorized in: Buying a home...
 When you first start thinking about buying a home -- whether you're moving up or buying your first home -- you'll be offered all kinds of advice from friends, family and co-workers. Their one purchase (maybe two or three) makes them an expert on home-buying. They'll recommend inspectors, lenders, insurance agents they've used.
But wait! They've only had one (okay, maybe two or three) experience. But any REALTOR® has had experience with hundreds, maybe thousands of transactions. That does make them an expert! And they've had a lot of experience with the professionals they recommend.
I've had ten years of experience working with home buyers to buy the home of their dreams. I've learned a thing or two about what it takes to get the job done. Here's what makes me different from your advisors.
I work hard for my clients to save them money. If I can negotiate $5.000 off the price of a home, that doesn't include the additional build-up of equity amortization for paying less for the original loan amount, and that's much more than the original $5,000.
Why would I do this when I'm paid by commission and a higher price would mean a higher commission for me? First, as an Exclusive Buyer's Agent I'm legally obligated to represent the best interests of my clients above any other interests, including my own! And -- the difference in commission for negotiating $5,000 off the price of the house is only $140! I want my clients to be satisfied. Their good will and word of mouth are good advertising, worth much more than whatever I save them. My goal is to save my clients as much money as possible when making what may be the biggest purchase of a lifetime.
I save clients liability and pitfalls they may not be able to avoid simply because they don't have the knowledge and experience to know what those issues might be.
I work with a virtual team. Markelle Harden in Arizona is my Online Transaction Coordinator. She uses Settlement Room to help clients through the final process of final loan approval, appraisal, home inspection, and a host of other details that must be attended to.
Lynn Payge Hoppe maintains my website from Texas. Ed Robisheaux in Virginia helps to maintain my position on the internet. Kathleen Allardyce helps with web search engine optimzation.
My team helps me keep my business on track so that I have more time to work with you when you're considering making the largest purchase of a lifetime. Your advisors, though well-meaning, have no financial stake in making sure your best interests are served. I do. Helping people make their dreams come true is my business.
So listen to the advisors, but let a REALTOR® put her or his expertise to work for you when you buy a home in Denver, Colorado.
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