Urban Real Estate
Everyday challenges of selling Denver urban real estate…
Nuts! Was it the second from MY left or Your left?
Denver Real Estate ~ the sky is not falling
A note to consumers from the pages USA Today and NAR’s Chief Economist:
Lawrence Yun: Consumers need to find out what is going on at the local level and not necessarily take national headline numbers as a point of reference. Sellers tend to be more stubborn in facing the reality of the market, so people who really need to sell need to come down on prices, given the high inventory and seller competition.
Denver real estate consumers need to ignore the National News and look to the statistics in the individual areas they are living or buying in. The real estate market is local.
Our prices never experienced the insane appreciation that happened in other markets. While others were shooting for the moon, we traipsed along at a slow and even pace. Now when other locals are experiencing a sharp decline (read price adjustment) we are not seeing the same in the market.
What we are seeing is a lack of consumer confidence (thank you media) and the inability of people relocating from other areas to be able to purchase a home here, until their home’s sell.
This doesn’t mean All of our Denver real estate is priced well. Much of it is NOT priced to sell, nor is it in show home condition.
What I continue to see are homes that are priced to sell and in great shape, selling. In fact 20% of our sales sell in the first 30 days.
The sky is not falling.
At least not today.
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.
Saddle Rock Golf Course
In 1998 Saddle Rock Golf Course was recognized as one of the America’s Top 10 Best New Courses by Golf
Digest. Ten years later this top notch Aurora public course continues to live up to it’s reputation. Saddle Rock Golf Course is a long, high-plains, links-style course and challenging. Even the best players find a challenge in negotiating native areas, creeks, trees and rolling diversity. The course is high and the panoramic views of the front range are among the best in metro Denver.
Saddle Rock Golf Course is a public course so the fees are quite reasonable. Players can enjoy either 9 or 18 holes of play. A cart is recommended (by me) this is a long and tough course to walk.
Residents are eligible to receive a special reservation card allowing them to book tee times seven days in advance. As with most community golf courses, residents also get discounted play.
Saddle Rock Golf Course is conveniently located at 21324 E. Briarwood Drive, Aurora, CO. 80016. To get there from I-25, take Arapahoe Road east, look for the entrance to the golf course on the left after crossing Liverpool.
Saddle Rock Real Estate
Homeowners desiring a nice place to call home, will be happy to know Saddle Rock is a planned community offering open space of parks, green belts and recreation trails. There are neighborhood "pocket parks" for the little ones to enjoy, or a great destination for walking the dog.
The Saddle Rock area offers a variety of housing options for those who desire to be in a golf community. Custom and semi-custom homes can be purchased along or near the golf course. The Community is fairly new, so resale homes built in the year 1998 and newer are also available. Custom homes start in the high $600k’s and semi custom can be found in the $500k’s.
It is also possible to find less expensive homes within a few blocks of the golf course. Multi-family (condos) are also available in the area.
Getting To Saddle Rock Golf Course or Community
The Saddle Rock neighborhood is conveniently located off the E-470 beltway. The population growth in the area has been expanding ever since E-470 opened, bringing the southeast neighborhoods closer to the city. The beltway provides quick and easy access to the Denver Tech Center (20 minutes), Meridian (12 minutes), Denver International Airport/DIA (20 minutes) or downtown Denver (30-40 minutes).
Saddle Rock Shopping
Outstanding shopping is available in the nearby fabulous Southlands. Patterned in old time Main Street style, Southlands offers more than 150 retailers, restaurants and second floor office suites. Southlands is home to major retailers; An Taylor Loft, Banana Republic, Coldwater Creek, J. Jill and many more.
Schools in Saddle Rock
The Saddle Rock neighborhood is serviced by two high schools both in the nationally acclaimed Cherry Creek School District; Grandview High School and the recently built Cherokee Trail High School.
CyberPros
I’ve just returned from Pittsburgh, Pennsylvania where I spent 2 solid days with associates from around the
country. The Cyber Professional group meets twice a year to discuss real estate issues and network among industry professionals.
My experience with this group tends to enhance my business perspective. When I return home, I have a briefcase full of new ideas that will help my buyers and sellers.
Communicating with brokers from other parts of the country only substantiates how much better off we are in this Denver real estate market. Yes, I know we have some very difficult spots, but in comparison to other areas, we have very little to complain about.
Home Inspection
Saturday evening, most people are relaxing after a satisfying work week. Some may even be popping the corks off wine bottles celebrating a moment or just enjoying life.
Tonight I was at a celebration of a different kind, a home inspection. This week I worked with a buyer who is relocating here from the Washington D.C. area. It was her second time out and the first time to seriously look at homes.
We spent two days touring all the homes that fit her specific criteria in the Denver area. On Thursday night we wrote the offer which was accepted late Friday. With one full day left before she went home, we scheduled a home inspection!
Much to my surprise, John Braddock the inspector who I can always count on agreed to do it Saturday night, the first time he had available! We were delighted at the prospect of my buyer being able to return home with her mission accomplished! So we accepted the appointment.
My hat goes off to the family with young children who agreed to leave us in their home for 3 hours on a Saturday night! They were most gracious and accommodating, in fact they left us fresh, home-made chocolate chip cookies! Yum!
The inspection went quickly as John called in his partner, Ryan. At the end we celebrated by clinking our water bottles in a toast to us and all the people that pull together to make a real estate transaction happen.
Thank you to the buyers, sellers, inspectors, listing agent, relo manager (who accepted the offer at home after hours), assistants and the future helpers; appraiser, title reps, closer and the neighbors who will welcome the new comers to Colorado!
Oh I forgot the mention Frances Wehner, the loan officer who took time out of her Saturday to travel to Park Meadows Mall to meet with the buyer as a convenience as to not interrupt her shopping!
Tomorrow my buyer goes home satisfied. She visited all the schools, registered the pre-schooler, shopped in her future grocery store, got a pedicure, went to the mall and purchased a home! All in 5 days.
Now that is what I call a productive week!
Welcome to Highlands Ranch!
Home Improvements
Home improvements are often very costly, both in money and the time it takes to undergo a renovation. I’ve had
clients who actually moved out of their homes while the home was being redone, thus absorbing a double cost of living, in addition to the cost of renovation.
When you are spending money like that you want to be sure you 1) really love what you are doing to the home 2) understand what the ROI will be when you go to resell 3) the renovations will appear to others, not just you and your family! Many times the cost of renovations far exceed the return on investment upon sale. When that occurs the homeowner must understand the renovations are for his pleasure only.
Recently I was showing a daring home an investor had purchased as a "fix and flip". As I toured the home with my clients, we were excited about it possibly being The Home! Then we got to the main bathroom. This is where our excitement ended.
The bathroom was very narrow. It was an old house where the main floor bath was the bathroom that serviced the house, including 3 bedrooms and the visiting guests. In the bathroom there was a toilet, sink and a bathtub, all very normal appointed, but the issue was the space.
The toilet was squished very close to the tub. A person of normal height could not easily use the toilet without their legs being pressed up against the tub.
Why on earth would any builder in their right mind complete a renovation with this very obvious negative arrangement? Perhaps the builder himself was 4′9"! A person of this height might be able to use this toilet in comfort.
Functional Obsolescence occurs in real estate frequently because styles change, tastes change and in the case of the squished toilet, people get bigger!
When renovating a home, take into account today’s taste in style and what is appealing to the broadest audience. They are your future buyers, ignoring them may cost you.
There are other faux pas home renovation homeowners make when trying to improve their homes. Most recently I’ve been seeing many beautifully finished basements with game rooms, extra bedrooms serviced by a 1/2 bath. Yikes! The rule to follow here, if you have a bedroom the bathroom needed to make a completely sweet finish must be at the very least a3/4 bath. The best scenario would be to have a full bath, that means a toilet, sink and tub/shower.
My clients have passed up at least 4 lovely homes that didn’t follow this rule!
Yes, full bathrooms cost more, but if you are going to renovate, do it right or don’t do it at all!
Another important rule to remember in real estate is one we Realtors learn early on.
Cost does not equal value.
Just because a renovation cost "$X" doesn’t mean your home will increase by "$X!" In the cases above, I would venture to guess the renovations SPOILED the home, not improved it!
Before you renovation, do your research. Talk to your Realtor about the lastest trends and styles. Pretend the renovations are finished and you have to sell your home. Will the neighborhood uphold the current value you have in the house? If not, are you OK with that?
Over-improving for the neighborhood is a fatal sin that cannot be forgiven. Well it will be forgiven if you throw enough CASH at it! Only the homeowner can determine if that is OK, it’s his cash after all!
Remodeling Magazine publishes the latest Cost vs. Value Reports each year. The values vary in different parts of the country, so they compile the trend reports accordingly. Research into the appropriate renovation will provide valuable insight as to whether the whole idea is a good one or not.
If after you examine the facts and the renovations are for pure personal enjoyment because you plan to live in the home for a long time, then go ahead renovate. A home is a castle, if we can’t enjoy living there what’s the point. Just remember when you go to sell, your enjoyment may have come with a bigger price tag than expected.
Denver Real Estate Market Trends
While much is being said about Denver real estate trends, the statistics are not looking all that bad. As of March 2008:
-
While the combined average price in the Denver Metro area is $21,000 less than a year ago, the drop in values began to level off from February to March this year with a loss of only $1300.
-
The total available inventory for sale decreased 3.46% from the same time last year. With builder inventory at the lowest in recent history, sellers can expect values to begin increasing soon.
-
The Absorption Rate dropped considerably from February, down 6.4 weeks, with the average days on market receding to 111 days from last March’s 119 days.
-
The Median Sold Price increased to $224, 900 in March. The February median was $221,500.
-
The total number of all homes and condos contracted for sale was 5,874 just 246 less than March 2007 total of 6,122. Sales are still strong.
-
The national average 30 year fixed mortgage interest rate as reported by Freddie Mac was 5.88% on April 10. The 30 year rate has held steady under 6% for the last 30 days.
Denver’s housing market strong
Yesterday I received a telephone call from John Rebchook, the real estate journalist for the Rocky Mountain News. 
John shared with me some very good news contained in a report by PMI. You can read the whole news here; PMI Study: Denver’s Housing Market strong
Hearing the contents of the U.S. Market Risk Index is music to my ears. Finally an outside source who has a vested interest in providing good data is handing us a positive report! Denver continues to out-perform other Metro areas. As far as real estate is concerned we have a future and it is good.
Really.
There is not a day that goes by where I’m not talking and/or working with people who are relocating to the Denver area. So many are in a holding pattern until their homes sell in other areas.
No doubt our market isn’t going to light on fire anytime soon, but there are homes selling. In fact as in my example in the paper, we are finding more and more buyers are competing for the good homes.
Properties that are priced right and nicely cared for sell quickly. In fact I showed one last week to a client who couldn’t (actually wouldn’t) write an offer until his wife could see it. She can’t get here until this week. Well, you guessed it, the property is already under-contract. Congratulations to that seller, they did very well. I’ll just have to go find the Mrs. another home this week.
Yes, the Denver real estate market is selling. Prices may be down in some areas, but in others they aren’t judging the entire market by the overall stats is a HUGE mistake. Buyers and sellers have to look at the micro market in the area they plan to buy or sell. Assuming that statistics are a "one size fits all" rule, is harmful.
Call a pro, let your pro show you the facts, the whole facts. Then make your decision.
This site brought to you by Kristal Kraft, a licensed Colorado Real Estate Broker