…Fed Holding Interest Rates Steady… Which Means Nothing in Denver

Today’s New York Times article about the Federal Reserve announcing a hold on interest rates, keeping them near zero for the foreseeable future, is a typical parable about how the Denver flyover zone continues to march in almost the exact opposite direction – at least as it applies to real estate – to the rest of the country. We went through the foreclosure car wash before anyone else; we avoided the massive run-ups in value, and few people want to leave here.

I talked to a couple of lenders that work the Denver metro area about this news, and they all seem to have the same opinion: Denver has done well to weather the real estate plunge. One loan officer at a national bank branch in Centennial said that rates are probably going to hold steady until the election, regardless of the Fed’s announcement. “After that, TBD,” he says, “but we’re doing better than the rest of the country.”

His view is that with Europe still in turmoil and an overbought stock market, more money continues to flow into treasuries.”The next market move is likely going to be down,” says the loan officer.

Still, read this little blast from Ian Sheperdson, chief United States economist at High Frequency Economics, in the same article: “Here’s what all Fed promises are worth: nothing, if the data tell them to do something different.”

Which is a fair point, considering that neither Japan’s nuclear crisis or Greece’s pull on the euro was completely foreseen. As a result, says one local independent mortgage broker,  “Don’t be lulled into thinking you can wait another two years to buy. Mortgage rates and the prime rate are not exactly connected!”

(I’m a Realtor, and am not interested in muddying the waters with cross-promotion between myself and lenders; hence the anonymity.)

My take is that the buying cycle in Denver has already started and fresh inventory is getting bombarded with showings. And, the best homes are getting scooped up quickly. Once current sellers understand that their price points are still too high (see my East Wash Park and Cherry Creek North analyses), they’ll either miss the boat or align themselves with the current demand. That demand, by the way, is willing to pay more than last year, based on the three weeks that have passed.

Isn’t it nice to live in a flyover state? Especially one that’s 5,280 feet above the economic cesspool below?

Karl Lueders is a residential Realtor with The Kentwood Company at Cherry Creek. He can be reached at 720.971.8267, email, Twitter or G+.

…30-year interest rates (fixed) since 1981.

So while the rest of the cyber world is protesting Congress’ discovery of the interwebs, let’s go buy a house. Check this out. I think there’s a trend in here somewhere…

30-year fixed rates since 1981

…This comes to us courtesy of the Federal Home Loan Mortgage Corporation, aka Freddie Mac. (The four bars on the right side of the graph are 2011 broken down into quarters.)

This guarantees nothing, but declining interest rates aren’t really a fad. Just remember, if you’re thinking of buying a home, a half-point rate increase from 4% is a greater jump than when they go up from, say 6%. Still, not too many people are going to feel sorry for someone with a 30-year fixed rate under 5%.

Talk to a lender about where your mortgage payments would be, if you don’t already own a home. In many cases, it’s cheaper than renting, especially if you’re buying a condo.

Karl Lueders is a residential Realtor with The Kentwood Company at Cherry Creek. He can be reached at 720.971.8267, email, Twitter or G+.

…2011 Cherry Creek North Real Estate Performance

From most angles, there was very little difference between 2010 real estate sales and last year’s in Cherry Creek North. But, for the second year in a row, it wasn’t 2009. Or, as it’s known, The Year That Shall Not Be Named.

For example, 55 homes sold last year in Cherry Creek North, 15 of them being detached single family homes averaging $1.25 million. That would have been three more units that sold in the entire year of 2009, attached and detached single family homes combined. In fact, if it weren’t 411 and 415 Cook, which each sold just above $2M in 2009, there would have been less than $20 million in total real estate sold in Cherry Creek North during that dark year. Compared to the $46 million of inventory that changed hands last year, you can understand why nobody likes to talk about 2009 at Cherry Creek Grill or Second Home (unless you’re the seller of 411 and 415 Cook).

The year 2010 was an amazing turnaround in terms of volume, although all other major factors dipped, reflecting an urgency to not have a repeat of 2009, where only 22 units sold in Cherry Creek North. All told, 52 units sold in Cherry Creek North in 2010, the majority of them – 37 – traditionally being attached single family (ASF) homes. Those homes decreased in value nearly 20% from ASF homes in ’09, but Days on Market dropped from 232 to 202. Both numbers were terrible compared to the entire Denver market, but it started a trend that continued into last year.

In 2011, Days on Market (DOM) plummeted to only 89 days while jumping in value almost 10%. ASF homes sold in 2011, on average, for $711,000, up dramatically from the average price of $617k in 2010.

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Here is the list of homes that sold in 2011 in Cherry Creek North:

55 homes sold in Cherry Creek North in 2011

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While detached single family homes don’t exactly fly off the shelves – normally, they carry a 7- to 9-month sale cycle – their DOM actually went down to 212 days. Unfortunately, so did their average sale price. Detached single family (DSF) home prices didn’t come close to the 2010 average of $1.718M, coming in at $1.25M. For comparison, read how Denver’s Country Club neighborhood fared last year. Part of that can be attributed to the lack of million-dollar homes sales. In 2010, 17 homes sold for more than $1M, accounting for a third of the inventory; last year, only 13 (25%). Even in 2009, a third of anemic inventory was more than $1M.

What does this mean moving forward? The good news: there are 8 homes under contract in Cherry Creek North – 4 of them more than $1M; one over $2M! The bad: the average DOM is at 321, which means some of these houses were originally listed in 2010.

More bad: currently, there are 41 homes for sale (24 ASF, 17 DSF). You can find all of them here. That’s 9 months’ worth of inventory, and with more homes coming on the market this spring, all the overpriced homes in Cherry Creek North will quickly grow stale (currently, averaging 7 months on the market). But, for now, Cherry Creek Grill is still packed, Second Home still has terrible seating, and 2012 is looking less and less like 2009 every day.

Karl Lueders is a residential Realtor with The Kentwood Company at Cherry Creek. He can be reached at 720.971.8267, email, Twitter or G+.

 

…2011 East Washington Park Real Estate Performance

For the record, if you want to claim to live in THE Wash Park, you need to live on the east side of the park, and live north of Louisiana and south of Virginia. If you don’t believe that, just look at the numbers: in 2009, the average sale price of a home in this area came in at $821,000 with a Price Per Square Foot ($PSF) of $379! Of course, 21 of the 79 homes sold that year were well over $1 million, so the average price skewed much higher than normal, as evidenced by the average sale price in 2010 – $670,000 – and the $650,000 for 2011. Still, with the possible exception of Hilltop and Country Club, there is no neighborhood in central Denver that commands such a high price point without feeling exclusionary to the average homebuyer. Which is why Wash Park remains most popular neighborhood, hands down.

Example: last year, 85 total homes sold in East Wash Park – two were attached single family (ASF) – 14 of them sold for under $400,000. Mixed in with the 9 homes that sold for more than $1M, you understand why East Wash Park attracts such a wide spectrum of homeowners, as opposed to West Wash Park, which is vibrant, albeit slightly more modest pricewise. Of course, there are rental homes sprinkled throughout the neighborhood, bringing in an even wider demographic.

Here is the list of homes that sold in East Washington Park in 2011:

85 Homes Sold in East Wash Park in 2011

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So, by now, I assume you’re fixated on the nearly $200,000 drop-off in average sale price from 2009 to 2011. Keep in mind that the million-dollar sector of the housing market all but disintegrated in 2010. Lenders stopped giving out jumbo loans and with cash buyers looking for deals, million-dollar homes turned into six-figure homes. So why was there such an uptick across the board in 2011 for million-dollar homes? It’s the old joke about owning a vineyard: how do you make a small fortune in the wine business? Start with a large fortune. Why did so many homes in the $1 million-dollar range sell in 2011? Because they all used to be in the $2-3 million range.

Fortunately for East Wash Park, it doesn’t rely on this sector to maintain volume and $PSF. In 2010, 82 homes sold at an average $PSF of $383, which was up from $379 in 2009. Last year 85 homes sold in East Wash Park, averaging $375 PSF. And no, sellers didn’t get desperate, either. These homes sold in less than 12 weeks!

Consider the current inventory of the entire city of Denver. Normally, it takes an average of 8 months to clear out the entire active inventory of homes at any given time. Because inventory is so low, the new average is only 4 months. In East Wash Park, it will take 9 weeks to clear out the 15 current active listings, which you can find here: 744 S York, 1250 S Gaylord, 1125 S Race, 923 S Gilpin, 1103 S High, 1026 S Williams, 700 S Gaylord, 876 S Gaylord, 1076 S Vine, 518 S Gilpin, 882 S York, 1046 S Williams, 565 S Gaylord, 1082 S High, and 947 S Gilpin.

And again, these homes are currently trending higher in Days on Market than those that have sold. Which means that new listings will get a lot of attention. And, if they’re priced right, will potentially sell before these.

East Wash Park remains Denver’s strongest neighborhood, and with more inventory, it will once again produce tremendous sales. And if you think the secret is safe in Denver, think again. The whole world knows about Denver now. Check this out.

Karl Lueders is a residential Realtor with The Kentwood Company at Cherry Creek. He can be reached at 720.971.8267, email, Twitter or G+.

…Denver is the USA’s best place to buy and invest in real estate.

Don’t take my word for it. Take a look:

So I’ve been writing about this for a while, just recently about cash flowing condos in hip areas of Denver, but Greg Rand of Own America says it better, and with a little less bias than I. If you didn’t think it was time to invest in real estate yesterday, today’s a new day. Rent in central Denver is through the roof and interest rates are as low as they can go. Go on Craigslist and try to find a decent apartment anymore.

Cash is obviously king in this equation, but even if you have to borrow, the opportunity to positively cash flow an investment property is there for the taking. There is a lot to talk about. Give me a call to discuss how you can take advantage of the USA’s best place to invest in real estate.

Karl Lueders is a residential Realtor with The Kentwood Company at Cherry Creek. He can be reached at 720.971.8267, email, Twitter or G+.

…2011 West Washington Park Real Estate Performance

Consistency and stability are two earmarks of the West Washington Park neighborhood, as the volume of sales jumped significantly in 2011 from 2010. Try finding that good news somewhere. Real estate journalists don’t use the words “jumped significantly” unless they’re talking about foreclosures or the rate at which their window of obsolescence is closing. (As a recovering journalist, I can engage in writer-on-writer hate like that.)

Anyway, if you live in West Wash Park and are thinking of selling, keep reading.

This past year, 107 homes – 86 detached single family (DSF) homes and 21 attached single family homes (ASF) sold in West Wash Park. [For matters of discussion, we define West Wash Park as everything east of Lincoln all the way east to Downing; the north border is Virginia down to Louisiana. Any homes bordering the interstate get thrown out. Some people consider east of Logan to be a better measure and some even go so far as to say that Washington is the dividing line. I would assume those people live closer to the park. :) ] Editor’s note: that is the last emoticon you will find on Karl Sells Denver.

In 2010, 82 DSF homes sold (ASF remained exactly the same) but the actual pricing went from $410,145 to $413,587 while ASF homes increased almost 10% from $395,262 in 2010 to $428,874 in 2011.

If you’re not a numbers person, here you go: more homes sold in West Wash Park this past year for more money!

Here are the DSF homes that sold in West Wash Park in 2011:

86 Detached Single Family Homes Sold in 2011

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It’s important to note that in 2011, DSF homes in West Wash Park showed an improvement in average price, average square footage (not including the basement), Price Per Square Foot ($PSF) and Days on Market (DOM). It took a West Wash Park home, on average, 82 days to sell in 2011, well below the city average.

Attached single family homes also improved, as a whole (average square footage spiked, due to several high-end sales), although DOM went up by a whole two weeks. It took 108 days to sell an ASF home, still below the city average.

Because I have yet run the East Wash Park numbers, Congress Park and West Wash Park have been showing remarkable resiliency over the last couple of years. While West Wash Park, “the affordable Wash Park,” doesn’t carry the same cache that the east side does – smaller homes, smaller lots, many requiring updates – when you can live this close to Washington Park for hundreds of thousands of dollars less than what these homes would sell on the east side, who cares what you call it?

True, 2009 was a bellwether year for home sales in West Wash Park, with 107 homes selling. The 84 DSF homes sold for an average of $419,557 in only 72 Days on Market.

But, interestingly enough, the square footage change over the three-year window fluctuated only 3-4%, while price only fluctuated 2-3% up or down.

Overall, West Wash Park is great place to live. Which means that when it comes time to sell, you know someone is going to buy. Currently, there are only 11 homes for sale in W Wash Park, with one being the perpetually For Sale home at 775 S Grant (569 DOM and counting). Excluding that home, the DOM is only 112, with three being under the neighborhood average. This means two things: price is negotiable but they will eventually sell. With detached single family homes selling at a rate of around 84/year, that means about 7 homes sell per month in West Wash Park. That means, that these 11 homes will likely be sold by March. These homes are:

Further proving this point, there are 8 homes currently under contract in West Wash Park, which should close this month.

What’s the point? Price your home correctly and you’ll sell your home in West Wash Park. If you reach a bit, it’ll take longer, but the market won’t blackball you for it.

Next up: East Wash Park.

Karl Lueders is a residential Realtor with The Kentwood Company at Cherry Creek. He can be reached at 720.971.8267, email, Twitter or G+.

 

…Denver’s Congress Park Real Estate Performance for 2011

The Congress Park neighborhood in central Denver, bounded by York Street on the East, Colorado Blvd., on the west, 8th Avenue and Colfax, is probably Denver’s most underappreciated – yet highly appreciable – residential neighborhood.

This year, 71 single family homes sold in Congress Park – only three of them attached – for an average sale price of $400,000. The best part? They sold, on average, in 79 days. That’s almost 50 days less than the Denver average and easily less than Driving Park Historic District and Country Club. If you think that’s impressive, it took an average of only 52 days to sell a house in Congress Park in 2010!

Here is the list of the homes that sold in Congress Park in 2011:

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Prices went up from 2010, when the average single family home sold for $392,000. Granted only 55 homes sold in 2009, but the Price Per Square Foot remained consistent from 2011 to 2010, and all the way back to 2009.

Consider 2009, at the relative nadir of the Denver real estate market, Congress Park homes sat on the market an average of 91 days… that’s still 30 days less than the average for the entire city. Factor in attached single family homes, and that number even drops slightly. In 2009, 76 homes sold, only 6 of them attached. Yes, Congress Park is a pretty big swath of neighborhood, but when the average home price in 2009 was $416,000, that’s a lot of desirable homes selling quickly.

Currently, there are 8 homes for sale in Congress Park: 1256 Columbine, 1052 Madison, 825 Fillmore, 860 Monroe, 1229 Saint Paul, 845 Milwaukee, 801 Detroit and 1366 Clayton. The average Days on Market for this bunch of homes? 172. Just like we discussed last week with Country Club, a new listing in Congress Park is sure to attract a lot of attention, especially one that looks nice and is priced right. Click on any of those houses for more information.

PS – With the north part of Congress Park bordered by Colfax with 14th and 13th Avenues running the entire north end, house prices within that two-block latitude usually will be adjusted 5-10% down from those south of 13th. Homes well south of 13th and north of 8th, as well as homes away from the high-rise buildings in the north and west parts of Congress Park, will likely enjoy slightly higher prices.

East Washington Park is next.

Karl Lueders is a residential Realtor with The Kentwood Company at Cherry Creek. He can be reached at 720.971.8267, email, Twitter or G+.