Highlands Ranch $350,000 to $450,000
From time to time it is instructive to look at an area from a more “micro” perspective. If you have read some of my posts then you know I really do not like “Denver” statistics because they so often hide neighborhood data on which consumers really need to be making decisions.
So, looking at 2008 vs. 2009 Highlands Ranch activity with the broad brush, we find a reduction in total sales 2008-2009 from 1592 to 1359 (down 15%) with average and median prices remaining pretty constant for both years at $341,000 and $301,000 respectively. The average price per square foot dropped from $158psf to $155psf (down 2%). Lets take a look and see if the $350,000 to $450,000 segment performed the same.
This segment represents about 20% of the homes sold in HR for both years. The average and median prices were both down a relatively insignificant 1% but the price per square foot dropped by 5%; more than twice the rate of the market taken as a whole.
There must be some meaning here.
With relatively level average and median prices, the reduced PSF figure for the overall HR market indicates deterioration in that market with buyers able to purchase larger homes for the same price as the prior year. With a doubling of that PSF figure for the $350-$450 segment, we can conclude that this price range is not doing as well as the overall HR market. That should make for better opportunities for buyers.
I am curious about your specific experiences so leave a comment or give me a call.
I will address market segments in HR and in other markets in future posts.
Russ Murray 303-721-1100, ext. 1 russ@buyerbroker-denver.com
How will Colorado handle growth?
Are the resources and infrastructure available?
One of my friends just forwarded to me an article by Alan Gionet of CBS-4 that indicated our state population is now approximately 5,000,000 (That was a surprise!) and expected to grow to 7,700,000 over the next 25 years. (An even bigger surprise!) The “rate” of growth is projected to be slower than in the 1990’s. That slower rate notwithstanding, 2,700,000 people is a huge addition. Also in the last few days I have read that the number of building permits for residential construction is down by at least 50% from 2008 to 2009 and down by 80% from 2007 to 2009. We regularly read that water supply in the state is limited. So, the population is growing both from births and from relocations and at the same time we are not creating new housing units and do not appear to be making progress regarding sources of water. Colorado clearly has some major planning to do and must do that planning sooner, not later.
Why more growth here?
Quality of life is one of the attractions to Colorado. The recent “Gallup-Healtways Well Being Index” shows Boulder as the number 1 city nationally in their well-being survey and Colorado a the number 7 state (down from #4 in 2008). People will continue to come here and those already here are not leaving. This post will not be lengthy enough, nor is my knowledge broad enough, to answer the question of how to reconcile the projected growth with the available resources. I will hopefully bring some clarity to the questions.
Enough housing?
On the housing side, the system will eventually meet the demand. It will probably be behind for awhile, at least until the banks are comfortable with speculative lending, and that will cause upward pressure on home prices and rents. The system is not particularly efficient so during this next twenty-five years there will also be a time or two of oversupply. The growth will also cause homes that are currently closer to places of employment to go up in value at a higher rate than the new and more outlying homes. (This phenomenon is nothing new, but will become even more pronounced.)
What about water?
Water availability is altogether another situation. Many areas are using deep wells as a source and these levels are dropping. The only disagreement seems to be how fast the aquifers are being depleted. Water law in Colorado is complex and the state has agreements that require a certain amount of the runoff water to move downstream. To make things even more “interesting”, most the moisture falls in the form of snow on the western slope and most of the people live on the eastern slope. I did some research in preparation of writing this post and actually came away feeling better as it relates to water. My conclusion will not make everyone happy.
From the most recent figures that I could find, Colorado agriculture represents about 90% of the water used in the state. Yes, 90%. At the same time, agriculture employs 2% of the work force and provides just $2 billion of Colorado’s $236 billion Gross Domestic Product. Developers and municipalities are already purchasing agricultural water rights. That is likely to continue and suggests that there will be water to sustain significant population growth without a major effect on the GDP. Right now, many farmers are finding that the economics of selling their water rights are better than those from farming.
We’re “good”!
S0, I think Colorado has and will have the resouces for growth. Water may get a little more expensive and the price of housing will continue to increase.
And if you are moving here or already here and thinking of purchasing a home, you should have the most experienced and energetic Exclusive Buyer’s Agent on your side. That be me!
Russ Murray 303-721-1100, ext. 1 russ@buyerbroker-denver.com
Whose Figures to Trust?
Which Trend to Believe?
Which Trend to Believe?
There are many sources.
Many local media use figures from the MLS as compiled by a real estate broker and information from industry trade groups. As I read those reports, particularly beginning in late 2006, it was clear to me that the “compiler” was looking at the figures differently than I was seeing the same data. I was reporting in my monthly communication to my clients that I was seeing a slow down in volume and in price increases and many other licensees were talking about price increases and the strong market. Going into 2007, I was very busy while at the same time seeing more inventory and more negotiation. My clients were able to make decisions based on what was really happening, not what was reported.
All real estate is local.
Yeah, I know you’ve heard that about politics too. It is at least equally so for real estate. Even with the overall decrease in Denver area home values over the past few years there are pockets that have done much better along with those areas that have fared worse thant the averages. What you care about is the neighborhood where you are living or purchasing. Be certain that if you are purchasing that your broker evaluates your prospective home using sales in the immediate area. It is very easy to go outside and support a higher price. If you have been diligent in your reasearch and hired an Exclusive Buyer’s Agent (EBA) then you should have someone on your side who will be doing just that.
Area trends do have value.
It is worth knowing what is happening in the overall market as those trends can have some effect on all neighborhoods and are an indication of the condition of the area economy. So, back to the original question, whose figures to believe? I have looked at reports based on MLS data, Zillow data and Standard & Poors/Case-Shiller data. It is my opinion that the “S & P/Case-Shiller” methodology and therefore the results are most accurate. It is the only system that tracks “same house sales”, has built in filters for anomolies and considers whether the sale is a “lender/seller” or a consumer seller. The other two consider all sales and can be skewed by several extremely high dollar sales or by a proliferation of non-market transactions.
So, what is happening in the Denver area?
According to Case-Shiller, Denver is one of only four of the twenty cities that they track that showed overall price increases from November 2008 to November 2009 (The most recent month that has been released). Overall, the Denver changes show considerably less “swing” than does the 20-city index. Also, and very interesting’ is that the same graph is heading into positive territory.
Is it a good time to purchase in the Denver area?
Probably so for many neighborhoods. Check your target area very carefully as there are still areas where values continue to decrease. Better yet, engage me to assist with your purchase and know that I will always be on your side.
Russ Murray 303-721-1100 russ@buyerbroker-denver.com
Where is your fire-extinguisher?
An Important "Accessory"
Is your answer “I don’t have one”?
You can fix that within a few hours and make your home and family that much more safe. Rated extinguishers can be purchased for $20 and up. What’s your excuse now? Please head to your local hardware store or “big-box” and correct this oversight right now.
What should I buy?
My suggestion is at least two, and maybe three. Put the first in an easy to reach location in the kitchen. That is one of the most common locations for home fires. Check on the extinguisher and/or with the retailer for a kitchen fire compatible unit. The second place is in the garage. You have more room here so you may want one that is a little larger and designated for the types of materials stored in the garage. The third? Perhaps on the second floor if you are in a two-story house or near the grill on the patio.
Next Step
Make sure all members of the family know where the extinguishers are located and how to use them. You may find that your local firehouse will have some training available. Here is a You-Tube FEMA video as a starting point.
Really Important!
The first two steps if you have a home fire do not include using the extinguisher. FIRST, call 911 and alert the fire department. SECOND, get everyone out of the house. THEN put your extinguisher training to work.
Want an agent who really cares about these issues and about you?
Call me. I am an Exclusive Buyer’s Agent with significant experience in all of the Denver area markets. Your interests are always first.
Russ Murray 303-721-1100, ext 1 russ@buyerbroker-denver.com
Not “President’s” Day – Washington’s and Lincoln’s Day
Yeah, I know this is a real estate blog. But it’s also my blog and from time to time I can write what’s on my mind even if it’s not about real estate. Hope you are not too disappointed.
I am old enough to remember waking up on Saturday morning and watching the test pattern on TV until programing began and then when I was just a little older watching the American Flag waving as the National Anthem played and the station “signed off” for the day.
There was no “President’s Day” and no President’s Day Weekend. On alternate years we did have a day off school on either George Washington’s birthday, February 22nd, or on Abraham Lincoln’s birthday, February 12th. And yes, from time to time, one of those would be on a Friday or a Monday.
What we did do, every year, was remember, discuss and honor the two greatest Presidents that this country has known. During the past several years I have been reading biographies of the “founding fathers” as well as two about Lincoln. I have come away with an even higher opinion of these great men and their contributions to our country.
George Washington was there to lead the Continental Army. As I read the stories of the other men available, it does not seem likely that any would have been able to have the same success. To be sure, he experienced failures along the way but Washington somehow had the loyalty and confidence of the men serving under him and of the country itself. (At least most of the time. It was a long war and things did not always go well for “our” side”.) As the first President, he was instrumental in holding together our fragile republic and then had the perception to step down after two terms. It is really difficult to reconcile his ownership of slaves and support of slavery to his service to his country. It was clearly a conflict for Washington as well because while he signed legislation in support of slavery during his time in office, his final will provided for his slaves to be freed, educated and those who were infirm to be supported. It is written that at least a part of his support for slavery was due to a belief that the Union would not survive immediate abolition. Very perceptive in view of what happened eighty years later. Click to go to Washinton’s “Farewell Address” and gain more insight into this incredible leader.
Abraham Linclon was the other of our two greatest leaders. He too was the right man at the right time. His was a life of service to country with much sadness along the way and the well known assasination that prevented him from providing some of the post Civil War leadership that could have been most helpful. We probably know more about Lincoln and his administration just because of the more complete record-keeping. His legacy includes more than preserving the Union and abolishing slavery although those two accomplishments are probably enough.
If it has been awhile since you read or listened to Lincolns Gettysburg Address, take a few moments to do so. It is short but will inject a little more meaning into your weekend.
Thanks for reading this far. Now, enjoy the weekend and celebrate the two men who made it possible.
Home Purchase – Seller Disclosures And Inspections
Very Important
Our Offer Was Accepted – What Now?
(This information is written for Colorado consumers. It may or may not be applicable in other states.)
Great! You are “under contract” with a number of contingencies in the agreement that are there to protect you. One of the most important is the inspection contingency. It is time to exercise your due-diligence. You either have or will shortly receive the “Seller’s Property Disclosure”. This is the multi-page document in which the seller identifies the condition of various components of the property. When you sign it, you are acknowledging receipt of the document but NOT accepting any of the conditions contained therein.
Do Sellers Always Tell The Truth?
Roof! Roof! (Not Woof! Woof!)
What is this about and Who should read it?
Okay, if I have your attention, you will find useful information here whether you are evaluating the roof on an existing home or ready to replace the roof on your current house. And it is important. A good roof not only adds value to your home but also is the first protection of the structure itself.
(As with most of my posts, this information is relevant to the Denver, Colorado metro area.)
What types of roofs are out there?
The most common roof is a 3-tab composition roof. These are typically installed over rolled on asphalt impregnated felt paper. The shingle itself is asphalt based with fiberglass granules as a surface protection. Typical life expectancy is 20 years.
Next in the “composition” roof family is the “architectural grade” composition roof. The materials and installation are similar to the 3-tab but the shingles are laminated so that there are two layers. This product is sometimes known as a “bi-laminate”. The two layers provide a heavier shadow line and longer life. You can figure 25 to 30 years for this roof. In this same category is the “tri-laminate”; similar but with three layers and a potential 35-50 year life span.
Frequently in use for both new and replacement roofs is a lightweight concrete tile product. While the system is ”light weight” for tile, it is heavier than composition roof material and the structure itself must be evaluated by an engineer before installation. Many of these roofs come with a 50-year warranty. Your insurance will be much lower than with other options; in many cases low enough to recapture the incremental cost over architectural grade composition in just a few years. One “negative” to consider with this roof system is that it is quite east to break the tiles when walking on them so be really careful during any maintenance operation. You always want an experienced installer. In the case of tile that become even more important as some installers will attach the horizontal ”battens”, over which the tiles are installed, without either shims or vertical battens. While an “approved” method, it is likely to shorten the life of the roof as the horizontal battens, if not raised, will trap water and deteriorate faster.
You may have, or see on your prospective home, hand-split wood (usually cedar) shakes. For many years this system was considered an upgrade from a composition roof and certainly has the heavy shadow line that many people like. This is NOT a good roof in this area. It was not bad when a “heavy” shake meant 3/4″ to 5/4″ butt ends. These actually had reasonable hail resistance and I have seen some 30-year roofs that were still serviceable. As time progressed and builders tried to save money we saw medium and light shakes being used. One light hail event and they are toast and 20 years is about it for life-span. To the best of my knowledge shakes are not used in any new construction and the only replacements that I see are in neighborhoods where the residents have not been able to change covenants that allow only shakes. Check before you buy if you are thinking of replacing shakes with ANYTHING else.
Two roof types that you will find on existing homes but which are no longer being installed are “Woodruff” and “Permatec”. Woodruff is “pressed-board” product made from sawdust and glue. I was to be a shake replacement but better. Some of it has held up reasonably well and may provide a 20 to 25 year life but too much of it deteriorated. Inspect this roof carefully. There are far fewer Permatec roofs around. This too was the man-made answer to wood shakes, did not hold up and was the subject of a class-action suit resulting in large payments to home-owners.
I am beginning to see what are called “stone coated steel” simulated shake roofs being used as replacements. I have observed that in some of the older installations, the stone coating has begun to come off. I do not know if that is a condition that has been addressed with some of the newer products.
The above options cover probably 95% of the roofs that I see. There is the occasional metal roof and some other “simulated shake” roofs. I have not tried to address flat roofs in this post and will save those for another.
The Process and The Permit
First, hire a really reputable contractor. If one tells you that you do not need a permit move on. Get references, call them and look at the work. Make sure that the permit is not just issued, but also closed out with a final inspection. I recently had a transaction where the inspection resolution required the installation of a new roof “in accordance with local building code and properly permitted”. I went by the property just to check progress, saw some things that did not look quite right and called the building department only to learn the work had not been permitted. I reported the address and when I went by the next day the old roof coverings were being properly removed and the code-required, new solid decking was being installed. If you don’t have an agent on your side, you just need to be on top of the work.
These were just the high points!
Contact me with questions and/or leave your comments and your roof experiences below, particularly if you can add to everyone’s knowledge.
Russ Murray 303-721-1100, ext 1 russ@buyerbroker-denver.com
Stucco and/or EIFS – A Review
Why Is There More To Discuss?
I have just recently had an experience with a consumer asking my opinion regarding a home that is under-contract with the inspector having identified 16 major cracks in the synthetic stucco membrane. They elected to not be represented for this transaction so my only advice was to refer them to a qualified EIFS inspector. What I wanted to say was “Move on to another home. There is just too much risk”. That last comment is a bit of a departure from my advice over the past few years and is the result of the problem of synthetic stucco exteriors growing, not shrinking.
Let’s First Define The Products - Stucco - EIFS – Hard Coat
Traditional stucco is a cement based product that has been used for centuries. It is applied over wire mesh in two or three layers with a waterproof membrane installed first to protect the house framing. Cement stucco itself is not waterproof and “breathes” so that moisture that may penetrate has an opportunity to escape and the waterproof membrane prevents moisture from getting to the wood framing members.
The history of synthetic stucco is much shorter. It was first used in Europe post WWII and was primarily applied to their typically masonry buildings as a repair and update. While there is some cement in the product it also has epoxies which provide some flexibility but which also render it waterproof. That was not a problem with application over a masonry structure.
When it began to be used in the United States in the 50’s and 60’s, builders saw it as a less expensive alternative to traditional stucco. As energy conservation took root, the ability to apply it over a foam insulating panel became attractive. With the foam insulation underneath, the “system” became known as “exterior insulating and finish system” (EIFS). Synthetic stucco installed without the insulating sheets is sometimes referred to as “hard coat” but this can also be used to reference cement stucco. Be sure you know which. There is a difference.
The BIG Problem With Synthetic Stucco
In short, it does not allow moisture that gets behind it to escape. Unlike cement stucco, synthetics must adhere to the structure and therefor a waterproof membrane cannot be applied. I thought for some time that the application without the foam board was acceptable. The more I read and see, the more I am convinced that it is problematic either way.
The result of the trapped moisture is usually mold growth. If caught early it can be mitagated. If not, it can grow into “black mold” which can affect the health of occupants.
In the perfect world, the synthetic material would be installed in strict accordance with manufacturers recommendations and then MAINTAINED in accordance with those same recommendations by the home owner. There would be no problems. Listen, I have seen hundreds of these homes and have seen only a very few that were installed and maintained correctly. The installers take shortcuts or use poorly trained workers, the general contractor trusts the sub contractor and/or does not become familiar with the product and finally, the home owner sees stucco as a “maintenance free” product.
But I Already Own An EIFS House or I Love This House And Want To Buy It
If you are an owner walk around your house carefully and look for any cracks. Look very careful at all penetrations; windows, deck rails, lights, etc. If you see any cracks or openings it is time to bring in a qualified EIFS inspector. The inspector will be able to tell you if there is moisture behind the walls and make recommendations for repair and/or maintenance. If you are lucky and there is no moisture problem, put yourself on an annual inspection and maintenance program. If problems are identified, they should be corrected and then begin regular maintenance.
If you really, really want to purchase one of these EIFS homes, make sure that you find a QUALIFIED EIFS inspector. You will probably need permission from the seller for some moderately “destructive” testing. (1/8 inch holes that are then re-sealed.) I have never seen an EIFS house come through with less than several thousands of dollars of repairs with one estimate for $70,000 because of mold.
Want An Agent To Represent You Who Cares About This Stuff?
That be me! I have been around and involved in construction and try to stay up to date on what is happening. You will benefit from my business practice of always and only representing the interests of my buyer-clients.
Russ Murray 303-721-1100 russ@buyerbroker-denver.com
The Pundits Missed Something! and How’s That Tax Credit Working?
You read/heard it where?
December 2009 Real Estate Results
I do not agree with the way that the December real estate results are being interpreted by most of the media. The theme seems to be that the extension of the first-time buyer tax credit should have caused December results to meet or exceed the results of prior months. The problem with that conclusion is not having considered how long it really takes to get from contract to closing. (more about that in a subsequent post) That time has increased with new underwriting and appraisal requirements so what we formerly could always do in 30 days is now taking longer. By the time the extension was approved, there simply were not enough days left to get a transaction closed in December and because the new deadline was April 30th, there was little incentive to move quickly.
“Cash For Clunkers” and “First Time Home Buyer Tax Credit”
What these two programs have in common is that they seem to have adjusted only the timing of most purchases, not the actual decision. Edmunds.com evaluated the CARS program and, adjusting for the autos that would have been purchased regardless of the credit, found that the cost per car to the taxpayers was about $14,000. The anecdotal history in our office for home purchases is similar. Of about ten first time buyer transactions following the announcement, only one person seems to have purchased because of the credit. When you think about the process, it just makes sense. The $8,000 could not be used forthe purchase and most of these first-time buyers are short on cash so the buyers had to be consumers who had already accumulated their needed funds. In terms of timing, once these clients had decided to purchase, the tax credit certainly was the carrot to get them to close by November 30th.
Unintended Consequences
As we approached mid-October, probably the latest a contract could be written with a guarantee of a November closing, we did observe that sellers with homes that were ready realized the date predicament and became less negotiable. I had to tell several buyers that they may have just “financed” the $8,000. Still a pretty good deal at 5% or less!
Going forward looks better. With the credit now decreasing at $2,000 per month after April 30th rather than just expiring, we should see less desperation on the part of buyers and more market-driven negotiations.
Have Questions or Comments?
Please leave any comments or questions. I am interested in your experience as a buyer or a broker (on either side of the transaction)
If you are thinking of a purchase in the Denver area in 2010, please contact me. I am an experienced Exclusive Buyer’s Agent (EBA) and will always be your advocate.
Russ Murray russ@buyerbroker-denver.com 303-721-1100, ext 1
Considering Washington Park in Denver?
Why Live In Wash Park?
Remember your early real estate advice? Location, Location, Location? Wash Park is it! A short commute to downtown Denver or DTC via private or public transportation. Downtown includes both work and play opportunities with the primarily office DTC area adding entertainment options on an increasing basis. For many residents it is the park itself. A 32 square block urban oasis with two large “lakes” (ponds if you are from a part of the country with “real” lakes) hike/bike trails, tennis courts, picnic areas and just a lot of open space. One of the largest park in the city, and for many, the best. There are several one and two block commercial areas with retail, restaurants and coffee shops. This is a VERY “walkable” neighborhood!
Who Lives In Washington Park?
There is more accurate census data available, but I will give you my anecdotal information based on the profile of my clients who want to live there as well as who I observe as the sellers of the homes that I see. Couples and singles of all age groups who place a higher value on the park and the shorter commute than on the larger and newer home available at comparble prices in the “burbs”. There are families with children with the young ones typically pre-school. Some of the families remain in Wash Park as the kids start school and find a way to make it work. Many others elect to move to an area that offers more highly rated schools.
What Kind of Housing Will I Find In Washington Park?
It is becoming more eclectic. A few years ago the “typical” Wash Park home was either an early 1900’s bungalow of 800, 1000 or 1200 square feet or a 2-story “Victorian” of similar vintage. That has changed with much new construction as a result of “scrape-offs” of the old housing and “pop-tops” of the bungalows. This new housing has provided options for those who want to stay but are not willing to forego some of the more modern conveniences. There are some newer and older “side-by-sides” and townhomes as well as several mid-century high-rise condominium buildings.
What Range of Prices Will I Find?
Almost all of the Washington Park housing stock is well above the median price for the metro area. For 2009 the median list price for detached homes was $550,000 ($350 per square foot) and for attached/condos $315,000 ($279 per square foot). The highest/lowest listed prices were $2,100,000/$185,000 for detached homes and $1,300,000/$106,000 for attached/condos.
How Can I Get More Information About Homes In Washington Park?
I hope that you will call me. I am an Exclusive Buyer’s Agent (EBA) with experience in Wash Park and can give to you the level of service that you deserve to have.
Russ Murray 303-721-1100 russ@buyerbroker-denver.com