photo by Benjamin Combs/Unsplash
With snow and cold temperatures hitting us more often than sunny dry days, it might be hard to believe spring selling season – when sellers list their home to beat the even busier summer – is upon us. Before you jump in, here’s five important things you should do when getting your house ready to sell. These steps are especially crucial this spring as the playing field is leveling between sellers and buyers.
Exterior – Step 1 in Getting Your House Ready to Sell
The saying “it’s what’s inside that counts” doesn’t really apply in the real estate world. Rather exterior and interior are of equal importance when it comes to selling a home. Why? The exterior is the first thing a potential buyer sees. It sets the stage for what is going to be inside. It has happened that when taking clients to a showing, they’ve decided not to go in based on the outside.
So what do you do?
Make sure bushes and tall ornamental grasses are trimmed and tidy and mulch is refreshed. And don’t forget any little presents your dog might leave in the yard. Believe it or not, if a buyer takes a misstep, they will associate that moment when evaluating their entire experience at your home.
Once that is done, take a look at your paint. Are there nicks on pillars or on your handrails? Touch those up! One easy fix to spruce up the look of your home is a fresh coat of paint on your door. Perhaps even a new pop of color. But do this with caution and after consulting your real estate agent. You need a color that will appeal to the masses, not serve as...
Denver home values are on the rise. Over the past couple of years buyers have been very competitively going after properties on the market and prices have gone up accordingly throughout the metro area.
If you’ve been in the same home for years and haven’t checked on its value in a while, you could be in for a nice surprise. The market conditions, along with low interest rates, make this a good time to sell.
Whether you’re about to list your home or you’re simply curious about what it would be worth on the market, here is a process you can follow to accurately gauge its value.
Art and Science
Starting with objective research of recent sales of similar properties is a great place to start. That will give you the best idea about market value. To gauge the ideal sale price, it also helps to have a gut-level understanding of the Denver housing market.
Think of it this way: “market value” is what your home would be worth irrespective of any special circumstances, but “sale price” is the actual number you need to land on to make as money as possible within any special time or market constraints. The best way to balance the art and science of picking a home sale price is to use the Neir Team’s free market analysis search.
If you want to estimate the value of your home yourself, you need to look deeper into sales of similar properties. First, let’s define what could make a property similar to yours. It must have comparable:
- Lot size
- Square footage
- Number of rooms...
At least right now, October 15th 2014. Rates this week are phenomenal and represent a great opportunity.
We have found that most people shop for a new home based on the monthly payment and not the cost of the home. At least this is where most buyers start when determining the price range for searching. This makes sense as the monthly payment translates to the carry cost of owning the real estate. The “sticker price” has little tangible value with regard to affordability without a monthly payment.
When looking at the monthly payment for financing a new home, a big driver is the interest rate. We find it fascinating how much the interest rate changes the amount a buyer can purchase at the same monthly payment. The rule is fairly obvious, the lower the interest rate the higher the purchasing power. That sounds good but translating it into real numbers revels the AHHA!
Every 1% decrease in interest rate translates into 10.75% increase in purchase price. This also works in reverse, as it will erode purchase power when rates are rising.
So a buyer that wants a monthly payment around $2,000, with 20% down can afford a $500,000 home at a 4.75% rate.
That same payment gets the buyer a $553,750 home when the rate drops to 3.75%.
So as a real estate broker we like to keep an eye on rates as they have a direct correlation with affordability.
Please let us know if you would like us to run the numbers based on your specific purchase.
I recently had a chance to tour the One City Block apartment complex at 19th and Pennsylvania in the Uptown Neighborhood. Typically I don’t focus on apartments as the Neir Team are residential sales specialists. However, the site plan calls for a considerable amount of ground level retail space that I was very curious about. New class-A retail space traditionally increases property values for surrounding residential real estate.
Our visit consisted of a developer tour of the property and a detailed financial overview of the project. Within the financial overview, the total ROI (return on investment) was discussed along with key revenue generators. When asked about the retail space, the developer explained that the retail space is not a key contributor to revenues for the project.
This peeked my interest as it seems counter intuitive that the retail space would not be a key driver of revenue, especially with 9,800 square feet of prime, ground level, Uptown real estate. The developer went on to explain that the model for the project focused on providing a very high-end experience for the residences and the retail space is expected to cater to that experience. One City Block will seek targeted business tenants with less emphasis on rental rates, creating an opportunity to place exceptional businesses in the project. The developer stated that they are primarily looking for restaurants...
Central Park Real Estate Trends
Real Estate sales in the Central Park neighborhood hit an all-time high in 2013. With record low inventory, record low interest rates and lots of buyer demand, many homes sold with multiple offers, bidding wars and a sales price well above the asking price. Many experts referred to the first half of 2013 as a “frenzied” buyer market which sharply pushed up prices. During the second half, the frenzy cooled because of rising interest rates but inventory remained low and home sales still continued at record numbers. Overall there were a total of 442 home sales, which was by far the most sales Central Park has seen since its last record year in 2012 with 359 sales. Median home prices have also continued to increase because of low inventory and high demand, with median prices landing around $401,870.
Right now is the time to buy real estate in the Central Park neighborhood because interest rates are expected to rise in 2014. In addition, we expect inventory levels to remain low which will support rising prices. This means you can afford much more home now than say in a few months. A good example would be to look at the mortgage payment of a $500,000 home. Assume current interest rates of 4.5% and a 20% down payment for a total of a $400,000 loan. If you calculate that mortgage payment you are at a monthly mortgage of $2,026. Assume interest rates rise to 5.5%. To afford the same monthly payment, you can now only afford a $446,250 home. This is a 10.75% loss of purchasing power and it doesn’t even assume any price appreciation. This could mean the difference between purchasing a home with a finished basement and an unfinished basement!
The Neir Team has 10 years of successfully selling...
Denver has some pretty glamorous hotels, from the Ritz and the Four Seasons downtown to the JW Marriott in Cherry Creek and the Hyatt Convention Center with its breathtaking views. These internationally renowned hotels appeal to a wide range of cliental and can sometimes seem overwhelming in their grandeur. But smaller, modern hotels in Denver are starting to spring up throughout the area and are drawing in a younger, chicer group of people. A new addition has just been announced for the vacant lot at the corner of 15th and Stout and buzz is already starting to circulate about the possibilities.
Aloft Denver City Center will be the newest hotel from Starwood Hotel Denver. Word from the developer, JBK Hotels LLC, is that the hotel will offer a sleek, contemporary vibe that will appeal to a younger, urban-oriented client. The lot at 15th and Stout that will house the hotel is rather small, only 12,500 square feet. This means that the Aloft will be about 70,000 square feet in size and only reach six stories high. For those who have stayed in some of the other modern hotels in Denver, their size can be intimidating and overpowering. This small-scale hotel is definitely a welcome addition to the available hotels in the city.
The lot is currently occupied by a rather depressing, former Burger King building. The company vacated the building in either the late 1990s or early 2000s, and has seen numerous cheap restaurants, none of which have stayed for very long. The redevelopment of this site is much needed and eagerly anticipated. The...
The Kentwood Company had an Amazing 2012
As the media is not shy from stating, the Denver real estate market has shown solid and confident signs of recovering. From the past year, the average sales price is up an astonishing 9% and the inventory for homes is at a record low. Currently, homes are for sale, on average, for three months, which means that our recovering real estate market is definitely a seller’s market. And leading the way in this boost to the Denver real estate market is the Kentwood Company, who wrapped up a record year in 2012 and is up for numerous nation-wide awards in the real estate industry.
The Kentwood Company was started in 1981 as a single office and has since grown into three, individually successful offices: Kentwood Cherry Creek, Kentwood DTC, and Kentwood City Properties. Combined, these three offices have created the most successful Denver real estate market company, holding roughly 10.3% of the market share, more than any other company. In 2012, the Kentwood Company’s sales volume increased 55.5% from the year before, while the number of transactions among the company was up 38.7%. This means that no one sells more than the Kentwood Company!
The Kentwood Company has taken advantage of the recovering real estate market as statistics show that the Denver real estate market is one of the top in...
2012 Denver Real Estate - Market Performance
As 2012 comes to an end it’s hard to find any good news on the economy. With the fiscal cliff solution receiving a Band-Aid and punted down the road another 2 months and continued high unemployment where can you turn for a glimmer of positivity? The answer is the Denver real estate market. With continued low inventory levels the appetite for homes keeps picking up resulting in very strong year-over-year market statistics.
Market stats are for the entire Denver MLS.
Highlights for the residential market:
- 11.2% increase in avg price - sold ($206,773)
- 27.3% decrease in avg days on market (72)
- 20.5% increase in the number of closed sales year-over-year (2,975)
Highlights for the condo market:
- 29.0% increase in avg price - sold ($198,080)
- 39.0% decrease in avg days on market (64)
Will this strength continue? It is my opinion that is will. Here’s why:
Sellers market or Buyers market? I think we’re moving to the seller’s side.
With the benefit of hindsight, it is now very apparent that the Denver real estate market, along with the rest of the country, underwent a price correction starting in 2006. The price of real estate began to decline when the supply of home buyers dropped sharply as a result of the subprime mortgage crisis. As we all know, the law of supply and demand has a large influence on price. When the demand fell, supply stayed the same exerting downward pressure on home prices.
The ensuing years saw high levels of supply coupled with massive regulation in the lending industry further diminishing demand establishing a very stagnant housing market through 2011. During this period the market was undoubtedly a buyers’ market. As a real estate broker, we referred to this period as the era of the “low ball offer”.
It wasn’t until the second half of 2011 that the market began to shift. The graph below shows residential home listings and sales for 2011 and 2012. What jumps out is the gap between listings and sales in December of 2011. The number of home listings started falling in June of 2011 and continued for the remainder of the year. This trend diminished the supply surplus and corrected the imbalance in the market. This supply correction had a dramatic effect on real estate in Denver for 2012.
Denver Real Estate Growth expected to be the best in the nation (originally posted 12/2011)
As we close out of 2011 and head into 2012 the troubled housing sector of the economy is showing signs of improvement. Year over year housing starts and home sales are trending upward. This is welcome news as these indicators begin to show signs that we are ending the current real estate correction period.
So as the housing market begins to rebound nationally how is our local market going to fare? According to real estate guru Greg Rand, Denver is at the top of the list when considering real estate investment. He bases his opinion on fundamentals such as:
- Migration – Are people moving to the area and from where? People are moving to Denver from all over the United States. It is not a situation where there is a specific climate that people are moving from. People are coming from all over.
- Denver has a stable, young, active population that is employed.
- The unemployment rate and foreclosure rate for Denver are half the national average.
- The most attractive attribute about Denver – a high quality of life combined with a relatively low cost of living. The people that live in Denver absolutely love it and attract others based on the positivity they have about the area.
Another key factor leading to a bullish outlook on Denver is the fact that the median home price has steadily climbed since 1996 without a major price collapse over the last 4 year. As you can see from the graph, a minor correction is observed with prices rebounding almost immediately. This is a strong indicator of health real estate growth without influences that cause hyper-appreciation....
Why is real estate a great investment?
If you look at different ROI (Return on Investment) scenarios and which of those ROI scenarios would have made you the most money from January of 2000 through June of 2010, purchasing a home would have been your most savvy investment. If you had invested in the DOW, your Return on Investment (ROI) would have been -9.9%. If you had invested in the S&P, your ROI would have been -19.1%. The Nasdaq would have been -46.4%. If you had purchased a home in January of 2000 in Denver, your return on investment would be 27.5%. This means if you purchased a home for $400,000 it should be worth about $510,000 in today’s market.
Why real estate is such a great investment right now!
According to the Case Shiller Price Index, Denver’s home prices are about the same as they were in 2004!
Therefore, if you purchased a home today, you would be paying the same as you would have in 2004. The biggest difference is that the cost of that home today is much less than it would have cost you in 2004 due to lower interest rates. For example, if you purchase a home in May of 2004 for $400,000 @ 6.27%, which is where interest rates were during this time, it would cost you $2,468.07 (Principal & Interest). If you purchase that same home today at 4.75% your P&I payment would be $2086.49 thus you would save $381.48 per month! This is a huge savings for most of us. Therefore, the price is the same it just costs less.