Heard on the Street – Denver Real Estate and the Mall
December 17th, 2008 categories: Life In Denver
It’s just 8 days until Christmas, and even fewer until Hanukkah. What have I been doing? Baking cookies for 80 people. The agents in my office are hungry for cookies, and I’m accommodating them in their time of need.
I’ve also been asking around, observing and trying not to shop unless absolutely necessary.
One of my father’s favorite Christmas movies is A Christmas Story. He watches it every year and laments that he’ll miss it this year since he’s on a boat in the Antarctic channeling Ernest Shackleton. But I digress…
In A Christmas Story Ralphie tries to convince his parents that a Red Ryder BB gun is the perfect Christmas gift for him. He obsesses over the Red Ryder while his harried parents and goofy brother stumble through the movie with him. The parents are obviously not wealthy people, but want to provide a nice Christmas for their boys. Ralphie’s mother obsesses too. She’s chronically worried that Ralphie will shoot his eye out if he gets the gun.
That’s my dad’s favorite part. That Ralphie’s mom says he’ll shoot his eye out. I think Dad is reliving his own obsessive childhood warnings, but that’s another story. My favorite part is when the dogs run through the house and take off with the turkey (after Ralphie shoots his eye out, and sorry if I gave that one away.) Their family ends up eating Christmas dinner at a Chinese restaurant.
I think many Real Estate Agents might be just fine with eating out anywhere right now – Chinese for Christmas means disposable income for a meal in a restaurant.
Here are my observations over the past few days that lead me to think we may have already shot out our eye and are on the road to Christmas dinner out (my puppy is definitely angling for the turkey and he’s already dismantled our tree.)
I went to the mall a few days ago to return some birthday gifts. It was PACKED. Capitalized because I was literally elbow-to-elbow with people shopping. I thought I should pay attention to how many shoppers had bags – most did! Every store except The Art of Shaving was packed (now that’s a niche…) The Art of Shaving was empty. You may see some bargains there in the next few weeks.
Both of the Starbucks kiosks had lines snaking down the hall. The department stores were bustling. Regardless of the bad news in the press, Denver’s holiday shoppers are out and about.
So I thought, “who can I ask about real estate trends right now – trends as they’re unfolding underneath our noses?” I asked Jackie, our receptionist. Jackie is the most practical and no-nonsense person I know. She doesn’t get fired up about much, but when she does – look out! Jackie has a wonderful relationship with the sellers who have engaged our company. She calls like an old friend to let them know someone would like to see their house. Jackie is like a man-on-the-street, only she’s a woman.
I asked her, “Jackie, how are showings going this month?” To my surprise she said, “kind of busy for a December.” She continued to tell me that she’s been setting more showings this December than in the past 5 years she’s been with us. While December is always a slower month, Jackie feels like this December isn’t all that bad.
So I hope that my piles of cookies keep our agents fortified and working toward a better new year. Judging from the mall and Jackie, we’re turning a corner here in Denver.
Subscribe to this Denver real estate blog by clicking on the links to the right – by RSS or email. And have a wonderful holiday season. Don’t shoot your eye out!
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Denver Colorado Real Estate | November 2008 Market Statistics
December 10th, 2008 categories: Market Trends, Real Estate News
It’s that time of the month to reflect back on Denver’s residential real estate sales. Denver real estate is up and it’s down, it’s selling and stalling. It depends on who you ask, what their circumstances are and what price range they’re in.
We’ve had several instances of multiple offers in my office this past month. This seems to be happening when the price is set correctly or even a little aggressively, when the house shows perfectly and when the price is between $250,000 and $500,000. Remember sellers – You’re not only in a pricing war, you’re in a beauty contest.
Higher end and luxury properties are still stalled. High end sales are closing where a luxury property is unique and special with little competition. Those homes will sell when the right buyer walks through the door and are a little more insulated from market circumstances. Most luxury homes are competing with a tremendous number of other listings, and with an excess of 2 years inventory over $1 million it will take awhile to shake that out.
We typically see a seasonal adjustment this time of year as properties are pulled off the market for the holidays. This is reflected in the 5.88% reduction in homes on the market since October. With nearly a 20% reduction since the same time last year, we begin to notice a pattern that’s not seasonal. Fewer homes on the market will ultimately result in fewer homes for buyers to choose from, higher demand and a shift in the balance of the market.
Remember, we’ve had a Sellers’ market in Denver since early 2002. While we never saw a big bursting bubble, we did have a deflation and we bumped along the bottom for years. Our average days a property is on the market continues to decline, another sign that homes are selling faster than in past months.
This New York Times article about the timing of buying a home suggests that we’ll never know when the bottom hit until after the fact. During the final months of ‘08 and the beginning of ‘09 we’re keeping our seat belts fastened and hoping that Denver can keep chugging along.
Happy Holidays to all!
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Denver, Colorado Gets a Real Estate High Five in Wall Street Journal
December 2nd, 2008 categories: Market Trends, Real Estate News
So the U.S. is in a recession. I got that important text message to my BlackBerry yesterday from the NY Times while I was sitting in a meeting. I was flabbergasted, couldn’t believe it.
Actually, I’ve been helping real estate brokers in my office and sellers whose properties I have listed weather this recession since about December 2007. Surprise – the official pundits tell us the recession started in…. December 2007.
In today’s Wall Street Journal I found an interesting article, “The Future For Home Prices.” The author, James Hagerty, discusses where home prices will trend in the future, and whether a home should be considered a sound investment. Hagerty’s research suggest that prices will remain flat in some areas, trend down some more in others, and trend a bit up in a few. Overall, we won’t see double digit appreciation again in the near (or probably far) future.
Does this mean that people won’t be buying houses? Is there no longer a market for homes like there’s no longer a market for railroad stocks?
Here’s the piece that many people seem to be missing, something I’ve told my clients for years when they asked me if that
property they wanted to offer on would make a “good investment.” Houses are where people live, have families, celebrate and mourn. Houses are not simply an investment like a stock or a bond. If you’re buying your primary residence then you should plan to stay there awhile if possible, if you’re looking to own rental properties make sure they cash flow and are in a strong resale area.
Sure, we all hope not to lose money on our home, and we even want to see a gain. We will see a gain over time, and while it may barely out pace inflation now that the “bubble” has burst, we’ll still have lived there. And if you’ve borrowed on a sensible mortgage that you can afford you’ve actually had the additional benefit of leverage. You’ll receive any upside increase on the total amount of the value of the home while only paying on the amount borrowed. That’s why it’s best not to take out a 100% loan unless your financial adviser sees reason why you should, why it’s best to get that sensible loan that fits your financial picture.
Just like in stocks, the loss isn’t realized until the investment is sold. If your home is worth less than you paid for it, hopefully you can hold on, make the payments and stay there until it comes back. You’re at least living there. Enjoy the laughter around the Christmas tree or Hanukkah bush. Those memories are important and this too, shall pass.
We’re cautiously optimistic here in Denver, and in fact, in today’s WSJ article Denver is mentioned as a city to watch:
“Among metro areas that Mr. Rosen expects to do well in the long run are Albuquerque, N.M.; Boise, Idaho; Salt Lake City; Seattle; Portland, Ore.; Denver and Colorado Springs, Colo. He says those places generally offer “urban vitality” and “easy access to outdoor activities” combined with affordable housing and good job-growth prospects from modern industries, such as biotechnology.”
Denver real estate has been counter cyclical for as long as I’ve lived here – 26 years. We’ll be the canary in the coal mine signaling a recovery. But remember that real estate is local one city’s boom may not be seen in another and one recovery may not signal them all. If you don’t have a mortgage you can afford and you can’t hold out until our Colorado recovery is gaining steam, then talk to the people at the Colorado Foreclosure Hotline. They can be an invaluable resource.
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