Last 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 were there as well.
I’ve been presenting to you the highlights from each speaker, but am writing one at a time. In this final article, we hear from David Mandarich, President & COO of Richmond American Homes.
Mandarich opened with the bold exclamation “Now is a better time, the best time to buy a house!!!! Let’s get excited! I’m so glad that I live in Denver, so proud to be part of this community.”
“What we experienced in 2005 & 2006 from local builders is a lot of overbuilding. We saw an interesting phenomenon during this time. Speculators. People were no longer viewing a home as a place to live but rather looked at it as an opportunity.”
He continued, “Here we all are in 2008 with a hangover from the party of buying and speculating in 2004 and 2005. We are living through that foreclosure process. You have a lot foreclosures in Las Vegas, Phoenix, and other markets. Why did this happen? Real estate values went down. In California, if you bought a home in some areas of California in 2005, the average home was priced around $550-$600K. Today that house is worth $350,000. People don’t have motivation to stay in those houses anymore.”
Mandarich also stated, “We are in Denver and glad to be here. Denver has a great story, different than most cities in America. Other markets like California and Arizona feed into Denver.”
Mandarich furthermore questioned, “What trends are we seeing in new houses? We are seeing across the country, people today are looking at a house more as a home than as an investment. Today the average square footage is smaller across the country than it is in Denver. Today’s average sales price for Denver is in the $300’s. Other places, is around $200-$240K. That’s one of the challenges that we have in Denver.”
“Richmond American is soon coming out with a product of single family detached homes in the $200’s. Recently, in Denver, the only way to get into a lower priced home was to buy an attached product. We’re adjusting to that.”
“Negative press has really hurt our consumers,” he stated. “Once that disappears, we’ll have a healthy market in Denver. There will be a void to fill because many builders left town. The real challenge in housing is that most of the banks don’t want to lend money to home builders. A lot of the big national banks have a moratorium and do not make loans to home builders . The banks have seen a lot of credit defaults where they have had to take properties back. For some smaller home builders, it is very hard in the Denver market to get a construction loan. Banks are concerned about lending to home builders. ”
“What does all of this mean for consumers,” he shouted. “Now has never been a better time to buy a new home in Denver!”
For more information about Gretchen Rosenberg’s real estate listings, or the Denver real estate market visit www.gretchenrosenberg.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.