Lies, damned lies and statistics…
Denver Real Estate ~ Take a close look at the sales statistics for real estate sales in the Denver Metro area. At first glance the average sale price has dropped $55,251 from a year ago ($267,259 from $322,510). That is a huge drop that would indicate values have dropped considerably.
But Wait! Let’s look at the Percentage of Sold Properties by Price Range:
Notice the lower prices ranges (single family), everything under $150,000 has seen an increase in volume this year.
Now notice the drop in sales of homes over $500k. We are selling the same number of homes, we are just selling them in the low end of the market.
The decline in value is due to the number of lower end homes we are selling coupled with the decrease in the higher end. A glut of low end sales will skew the average price, pulling it down and giving an inaccurate picture of the market.
Interestingly the middle of the market has not been effected.
First time home buyers, investors are in the market. They are scooping up the low end real estate. Savvy buyers know how to buy (low) and sell (high). People who continue to put their trust and faith in the news media will be saying in a few years, "Gee I coulda bought that for $xxx, but now the market has passed me by and I can’t afford to purchase a home."
Why is my house not selling?
As I go about my daily routine selling Denver real estate, I get asked by home sellers, "why doesn’t my house sell?" That is the $64,000 question.
I wish there was one simple and complete answer, but alas there isn’t. In today’s real estate market we are dealing with factors beyond what I’ve seen in my 24 years in the business. We are seeing sales occur in the first 30 days and others that take 6 months or more.
Typically the reason the home is not selling is either price, condition or location.
What most seller’s don’t take into consideration, they are competing with the market as a whole, not just their neighborhood. True when pricing a home we look to the area for valuation. That is normal and accepted.
What isn’t realized is buyers have many choices. They might like a particular neighborhood or any of the other hundreds of neighborhoods in the Denver metro area. Seldom do buyers (or at least the ones I’ve worked with) hang around waiting for a home to go up in one specific neighborhood.
Most buyers are going to buy based on 1) their budget 2) personal tastes 3) proximity to work and/or schools. These requirements often times have multiple solutions, so your house may work or maybe not.
Condition of the home is a huge factor.
Today most savvy agents and homeowners take the time to prepare the home by hiring a professional stager. We learned a long time ago "the way you live in a home and the way you sell a home are two different things." Hiring a professional to come into the home and either work with your belongs or augment some of their own, works miracles. Simply said.
It has been my personal experience the expense of hiring a stager often comes back in multiples by shortening the listing period and increasing the homes potential. (a great resource for staging is found at Staging rants & ravings)
Another factor that makes a home more difficult to sell is the "dated aspect". A homeowner must consider who the potential buyer will be. In the year 2000 home styles changed. We went from gold fixtures to chrome. Some age demographics will not purchase a home with anything gold in it! Changing out the fixtures is usually a fairly easy fix. However if your home has 1970’s vibrating through it, the makeover my be more than one will want to do. The only way out maybe to price it accordingly and let the buyer bring it up to date.
Homeowners who want to "update" a home, be sure you are up to doing the job, not just right, but complete. There is nothing sadder than having a seller update part of their home. Buyers will come look and the only thing they will see is the undone updating. Yes, buyers are cut from the same "the glass is half empty" mold.
Location is so important.
Buyers shop for the best of everything. If your home has a location with a glitch, say an apartment building next door, or a messy neighbor, barking dog, busy street, backs to a freeway, a blinking sign glaring through the bedroom window or railroad tracks in the back yard, you may have a problem.
Location issues can be overcome. Sometimes the best thing to do with a bad location is tackle it head on. Some buyers actually LIKE homes on a busy street, because they crave the "pulse of the city" nearby. Others might be looking for a home next door to the soup kitchen, because they are into volunteering. Creativity is part of sales. Get creative with a solution.
Pricing is the most important factor.
When all else falls reduce the price. Statistics have shown a property that has 10 showings and not offers is over-priced. Homeowners who insist on a price that home buyers aren’t grabbing need a reality check, or to remove their home from the market.
Overpriced homes that get shown and are getting good feedback maybe being used as an example. Buyers are comparing values and if one home isn’t selling and the other one is, perhaps being the bridesmaid again and again means it’s time to adjust for the market.
When it comes to real estate there is a mathematical equation that works time and time again.
Price=Sale.
Find the right price and find the sale.
Mortgage Debt Cancellation Relief - H.R. 3648 Public Law 110-142
Individuals who are relieved of their obligation to pay some portion of a mortgage debt on a principal residence between January 1, 2007 and December 31, 2009 will not be required to pay income tax on any amount that is forgiven.
General Provisions of Public Law 110-142:
- No income limitation: All Borrowers receive the relief, no matter what their income.
- Dollar limitation: no more than $2 million of mortgage debt is eligible for the exclusion ($1 million of debt for a married filing separately return).
- Relief applies only to an individual’s principal residence.
- The forgiven mortgage debt must have been secured by that residence.
- No relief is available for cash-outs, whether the cash-out takes the form of a refinanced first mortgage, a second mortgage, home equity line of credit or similar arrangement.
- Eligible debt is what is called "acquisition indebtedness." This is debt used to acquire, construct or rehabilitate a residence.
- Refinanced debt qualifies, so long as the debt does not exceed the original amount of the debt. (Same rule as Mortgage Interest Deduction).
- Home equity debt (or second mortgages) qualifies if the funds were used to improve the home. ((Borrower must have adequate records, as under current law.)
- See cash-outs, above. No amount of a cash out maybe treated as acquisition debt.
Additional Provisions of Public Law 110-142:
Refinanced Mortgages:
The relief does apply to refinanced debt in some circumstances. The rules seek to assure that any debt eligible for the relief is directly related to the acquisition or improvement (such as rehabilitation, expansion, renovation, reconstruction) of the principal residence. Debt used for furnishings (i.e., any movable property) in the home is not eligible for the relief. When the proceeds of any refinanced debt is used for any purpose other than acquisition or improvement, those proceeds are not eligible for the relief.
Principal residence:
A principal residence is defined in the same manner as the rules that apply to the capital gains exclusion on the sale of a principal residence. An individual may not have more than one principal residence at any given time.
Second Homes:
As a general mater, the relief does not apply to any debt forgiveness on any mortgage for any second home of the taxpayer. However, if a taxpayer uses a residence (other than his principal residence) solely as an income-producing rental property, already-existing relief provisions might apply, depending on the taxpayer’s situation. If the second home property was acquired as a speculative investment (such as for resale rather than rental), relief provisions are unlikely to be available.
In all events an individual who is in a short sale, foreclosure, workout or similar situation on a residence (including condos) other than his principal residence should consult a tax adviser to determine what, if any, relief provisions might be available.
Mortgage Insurance Premiums:
The deduction for mortgage insurance premiums is extended through tax year 2010. Income limitations on the deduction will continue to apply.
Surviving Spouses/$500,000 Exclusion:
In some circumstances, a surviving spouse is denied eligibility for the full $500,000 exclusion on the sale of his/her principal residence. This most frequently occurs when the residence is not held in joint ownership at the time the spouse who is not on the title dies. In that case, the deceased spouse had no ownership interest, so there is no basis step-up on that half of the property. The surviving spouse is thus eligible only for an exclusion of $250,000 . (Had the home been sold during the deceased spouse’s lifetime, the full $500,000 exclusion would have applied, so long as they filed a joint return.)
Challenges for the surviving spouse are compounded when this circumstance occurs late int he year. The surviving spouse is often unable to sell the property within the same year that the spouse died. This legislation provides that a surviving spouse may claim the full $500,000 exclusion not only in the year of the deceased spouse’s death, but also during the two years after the spouse’s death.
Second Homes Converted to Principal Residence:
The new law signed by the President does not include a provision limiting the application of the $250,000/$500,000 exclusion when a second home is converted to a principal residence.
Background Information
A fundamental principle of the income tax is that a taxpayer must recognize income and pay tax any time a debt of the taxpayer is forgiven or discharged. Exceptions are provided in several circumstances, including bankruptcy, insolvency (as defined by state law) and for some investment real estate. until this new rule was enacted, however, no exception applied to any amount debt forgiven on a mortgage for a taxpayer’s principal residence. Thus, until now, when some portion of a mortgage debt was forgiven, that amount has been treated as taxable income and borrower has been taxed at ordinary income rates on the forgiven amount, even though there is no cash.
The newly-enacted relief for mortgage debt forgiveness is Congress’s response to the problems generated by the subprime crisis, short sales, rising foreclosure rates and price corrections in some markets. Thus, when a lender forgives some portion of a borrower’s mortgage debt in a short sale, a foreclosure, a workout with the lender or some similar circumstance, the borrower will not be required to recognize income or pay tax on the forgiven amount. This relief applies to debts forgiven between January 1, 2007 and December 31, 2009.
Let’s Wiki it! Fix I-70 Now!
Are you following the conversation over at Google Groups regarding Chris Romer’s wiki bill?
To read the comments just join the Google Group called Fix I-70 Now. The comments run the course of good to great, many of which I’ve never considered before.
It all started off a month ago when Senator Romer suggested a wacky plan to charge a fee to users of I-70 during rush ski hours along with giving a rebate to travelers who make an effort to drive to and fro the mountains in low traffic time. Romer went skiing the same weekend, when identifying himself, follow skiers wanted to hit him over the head with a ski pole!
The assault didn’t actually happen, but what did happen was Romer got everyone talking about a problem we all have been living with for a very long time.
The bummer to bummer traffic is ruining our wonderful day trips to the mountains. It is most evident during the winter, but summer time traffic is not all that light either.
The truth is, our highways are in adequate for the amount of traffic using them.
I love the idea of constructing a monorail. The graceful gliding of silent cars through the mountains seems to be an elegant solution. Of course the solution will come with a price tag, but any solution has a price tag. The problem is, who’s going to pick up the tab?
On the Google site the most interesting suggestion is:
The idea that follows was suggested by someone in a letter to the
Rocky Mountain News sometime last year, and it struck me as
brilliant. Bore a highway tunnel from Floyd Hill to Dillon. One
“hole” could be drilled initially with two reversible lanes, and a
second one added later if necessary. A toll could be charged to help
defray the construction costs. This option would have minimal impact
on I-70 during construction, would be immune to weather problems, and
would save both time and fuel for those who used it.I am told that Switzerland, Austria and Italy have extensive highway
tunnels through the Alps, we should too.
Wow, that would be a heck of a long tunnel! The benefits certainly are obvious, of course the price tag for this would be enormous too! Colorado doesn’t have the tax base like Switzerland, Austria and Italy does. But I bet if we managed to build a tunnel like this and charge for its use, the users would be glad to pay, simply for the convenience of it!
Some suggestions for finding the money are interesting too:
My suggestion is to take all the money budgeted to keeping hard-core prisoners on death row alive in the Colorado Prison Systems and use that money to use the already operating bus transits system in effect to shuttle from a point on I-70 to their designated slopes/skiing area. What’s so difficult about using a method already in effect?
Staggering the opening/closing of the resorts is another good idea.
Taxing out of state home owners?? Utterly stupid idea. Do you know the long term affects of that? Get out your calculator.
WHAT TO DO WITH THE PRISONERS? Enforce Capital Punishment. Prisoners are in prison BECAUSE they broke the Law of the State of Colorado or the Law of The United States of America. How much tax money does it take in one year to keep an habitual criminal alive? Colorado’s Crime Rate is on the rise because the criminal has no fear of the Law. Capital Punishment enforced is a deterrent.
They are violators of the Judicial System. Keeping them alive on death row - why, gee thanks and a slap in the face to the Law Abiding Tax Payer.
Finding existing money that is not being used efficiently certainly is a good start. It doesn’t matter which way we go, the road to a solution is going to be littered with road-blocks, opposition and miscellaneous challenges.
I encourage everyone to go browse the Fix I-70 Now site. The comments are entertaining, some far fetched, others ignorant and even totally self-serving. Go browse and ponder a solution. Colorado needs it.
The mystery is finally revealed
Ever since the announcement was made a mystery LLC purchased the former Storage Tek site in Louisville for $55.6 million, the rumor mill has been going wild. Every high tech company from Yahoo, to Microsoft to eBay and even Google has been named as the buyer.
Today the announcement by Gov. Ritter cleared up the speculation. The new owner is ConocoPhillips. Huh? Not a tech company?
Now wait;
The Houston-based energy giant plans to convert the 432-acre site to a global technology and corporate learning center. ConocoPhillips (NYSE: COP) plans to bring thousands of employees to the center for training each year. The center will be the company’s hub for research and development of renewable energy and high-tech carbon fuels recovery. ~ Denver Business Journal
Now that we know the whole story, it makes perfectly good sense. Energy & Colorado goes hand and hand. The new economy is about renewable energy.
Now in Colorado we have both.
WELCOME TO COLORADO CONOCOPHILLIPS!
We are happy you are here. Can I interest you in some nice Denver Dirt?
Realty Agents Seeking Other Careers
The tide of the real estate market ebbs and flows. The past few years the business has been so good everyone wanted a piece of the action. Now the tide is changing leaving many short-timers rethinking their strategy. According to Business Week the National Association of Realtors is experiencing a drop in membership for the first time since 1996.
Dues to belong to the National Association are not terribly high, I believe I paid around 5 or 6 hundred dollars. Of course when you are serious about your business and work everyday to grow, that amount of money is just another cost of doing business.
On the other hand when you dabble in real estate selling only a house now and then, the price of membership goes beyond the cost of what a hobbiest real estate agent cares to pay.
Now that the market isn’t ripe with low hanging fruit, many are finding now is a good time to look for other options. Of course there is nothing wrong with this. I just feel sorry for all the “orphan consumers” who are left holding their unsold listings or are tied into an existing offer than needs some serious transaction management.
Part timers in the real estate industry make it hard for everyone, consumers, associates and themselves. Real estate is and will always be a full time job. Trying to make real estate a career with anything less than 40-50 hours a week is a disservice to all involved, including the part-timer.
I remember once talking to a broker-manager friend of mine. She said a huge part of her job was helping agents discover other employment!
It just goes to show, it make look easy but selling real estate is a difficult, time consuming job. This is my 24th year in the business. I’m beginning to think I might just hang around another decade or two!
<Inspiration for post belongs to ResPres for leading me to the link via Twitter!>
Who Purchased the Sun/Storage Tek campus?
Just like the “Who Killed JR?” cliffhanger, the recent news reports are providing us with speculation and little confirmation! The big Denver real estate scoop is the Sun/Storage Tek Campus has been sold for a sweet $55,000 but the mystery is, who wrote the check?
ST Acquisitions LLC is the owner, but who the heck are they? Speculation has it over on the Denver Modern Homes and Architecture blog that it could be Yahoo (in light of their current possible takeover not likely) or Microsoft? A year or so ago Google was scouting around for Denver real estate, could it be them?
No one seems to have a line on what type of company will be occupying the space, or if they even plan to occupy it. One can only hope who ever brought it will in fact open and more importantly hire employees to fill the huge space.
The Denver metro area is full of local people to hire or will welcome relocation to Denver from a far!
ST Acquisitions LLC Welcome to Colorado! Now tell us what your are up to please? 
Downtown Denver Dine & Shop…Win!
Shop, Dine, and Enjoy Downtown and You Just Might Win Big!
Downtown Denver is reinventing the way we approach holiday shopping by rewarding the shopper! In addition to the sparkling lights, endless entertainment, and fabulous selection of boutiques, stores and restaurants, you might be the winner of one of more than 50 fabulous prizes valued at nearly $10,000!
Here’s how it works…
Register online at
or sign up at the Denver Pavilions, Larimer Square or Tabor Center WIN Locations. You will then be emailed a “lucky” number. Every Thursday between November 17th and December 22nd lucky numbers will be posted at the Denver Pavilions, Larimer Square and Tabor Center WIN Locations.
If your number matches one of the posted numbers, you can collect one of the many magnificent prizes ranging from lodging and dining to specialty gifts and entertainment. Prizes must be claimed within a week of numbers being posted.
Participants will be eligible to win prizes such as a night in the Brown Palace Presidential Suite, a Palace Arms dinner for two and a $50 spa gift (valued at $1,650), gift certificates to places such as Sunglass Hut, Virgin Megastore, Corridor 44, Mariel, Jon Ric Day Spa, Barnes & Noble, Hotel Teatro, and much, MUCH more!
Lockheed Martin & Boeing hiring?
Lockheed Martin and Boeing’s proposed joint rocket venture will relocate about 1,000 well-paying jobs to the Denver area. The joint rocket-manufacturing venture, United Launch Alliance, already has said it plans to set up headquarters at Lockheed’s
Jefferson County facilities in Waterton Canyon . A Boeing spokesman said about 1,000 administrative, engineering and support jobs at the company’s Huntington Beach, California Delta rocket facility are earmarked for relocation to Colorado . The 50-50 venture would serve as the sole supplier of booster rockets used by the military, NaSA and other federal agencies.
Colorado economic officials are thrilled about the prospect of the Boeing jobs coming here, particularly after recent news that four Denver-area companies had relocated their executive offices to outside the state.
(Source: Rocky Mountain News, 07/14/05)
Congress & Real Estate Matters
As the lawmakers gather on Capitol Hill this year they are considering tax laws that could affect real estate. Charitable contributions involving real estate, interest on home equity loans and short-term vacation home rental are being explored for changes.
Considering so many loans today include a first mortgage and a second of a home equity loans (to avoid the costs of PMI), this is something that can have a huge effect on many home purchasers.
For more information…go here.
This site brought to you by Kristal Kraft, a licensed Colorado Real Estate Broker