Denver Real Estate Blog

Development is a strange and complex process, especially in neighborhoods with over a century of history, character, and architecture.

Denver’s Highland neighborhood is one of those areas - and there is a little bit of good, a little bit of bad in the news today.

Which do you want first?  The bad?  It’s always sad when a property is neglected to the point that it becomes a safety hazard - especially when it’s a 107-year old house in a fantastic location.  What really strikes me about the article in the Denver Post is this: the developer that purchased the property a couple of years ago applied twice for permission to demolish the property and was denied due to the historic status of the neighborhood.  So, he neglected the property until the city decided to demolish it for him.  How does that make sense? 

Anyway, I guess it’s all just part of the natural process of development, but it is a sad photo, isn’t it?  Hopefully now the developer will actually do something with the property.

So what’s the good news?  On the East side of Highland, in the old Olinger mortuary space, development is in full, compliant, swing with the announcement that the same group that brought the neighborhood goodies like Lola and Vita is doing it again, and I can’t wait to see how it turns out!  Apparently they already have one new restaurant concept committed to the space, and will make room for several other retailers and restaurants, which will drive up property values in LoHi even further.

I guess it’s all part of the Circle of Life of a growing, thriving, changing neighborhood (insert Lion King theme song here).

I was recently talking to a potential buyer who happened into my Open House, and she commented on the seriously varied types of architecture that can be found in Highlands - and we agreed that was part of the beauty of the ‘hood - the mix of new and old, the beauty of a 100+ year old tudor 10 feet away from a spanking new modern “green” house and across the street from 3 beautiful old Victorians.

Now one of the major developers in Riverfront is bringing that some of that same cool juxtaposition to the Valley - I wonder what style of home he will build?!  Can’t wait to see it…

From today’s Denver Post…

A plan is in the works to build a single-family home amid the sea of condos and townhomes that have sprouted up in the Central Platte Valley near downtown.

Riverfront Park developer Mark Smith’s home will be the only detached residence in the neighborhood.

“It’s just something I kind of thought would be fun and different and interesting,” said Smith, head of East West Partners, which developed Riverfront Park.

Smith said he has been working with 4240 Architecture Inc. to design the home but isn’t likely to start construction until the market improves.

The 6,500-square-foot lot, which Smith bought in December, is in front of the Glass House condominium tower at Little Raven and 17th streets overlooking Commons Park.

Real-estate broker Deviree Vallejo lives in the nearby One Riverfront building and has a listing on the 12th floor of the Glass House. She said the question she was asked most during a recent open house was: “What’s going to happen on that lot?”

“If (Smith) builds a single-family home, unless it’s seven stories tall, that will make a lot of people in the Glass House happy,” she said. “The only question mark was that lot.”

Built around an internal courtyard, the 4,500-square-foot, two-story home will have views of Commons Park, the 17th Street corridor and the mountains. It will be contemporary in style and use stone, glass and brick similar to the materials used for the development’s other buildings.

“It’s a beautiful little addition to the architecture down there,” said Randy Johnson, principal of 4240.

The architecture firm also designed many of the buildings in Riverfront Park, including Park Place where Smith currently lives.

“It’s a real testament when a developer wants to put his private home in the midst of his development,” Johnson said. “It’s also nice in this economy that he’s still working on stuff.”

Ori and I have spent the last several weekends creating our own little urban farm. 

Tearing out a large section of grass, we installed two raised garden beds and a large flower bed - it was a ton of work, but I know that it will pay us back in several ways.  As we live there, we will be able to plant, tend, and harvest our own food - it’s really satisfying work that will not only save money, but will taste great.  As the kids help us with our project, they will learn about the cycle of life, about the satisfaction of a job well done, and about the benefits of good nutrition. 

Eventually, we will sell our house, maybe move to a house with a few acres - and an even bigger garden - but I think that the urban garden that we have created will pay us back at resale, as well.  As contemporary homebuyers look to go green in all sorts of ways, they will look beyond the bamboo flooring, recycled glass countertops, and solar panels to the potential of the land and how it can give back.

Enhanced Tax Credit Provides Outstanding Opportunity for Home Buyers

In its efforts to stimulate the economy and revive the housing market, Congress has enacted legislation providing a tax credit of up to $8,000 for first-time home buyers.

But time is of the essence for buyers who want to take advantage of this opportunity. Only homes purchased on or after January 1, 2009 and before December 1, 2009 are eligible.

Find out more here.

The Denver Metro is HOT right now, and I’m not just talking about the 70 degrees and lovely sunshine we had today…check out what the Business Journal had to say about the lastest Standard and Poor’s report…

Prices of existing homes declined less through 2008 in the Denver area than in any of 20 major U.S. cities, Standard & Poor’s reported Tuesday.

The monthly S&P/Case-Shiller Home Price Indices said average prices of existing homes in Denver fell 4 percent between December 2007 and December 2008, less than any of the other 19 cities in the report.

The average decline among the 20 cities was 18.5 percent, S&P said.

Among the 20 cities covered in the Home Price Indices report, Dallas had the second smallest year-to-year housing-price decline after Denver, at 4.3 percent, followed by Cleveland at 6.1 percent and Boston at 7 percent.

The cities with the greatest price declines were Phoenix at 34 percent, Las Vegas at 33 percent and San Francisco at 31.2 percent, S&P said.

The survey also indicated that Denver had the second-smallest decline in existing-house prices between November and December 2008, at 1.5 percent, behind only Boston at 1.3 percent. Denver’s decline between October and November 2008 was 1.1 percent.

Phoenix had the greatest month-to-month decline from November to December, 5.1 percent, followed by Las Vegas at 4.8 percent and Minneapolis at 4.6 percent, S&P said.

Nationwide, the S&P report painted a gloomy picture of steadily declining home prices.

“The broad downturn in the residential real estate market continues,” David Blitzer, chairman of S&P’s index committee, said in a statement Tuesday. “There are very few, if any, pockets of turnaround that one can see in the data. Most of the nation appears to remain on a downward path.”

The survey tracks changes in the value of the residential real estate market by comparing sale prices of specific sample homes in a city at two different times. Calculations are by Fiserv, Inc. using methodology developed by Karl Case and Robert Shiller.

The survey assigns an index number to each city and does not report actual home prices. The index is a measure of how much home prices have gone up or down in each market since January 2000, which has been assigned a price index of 100 in that market.

The report said Denver had a home-price index of 125.74 in December, meaning home prices have gone up 25.74 percent since January 2000. Home prices in Denver peaked in August 2006.

Six of the 20 cities had a lower price index than Denver, with Detroit at the bottom at 80.93. New York topped the list at 183.50.

The average price index for all 20 cities of 150.66.

Wow, with the New Housing Plan has come a ton of new business - both buyers and sellers are getting in on the action, and we are seeing the Denver market pick up at an unbelievable pace.  Case in point, the listing we put on the market last week already has a contract pending, and it had multiple offers for the list price.  So, if you have been sitting on the fence and waiting for the perfect time to buy or sell, jump down and join the fun - that time is NOW.

Of course, with the changes put in place by the Stimulus Plan, there are a ton of questions that our clients are asking…here are just a few:

- Should I refinance now, and will the New Housing Plan help me out even if I have never missed a mortgage payment?

The answer is maybe.  I like this summary from the New York Times:

Removing a limit on refinancing for “responsible homeowners”

4 million to 5 million households.

The bill will remove the current restriction on Fannie Mae and Freddie Mac that prohibits them from guaranteeing refinancing on mortgages valued at more than 80% of the home’s value. This will allow many more homeowners to refinance at lower rates.

Helping renegotiate loan terms for “at-risk homeowners”

3 million to 4 million households.

The bill creates incentives for lenders to modify the terms of subprime and other loans. Participating lenders will reduce payments to no more than 38% of borrower’s income, with the government matching further reductions down to 31%.

Who doesn’t qualify

There is also a good Question and Answer sheet posted on the US Treasury website: http://www.treas.gov/initiatives/eesa/homeowner-affordability-plan/ConsumerQA.pdf

- Are there areas in the Denver Metro that haven’t decreased in value over the past year?

Absolutely.  There are neighborhoods that have increased in value over the past year - and that are projected to keep on doing so.  Highlands, Berkeley, Sunnyside, Wash Park, Congress Park and Cheesman are just a few of the places where it’s still rare to find foreclosures - and still solid areas to invest in and live.   

- Is it still possible to make a profit by flipping?

Of course, but you have to be super smart about it.  You have to be careful about what you pay for the property, how much you put into it, how long you hold it, and how you price it to sell.  There is a ton of competition for great investment proeprties, so the best thing to do is set up an automatic search that will send you new listings the day that they hit the market.  If you see something that looks like a good investment, don’t wait - make an offer.  And create a net sheet that will allow you to project your profit so that you can budget for the flip accordingly.

I had a closing Friday (yay!) and I agreed with the mortgage broker who had referred the client to me, that we really needed to blog about this situation - which ended up being a win for everyone involved, because it was such a perfect example of why it’s really important to be fully prepared and pre-qulaified when you find the property you want.

My clients are first-time investors (both accountants) who are, luckily, extremely organized with great credit.  Although they weren’t completely sure what type of property they wanted at first, or in what neighborhood, they did know that they wanted a great deal (of course) in a popular Denver area, and they knew they wanted to keep it as a rental property.

We looked at over 50 properties, all over the Denver area, from flipped condos to foreclosed duplexes, and wrote 4 contracts that didn’t go through.

I was out previewing some new listings for them when the client called - a new listing on a great street in Lower Highlands had just come up in the MLS, and the price seemed ridiculously low for a 3 BR 1 BA on an 8000 SF lot - and there was no picture.  Assuming that it was too good to be true, I drove by to take a look. 

A cute little stuccoed bungalow on a great lot, the house was a bit run-down but had great curb appeal, and the location couldn’t have been better.  Right up the street from the new Pasquini’s and Duo Restaurants, as well as all of the little cafes, coffee shops, and charm of the shopping district, and within blocks of the Pedestrian Bridge, this house was a charmer - and a steal.  Listed at $129,900, there is nothing that would even try to comp in that area for less than $200,000.

I scheduled a showing and the clients raced over to meet me.  They wanted that house. (So did I!)

We wrote an offer after I spoke to the listing agent, who told me that they had a few offers in but that he hadn’t presented them yet.  We offered more than the list price, but here is what clinched the deal - we were able to close in two weeks.  Because my clients had all of their documentation in, and the mortgage broker had everything they needed for a quick close, the sellers went with our offer, which wasn’t the highest, because they wanted the closest closing date possible.

So, lesson learned - even if you are pre-qualifed, keep in close touch with your lender and make sure that your file is completely up to date as you look for that perfect property - a little organization and diligence might just win you the prize!

I always like to read some good news - that’s why I like the site http://www.happyrenews.com/ - and why I was psyched to come across this article in the Rocky Mountain News:

Good news for Denver-area housing market By John Rebchook

The Denver area housing market showed the most appreciation of 20 metropolitan areas tracked by the closely watched S&P/Case-Shiller Home Price Indices from May to June.

The Denver area showed a 1.5 percent gain in that period. Boston, with a 1.2 percent increase, was the only other metropolitan area to show an increase.

The average percentage change in that one-month period was a loss of 0.5 percent for all 20 cities, and a loss of 0.6 percent for 10 of them.

Denver and Boston have shown three consecutive months of positive returns. Denver homes showed a 4.7 percent decline from June 2007 to June 2008, the third best of the 20 cities. (more…)