Denver Economics - Real Estate Market and Current Trends - part 2
October 31st, 2008 categories: Market Trends, Real Estate News
This week, The Kentwood Companies sponsored a real estate and economic forum for our agents and clients. The speakers were nationally recognized experts in their respective fields, and had some extremely interesting comments to make about the U.S. economy, the Denver, Colorado economy and real estate trends. Over 1,000 people attended, and the local media was there as well.
I plan on presenting to you the highlights from each speaker, but will write one at a time. Today, let’s hear from Joe Blake, CEO of the Denver Metro Chamber of Commerce:
Blake opened with a quote from Shakespeare, “All the world’s a stage and all the men and women merely players. As we look forward to the remaining of 2008 and 2009, we are all now on an uncertain stage. Business hates uncertainty.”
“Before the event, I was chatting with Bill Moore. He asked me to give us all some good news. There is some good news and some bad news. One of the things that we tend to overlook is the powerhouse that we have at DIA (Denver International Airport). There is no greater engine for our economy than DIA. They did have plans for a $280 million dollar expansion on concourse C. They have postponed that due to the economy. Also delayed is The Cherokee Gates project has been delayed a year and now will begin 2011. Bond issues in Steamboat Springs and Colorado Springs have been postponed. In Colorado, it is projected that 1 in 25 homeowners are likely to go into some kind of foreclosure. The $4.7 million dollar expansion of Light Rail has now ballooned to $7.9 million.”
Joe explained the crisis with the transportation in the budget and the fact that much of our transportation infrastructure is in dire need of repair and that we must figure out a way to continue the Light Rail expansion.
Here are some of the positives mentioned by Blake. We have a tremendous military investment from Congress-$700 million allocated for Colorado. Buckley is the fastest growing air force base in the country. Denver is one of the top 10 real estate markets to watch in 2009. The ground breaking of the first phase of Denver Union Station is set with a budget of $125 million. That is going to be a major revenue maker for the state. Colorado leads the world in aerospace research. RTD is doing an extraordinary job now hitting the 100,000 million person mark with their passenger service, which is a major statement for a Western City that relies on its highways. Job growth in Colorado is predicted to be up 1.6% for 2009. We expect to see net in-migration of 23,000 to Colorado in 2009.
Joe continued, “Why, as the rest of the county is having problems, do we seem to be doing relatively well compared to other cities? One reason is that we have focused on growing 11 industry sectors. Space opportunities – Colorado is #2 for space employment. There is also bioscience, tourism, agriculture, energy to name a few.”
Blake touched on his concerns in his closing statement. “On Saturday, Governor Ritter will announce the 2009 budget. One of the areas that is going to be hardest hit is transportation. TREX (the I-25 widening with Light Rail component) came from bond issues, not from taxes. This year and for the future, the state is going to have to repay $169 million for this bond issue. We are facing a crisis in transportation. There is no money for Senate Bill 1. What are we going to do to take care of our transportation shortfall?”
With the lower unemployment rate and the firming up of the lower and mid end property sales, Colorado will fare better than many cities in 2009. We must, however, face transportation head on.
For more information about Gretchen Faber’s real estate listings, or the Denver real estate market visit www.gretchensdenver.com. This comprehensive real estate web site includes all available idx listings in Denver as well as state-of-the-art mapping and search software. Also included is relocation information for those people looking to relocate to the Denver area.
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Denver Economics - Real Estate Market and Current Trends - part 1
October 29th, 2008 categories: Market Trends, Real Estate News
Last night, The Kentwood Companies sponsored a real estate and economic forum for our agents and clients. The speakers were nationally recognized experts in their respective fields, and had some extremely interesting comments to make about the U.S. economy, the Denver, Colorado economy and real estate trends. Over 1,000 people attended, and the local media was there as well.
I plan on presenting to you the highlights from each speaker, but will write one at a time. Today, let’s hear from Steve Murray, CEO of Real Trends:
The causes of the housing downturn are many, but the affordability index fell drastically in 2005. As housing became less affordable, homeowners were less able to pay for housing.
Another factor, of course, was easy-money mortgages. There were even mortgages called “ninja” mortgages. No income, no job or assets.
Housing is a “trickle up” marketplace. In Denver, we’re seeing the trickle up beginning already. Affordability is better and the lower end properties are selling well. This will eventually “trickle up” to the high end properties. In Denver, the high end is really slow this year. It’s the lower end that’s recovering first. We’re seeing that in many markets, the leading indicator of a recovery is the increase in entry-level home sales.
The increased sales of starter homes and the slow-down in high end home sales is resulting in depressed average prices. It appears as if prices are falling drastically when you look at the decrease in average price, but it’s largely influenced by the increase in lower priced home sales.
Typically, 5% of households in any marketplace will buy homes in a given year. This average helps inform us about what the market might look like next year, and how many buyers we’ll have enter the market.
The real estate recovery will be slow and steady. The markets that are recovering - like Denver - are recovering at the lower price points first. As affordability increases, and as inventory decreases, we’ll be seeing a much more balanced market.
For more information about Gretchen Faber’s real estate listings, or the Denver real estate market visit www.gretchensdenver.com. This comprehensive real estate web site includes all available idx listings in Denver as well as state-of-the-art mapping and search software. Also included is relocation information for those people looking to relocate to the Denver area.
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Denver Colorado Real Estate | Top 5 Ways to Move Your Listing to First Place
October 25th, 2008 categories: Market Trends, Selling Strategies
Many home sellers are finding themselves heading into the Fall and Winter months with their house still on the market. “Why?” They ask, “My home is wonderful and I love it, why doesn’t someone else? Why are we missing the bullseye?”
Denver real estate is very segmented right now with some segments selling much better than others.
Many home sellers are on their second or even third listing agent and have reduced their price along the way. They’re wondering where they go from here. Even wondering if they should remove their house from the market through the winter.
Market trends dictate that sellers need to be calculating in how they approach the sale of their house. Here are my top 5 suggestions for sellers to keep in mind:
1) Get a New Market Analysis - when real estate prices are trending down you’re in a very different position than when prices are flat. If you get a new market analysis every 5-8 weeks, you can discern what’s been happening with actual sales in your area. If you see prices continuing to deflate then you need to get in front of that rock that’s rolling downhill. Price reductions putting you just behind the rock won’t help you move into first place for buyers.
If the prices seem to be remaining flat, then you can adjust your price to that place and then leave it there. Pay attention to other factors that will move you into first place and keep getting a new market study every month or two. Remember, prices of homes currently available on the market don’t count when comparing prices.
Avoid “pricing entitlement” - a friend just coined that term and it fits. Sellers need to realize that their house is a commodity that goes up and down (more up than down for sure). If you’re willing to look at stocks as an investment and recognize that sometimes you sell up and sometimes you sell down, why is it so difficult to recognize that this can happen to a real estate investment too? You aren’t entitled to a price, the market will tell you what the house is worth. You can choose to sell or to hold on for a price upswing, but you can’t change market perception.
2) Consider Staging - if you’re living in your house while it’s on the market, you’d be amazed what a staging specialist can do with your own belongings to make the house pop. A fresh eye on furniture placement, some added decorative items and massive de-cluttering can completely transform a property.
If your house is vacant, you should investigate professional staging. The addition of classy furniture adds warmth and pizzaz to an empty house. Staging can add up if you’re paying a monthly fee, but there are ways to economize - like staging main rooms and leaving secondary rooms unstaged.
3) Re-Frame From the Curb - are you missing showings that were scheduled, but they skipped coming in? Then you may have to act like a movie director and look at your house from the street to see what’s going on. Be critical - act like you’re a buyer and this isn’t your house yet. What do you see? If there is chipped or peeling paint, if the front door is dirty, if the grass or shrubs are dead (or they block the front) you’ll need to give some attention to the maintenance of the exterior of your house.
Washing the windows will add sparkle that isn’t overt, but still makes a difference. Buyers like to look out through clean and clear windows. Dirty windows add a dingy feeling to an otherwise nice property. You can hire a window washer, or buy one of the spray products that screw onto a hose.
4) Paint the interior - I like colorful walls, and have several rooms in my house painted in color. That probably isn’t the best way to show a house. Neutral (with a little spark so it’s not boring) is much better. If you already have fairly neutral walls, but they haven’t been painted in over two years, then re-paint again. Fresh paint makes a world of difference in a buyer’s attitude about a house. If you have white walls, that’s just as bad as having too much color. White is harsh and cold - it doesn’t add a feeling of warmth to a house.
5) Have Your House Ready - too many sellers get preparedness fatigue after a few months on the market. They’re sick of living in a show home, tired of picking up and harassing the kids, and want to leave the bed unmade for just one day. Discipline yourself - don’t fall into this trap! I can’t tell you how many times I’ve walked into cluttered and unprepared homes with buyers lately. It amazes me that sellers would let their guard down when there is so much competition. Can some buyers look past this and see the house for what it is? Sure, a few can. Is that a risk you want to take?
Keep things in perspective, keep a positive attitude and remember that there’s an ass for every saddle! Your saddle just needs to be in first place on a buyer’s list.
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You Can Live in Spectacular Colorado
October 19th, 2008 categories: Life In Denver
You must know that when you live in Colorado, you have breathtaking vistas every day. Sometimes it’s not enough to just enjoy the mountain views from a Denver freeway, you need to get out there and experience it for yourself.
Manitou Springs in the Fall
A dear friend gave me an overnight to the Cliff House in Manitou Springs last year. We finally got around to using it this weekend, and what a gorgeous weekend to get out of town! Denver’s weather the past few days has been in the upper 70’s, sun dappled with red and orange trees and clear. Driving to Manitou Springs we had sweeping views of the Front Range as we passed through the city of Colorado Springs.
Colorado Springs Real Estate
If you happen to be interested in what’s happening in Colorado Springs real estate - check out my friend Mariana Wagner’s web site, Colorado Springs Real Estate Connection. Mariana and her husband Derek offer a wealth of information and knowledge about their market and what’s happening in the city to Denver’s south.
Weekend Getaways
The greatest thing about Colorado is our proximity to so many world class getaways. You don’t have to hop on a plane for a weekend (unless you’re an ocean person) and you don’t have to spend a fortune filling up your tank. Plenty of places are an 
hour or less from Denver.
Manitou Springs still feels like an old west town (with plenty of kitschy gift shops hearkening back to the old days.) You can take the cog railway up to Pikes Peak, visit the Cave of the Winds, hike around the Garden of the Gods or just wander around town with an ice cream cone. There’s a fun arcade in the center of town with games I played as a child. I still love skee ball! Classic Victorian architecture is found throughout town, and most buildings are lovingly maintained.
When you’re relocating to Denver, remember to let me know ahead of time so we can plan your house hunting trip and build in plenty of time for your own weekend getaway.
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Gretchen Faber’s Relocation Interview
October 14th, 2008 categories: Market Trends, Real Estate News
I have two observations before you watch this:
1) What the heck is that awful expression they froze me on? I asked Mark at Broker IPTV to fix that and he said I look fine - what’s he smokin?
2) The camera really does put on 10 pounds! (At least that’s my story and I’m sticking to it.)
BrokerIPTV: Today we are talking with Gretchen Faber, managing broker for Kentwood Company at Cherry Creek. Gretchen thanks for being with us.
Gretchen Faber: Thanks Dan. Hi.
BrokerIPTV: Appreciate it. I want to talk about relocation in general. Most people don’t really know, but this is a very large segment of the real estate business for local companies and international companies.
Gretchen Faber: Yes, you are correct. It is a large segment of business into and out of Colorado. Most larger companies do have specialty of relocation or relocation department.
BrokerIPTV: It seems to be a little bit more difficult in trying times. What are somethings that you are hearing about relocation these days? <Read More>
Gretchen Faber: When I talk with our relocation department - Kentwood Relocation, what I am hearing is that they are not negotiating as many large contracts for large blocks of load. So we are not seeing companies moving mass amounts of employees. More often today it’s an entrepreneur or a smaller business or an executive with a large company moving an individual person.
BrokerIPTV: Now, I have heard some companies on one end being really great about the tough economic times and saying “Hey, we are going to do everything including making up some short fall between the sale price of your house and what you owe to make the move more palatable” and then I have heard some companies that are saying “Here is a lump sum of money, enjoy to move.”
Gretchen Faber: It used to be that more employees would get these golden relocation packages. Their move would be paid, their closing cost would be paid, their real estate commission and its not as easy for companies to put these bill, so often now they are either giving a lump sum to their employee and saying you manage and move yourself or they are not getting quite the large packages.
BrokerIPTV: How about relocation specifically in Colorado, are we up, are we down or we level where are we?
Gretchen Faber: Our Company is up than last year.
BrokerIPTV: Okay.
Gretchen Faber: So, while Denver seems to pulling ahead in terms of the real estate recovery, so to speak. Relocation seems to really be doing well.
BrokerIPTV: If you are not used to doing relocation deals, its a little more complicated in the standard here, because we have got a third party relocation company involved. Can you explain a little bit how that network works?
Gretchen Faber: Right. Your client is the individual person, but your client is also the relocation, third party relocation company and you are working with both to manage this person’s move either into or out of
BrokerIPTV: The area?
Gretchen Faber: The area, right.
BrokerIPTV: Sure. The biggest thing I think that’s got to be tough on the relocate people is that, you know you got to start all over again?
Gretchen Faber: Right.
BrokerIPTV: Are there some things that relocation companies do to kind of ease that thing?
Gretchen Faber: I call that Rebuilding Fractured Networks.
BrokerIPTV: Okay.
Gretchen Faber: It’s something that I have worked for years with helping people and families. When they come to a new city, they are relocating with a job, they are often brining families, not always and they need schools and they need pediatricians and they need to know which neighborhood they would feel most comfortable in so, you have to have manage that and the third party relocation company doesnt manage that. Its the real estate broker’s job to do that.
BrokerIPTV: Any other advantages to working with a more specialized relocation company?
Gretchen Faber: You will have someone that’s more experienced, understands the importance of listing a property at the right price or how quickly you need to get feet on the ground when people are relocating into an area.
BrokerIPTV: Thanks so much for joining us.
Gretchen Faber: Thank you.
BrokerIPTV: Appreciate it.
Gretchen Faber: Thank you, Dan.
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September ‘08 Market Stats
October 8th, 2008 categories: Market Trends, Real Estate News
Metrolist has released the sales data for September, and the trend continues to show that days on market are shortening. As we see inventory moving in the medium price ranges, with fewer new listings coming on the market, we’ll see that properties are selling more quickly.
The high end properties continue to languish, and as you can see in the attached chart, average sales price is falling. A friend of mine, Lon Welsh at Your Castle Real Estate, publishes his own statistical analysis of Denver’s Market, and he shared a graph with me today that shows we have 31 months of inventory for properties priced over $1,000,000.
The dearth of high-end sales is resulting in a reduction of our average sales price. This will eventually move back up when the higher-end homes begin selling again. The cost of jumbo loans and the fact that many people in luxury homes are deciding to stay put for the time being have contributed to the slow down in high-end sales. This vicious cycle is perpetuated when new listings come on the market, increasing inventory numbers.
Denver real estate sales are much more active for moderate priced homes. Homes and condos priced $200, 000 to $800,000 are still the price point that we’re selling. This has been the case for many months now. The reduction in overall inventory is a result of this healthier segment of the market selling more quickly.
Sales for September 2008 are up 14.13% from this time last year and average days on the market are down 4.56% from last year. We’re hoping this shows that Denver, ever counter-cyclical with the rest of the U.S., is actually showing signs of strengthening and pulling out of the slump earlier than other areas.
Of course, as I write this, the news about the credit crisis, the bailout, international markets crashing along with ours is permeating the press. This frightening and unprecedented unraveling may very well slow Denver’s recovery. It remains to be seen, but overall, our news here positive.
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Gretchen Faber’s International Real Estate Interview
October 6th, 2008 categories: Market Trends, Real Estate News
BrokerIPTV: Today we are talking with Gretchen Faber. She is the managing broker for Kentwood Company at Cherry Creek. Gretchen thanks for being with us.
Gretchen Faber: Hi, Dan.
BrokerIPTV: Lets talk about international real estate, because when people say international real estate they think like Milan or Germany, but does Denver have kind of an international component to it?
Gretchen Faber: Well, at Denver and Colorado we have buyers from all over the world, many from eastern Asia, from India, a lot from Latin America and Europe as well. Europeans are buying investment and commercial property. Canadians look at Denver and Colorado as a great buy, because of the US dollar being devalued. Then we have many, many executives. I have worked with business executives coming and going from Hong Kong and from Mexico City.
BrokerIPTV: Now, imagine as the relocation department in your company and other specific companies, I mean dealing with an international buyer has a lot of different kind of tricks and flips, am I correct?
Gretchen Faber: It does. That most large real estate companies do have a relocation department. Our company has Kentwood Relocation and we are also members of a larger network called Leading Real Estate Companies of the World and Leading Real Estate Companies of the World has a very global presence and the Kentwood Relocation Department is working with a publication called Residence International where we publish our listings and then they also put them online for us to email. So, global relocation is a huge business and our company is definitely involved in that.
BrokerIPTV: How is this transaction different? I mean obviously we have got a currency issue, but you are talking about people who are coming from a different country with different values about what you can buy at what price for a land and homes and so forth, I mean is there a huge education process that goes on there?
Gretchen Faber: Well there is and you can get a designation as a real estate broker called Certified International Property Specialist. That helps you with cultural awareness for people coming from different parts of the world and being culturally aware, how different people negotiate and also understanding currency is very important. These currency transfers need to be strategically managed so that they can leverage correctly when they transfer their currency into US dollars to make the purchase. Then there are tax laws that you need to be aware of like the Foreign Investors Real Property Tax. So, it is more complicated for sure.
BrokerIPTV: Yeah and your relocation department helps out all that?
Gretchen Faber: The Cherry Creek office of the Kentwood Company has several people who have the certified international property specialist designation.
BrokerIPTV: How about a US citizen wanting to buy internationally, whats the difficulty or obstacle there?
Gretchen Faber: Right. There is a book called Who is Who in International Real Estate and we can look at brokers all over the world, if I someone who wants to go to Costa Rica I can find them a broker in Costa Rica who understands how to work with an American buyer and then I make the referral and I earn a referral pay that way.
BrokerIPTV: How about trends in international real estate, I mean if somebody called me say “Hey, whats happening in Cherry Creek Village?” I could tell him, but if somebody said “Hey, whats happening in Italy right now?” I don’t know what the market is going on in Italy.
Gretchen Faber: There are so many resources online for that. The University of Denver, Burns School of Real Estate analyses markets all over the world. The CIA actually has a great website that you can go to. That will give you some insight into whats going on in different countries. So, most of us who do international real estate use the internet to do the research we need to do in different countries.
BrokerIPTV: Thank you.
Gretchen Faber: Thank you, Dan.
BrokerIPTV: Appreciate it.
Gretchen Faber: My pleasure.
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