Jonathan Ghaly

Not only did the TODAY show rank Denver the #1 city in America for the real estate rebound, but there is much hard evidence that Denver is passed bottom (including the number of bids on every good property under $200K...some up to 37 offers!).

Now I'm not talking about the near-luxury market above $350-$1MM...that's as slow as a snail (which have over 3 years of days on market).

Explaining the Charts Below:

The National Association of Realtors defines a "balanced" market as having 6 months of inventory:

• Less than 6 months is a Seller's Market: homes are selling relatively quickly and there are more buyers chasing homes.
• More than 6 months is a Buyer's Market: homes are selling relatively slowly and there are too many homes on the market.

While Denver has been a Buyer's market the past several months, the inventory of homes on the market in Denver has been declining. This is not true in many regions of the country.

Denver is at about 5 months of inventory...1 month LESS than a balanced market, making it actually a Seller's Market according to NAR. I've actually experienced this writing offers for clients - if the house is well-priced in a good neighborhood, or well under market-value, it's almost guarenteed there will be a bid war between buyers. The home ends up selling for more than the asking price!

It's a mixed issue. Lower cost areas, such as Thornton, are seeing inventory move fast. Sellers (mainly banks) don't have to wait long for offers. Thornton's average price in the last year was around $250,000 and the average MOI (months of inventory) was about 3 months. Greenwood Village, on the other end of the scale, had about 13 MOI and an average price of about $1.4 million. Sellers are suffering there. The city of Denver is about in the middle.

The second CHART below compares REO's (lender owned) homes to regular homes regarding inventory, solds, and months of inventory. It is jam-packed, but very helpful once you look at it. The main principle here is that neighborhoods with homes under $225,000 are selling fast, while upscale neighborhoods like Cherry Creek and Hilltop have significant levels of inventory and it's taking a long time to get homes sold, especially over the $1 million price barrier.

Nerds are often the target of many jokes...and not surprisingly so. However, nerds are very needed in today's day and age... and sometimes even envied. Nerds usually have an expert knowledge is some field: math, science, computers, comics, superheros, magic, computer games, etc. Nerds also have a certain loveable way, like the show Beauty and the Geek, many times beauties will fall in love with the geeks (unexplainable). Now, I'm not that kind of nerd, but I am a nerd when it comes to real estate.

My company,Your Castle Real Estate, are known as the experts of Denver market real estate knowledge. We have come up with a maximus intelligensius ton of Denver market knowledge using our two custom software packages. The first appraises all 20,000+ properties on the Denver market to uncover the small number of exceptional values. Our clients often save $20,000 to $50,000 on the properties they purchase with us. The second software system does extensive economic research on what is going on in the 350 Denver Metro neighborhoods, and what is driving those trends. It happens to be the source for the Denver Post price change map. Among other things, we study price changes by neighborhood, discount trends, marketing time trends, and the impact of foreclosures on the market. We do this for homes, condos, and income properties.

De-Mystifying Your Home-Buying Process Step-by-Step!

1) Needs Analysis: You’ll fill out a Home Preference Profile to help me understand both your wants and your needs, and to help you get a clearer picture of the perfect home for you.

2) Pre-Approval: You’ll then get pre-approved by a recommended loan officer who will use your credit and qualification status.

3) Target Neighborhood Information: I'll create a broad neighborhood search profile matching your desired area and price-range using my Your Castle tools.

4) Home Search: I’ll run a search according to your criteria, and you will select the available homes of your interest and we will set up a time to take a tour to see them. Before we go on tour, we’ll have to sign the Buyer-Agency contract to make our agency-relationship explicit.

5) Make an Offer: I’ll run comps on the home(s) that you like and are ready to write an offer on to get an idea of what the neighborhood is selling for. I will write the offer contract for you, and advise you on the terms and numbers for the offer. You’ll sign the offer, and I’ll present it to the listing agent.

6) Negotiation: If they submit a counter-proposal, I’ll present it to you and advise you on what I think, and you can either accept it or make a counter-proposal.

7) Under Contract: I’ll guide you through all the dates & deadlines of the contract (title, inspection, appraisal, survey, loan conditions deadline, etc.) and recommend trusted vendors like an inspector, sewer scoper, etc., and make sure things run as smoothly as possible!

8) Pre-Closing: We’ll be in touch with the loan officer and make sure everything is approved for the loan, and all documents are prepared and any monies are ready for closing.

9) Closing: Congrats! Sign the papers and move into your new home!!!

Your Castle Tools – the Denver Market Trends Experts

1. Your Castle Market Trends Analysis: With Your Castle’s exclusive voluminous real estate trends research and analysis, I can show you detailed trends all over the metro area for homes, condos, income properties, fix & flips, and detailed neighborhood trends from houses under $100K to Luxury neighborhoods above $500K, all updated for the 3^rd Quarter of 2008!

2. Your Castle Hotsheet: An Excel sheet that has every house and condo on the market and compares information on each property concerning several criteria such as comparable market values, schools and school rankings, fix-and-flip activity, foreclosure intensity, price-change percentage, distance to light-rail stations, and description of property.

3. Your Castle Price Change Map: Our exclusive Price Change Maps (for homes and condos) which shows by neighborhood average sold price, percentage of foreclosures, neighborhood price change, and days on market.

4. Your Castle In-house Comp Program: Our Your Castle in-house comp program will show you the comparable sold properties near the house of your interest using square footage, date, and location.

Investing in Real Estate 9 - Scrapes, Pops and New Construction

This blog will discuss a type of real estate investment, scrapes, pops and new construction, in the University Park area in Denver.

What this investment is: Purchasing a small home in an expensive neighborhood that may or may not need work. The home is bulldozed and a new home or duplex is put on the lot. Alternatively, the existing home is renovated and more square footage is added on. A pop-top is adding a second story to an existing home to add more square footage (commonly, a master bedroom suite).

Equity needed: Being able to document your income and your assets will be critical. For a commercial loan, your net worth should generally be at least as much as the loan you are seeking. The good news is that the commercial loan usually does not show up on your credit report, so it doesn't count towards the "four investment home limitation" from Fannie / Freddie.

Importance of credit: Essential. A 720 FICO is a must. A 740 would be better.

Importance of experience with contractors: Critical. If you have never done it before, start with an easier "paint and carpet" project to build your skills. The more sophisticated the project, the better your contractor management skills must be to make money. Not surprisingly, the simpler projects have lower profit margins than the complicated projects. Make sure you can take the time to really focus on the project. We run classes on how to do this from time to time. Go to http://www.yourcastle.org/events.cfm to see when the next session is.

Important of experience with property managers: Generally not important for this type of investment.

Investing in Real Estate 8 - Condo Conversions

This blog will discuss a type of real estate investment, fix and flips, in the University Park area in Denver.

What this investment is: A synthesis of the fix and flip and rental operations - purchasing an apartment building in a neighborhood dominated by owner occupants, then converting the building from apartment building to condominium. Often requires renovation of the units to meet the expectations of owner-occupant buyers in that area. Complex and time consuming, but has wonderful tax advantages compares to fix and flips and often has superior returns to all other asset classes. Ideally suited for the sophisticated investor with extensive experience.

Equity needed: Being able to document your income and your assets will be critical. For a commercial loan, your net worth should generally be at least as much as the loan you are seeking. The good news is that the commercial loan usually does not show up on your credit report, so it doesn't count towards the "four investment home limitation" from Fannie / Freddie.

Importance of credit: Essential. A 720 FICO is a must. A 740 would be better.

Importance of experience with contractors: Critical. If you have never done it before, start with an easier "paint and carpet" project to build your skills. The more sophisticated the project, the better your contractor management skills must be to make money. Not surprisingly, the simpler projects have lower profit margins than the complicated projects. Make sure you can take the time to really focus on the project. We run classes on how to do this from time to time. Go to http://www.yourcastle.org/events.cfm to see when the next session is.

Important of experience with property managers: Not important; the majority of our clients manage their own rentals when they get started. Ideally you will have started with some smaller investment rentals and built property management experience. Now, when you have to finally manage a property manager, it will be easy since you have done the job yourself in the past.