There is a silent feeding frenzy going on in the Denver real estate market right now. Few people are aware while others refuse to believe and the rest will never share their secrets with you. Since I'm a witness to the statistics and a recipient of their calls, I will tell. Besides no one has ever sworn me to secrecy.
Here goes; People are buying real estate for investment!
OK, so maybe that is not earth-shaking news to you, but it's true. What you may find interesting is how many properties under the $100,000 mark are being sold. A quick look at last month's statistics will show 15.37% of the sales in August were for properties priced under $109,999! Yes, these properties are single family homes.
Condos under $109,999 accounted for 32.65% of the sales in August.
How are these purchases being made?
Single family home financing looks like this:
- 57% Conventional financing
- 25% FHA financing
- 14% CASH (no financing)
- 3% VA financing
Condo Financing is very much in line with single family, it looks like this:
- 50% Conventional financing
- 26% FHA financing
- 22% CASH (no financing)
- 2% VA
What type of properties are investors buying?
Obviously the lower end market is hot right now. It is easy to get into for both first timers and the seasoned and savvy investor. First time home buyers who are just looking to say good bye to their landlords are also jumping in. They are buying value properties in need of tender loving care. HUD is offering (via a bidding process) many foreclosures in NE and SW Denver.
By "tender loving care" I mean these are homes that aren't exactly ready to move into without work. The savvy investors have a system with a construction crew and a strategy to fix and flip these properties. Some actually fix and hold the properties renting them until the prices increase.
"Opportunities are never lost. The other fellow just takes those you miss."
Watching the statistics of sales in the Denver metro area we now believe the "bottom" of our market was in April/May 2008. Of course we won't know this for absolutely sure until next year, but then the time will have passed would be investors will have missed the opportunity.
As the stock market continues to shake and quake with big businesses failing in ethics of business practice, investing in real estate makes better sense. We may never be able to control the market, but owning a piece of dirt that is tangible and real makes sense to me. At least the dirt won't dissolve into the ether.
We all know what Will Rogers said,
Buy land they aren't making anymore of it!
In our market the opportunity is not limited to land, we have single family homes, condos, townhomes and multi-family dwellings for sale. If you would like to talk about opportunities that might fit your needs, let's talk. I welcome your call.