Random thoughts, photos and rants woven together make a fine tapestry or so I'd like to think.. a blog. I've been selling real estate in Colorado long enough it is a strong part of me. Sharing knowledge about my trade along with the beauty of Colorado through photos is my way of attracting those who appreciate the same things. I enjoy sharing, hopefully that joy shines through.Happy Holidays to All!
Thoughts on Focus
Social networking rocks! This year I’ve gotten involved with a photography group that meets to do what is called a “Photowalk.” A photowalk is when a group of people meet at one place and proceed to a specified location to shoot photos. It is a great way for people who share the same passion to meet and share their knowledge and friendship.
This particular Meetup began at the Starbucks on 16th Street Mall and Tremont Court. From this location we walked to the magnificent Civic Center Park adjacent to the Colorado State Capitol. This time of year the holiday decorations are so distracting for a photographer, particularly at night!
I was busy shooting this:
When all of a sudden I turned around and saw this…
Funny, the Capitol was there all the time, andthe moon just happened to be The Largest Moon of all year. What luck I found when I tore my focus from the Civic Center and simply turned around!
There is actually a lesson to be learned here. When we focus on one thing to the exclusivity of all else, we miss things.
Let’s not miss anything in life. Let’s do a 360 and take it all in.
Median Price Charts for Denver, Englewood and Littleton Real Estate
Latest statistical news from Altos Research indicates a very positive trend in the Median Price for Denver, Englewood and Littleton!. The chart below indicates an upward trend since about April 2008 (didn’t I report that here and here?). Well it is so folks, perhaps Denver metro will lead the country out of a real estate recession!
All in favor…say “I”
Asking prices fell at the fastest rate in Las Vegas - down 3.3% during November - and 6.9% over the most recent three-month period. This marks the eighth consecutive month that Las Vegas has posted the fastest rate of declining prices among major markets. Listing prices rose at the fastest rate in Houston - up 2.4% in November. Denver, Dallas and Houston are now the only markets showing three months of sequential price increases. Mike Simonson ~ Altos Research
FYI ~ Denver stats include all ZIP codes in Denver County. Littleton also includes the ZIP codes in Highlands Ranch and Lone Tree. Englewood ZIP codes include Greenwood Village (aka DTC - Denver Tech Center).
Inventory in these areas is decreasing. Of course this time of year we see seasonal decreases in inventory and of course last month was chock full of bad news. Just the same, inventory decreases are a positive sign.
Properties are being absorbed at a steady rate in Englewood and Littleton. Denver has seen a more significant drop in comparison, but not drastic.
Altos Research provides real estate statistics sliced and dices just about any way you like. If you are interested in a report of a different nature, please let me know and I will see what I can do for you. Alternatively, I now can offer weekly, up-to-date market stats by subscription (FREE) for the Denver metro area. If you are curious about a specific zip code, please feel free to sign up. Once you provide an e-mail address, the report is sent immediately!
Be my guest…Use the Altos Widget on my sidebar to get your report now.
The Anatomy of a Denver Investment “Deal”
At this time in Denver there are 2 types in buyers in what has become a very hot market for single family dwellings priced under $200,000. One type is the “First Time Buyer”, using predominately FHA financing to acquire that “Dream Home”. Make no mistake, the dream of owning a home is part of the American culture, and an unstable economy will not completely quash that dream. The other type of buyer is the “fix and flip” investor. Those two types of buyers have come together in an unintended symbiotic relationship that is fueling the lower spectrum of the Denver market. Here’s why:
-
There are many “bank owned or REO” properties available for sale. These properties are relativity easy to acquire if a buyer will pay slightly more than asking price. The devaluation loss has been absorbed by the financial institution. - There are few if any new built homes priced below $200,000.
- A well done “rehab” project provides the “First Time Buyer” with a solid, amenity filled home in an established neighborhood at an affordable price, perfect for FHA financing.
Here is how it works. The example is a real situation that occurred in southwest Denver this year.
- The subject was acquired by the “bank” in April of 2008. It was placed on the market immediately. It was sold and closed in late May, with the buyer paying cash at slightly more than the asking price.
- Clean-up and rehabilitation began in early June, and was completed in early September.
- The property was resold to the “First Time Buyer” using FHA financing, with the closing occurring in mid-October. The total holding time was approximately 145 days.
- Here are the numbers:
o Acquisition Price - $75,000.
o Rehabilitation expense - $36,500.
o Total Expense - $111,500.
o Sale Price - $160,000.
o Less Cost of Sale - $14,625.
o Gain before Expenses $145,375.
o Profit before taxes - $ 33,875
- The investor committed $111,500 to the project for 145 days, and realized a before tax profit of $33, 875. That is an annualized return of 76%.
- Is there risk? Absolutely, yes there is risk. Not every distressed property will work as well as this example, although research has revealed many similar situations. The property must be sound in structure, or the rehabilitation expenses become exorbitant. There must be a good contractor involved, with a focus on time and minimizing expense. Having said that, cutting corners will result in a slow sale. The materials and workmanship must be of good or better quality. The prospective “First Time Buyer” must perceive the newly remodeled house as having a high “WOW” factor.
- The investor cannot get greedy. Completing the re-habilitation “on the cheap” or trying to sell the property above a fair market value will provide poor results.
- The investors purchase price must be low enough to absorb the total expense and realize an acceptable profit from the post-rehab sale.
- The entire project must be researched and managed by someone with experience. The risk is lessened with good analysis and investor understanding.
There you have it, how to make a “deal” in real estate in Denver. Is it easy? No, but neither is it particularly difficult. True, the process does not produce enormous profits, but then again, what is the interest being paid on CD’s today?
Denver Holiday Events
This holiday season be sure to mark your calendar for at least one of the many events offered. Tonight is the second night of the popular Parade of Lights. 
Starting a 6:00 p.m. the lights go on and the show begins, thousands of sparkling lights, vibrant marching bands, giant balloons, fascinating floats and many strange and unusal characters will march in the streets of Downtown Denver.
Parking isn’t a problem if you plan ahead and take the RTD LightRail into town. The LightRail stops at the Colorado Convention Center, just a block from the parade route. When done hop on and take the Light Rail home, while your neighbor tries to fight the traffic home! Last night RTD offered a special price for roundtrip tickets from the Broadway station (free parking) to downtown and return ($3.50).
I must say we decided to take the Light Rail in last night and it was the best decision we made. Not only did we arrive in perfect time, my little Grandsons were thrilled to finally get to ride on The Train! (free for them under 5 years old). I couldn’t believe they nor their parents had ever taken the Light Rail before!
If you miss tonight’s event there’s more:
Tuba Christmas
400 tuba players come to town for the 33rd Annual Tuba Christmas Concert in Skyline Park on December 14th from 1-2. If you really want to enjoy an interesting afternoon in downtown Denver, come out to hear them play.
Just for KIDS:
Breakfast with Santa at the Hard Rock Cafe’ On Saturday December 13th come bring the little ones from 8:30 - 10:30 for picture taking and wish making. Kids will be given a party bag filled with rockin’ holiday goodies while adults have an opportunity to bid at auction to benefit the Parade of Lights 9News.
Zoo Lights
What could be better than a Holiday Safari in the wildness of Denver Zoo? 38 acres of illumination turn the Zoo into a wonderland, loved by both children and 
adults! Starting on December 12 and continuing through January 4, 5-9. Purchase tickets in advance. Afraid to get too cold? No worries, Denver Zoo has warming stations to “Thaw Your Paws.” Of course!
Denver Botanic Gardens at Chatfield
Alive and well during the Holidays the Botanic Gardens celebrate by offering a magnificent Trail of Lights with over One Million Lights! It is a winding forest path through the Colorado countryside. There is a playhouse for the kids to hang out. Refreshments of Hot Chocolate are available. More Info here.
Budweiser Clydesdales Camera Day
This time of year Anheuser Busch shows off the trademark Clydesdales at the Brewery in Fort Collins. Dress in your Holiday Best, bring your camera and make a photographic memory with a beautiful Budweiser Clydesdale. Tour the Brewery while you are there! Check the calendar to confirm Anheuser Busch Brewery camera day.
Santa Claus Express
Colorado Railroad Museum in Golden, Colorado welcomes Santa as he arrives in a LOCOMOTIVE! Kids are encouraged to come and join Santa for a ride along the rails in the foothills of Golden, Colorado. The Depot Store offers a great selection of railroad toys and Tomas the Tank Engine gifts too! Kids of all ages will enjoy this special place. December 13, and 14
I hope this holiday season you and yours get to enjoy at least some of the many fun things the Denver metro area has to offer.
Rental Scam Alive and Well in Denver
If nothing else Nigerians are creative people. The latest hoax out of the African continent is being delivered to us via Craigs List, the popular bulletin board service
that serves everything from jobs to homes for sale.
Several months ago my broker had a home for sale that was targeted by these crooks. The put a “For Rent” ad on Craigs List with a rental amount that was far less than the going rate. Included in the ad was the address, so prospective tenants were driving by the property checking it and the neighborhood out.
What the Nigerian scammer didn’t know or count on, was the fact there was a FOR SALE sign in the yard. Yup. It was a normal real estate sign with telephone numbers etc.
So the telephone starts ringing, Larry the listing agent (my broker) begins to get these odd telephone calls wanting to see the property for rent. “Well no,” he replies “the property is not for rent it is for sale. Are you interested in purchasing a home?”
“No, I’m calling on the ad in Craig’s List.” insisted the callers
Finally he figured out it wasn’t a mistake, nor did the owner place the ad. It was the dirty double dealer in Nigeria.
The ad would come in go in Craig’s List, annoying Larry and all that got caught up in it. Eventually they moved on to other properties. Yesterday CBS 4 News reported on the same scam being purpetrated on others. In fact some people even lost there money.
Oh my!
Why I ask would anyone in their right mind send money out of the country to rent a home? And to Nigeria? Hello?
Rules for Renting:
Any good intending homeowner or professional manager, will be taking an application from you. While they check you out, you check them out!
- Home ownership is a matter of public record. Check it.
- In Colorado Property Management companies are licensed by the State. Check them.
- Don’t send money until you are certain of ownership, management in charge and if the keys actually work. (Of course most anybody can have a vacant property re-keyed, so that may not be the best advice).
Footnote in Defense of Nigerians
A few years ago one of my agents had the pleasure of dealing with a family from Nigerian. She loved working with them as they treated her respectfully and were most pleasant to deal with. This leads me to conclude there are actually nice people in Nigeria, unfortunately there are also a bunch of crooks that give everyone else a bad name.
Denver Single Family Home Inventory Drops
Ending in November the overall Denver area inventory continues to drop.
The decrease in inventory in part is seasonal. This time of year it is very normal to have homeowners take their homes off the market or wait until spring. For buyers, it’s frustrating to have less inventory. Most buyers would prefer to have more to choose from.
The reality is if you are an owner wanting to sell, now would be a good time to put your home on the market. With the lessening of inventory it is easier to stand out.
Are You Smart Like a Fox?
Last week the rates dropped to yet another low. If analysts are correct, we should see mortgage rates below 6% for the next few weeks and possibly a few months.
These same analysts emphasize the rate will also rise. Typically when this happens homeowners march out and refinance their mortgages, to claim a better rate.
Is a lower rate a reason to refinance?
Maybe, but maybe not. Before refinancing a borrower should consider the overall cost analysis. Refinancing a loan means closing costs. If they aren’t paid up front they will need to be rolled into the new loan. That raises the loan balance. Is this really a good thing?
Many homeowners who purchased in the past 12-24 months may have 1st and 2nd mortgages combinations with blended rates well over the mid-to-high 5% rates available now. Refinancing these WILL result in a more costs and the borrower still needs to have at least 5% equity in the home.
If a borrower is currently in an “interest only” first loan, a refinance into a fully-amortized loan, even at a rate 1% lower, will see a payment increase.
Bottom line, think, evaluate and understand what you are doing before refinancing. After all the final responsibility is up to you. Don’t screw it up!
Be smart like a fox, do what’s best for you and your family.
Denver Investors Gobble up the Deals
Thanksgiving is fast approaching and more than one investor in the Denver metro area is happy this week! How so? Well I did some RESEARCH about the hot Denver real estate market under $200k and found some very exciting news.
Let me share…
Last week 87 properties closes that were priced under $200k. Well that got me to thinking about who is buying them. I pulled up the SOLD list and reviewed each property one by one. Just reading the details, I found 6 property descriptions where the property was advertised as “renovated.” I plucked (pardon the pun) these addresses out and traced the sale backwards.
What did I learn?
Each one of these “renovated” homes just happened to sell previously this year.
Fix and Flippers are back!
Yes, of course I’ve known this to be true. Now I have the proof and will print it out right here on the Denver Dwellings Blog. Before I do, I must issue a disclaimer,
- I have no idea to what extent these properties were renovated
- I have no idea the extent of the renovations
- I have no idea of the quality of the renovations.
These are real life examples of homes purchased and sold this year. Additional expenses were incurred so please understand the numbers for what they are, GROSS (before expenses) numbers not NET.
Got that? Great, now let me roll out the spread sheet. Drum roll please…
| address | sold date | sold price | DOM | financing |
| 1395 W. Dakota Ave | 06-12-2008 | $58,000 | 52 | Cash |
| 10-30-2008 | $155,000* | 35 | CV | |
| Difference | $97,000 | |||
| 1670 S. Quivas St | 05-21-2008 | $75,005 | 31 | Cash |
| 10-14-2008 | $162,500 | 2 | CV | |
| Difference | $87,495 | |||
| 801 Tennyson St | 04-23-2008 | $70,224 | 21 | CV |
| 10-14-2008 | $175,000 | 12 | FHA | |
| Difference | 105,224 | |||
| 10 Bryant Way | 06-26-2008 | $68,000 | 165 | Cash |
| 10-31-2008 | $145,500* | 6 | CV | |
| Difference | $77,500 | |||
| 1660 S. Java Way | 09-31-2008 | $92,000 | 22 | Cash |
| 10-27-2008 | $160,000* | 21 | VA | |
| Difference | $68,000 | |||
| 1839 S. Tennyson St | 08-06-2008 | $115,000 | 14 | CV |
| 10-30-2008 | $150,000 | 25 | Cash | |
| Difference | $35,000 | |||
* Indicate sold price was adjusted to reflect concession to buyer.
Are you ready to Gobble a Deal?
Knowing now what you do about the Fix and Flip investment potential in Denver, are you ready, willing and able to get started? IF so, give me a call! There’s no time like the present.
Hot Deals in Denver Attract Mulitiple Offers
Across the country home sellers are waiting it out. Waiting for prices to go up, waiting for buyers, waiting for what ever
is going to happen to make their home sell.
This month’s Forbes.com features in the the top Ten Best Suburbs to Sell that even the best of markets are not finding homes flying off the market. Most areas are experiencing 3 months and more before finding a buyer.
In Denver we have noticed segments of the market are doing well, actually very well.
In fact, last week in Denver Metrolist reported 87 closings of homes priced under $200,000. Of those 87 sales, 45 (over half) were sold in less than 30 days.
Excuse me folks, but that is NOT a buyer’s market, that is a Seller’s market.
Who’s buying?
Investors and first timers both have the money and the desire to seek out the deals. Investors are paying cash and first timers are using FHA and other Convention loan programs to finance these home.
Where are they buying?
| Area | Units Closed | List Price | Sold Price |
| SW Denver | 40 | $31,000 | $32,400 |
| SE Denver | 9 | $52,020 | $49,000 |
| NW Denver | 6 | $119,000 | $100,000 |
| NE Denver | 32 | $52,900 | $65,111 |
| Total | 87 | 11-14 thru | 11-24-2008 |
Just for grins, I’ve noted the lowest list price of the homes sold in each of the areas last week. The entry level prices are surprising even to me.
Note the List vs Sold Price…in three instances the sale price is HIGHER than the list price. This is further evidence homes in this price range are experiencing multiple offers. NW Denver had the one instance where the property sold for significantly less then the list price.
These numbers show us not only is the market moving in the lower end, there’s competition. Activity is good, eventually this is going to trickle upwards into the higher price ranges.
What are the Financing Terms?
| Cash | 40 units sold |
| FHA | 23 units sold |
| Conventional | 21 units sold |
| VA | 2 units sold |
| Owner carry | 1 unit sold |
Cash is king! Considering the state of the stock market these days, investors appear to be turning to real estate. The reality is, your money is better off owning real estate, particularly now as prices are low than risking the roller coaster ride of Wall Street.
A few years ago we were hard pressed to find homes for buyers priced under $200,000, now we are finding many of them. No, they aren’t brand new homes, for the most part they are modest homes on a city lot that need work. Investors are putting fix-up funds into the properties and will soon be selling them at a profit.
It’s no wonder the prices are getting bid up. Everyone wants in on the action!
If you are a qualified buyer and would like to search out a bargain (before they are gone) give me a call.
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This site brought to you by Kristal Kraft, a licensed Colorado Real Estate Broker
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