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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December 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.
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Project - All Midrange
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Cost
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Cost Recovered
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Basement Remodel
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$56,476
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73.8%
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Bathroom Addition
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35,409
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56.6%
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Bathroom Remodel
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15,171
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67.8%
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Roof Replacement
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14,238
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55.1%
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Window Replacement (vinyl)
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9,669
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72.4%
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Window Replacement (wood)
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10,578
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75.9%
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[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.
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