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Current analysis of the luxury home market in Denver, Colorado – One street that has it all

Posted on July 24, 2010 by Properties_Colorado

Current analysis of the luxury home market in Denver, Colorado it is fragmented to say the least.  One of my biggest focuses lately has been expired listings in the Denver metro area.  The market has started to shift to a neutral market on the whole it favors neighter buyers or sellers. However certain areas and market segements are unique.  To search the Denver luxury home market.

Working my expired listing market is not price constricted it is geographically targeted.  I’m going by this house in a great Denver luxury home neighborhood.Analysis of the Denver Luxury Home market

This home is designed to be a scrape.  The home itself is not that attractive.  It was priced around $800,000.  It is a well established neighborhood.  I absolutely loved the neighborhood driving around in there.  It was quiet and out of the way, off the beaten path, surrounded by luxury homes. The buying of a lot and scraping the hold house off is quite common in these areas.  It definitely was before the real estate crash. There is a lot of challenges in the construction loan market. There is also a plethora of luxury homes in the Denver market. These scrapes aren’t done nearly as often as they used to.

Denver luxury home construction

Building luxury homes is still going on!

Just up the street a new luxury home is being built.  This is what really gets the economy moving, new home construction.  Absolutely this is a luxury home going in here, just look at the sign.  Whenever you see a custom sign for a new home consider that it’s not a tract home.  Then you see this going on in the same neighborhood.

The bad news that is going on the same street

Denver luxury home foreclosure

Whoops

Denver luxury home foreclosure

Here we have a luxury Denver foreclosed property.  People are all to familiar with this situation.  The foreclosure crisis is even hitting the luxury home market.  This makes sense for a few reasons.

  1. The rich generally have more assets and options than most people.  This allows them to delay foreclosure longer.  They can liquidate assets to help with their situation.
  2. Option Arm’s were generally more prevalent among luxury properties.  These are finally coming due, resetting, and/or becoming fully amoratizing.
  3. The stated income loans went away.  This takes away the option of refinancing for a lot of people.

So here on one little street you can see a snapshot of the entire luxury home market. If you would like to search for Denver luxury homes.  My analysis, especially in this market is that each property and neighborhood is unique.  Some favor the buyer and others the seller.  There is a great deal of customization of homes and there is a much greater variety and divergence in these homes compared to track homes.  On the whole I’d rather be the buyers agent rather than the selling agent.

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Categories : Denver Luxury Homes, Expired listings
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Denver luxury home sales hit highest level in two years

Posted on July 19, 2010 by Properties_Colorado

Denver luxury home sales hit highest level in two years. This applies to homes that sell for over $1,000,000.  Sixty-seven existing homes, including houses, condominiums and townhomes, sold in that price range last month — up 3 percent from 65 in June 2009 and up 22 percent from 55 this May. “It was the highest level for luxury sales since 89 properties changed hands in August 2008.  Read the complete article in the Denver Business Journal.

• The most expensive $1 million-plus sale in June was a six-bedroom, five-bath Denver house that sold for $3.95 million. The home included 7,403 square feet.

• Denver had the most million-dollar sales, with 17, followed by Boulder (13), Castle Rock (7), Cherry Hills (6)and Greenwood Village (5).

• Average days on market for high-end homes dropped to 115 in June from 103 for the same month last year.

My analysis of the Denver luxury home market. The biggest factor is jumbo mortgages. It is possible to get a jumbo mortgage today, July 19th for under 5%. The rich aren’t stupid.  They recognize this incredible environment and are taking advantage of it.  By the way a non jumbo mortgage is 4.5% or lower.  Think this is a good time to buy a house?  The Denver luxury home market still favors buyers over sellers. In my market segments I want to work with sellers instead of buyers. It’s not that don’t know how to market the luxury home market,  it’s just that my negotiating skills work out better on the buyers side.

To search for Denver luxury homes.

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Categories : Denver Luxury Homes
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Recent real estate sales for commercial, land, and light rail in Denver, Colorado

Posted on by Properties_Colorado

Recent real estate sales for commercial, land, and light rail in Denver, Colorado. There are several entries on the complete list which came from the Denver Business Journal. There were several transactions that stuck out to me.

Real Estate Builders buying land

  • Vacant land, Douglas County — Celebrity Custom Homes Inc. of Englewood bought this acreage for $4.37 million. The seller was D&D Real Estate LLC of Englewood.
  • 1397 Sky Rock Way, Castle Rock 80109 — Meritage Homes Colorado Inc. of Greenwood Village purchased this vacant land in The Meadows subdivision for $2.09 million from Arcadia Holdings at The Meadows LLC.

Builders buying raw land will be one of the predictors of the housing turnaround and US economic recovery. This is step one of building new houses and creating jobs.

  1. Buy Land – Somebody made some money by selling land that was not generating any income.  Now they can spend that money or invest in another capital producing investment
  2. Builder builds a house.  This is where the bulk of the value is created.  Think of all the contractors that are needed.  The raw material and capital investment is big as well.
  3. Builder sell the house.  This is where title companies, real estate agents, and mortgage bankers makes the transaction happen.
  4. Customer moves into house.  They likely need new lawn equipments, furniture, LCD TV’s etc.  This helps with retail sales.

It all starts with the purchase of land.

Light Rail Properties

  • 5155 E. Yale Circle, Denver 80222 — The Urban Land Conservancy purchased this 1.2 acres, near the light rail station at Yale and Interstate 25, for $1.33 million. The City of Denver’s Transit Oriented Development (TOD) Fund covered 90 percent of the cost. Affordable, workforce housing will be built at the site. The seller was Denver residential developer Wally Hultin of Byers Street Properties LLC, as East Yale Circle LLC, according to property records.

What does this mean for the light rail in Denver, CO.  I view this as a positive stop for the light rail. One of the key factors in the success of transit is the amount of people that live around it.  This leads to people using the light rail. Wouldn’t you use if was in walking distance?  Perhaps you like driving down I-25.  This increases revenue and use of the light rail system.  This also leads to higher retail sales for business in the Transit Oriented Development (TOD) district.  At the risk of stating my political views, not supposed to talk about politics while selling real estate, and the answer is.  I’m a conservative and I believe light rail should be a conservative issue.  If you don’t believe in the welfare state you want people to work.  One of the biggest problem the poor and unemployed have is access to transportation. Why don’t we make it as easy as possible for them to get a job.  If you are probusiness don’t you want people to have reliable trasportation?  Don’t you want the widest applicant pool possible.

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Categories : Commercial real estate, Investors, Light rail
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Colorado Foreclosure filings down 4.2% in 2nd quarter

Posted on by Properties_Colorado

In the quarter ended June 30, Colorado had 15,287 properties with foreclosure filings, down 4.59 percent from the first-quarter total of 16,023 but up 4.73 percent from the second quarter of 2009.  On the whole this is positive news.  Any bright spots are rays of home.  However, there is a lot of factors not considered.  Are the loan modification programs still holding up the process.  Are banks still waiting to foreclose or are they filing quickly?

Link to original article http://bit.ly/duPzeH

The other big factor are lenders more likely to do short sales now to avoid the foreclosure time and expense.  This data can mean a lot of different things depending on:

  • if you are a homeowner
  • if you are an investor
  • looking to purchase a home

What I think this means for investors.  It’s much, much harder to get a great deal.  If the supply has remained basically constant the demand is through the roof.  I have never seen so many people wanting to invest in real estate.  The turnout at trustee auctions appears to be double from a few years ago.  Whether it is the late night informercials or investors getting frustrated with the stock market there are a lot more people looking for deals.

My advice is that it is better to try to get the property at a short sale rather than waiting for the auction to come along.  First time homebuyers (FTHB)  are also recognizing the market and starting to get off the fence.  If you are an investor looking to get a great deal or a first time homebuyer I can help.  Call Mike at 303-949-5848 or email mikeh@propertiescolorado.com

If you are interested in short sales in the Denver metro area.

SHORT SALES IN THE DENVER METRO AREA

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Categories : Investors
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TriZetto headquarters is moving to Greenwood Village, Colorado from Newport Beach, CA

Posted on July 16, 2010 by Properties_Colorado

TriZetto headquarters is relocating to Greenwood Village, Colorado. This is either good or great news depending on ones viewpoint.  TriZetto is a $500 million health care software company.  A few things that I really like about it.

  1. What great industries to be involved with health care and software.  Both are great industries.  The employees are likely to be making more than the median wage for the area.  Headquarters relocating mean that you’ve got a company that is generating money from all over the United States and bringing the money to Denver to be spent on salaries.  This is a great thing.
  2. Colorado steals another business from California.  This is another great thing.  I can’t imagine a worse business climate than the state of California.  Those companies have to go somewhere.  Colorado is a great business environment and I hope more companies follow their example.
  3. It sounds like there will not be a lot of employees coming in the transfer.  The article didn’t mention how many would come but it helps in so many ways.  Ultimately the Denver real estate market is determined by supply and demand.  New home construction has fallen off a cliff.  Not only in Denver, but across the United States.  Denver needs new residents to come in and buy homes.  This will help all homeowners stabilize and increase in value, it is also a necessary condition to start new home construction and jobs.  In addition to all of the real estate business these people have to eat whether it is Sam Taylor’s BBQ or Brooks steakhouse it’s a win.

For all you employees relocation to Greenwood Village, CO you can Search for homes in Greenwood Village, CO here.

For potential people looking for employment here is the TriZetto home page.

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Categories : Uncategorized
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Buying a For Sale by Owner Home in Denver, Colorado

Posted on July 12, 2010 by Properties_Colorado

Buying a For Sale by Owner (FSBO) in the Denver metro area involves both challenges and opportunities.  The ability to determine which one is which involves a skill that a good real estate agent or Realtor can provide.  It can be very smooth or pulling teeth without drugs.  Here are the pros and cons of working with FSBO’s.

Pros of working with a FSBO

  • Likely to be uneducated about the process. Always try to find out there background as it relates to real estate.  Here are some professions that might have a background that relates; attorneys, accountants, title professionals, appraisers, etc.  Basically if someone has been involved in the industry they might have some knowledge.  I still advise working with a competent real estate agent.  If these people are unfamiliar with the process there are a lot of way to take advantage of them.  This is even so true that if I am working for the homebuyer then I have to disclose to the FSBO that I’m a licensed agent and can have them at a disadvantage.
  • Less competition.  The real issue is most homes around 90% of the homes are sold through the mls.  This is how agents and buyers find you.  Yes it’s possible to sell your home on Craigslist it’s not how most homes are sold.

Cons of working with a FSBO

  • Likely to be uneducated about the process. This can lead to delays, not getting the home in a timely manner, liens, and the contract not even coming through.  At a training recently with a title rep I found out that only about 25% of FSBO’s actually close.  This is without either party having an agent involved.
  • Pricing the home correctly. Most FSBO’s don’t have the access to the most up to date home price data.  Hint Zillow is frequently wrong.  Without the right data or realistic expectations even if you find a home you like it may not be possible to negotiate a fair price.
  • Emotional involvement. Lots of people have an emotional attachment to the house this can affect the deal in strange ways.
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Categories : For Sale by Owner
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What do you mean my home is off the market in Denver, CO

Posted on July 6, 2010 by Properties_Colorado

I have been working expired listings in the Denver, Colorado market. Most real estate agents just rely on there Sphere of Influence (SOI) or as we used to say at MCI Friends and Family. That is low hanging fruit. I’m a professional salesperson, marketer, and businessperson, and my feeling is if you can’t market to more than those people then you will likely have a short career.

I actually go up and knock on the expired listing in the metro denver area if you are afraid to talk to strangers then how are you going to negotiate a contract effectively? As I am starting to do this, most of my career has been spent working with investors, the stories and situations that I see are incredibly weird. Here is my favorite one and I was at almost loss for words.

As I’m pulling up to the house there is the big real estate sign in the front yard. The house is on a corner so there are actually signs on both corners. I’m thinking somehow I screwed up and this got relisted and my search missed it. I’m a completely ethical agent and I’m like, don’t engage in sign crossing. I pull out my trusty Android phone and check the mls. Yep it’s expired, so I proceed to go knock on the door. It looks like they are home so I have really got to be ready.

I knock on the door and the homeowner answers. She’s holding back a big dog, a Golden retriever I believe, that is desperately trying to get outside to greet me. I have two boxers at home so I’m very familiar with this problem. It certainly makes talking difficult and I realize unless she can come out of the house I’ve got between 30-60 seconds to make my pitch.

confused dog

What do you mean you didn't know your home was off the market?

I noticed your listing has recently expired and I was wondering if you have any plan to put your home back on the market. She tells me, I didn’t know my home was off the market. I felt like my dog when you try to explain something to him, very confused.I was dumbfounded. Having been a championship debater in high school I knew not to say “uhhh uhhh uhhh.”

I had a million thoughts running through my head.

  • What a bad agent.  I work so hard to get and satisfy my clients that I can’t imagine letting this happen to them.  My listings get sold, they don’t expire.  I’m certain going to communicate with my client to see if they want to relist.
  • Does this person have so much business that they can just ignore this client and potential?
  • Do you just want your signs on the corners of this house to troll for buyers?
  • Can I tell the homeowner you hired a bad agent if this is how they treat you and your house?
  • Did the agent make a mistake on the date or enter it in wrong.  Would they make a mistake  like this or screw up a date in the actual buy and sell contract?

What did I tell her?  I’m not exactly sure what is going on, but if you are actually under contact with the other agent I’m not even allowed to talk with you about anything about your house.  If you are not under contract then you really should talk with another agent they can offer opinion of your marketing campaign to sell your home and even if it is realistic to get the price you need for your home.  I’m going to leave this packet of information with you and if you aren’t under contract then you can call me and I’ll be happy to give you a second opinion on your situation.

Follow up: I still haven’t heard back from her nor have I followed up with her.  That happens tomorrow.  I went door knocking again today and had the exact same thing happen.  I handled it much better.

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Categories : Expired listings
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Rental analysis of the Denver Market

Posted on June 30, 2010 by Properties_Colorado

The new Gordon Von Stroh report is out that goes over what all homes should rent for is now available.  A powerful tool so clients can know what they can figure out for rent with their residential properties.

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Categories : Residential Buy and Hold
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Commercial Real Estate – More trouble to come?

Posted on by Properties_Colorado

I am of the personal belief that we are soon due to have a crisis similar in commercial real estate similar to what recently hit the residential real estate market.  The trouble has to do more with financing rather than cap rates, vacancy or any other issue.  Their are some real issues with commercial financing.

  1. The length of the term. Most residential loans are for 30 years.  Most commercial loans are short term 3, 5, or 7 years are common.  If borrowers cannot refinance or pay off their loans, they either default or persuade lenders to extend their maturities.  Right now 50-60% of properties failed to refinance within a few months of their maturity this year.
  2. When the loans were written and when they mature. A large number of loans with five-year terms taken out as property values soared and underwriting standards plummeted will come due during the next two years. More than $60 billion of the debt matures in 2011 and $80 billion in 2012, according to Bank of America.
  3. Late payments already occuring. Late payments on commercial real estate loans packaged into securities are at a record 7.5 percent, according to Moody’s, and may reach 11 percent by yearend.

I believe that commercial real estate will be a great investment soon.  I don’t think we are there yet.  I’m advising my clients to wait and accumulate capital to take advantage of the bottom.

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Categories : Commercial real estate, Investors
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Government to help with funding on Transit Development Projects

Posted on by Properties_Colorado

The federal government is allocating a certain amount of money to various communities to aid in transit oriented development (TOD) and projects around mass transit.  This could be good news for the Denver light rail programs.  It remains to be seen how much of the money will actually make it’s way here.  This should help speed up the projects and make things move a little bit faster.

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Categories : Light rail
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