Gretchen Faber ~ LifeStyleDenver

Prognostications from the kitchen table

That’s pretty much what we do, real estate bloggers - peer into our crystal balls, ignore the strictly bad news and go with our gut. But our gut involves real world experience. We’ve either got buyers in our cars or we don’t, we’re either listing properties or we’re not. If we are driving buyers around and we can find good inventory to show them, then we can say that for that market segment we see demand.

Seasonally Adjusted

Listen to the statistics you hear from “national” publications, and you may not be aware that there is a seasonal ebb and flow to real estate sales. Yesterday we learned that the market was down in fourth quarter 2008. Surprised? You shouldn’t be, the market is always slower during the fourth quarter. In actuality, the supply of unsold homes (or inventory) fell again for the 6th month. The declining inventory began in June 2008. May 2008 was the last month Denver saw more inventory added than sold. In May, we had 26,333 listed properties in the MLS, in December we had 19,600. That’s a whopping 6,733 fewer homes for buyers to look at. This number will likely begin to rise again in the next few months for the spring selling season, which is good news for buyers. When there is a dearth of homes to choose from, buyers will begin to see prices creep - even if it’s not a lot, this will be the indicator that we’ve hit the floor.

Denver’s Statistics

The Denver statistics are provided by Metrolist, our local MLS provider. It’s really fascinating to compare not just the month-to-month stats, but the year-over-year as well. The amount of inventory for both single family homes and condominiums is down 20% from this time last year. That’s a pretty drastic reduction in available homes for buyers to look at. If any pent-up demand emerges as interest rates go lower, we’ll continue to see homes selling more quickly. That’s illustrated by average days on market going down both from the month before, as well as from last year.

Why are prices down?

People ask me, “well, why are prices down?” Probably as many reasons as there are neighborhoods and price points. There are still foreclosures that need to be sold to new owners. Colorado’s foreclosure rate is drastically lower than it was a few years ago, and it seems to be slowing. We’re not even in the top 3 states - and in 2006 we had the dubious distinction of being the number one state for number of foreclosures. But we are still seeing the mix of properties that sell skewing to the lower end of prices. There have been a few more high end sales in recent weeks, but that end of the market will only really begin to recover when mortgage money for jumbo loans is more affordable and when more of the high-end inventory is sold off.

New York Times on Denver

The New York Times has repeatedly focused on Denver’s positioning as a good economic bet. In an article published in yesterday’s Times, the diversification of our economy and the relative stability of our residential real estate market are chief causes. Don’t forget quality of life. Today is January 8th and the temperature is 62 degrees - plus the snow in the mountains is perfect for skiers. My husband is out enjoying his motorcycle this afternoon.

Statistics are an interesting indicator of history. We look back and see what happened. Talk to your full-time professional real estate broker and you’ll get the answers from his or her crystal ball and real world experience .

The Denver Post interviewed me this week about picking Denver’s Next Hot Neighborhood. The crystal ball will come in handy for that one too.

You could have seen this first at LifeStyle Denver.

When you’re selling your home in Denver, you may want to have the correct label on the house for it’s architectural style. I’ve seen homes that were clearly Victorian labeled Tudor, or Mid-Century Modern called International Style. Denver Real Estate is replete with fabulous architectural styles, and remember, marketing is everything. Your Bungalow may or may not be Arts and Crafts.

My home is a Tudor style, something my husband and I said we didn’t want when we were looking for a home. We tended to gravitate to clean lines and a more modern, warm feel. Our house was built in 1938, and many of the architectural details reminded me of the house I grew up in, built the same year. While we thought a Tudor home would be dark and choppy, we discovered that the house was perfect for our family’s lifestyle.

Another lovely style that’s been adopted as a Denver original is the Foursquare. Locals call this a “Denver Square” and these homes were primarily built in the late 1800’s and early 1900’s. They supplanted the more embellished Victorians found in many of our older neighborhoods.

Always a favorite of mine is the Modern Style home. Among “Modern” you’ll find Prairie and Usonian styles, and in some neighborhoods (Bonnie Brae for example) there are fine examples of International style homes. These tend to be devoid of decoration with clean lines and flat roofs. As a child, our coffee table books were Art or Architecture books. I clearly remember thumbing through my parent’s Bauhaus book and being enthralled with the artistry of the style.

Other typical Denver styles of architecture are Neoclassical and Georgian. These are often confused. The Georgians are very symmetrical and formal. They usually have a grand entryway or portico. The keystones above the windows are another giveaway that you’re looking at a Georgian style home. The Neoclassical style shows off the very prominent columns and you can’t mistake the look that was intended to mimic a Greek Temple.

Finally, we must admire the workhorse of Denver’s Washington Park neighborhood - The Bungalow. Bungalows in Denver are low slung and brick. They typically have lovely front porches with brick columns holding up the roof. Many bungalows have beautiful Craftsman style mill work inside, and it’s always a pleasure to find the warm wooden trim unpainted or restored.

Central Denver is a unique mix of architectural styles, and while some have been adapted with a western flair, there are elements of historic styles in new and older neighborhoods. Read today’s terrific article in the Rocky Mountain News if you’re interested in more information on Denver’s architecture.

Enjoy your search for a new home in Denver, Colorado!

See this and other Denver real estate articles at LifeStyleDenver.

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.

This story was written over at LifeStyle Denver.

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!

This post was first seen at LifeStyle Denver.

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.

This article and it's timely observations were first witnessed at LifeStyle Denver.