It's about time!
It's about time for a forum that talks about Metro Denver real estate without the sales pitch. Nobody likes to be sold. The "get Real" Estate blog will always live by the promise of truth and conversation without a price tag. This blog will bring together some of the finest contributors on every imaginable subject relevant to real estate.
That's because this blog will be about YOU! My goal is to always inspire discussion, provide facts, opinions, a few laughs and I'll even provoke response along the way. But, YOU will drive the content of this blog. What is it about real estate that YOU want to know? Are you a buyer or a seller... or maybe you're window shopping? Come to The "get Real" Estate blog and kick a few tires. Wanna learn how to stage your home, make the correct choice on a loan, invest in your first "fix and flip" or find a mortgage expert you really can trust? Go ahead test me! Are you scared about the whole real estate game? What is mold? What isn't mold? Maybe all you can do right now is spell real estate. The "get Real" Estate blog will also soothe, gently pamper and apply digital band aids where necessary.
What are the trends in Metro Denver real estate? What does the national landscape say about what's really going on in our cities and communities? And, what's going on in YOUR neighborhood and YOUR house. Now that... is what's really important!
So, jump in anytime and help The "get Real" Estate blog be real. Really!
Wayne
My name is Wayne Herman. I bring to The "get Real" Estate blog nearly 24 years of real estate practice and management in the Denver area and California.
I work with the wonderful and forward-thinking company Colorado Home Realty and Colorado Home Mortgage. The company leads the industry in exceptional agent, and more importantly, client and transactional support management. Our motto is to serve our clients beyond their widest expectations.
I also have a passion for teaching real estate, especially on the agent and consumer level.
You may also recognize the name and face (minus the mustache) from CBS4. I was the Morning Business Anchor for several years before leaving the part-time television job to continue my full time job as a Managing Broker in 2006. I had a nearly 28 year broadcasting career that, for many years, complimented the real estate profession as well.
Click HERE to drop me an email or give me a call at 720-271-0790.
You can also view my Facebook profile.
Eric Nesbitt is the President/CEO of The Nesbitt Group, a commercial real estate tenant and buyer representation firm affiliated with Keller Williams Executives. His firm assists clients in lowering their bottom line through real estate. He is also the President of the Denver Board of Commercial Realtors and a Colorado licensed real estate attorney. thenesbittgroup.com| nesbittlawoffices.com
Rebecca Hansen, Senior Mortgage Loan Consultant, Liberty Financial Group. "Touching lives with integrity. All of my business comes from 100% referral. We have been in the loan business since 1960. Looking forward to consulting you on your future goals and plans." rebeccahansen.biz
Jim Renshaw's expertise is in title insurance and real estate market trends for the greater Denver Metro area. He works for Land Title Guarantee Company, locally owned and operated since 1967. jimrenshaw.com
Click Here for Total MLS Sales Statistics
Based on Information from Metrolist, Inc. for the period Jan 2008 through present. Metrolist, Inc. Note: This representation is based in whole or in part on data supplied by Metrolist, Inc. does not guarantee nor is in any way responsible for its accuracy. Data maintained by metrolist, Inc. may not reflect all real estate activity in the market.
In July, home sales in the Denver area rose to 4,440, up from 4,186 the previous month, according to Metrolist data. The median home selling price slide to $229,900 from $237,500 in June, but rose slightly from $229,200 in July 2008. At the end of July, the inventory of unsold homes stood at 20,890 units. Most buyers paid from $200,000 to $300,000 for homes, while 52% of condo sales were under $150,000.
You can read more statistics at a Denver Post article.
Wayne's email
Wayne Herman | Create Your Badge
We continue to get great news in terms of housing prices and the worst be over.
By every measure, except foreclosures, the housing market has stabilized and many areas are recovering including the Denver market. Nationwide, home resales in June are up 9% from January, on a seasonally adjusted basis. Sales of new homes have climbed 17% during the same period. And construction, while still anemic, has risen almost 20% since the beginning of the year.
Even home prices, down one third from the top, edged up in May, the first monthly increase since June 2006.
Read more in the latest from USA Today. Enjoy!
Construction of new U.S. homes rose in June to the highest level in seven months as builders rushed to pour foundations for homes that must be completed by the end of November for first-time buyers to take advantage of a special tax break.
The Commerce Department said Friday that construction of new homes and apartments jumped 3.6 percent last month to a seasonally adjusted annual rate of 582,000 units, from an upwardly revised rate of 562,000 in May.
It was better than the 530,000-unit pace economists expected, and was the second straight monthly increase after April's record low of 479,000 units.
"This was the most positive housing report in ages," wrote Patrick Newport, an economist with IHS Global Insight.
Homebuyers are being attracted by lower prices, and first-time buyers can also take advantage of a tax credit worth 10 percent of the purchase price, with a cap of $8,000, which was included in the federal stimulus package.
"The largest spark...has been the looming deadline," said David Crowe, chief economist for the National Association of Home Builders. His trade group said Thursday that the confidence level of builders has risen to the highest level in nearly a year.
Shares of major homebuilders rose on the news with Beazer Homes and Hovnanian Enterprises up about 5 percent in midday trading. The broader stock indexes, meanwhile, were little-changed Friday after Bank of America and Citigroup became the latest banks to report big second-quarter profits but also weakness in their loan portfolios.
This story comes in part from The Associated Press.
If you or someone you know is thinking about buying a home... procrastinate no longer - it's time to GET OFF THE FENCE!
"There's no place like home," so the famous saying from The Wizard of Oz goes. And this year, that saying applies to many new home owners, as first-time home buyers (FTHBs) have accounted for 53% of total residential real estate purchases during parts of 2009. For those of you who have already bought a home, congratulations. For those of you still waiting, this is a call to action: It's time to get moving.
While it's true that the best environment home buyers have ever seen may have been from January to late May of this year, outstanding opportunities still exist for those who act soon. If you are planning to buy a home, there are important dates on the calendar that you need to take note of so you can act accordingly. These dates represent money-saving opportunities for consumers.
We May Never See Rates This Low Again Beginning in late November last year, 30-year fixed rates plunged into the mid 4.0% range. So what prompted this precipitous decline? The Federal Reserve announced that they would start purchasing mortgage backed securities (MBS) issued by Fannie Mae, Freddie Mac and Ginnie Mae. The Fed made this decision because there was a lack of liquidity and buyers in the fixed income securities market. By becoming a buyer for the securities that determine interest rates, the Fed helped lower rates to stimulate the economy by absorbing supply not picked up by others in the markets.
Following the announcement by the Federal Reserve, home loan rates immediately responded, falling a full percentage point. When the buying started, home loan rates fell even more, sparking a frenzy in refinancing and buyers seeking financing.
However...and here's what you need to note...this program implemented by the Federal Reserve has a deadline! That deadline is December 31, 2009. And as the Federal Reserve has been the primary buyer for MBS, purchasing up to 85% of all MBS since March, the impact to rates when the program ends could be as dramatic as when the program was announced. This means that interest rates could conceivably rise to well above 6.00%.
In the month leading up to the announcement, interest rates had been exceptionally volatile, peaking on some days near 7.00% for a 30-year fixed rate loan with no points and fees. This kind of volatility often happens when investors are reluctant to purchase MBS and trading volumes in securities are light, causing rates to rise quickly if investors demand a higher return for their investment.
While the final impact to interest rates will have to play itself out, one thing is certain: without the Federal Reserve as a primary buyer of MBS, home loan rates could be primed for a spike if other investors do not pick up the slack that could result in 2010.
It is unlikely that interest rates will return to the sub-5.0% range again this year. Why? The purchase and refinance mortgages that have already occurred this year were packaged into Mortgage Backed Securities after they closed and were sold on the secondary markets. This added supply to the markets and the new Bonds simply outweighed what the Fed had allocated to buy. Still, the Fed's program is helping slow down the rate increases we are seeing...but remember; their program is due to end on December 31. That's why now could mark the lowest rates that will be seen for some time to come.
Would You Like $8,000? Buy a Home. Soon! To stimulate the economy, Washington juiced up the stimulus plan passed last year in February. Two benefits for FTHBs were that the amount of the tax credit was increased from up to $7,500 to $8,000. And, more importantly, the amount of the credit does not have to be repaid!
To qualify for the credit the individuals buying a home cannot have owned a home in the last three years. So, while the credit is discussed as a credit for first-time buyers, anyone who has not owned a home in the last three years is eligible.
There are income limitations to fully qualify but they are quite liberal. Single tax filers earning up to $75,000 and joint filers earning up to $150,000 based on modified adjusted gross income can earn the full credit. A partial credit is available for those earning up to $95,000 and $170,000 respectively.
The amount of the tax credit is based on a percentage of the price of the home, specifically 10% of the purchase price, up to $8,000. This means if someone purchases a home for $70,000 their credit would be $7,000 and if the amount of the home purchased is $100,000, the credit would max out at $8,000.
Note! The deadline to take advantage of this opportunity is November 30, 2009. Close in December, and you just lost $8,000.
Homes Have Never Been More Affordable FTHBs are leading the way, taking advantage of one of the best home buying opportunities ever, providing support for the real estate market. As indicated earlier, FTHBs have accounted for as much as 53% of purchases for any month this year.
Who can blame them? In short, no one. Home prices have fallen to levels not seen in years and interest rates hit their lowest point ever. This combination led to the highest home affordability ever recorded.
The National Association of Realtors® tracks what is known as the Home Affordability Index. The Home Affordability Index is arrived at as a function of both median home prices, available interest rates, and median family income.
The index represents the amount of monthly income that is required to pay a mortgage payment. In 2005, approximately 23.3% of a family's monthly income was required to carry a mortgage payment. With falling home prices and interest rates, the percentage of monthly income required to pay a mortgage payment is now approximately 15%.
This means that for a family at the median income level purchasing a home priced at the median income level, the monthly mortgage payment has declined nearly 36%! This is great news for anyone shopping for a home today.
Get Busy, Time is Short! In order to take advantage of both the available tax credit and low interest rates, anyone going into contract should strive to have their purchase agreement not later than mid-October. This will allow some time cushion in the event anything pops up in the purchase process and still allow for closing in time to take advantage of the available tax credit.
Home prices have fallen to levels not seen since the start of the decade in many parts of the country, interest rates are still near all time lows, and the availability of free money from the IRS all mean that the time to act is now. It is always easy to look back and identify times people should have acted, and this could well be one of those times people will look back and say, "Wow, I should have bought a home in 2009!"
Metro Denver's resale housing market appeared to start returning to normalcy in June, according to sales data Tuesday from Metrolist Inc.
Single-family home sales in June, for example, were equally split between the lower price ranges that appeal to first-time homebuyers and pricier houses that attract homebuyers moving up to larger and/or more expensive homes.
A broker tells the Denver Business Journal, "Earlier this year, the majority of resale home activity was first-time homebuyers, distressed properties and investor activity. June appears to be the transition to a normal Denver market -- a market with both first-time homebuyer activity as well as 'move-up' activity."
Resale homes are those that have sold at least once before.
Combined sales of single-family houses and condominiums increased 15.4 percent to 4,186 in June from 3,628 in May. Late spring and summer traditionally are this country's prime home-selling season, because families buying and selling homes try to complete deals and move when children are out of school.
But June home sales this year were down 13.6 percent from 4,845 for the same month of 2008.
In June, 3,328 single-family homes were sold, up from 2,857 sales in May, but down from 3,847 for the year-prior June.
Last month, condo sales rose to 858 from 771 in April, but were down from 998 year over year.
Average sold price for both types of home rose 6.34 percent to $258,434 in June from $243,022 in May. That price was down 3.21 percent from June 2008's average selling price of $267,005.
Other June sales price breakdowns from Metrolist include:
For this year's first six months, total home sales and sold prices were down from the same period of 2008, according to Metrolist.
Combined sales of single-family homes and condos decreased 17.5 percent to 19,363 from 23,471 for the first six months of last year. Average selling price was down nearly 8 percent to $235,930 from $256,408.
Average days on the market for both housing types dipped to 104 through June, from 106 for the same period of 2008.
Other year-to-date data through June, compared to the same period of 2008, include:
When tenants go out looking for new office space, often they are impressed by a building's appearance, location and rent. But they aren’t aware of a landlord’s financial situation, the performance of building systems, the likely trend of operating expenses during the next five or 10 years, neighborhood problems and other factors which could turn what seems to be a good deal into a bad deal that would hurt your company and your career.
To protect your company, you need candid, complete answers to 6 key questions when you look for office space:
1. How good is the quality of building management?
You've got to go beyond the well-maintained corridors to determine whether the landlord can be counted on to honor the terms of a lease and be a good partner during the lease term. You should assess the satisfaction of existing tenants and how the landlord responds to routine and not-so-routine requests for maintenance, alterations and special services. Does the landlord respond promptly and deliver fair value? Do they see every request merely as an opportunity for revenue? Is the service adequate or does it take many repeated requests to correct a simple problem or achieve agreement on how to proceed with a desired alteration?
2. From a financial perspective, how does a building you're interested in compare with others?
This requires a thorough assessment. You should determine how much debt a building is carrying, how the operating expenses and management fees at a building you're interested in compared with the operating expenses at comparable buildings, whether critical maintenance has been performed or deferred (which would mean much higher operating expenses in future years). If a building has serious financial problems, working conditions could be compromised by poor air quality, unacceptable temperature swings and inadequate security. More importantly, if the landlord is suffering financially, there might be a strong possibility that the lender will foreclose, which may terminate your lease in most cases.
3. What's the physical condition of the building?
There are plenty of factors, difficult for a tenant to see, which affect the desirability of a building. For example, some floors might be offered with HVAC capacity suitable only for an open floor plan. Virtually any use of closed offices, as are typical, would require so-called "supplemental HVAC" at your company's cost. Buildings which seem quite modern could have elevators with unacceptable wait times -- a million-plus square foot institutional structure is plagued by elevator delays and lapses in elevator service; every day, tenants suffer tangible dollar losses as staff are gone longer than necessary from their offices, delayed by the elevators.
It's easy for a tenant, touring a building, to miss signs of problems with structural integrity. For years, high winds caused excessive sway on the top floors of one well-known building in the Denver area. Many employees felt the effects of motion sickness, and some feared for their safety. Eventually, the landlord provided an adequate engineering solution, at substantial expense to existing and incoming tenants.
4. How do the nature of non-rent charges compare with other buildings?
Many deals appear similar when a lease is signed, but over time total costs tend to vary dramatically. Determining what costs your company is likely to face at a particular location requires thorough analysis. That's why your commercial real estate broker should analyze operating expenses, management fees, real estate taxes, overtime HVAC charges, supplemental HVAC charges, condenser water charges, tap-in charges, sub-metered electricity and ERIF, among other costs a buildings you're interested in. 5. Are there any "hidden" drawbacks to a building's location?
5. Are there any "hidden" drawbacks to a building's location?
Crucial drawbacks are often overlooked as tenants focus on obvious criteria like proximity to light rail, downtown or a highway interchange. For instance, an institutional tenant sought reasonably-priced space for an important operation which involved people working beyond normal business hours. The tenant liked an older building that had recently undergone substantial refurbishment. It offered good light, a functional floor plan, adequate electrical capacity and nice building amenities. Their visits during normal office hours left them with a good impression of the building and the neighborhood. They started preparing preliminary plans. Only when their commercial broker explored their need for after-hours operation and told them about a nearby drug rehabilitation center did they have second thoughts. Additional research revealed that several adjacent buildings used extra-heavy night-time security including dog patrols to sniff out drugs. Since the tenant was not in a position to provide such security for their staff, they decided this wasn't a suitable location.
6. How would other tenants in a building affect its desirability?
It's reassuring to see that a building has Fortune 500 tenants, but you need the right building dynamics, too. For instance, if you're moving into a building with one or more tenants which occupy multiple floors, elevator usage and wait times will be very much affected by inter-floor traffic. Most commercial real estate brokers advise clients in this situation to avoid being in such an elevator bank, to seek a dedicated elevator or other solutions. If you're considering a building with a government entity, media entity or other high profile tenant, you need to be well-advised about whether the landlord maintains adequate security. Who wants their business disrupted by TV cameras, picket lines or bomb threats?
These are only a few of the questions you should be asking when looking for office space. What's needed is expertise in the Denver real estate submarkets, building operations, and landlord accounting practices.
This comes from the "did you know about this one" file this morning.
Did you know that the Cap-and-Trade bill heading to the U.S. Senate has a clause that could FORCE homeowners to make their home EcoFriendly BEFORE THEY SELL IT?
That's right!
Nancy Pelosi has included a new federal policy in the bill that residential, commercial and government buildings be retrofitted to increase energy efficiency. Now, I'm all for EcoFriendly and energy conservation measures, but it can be VERY, VERY expensive to retrofit an existing home that wasn't built with "green" in mind. The policy means that homeowners could be required to retrofit their homes to meet federal "green" guidelines IN ORDER TO SELL THEIR HOMES. If the Cap-and-Trade bill passes the Senate, it would require the Secretary of Energy to develop and implement an retrofit policy for single-family and multi-family residences.
Is that you? Can you afford it?
The program would require homeowners to have inspectors, certified auditors and raters to uses infrared cameras to measure their energy efficiency.
Can you afford to hire these professionals?
Then, the results of these energy audits would determine what retrofits would NEED TO BE PERFORMED BEFORE THE SELLER CAN SELL THEIR HOME.
Can you afford to do this?
Then the retrofits would be performed by licensed retrofit contractors using government-approved methods and resources.
This is a hideous policy buried in this bill that could cost you as a homeowner THOUSANDS OF DOLLARS before you ever decide to put your home on the market.
Read this article by clicking HERE and decide for yourself. I just thought you might like to know about this.
LOCATION, LOCATION, LOCATION!
It may be a worn out adage, but it's the only real factor that should figure into buying a home.
Location can usually make up for anything that may be wrong with a home. When a buyer has eliminated all but two houses they like, some of them will inevitably choose the wrong location. It's so easy to become emotionally involved with a home without consideration of where it sits. There's a reason why the same home in Brighton costs tens of thousands less than the same model in Highlands Ranch or Golden. It's all about location - hands down. Since very few of us in today's culture buy a home to live in forever, location should be the only factor in a final decision to buy a home. Of course this scenario is only true if the buyer is looking to make their real estate purchase a financial investment over time.
Assuming that's the case, here are a few tips on where NOT to buy your next home. Some of them may seem like common sense, yet populations can be dense in these areas:
Near freeways or busy streets, under flight paths or railroad tracks: Given the choice to buy a home that backs up to a busy street or the one 4 blocks further into the neighborhood, which one would you buy? Should be common sense right? But, unfortunately it isn't. In the past several years, I've turned down listings because sellers are too attached to the home and not the location. The homes next to the busy street are tough to sell at what the seller usually thinks the home is worth. The buyer’s pool shrinks exponentially when a home is in a poor location. The sound of train tracks and whistles may be a soothing thing for some homeowners, but the vast majority of current buyers will see it as an eye (and ear sore) that takes the home out of the running.
Depressed neighborhoods: While I don't and legally can’t recommend "good" neighborhoods, I could easily argue that buying in an economically depressed area is a nightmare. When you're looking at a home, check out the neighborhood first. If cars are on blocks and the porch has couches and mattresses on it that you can barely see because the grass hasn't been mowed in 2 years... well, you get it. Sure you can find bargains in these places... but ask yourself why. Is it truly a bargain or is that really all the home is worth now and likely for many years to come. We call it pride of ownership. If your potential neighbor's home and yard looks fantastic, that's a wonderful sign that you're in an area that's more likely to appreciate down the road. Unless there's visual proof that the neighborhood is going through rehab, it's probably not a good choice to buy in a place that looks like a junk yard.
Remember, hazards are hazardous: Sorry, but I wouldn't live next to Three Mile Island. And, transformers are things movies are made of - they don't belong in my backyard or just over the fence. So. you've heard that your home may sit on or near an old landfill, what do you do? Buy a similar home 2 miles away instead. Stuff rises from the dirt and can make you sick... or not. But, the first time a buyer gets wind that the home sits on top of gasoline or nuclear power-laden dirt, the deal is done and over for good.
Crime: Now unless you're a drug dealer or pimp, I don't know anyone who would want to live, given a choice, in a crime infested neighborhood. As a buyer, do your due diligence when it comes to crime. Statistics are readily available on most "drug houses" or places where sexual offenders are living. Also, if you find a house you think you like, go knock on a few doors and say hi and ask questions. Drive the neighborhood at different times of day to establish the "attitude and behavior" of its residents. This could save you some headaches later when you hear cars screeching down the street and stopping at the same home at midnight.
These points as I said should be common sense. Don't become so emotionally involved with a home that you overlook these things. Some good location tips may not be as easily determined though. For instance, given the choice of buying a home on a corner lot or in a cul-de-sac... always go with the cul-de-sac. It's likely to be more quiet and family's with children will probably be your buyer when you decide to sell and move on. It's great to be NEAR shopping, but not across the street from it. Annoying traffic and people walking the streets are less likely a few blocks away from that strip mall or grocery store. I recently sold a home that backs to a cemetery. It wouldn't bother me - it's quiet. But, for many more potential buyers, this scenario is nothing short of a Stephen King novel.
So, do yourself a favor and consider LOCATION to be the most important amenity to consider when you're looking for your dream home or even a starter home. You'll be much happier in the end and it will work better for you as an investment.