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nakman
02-24-2009, 03:21 PM
http://denver.bizjournals.com/denver/stories/2009/02/23/daily22.html?ana=e_du_pap

Tuesday, February 24, 2009, 8:52am MST | Modified: Tuesday, February 24, 2009, 8:56am


S&P: Denver had smallest 2008 home-price decline of 20 U.S. cities


Denver Business Journal - by Mark Harden (http://www.bizjournals.com/search/results.html?Ntt=%22Mark%20Harden%22&Ntk=All&Ntx=mode matchallpartial)

(http://denver.bizjournals.com/denver/stories/2009/02/23/daily22.html?ana=e_du_pap#comment)

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Prices of existing homes declined less through 2008 in the Denver area than in any of 20 major U.S. cities, Standard & Poor (http://denver.bizjournals.com/denver/gen/Standard_&_Poor_10261D8C3D1B4E44ADD1110C2E77B4A5.html)ís reported Tuesday.
The monthly S&P/Case-Shiller Home Price Indices said average prices of existing homes in Denver fell 4 percent between December 2007 and December 2008, less than any of the other 19 cities in the report.
The average decline among the 20 cities was 18.5 percent, S&P said.

Among the 20 cities covered in the Home Price Indices report, Dallas had the second smallest year-to-year housing-price decline after Denver, at 4.3 percent, followed by Cleveland at 6.1 percent and Boston at 7 percent.

The cities with the greatest price declines were Phoenix at 34 percent, Las Vegas at 33 percent and San Francisco at 31.2 percent, S&P said.
The survey also indicated that Denver had the second-smallest decline in existing-house prices between November and December 2008, at 1.5 percent, behind only Boston at 1.3 percent. Denver's decline between October and November 2008 was 1.1 percent.

Phoenix had the greatest month-to-month decline from November to December, 5.1 percent, followed by Las Vegas at 4.8 percent and Minneapolis at 4.6 percent, S&P said.

Nationwide, the S&P report painted a gloomy picture of steadily declining home prices.

"The broad downturn in the residential real estate market continues," David Blitzer, chairman of S&P's index committee, said in a statement Tuesday. "There are very few, if any, pockets of turnaround that one can see in the data. Most of the nation appears to remain on a downward path."

The survey tracks changes in the value of the residential real estate market by comparing sale prices of specific sample homes in a city at two different times. Calculations are by Fiserv, Inc. using methodology developed by Karl Case and Robert Shiller.

The survey assigns an index number to each city and does not report actual home prices. The index is a measure of how much home prices have gone up or down in each market since January 2000, which has been assigned a price index of 100 in that market.

The report said Denver had a home-price index of 125.74 in December, meaning home prices have gone up 25.74 percent since January 2000. Home prices in Denver peaked in August 2006.

Six of the 20 cities had a lower price index than Denver, with Detroit at the bottom at 80.93. New York topped the list at 183.50.
The average price index for all 20 cities of 150.66.

(http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_Release_022445.pdf)

Hulk
02-24-2009, 04:36 PM
We suck less!

sgtpeper
02-24-2009, 04:58 PM
Actually, Denver itself is really strong vs other cities. There are certain neighborhoods that still went up in value such as Whitter (ugh spelling pwns me), parts of the Highlands, and a few other areas.

Everyone is so down on real estate, but I'm a realtor and starting work for a developer as a PM, and honestly, we havent any real loss in this market. Everything we build is selling before we finish it - in the highland area.

Be happy to live in or around Denver! :)

Food for thought.

Azrael
02-24-2009, 04:59 PM
Yay. I'd only lose 30% of my house's original purchase price if I tried to sell right now. Hence the reason I'm putting it on the rental market.

sgtpeper
02-24-2009, 05:21 PM
What neighborhood are you in?

Renting isnt a bad idea while we wait for certain areas to come back.

Red_Chili
02-25-2009, 09:01 AM
Per the founder of RE/MAX, Denver is actually rebounding on average. I know downtown Littleton has lost nothing. Hasn't gained much, but hasn't lost. TGFT!

AxleIke
02-25-2009, 09:19 AM
Hmmm sucks for me. I was digging the buyers market.

Beater
02-25-2009, 09:40 AM
yeah - I think it's all in the neighborhood, but I am just a consumer. I know this, old, established neighborhoods are like the bond market. No huge swings in value, not very sexy, but really dependable.

sgtpeper
02-25-2009, 10:08 AM
Actually, a year ago the Highland neighborhood saw double digit increases in property values - that whole area has gone up consecutively for something like 15+ years though.

Whittier is now seeing the same thing begin. Very old neighborhood that needs a lot of rehab. Lots of great houses that look like they belong in Wash Park if they were cleaned up properly. As such one can find a house with great bones for about a 100 that once fixed is worth 300. A couple of guys in my office do this exclusively.

Pretty incredible!

Romer
02-25-2009, 10:36 AM
And 6 months later I still haven't been able to sell my house in the DTC.

MDH33
02-25-2009, 10:49 AM
Actually, a year ago the Highland neighborhood saw double digit increases in property values - that whole area has gone up consecutively for something like 15+ years though.

Whittier is now seeing the same thing begin. Very old neighborhood that needs a lot of rehab. Lots of great houses that look like they belong in Wash Park if they were cleaned up properly. As such one can find a house with great bones for about a 100 that once fixed is worth 300. A couple of guys in my office do this exclusively.

Pretty incredible!

I lived in highland and it's disgusting to see what's happening there. :mad:

Nice old houses being torn down to put up giant, ugly, poorly built boxes.

I agree with blighted areas being rehabbed (highland isn't blighted) but what is happening there is just greed. Flippers and developers ruining what made that neighborhood nice to live in; nice older homes in a pedestrian friendly, diverse area that wasn't too expensive.

I know Mr. Markofsky has a different opinion, but we're all entitled to them. ;)

sgtpeper
02-25-2009, 11:16 AM
I have mixed feelings about development in Highland.

Last year they downzoned the side of 32nd toward Sloans Lake from R2-R1. Now they are petitioning to do the same from 32nd to 28th. In my opinion this was/is a bad idea. Why?

So far it has made property values drop. Everyone says well now they can build large single family homes. But the neighborhood isnt ready for that. Without some of these duplexes being built, the money isnt going to just keep coming into the area. And right now the lots are worth too much for single family homes to make sense unless they are in the million dollar range.

The other part of this is that a LOT of the homes in Highlands are falling apart in a non-repairable way. TONS of homes in the area have cracked or sunken foundations that might cost the buyer $10-100k to fix depending on severity. Add to that that some of these homes were built/designed poorly to begin with and you get to my point of why are homes such as these worth saving?

I completely understand not tearing down a beautiful Victorian or Bungalow thats been well cared for and is in good shape. But a house that is literally falling down just hurts the block its on.

If the ones that are truly messed up can't be developed any longer, no one will buy them - at least not for anything a seller not in foreclosure would want to sell for. At which point a lot of these messed up homes will become cheap rentals which will pull the value of the entire neighborhood down quite a bit. Its a fact that the more houses on a block that are being rented on a block, rather than being owner occupied, the lower the value of that block.

Would you rather have a $700k well built duplex next to you, or a dilapidated house with screaming college kids living in it, clogging up the street with cars.

Also, keep in mind even if large single family homes start coming in with the downzone, does that really mean developers wont build junk? No.

I agree a lot of developers built some absolute crap recently. I work for one who does not build crap - his projects are green built and everyone on the block comes by to tell us how beautiful our project looks. In fact we sell out of ours before we finish building them every time (knock on wood).

Just because the house is 100 years old doesnt mean the developer back then wasnt building crap as well :).

I do believe in preserving a neighborhood, but as a home owner in the area I would also love to see my property continue to appreciate radically. In my opinion for this to happen, a lot of the garbage houses need to go.

Thanks,
Jeff

Crash
02-25-2009, 12:18 PM
How does zillow.com asign values to a home and are their figures somewhat accurate?

Jacket
02-25-2009, 12:28 PM
I think Zillow accesses public data regarding home sales in the area within a given time window, and has some sort of algorithm to figure out the value of your home based on square feet, rooms, lot size, etc.

I haven't looked in a while, but in my estimation it was somewhat hit or miss in terms of accuracy. Some towns and neighborhoods seem to have better data than others.

Red_Chili
02-25-2009, 12:33 PM
I lived in highland and it's disgusting to see what's happening there. :mad:

Nice old houses being torn down to put up giant, ugly, poorly built boxes.

I agree with blighted areas being rehabbed (highland isn't blighted) but what is happening there is just greed. Flippers and developers ruining what made that neighborhood nice to live in; nice older homes in a pedestrian friendly, diverse area that wasn't too expensive.

I know Mr. Morkofsky has a different opinion, but we're all entitled to them. ;)

We are one of the folks driving up property values in old Littleton. But it is far from poorly built, it saved as much of the original home as possible (a 600sq. ft. railroad bungalow, but a charming one, and former home to a Littleton mayor), and it was designed to FIT IN with the neighborhood which is still pedestrian friendly and one block from the park. The design hides the size from the street, in direct opposition to what most architects aim for (bigger = 'curb appeal')...:rolleyes:

Still didn't make us popular with a couple neighbors, but the vast majority like it. Don't know that these kinds of design goals are in the forefront of developers' minds though. I DO know that I am upside down on investment to value (though not on loan to value... thanks be...) so that is part of the equation.

Before:
http://redchili.smugmug.com/photos/118596114_jqV4Q-M.jpg

'After' (still not done in this photo, as we are doing all the finish work):
http://redchili.smugmug.com/photos/118594921_KDvKA-L.jpg

The porch columns are now finished, and UB, there is actually finish trim in the front living room. But a home is not primarily an investment, so no regrets.

Folks who do this should hire an architect (a good one obviously) to make sure it is done with an eye to the neighborhood's history... IMHO of course.

http://redchili.smugmug.com/photos/118596111_hvqSp-L.jpg

sgtpeper
02-25-2009, 12:35 PM
I'm not exactly sure how they asign values to a home. I'm sure its just from closed numbers without actually looking at the house.

I have an appraisal background as well, and they say first thing in the classes that Zillow is not a great tool for finding value of a property.

Just like anything else its just another tool but take it with a grain of salt. I have seen Zillow say a property was worth 150k more than it really was - this was for a loft in the Titanium lofts downtown.

Also keep in mind appraisals are BS right now too. Most appraisers are SOOOO afraid of losing their licenses that even if a house is worth WAY more than what its under contract for they still only show it as being worth maybe 3k over the contract price.

My best advice is to work with a really good realtor who really knows your area. Honestly there are SOOOO many bad realtors out there its scary. I'm not necessarily advocating you work with me, but you should definitely really interview any realtor you plan on working with. Make sure they REALLY know the are, make sure they have a really good idea of what youre looking for and look for other qualifications. For example I have a double degree in finance and real estate, an appraisal background, and a construction background from ultra custom to rehab homes.

Look for people that are very well rounded :)

sgtpeper
02-25-2009, 12:40 PM
Oh another part I should add to the debate of new builds -

I sat down with my developer boss to help design a new large building were going to be starting this summer. I said why don't we build something with classic aesthetics and charm. He said he would LOVE to build something like that. The problem is, the people willing to pay good money for a new built home in the city seem to only be buying modern. He said if there was a market for classicly designed and built properties he'd instantly design/build those.

Builders just have to keep building whatever the market calls for unfortunately.

BUT I still agree, it doesnt mean they should build crap.

Corbet
02-25-2009, 02:04 PM
I took a beating on our townhome in Frisco selling it last November. Summit County property values fell plenty last year.

Red_Chili
02-25-2009, 02:42 PM
Oh another part I should add to the debate of new builds -

I sat down with my developer boss to help design a new large building were going to be starting this summer. I said why don't we build something with classic aesthetics and charm. He said he would LOVE to build something like that. The problem is, the people willing to pay good money for a new built home in the city seem to only be buying modern. He said if there was a market for classicly designed and built properties he'd instantly design/build those.

Builders just have to keep building whatever the market calls for unfortunately.

BUT I still agree, it doesnt mean they should build crap.
Then why was/is Wash Park so hot?
I think folks would certainly buy classic architecture with modern under the skin. Problem is, it is a bit more expensive to build.... and true old is expensive to refurbish. I think folks buy what is marketed to them, and in the back of their minds has been "but I could get so much more house for that coin, in the suburbs...". But IMHO you won't lose marketing 'classic' to older baby boomers who are downsizing.

sgtpeper
02-25-2009, 03:38 PM
That is true. Classic to baby boomers sounds great. Unfortunately thats not the target market for most new built in Denver. Its mostly 30-40 yuppies. They are the market that cause "lofts" to be overbuilt in Denver and why downtown is now very very slow - but not taking too hard of a hit yet. The baby boomers are not moving into Highlands nor are they moving to Wash Park. If they are downsizing, they are moving downtown. Where there really is no room for new builds at this point. In fact a lot of the homes in Wash Park that are not redone yet that are for sale seem to be for sale by baby-boomers downsizing and moving downtown OR young couples selling a small bungalow to move to areas like Observatory Park and have million dollar + monsters.

Wash Park is very hot because of the stigma that comes with Wash Park. I find that most of my out of town clients that are moving here have already heard of Wash Park and as such want to move there. Also, keep in mine Wash Park has far less structural issues than Highlands. It has also been an expensive neighborhood for a LOT longer period of time than Highlands.

A little history on Highlands. The area at one point was a burb of Denver. 32nd and Lowell is where the trolly car station used to be. It was a HEAVY Italian area with a lot of mafia influence in the early 1900s. Then in the early 80s people began moving out of the area and moving into the suburbs. Many of the homes became very run down and property values dropped. Now, as Denver is growing once again, people are moving back to areas closer to Downtown and thus the property values have been going up once again. Its just a big circle.

Drive around highlands, then drive around Wash Park and tell me which are has more old houses that look like they are worth saving. Wash Park wins by a landslide. Some of the homes built in the 50-80s are just plain ugly in Highlands. Whereas in Wash Park there are far fewer homes built past the 40s. Wash Park went in phases late 1800s were the Victorians, 20s and 30s were the Tudors, and 30s and 40s were the Bungalows.

On top of that Wash Park is known as one of the Premier parks of Denver.
Still that doesnt mean there arent some awful new builds in Wash Park as well. I looked at over 100 properties in Wash Park in the last few months, and I can tell you there are some AWFUL new builds and remodels that people want absurd amounts of money for.

As for cost of building, its really fairly negligible to build a classic style vs a modern style - IF you are building a high quality product that is. It is FAR cheaper to builder modern if you are building crap. Our porject near Sloans lake employs the use of a bit of stucco, lots of Cedar and Aluminum to create the facade - to give an example of a modern home built with lots of quality expense - as it should for 700k a pop!

Again, these are just my observations from being in the business. I don't necessarily disagree with any of your points, its just not what I'm seeing on a larger scale.

Hulk
02-25-2009, 03:58 PM
I'm really enjoying reading this discussion, even though I have virtually nothing to add. Just thought I'd let you guys know. :)

sgtpeper
02-25-2009, 04:14 PM
I do think its fun to talk about these things as it really does effect all of us. Its also nice that were sharing opinions in a calm manner. Its no fun to discuss when people get upset :)

calphi27
02-25-2009, 07:00 PM
sgtpeper - I closed a deal today for a home in Green Valley for $150k if you can believe it.

Denver is recovering faster than anything on the coasts. California, Florida, Arizona, etc have a LONG way to go unfortunately.

The problem is that people are afraid right now and are laying low. The new stimulus packages are giving banks incentives to short sale instead of foreclose. So what you will see in the news is that foreclosures are going down even though they are just being converted to short sales. It is all about perception.

Once people hear about that on the news, then things will change. Mortgage rates are already extremely low, so that is helping. We are getting ready to refinance a number of customers when they rates drop, which should boost perception.

The thing that most people don't realize is that by the time you hear about it on the news, the bottom has been found and the market is on the up and up. So if you want a deal on a property, this year (sooner than later) is the time to strike.

sgtpeper
02-25-2009, 07:09 PM
Thats absolutely right. I hate the news just for that reason. All it does is scare people. You have to look at things on the local level. And locally we arent doing too bad at all :)

sgtpeper
02-25-2009, 07:16 PM
And if you want to see weird deals, I just head about a 4bedroom 1 bath for sale for 51k asking lol On a 6k sqft lot!

Red_Chili
02-26-2009, 12:20 PM
Thats absolutely right. I hate the news just for that reason. All it does is scare people. I was reading an interview with George Soros where he basically said he makes investment decisions not on the news, but on anticipated impacts on people's perceptions, with the resulting (panic) behavior.

Rationality need not apply. In fact it gets in the way of reactive investment. Interesting. The irrationality creates a spread on which money is made.

Chaos theory applied to equities. It does work both ways though.

sgtpeper
02-26-2009, 12:33 PM
That makes perfect sense too.

My step dad's father was a union plumber in Chicago. He took every penny he ever made and put it into buying larger apartment buildings on the west side of chicago. His formula was to always buy buildings with close proximity to the el trains. It paid off because when he died he left his wife very well taken care of.

I've been looking at the light rail expansion and following the areas that will be effected by it. There is discussion that the light rail from DIA to downtown may run through 5 points which would really make that area come back to life. If only I had an extra million to buy a couple buildings on Welton hehe.

Jeff