October 2007

In response to today’s column by Al Lewis in the Denver Post, I’ve responded with the following:

I read your column in the blog. Thank you for not treating my comments negatively. I am curious about your headline “Desperation” and your thoughts about it always being a good time to buy. Consider that (1) the NAR should always say it’s a good time to buy. The NAR is in fact a trade association representing 1.35 million people that make their livelihood from selling real estate. (2) Property values have increased an average of 6% each year since WWII. That does not mean every year, but that steady increase has made not a few fortunes. (3) Real estate is a long term hold, and while it is true that a high risk buyer can make money by short term ownership (so called flips or timed buys), the real money is made by paying off a mortgage over time, either as an investment with someone else making the payment, or by adapting the mind set that a house is a home, and should not be looked upon as a convenience purchase. I suspect that many of the people buying homes today really do not understand long term hold, especially considering the instant gratification mentality that is prevalent today.

Many people with good cash positions are buying real estate today, and mortgage money is very available for those that are qualified.

In conversation someone mentioned to me that they are losing equity by the minute on their home. I respectfully disagree. Any loss is imaginary unless an owner must sell at a time when the market has positioned their property at a price less than the original purchase price. Not considering expenses of sale and inflation, if someone paid $300,000 for their home and can sell it today for $350,000, they booked a gain. If they paid $300,000 and must sell today for $250,000, they show a loss. While the present value of a house may fluctuate over time of ownership, it only matters at the time of sale. So unless an owner needs to sell the home today at a loss, it does not matter. And, based on 60 years of history, most real estate will recover any losses in time.

Consider also that real estate values are very local and situational. One of my associates clients has twice this week been unable to come to terms on separate contracts offered because they were out-bid by other buyers. Some parts of the Metro Denver market are doing well, while others are definitely suffering, and certain homes sell quickly at a good price because they are desirable in condition and location.

Many home buyers over the past 3-4 years purchased homes using poorly conceived mortgage instruments that made it possible to secure a loan at teaser interest rates, and because of 100% financing, there was no commitment on the part of the buyer. Many of those people failed to understand or appreciate the inevitable increase in the payment rate, and few people read the rather large print that often imposed a prepayment penalty.

Lots of folks should accept responsibility for this current home value crisis. We should point the Flying Fickle Finger of Fate at sophisticated Wall Street investors that offered easy money mortgage loans to legions of unsophisticated first time home buyers, a glut of home building fueled by national home builders that were more concerned about their stock prices than the primary purpose of their business, retail mortgage lenders that sold quite a few of their clients down the river rather than providing proper counsel, some Realtors that sold homes knowing their client was poorly prepared for home ownership, the media for sensationalizing the opportunities to make big bucks in real estate, and not a small number of crooks and charlatans that lied to and cheated the unsuspecting consumer.

The fact is that real property is a market, subject to the foibles and intellect of those that engage in any market. While it is of little consolation to people that are losing their homes to foreclosure, one should remember that lots of nice folks lost big bucks in the Enron collapse. Those dollars were lost because people trusted other people, and there will always be a market for misplaced trust and a lack of understanding.

Written by Larry D. McGee, Denver Realtor - Visit Website Sphere: Related Content

Modern day Carpet baggers are taking advantage of the public in a different way. Homeowners are renting their homes to tenants, collecting the rent and not paying the mortgage.

This practice is called “Equity Skimming.” While the homeowner, who many times pass themselves off as “investors” legally own the home, they fail in their obligation to keep the mortgage current.

Time is on the Equity Skimmers side, for only so long. Eventually the tenant will come home one day to find a “eviction notice” taped to the door. When that happens, the tenant has little choice but to move out. Seldom does the new owner (the bank) honor the lease. They want the property sold and quickly. That means you will be asked to move.

Eviction notices that are ignored are followed by the Sheriff arriving and physically having you and your possessions place at the curb. It’s not a pretty sight.

To add more injury to the situation, the tenant is left with little hope of receiving the “damage deposit” back, regardless of the condition of the home. The recourse is to sue the homeowner. Haha! That’s a joke, if the owner didn’t pay the mortgage, is it practical to assume your deposit is safely kept in a trust account? Not likely!

The tenant has very little time to locate a replacement home, pack and move. Life disruptions like these are difficult from which to recover. It’s best to research a rental home prior to renting.

• Foreclosures proceedings in Colorado are recorded. Visit the Colorado Public Trustee’s office in the county where the rental is located to see if the property has had a lender file a request to sell the property.
• Using a Licensed Property Manager who also holds your deposit will help ensure your deposit will be returned to you.
• Research how many properties your landlord owns. Follow your instincts. If the landlord recently has purchased multiple properties a red flag should go up.
• Research how much is owed on the property. If you are leasing a home that has a very large mortgage that your rent is not meeting, ask why.

This problem is not an obscure one. For some reason when times are bad these proverbial Carpet Baggers show up to skim skam the consumer. It really makes my blood boil! Protect yourself, use your head, follow your instinct and if necessary call an attorney.

kk

Written by Kristal Kraft - Visit Website Sphere: Related Content

Colorado Ski resorts have been offering free passes to 5^th graders for 12 years! Kids who qualify receive up to 3 days of skiing at each of Colorado’s 25 Ski resorts.

If your 5^th grader wants to learn or already knows how to ski, apply for this great Colorado benefit online at: http://www.passport.coloradoski.com

Learning how to ride the snow is a lifetime sport for Coloradoans. Isn’t nice so many kids get to learn at an early age?

Participating resorts are:

1. Arapahoe Basin’
2. Aspen Highlands
3. Aspen Mountain
4. Beaver Creek
5. Breckenridge
6. Buttermilk
7. Copper Mountain
8. Crested Butte Mountain resort
9. Echo Mountain
10. Eldora
11. Howelsen
12. Keystone
13. Loveland
14. Monarch
15. Powderhorn
16. Purgatory (Durango)
17. Ski Cooper
18. Snowmass
19. Solvista Basin
20. Steamboat
21. Sunlight
22. Telluride
23. Vail
24. Winter Park
25. Wolf Creek

Written by Kristal Kraft - Visit Website Sphere: Related Content

Denver Country Club is located just west of the fashionable Cherry Creek neighborhood and the area extends from Speer Boulevard north to 6th Avenue and from Downing Street east to Oak Street. Many of the most socially elite people live in this area and have private membership privileges to the prestigious Denver Country Club. The Denver Country club prides itself in featuring a beautiful 18-hole private golf course, indoor and outdoor tennis facilities, and outdoor Olympic sized swimming pool, and an outdoor ice-skating rink. Country Club North, located near the Cheeseman Park recreational and open space area, is just north of 6^th Avenue up to 8^th Avenue. At Cheeseman Park on can enjoy a beautiful jog thru the tree lined running path. This time of year, the changing colors of the trees are absolutely stunning. You also have the area just south of Denver Country Club that is known as Country Club South and Washington Park North. All three of these neighborhoods that make up the Denver Country Club neighborhood and are conveniently located to great shopping, art galleries, restaurants, bars and popular hangouts.

Denver Country Club home statistics include: 36 homes have sold in this area in the past 6 months at an average price of $1,376,816. The Median income per household is $165,428 and the average age is 41. For more real estate information please send me your questions or call me at 303-246-6629.

7the Ave Historic District The East 7th Avenue Historic District extends from Logan Street to Colorado Avenue, and from 6th Avenue to 8th Avenue. Between Steele and Harrison Streets, the district is limited to the 7th Avenue Parkway. Because Downing Street was a main thoroughfare in the late 1890’s, the earliest construction in the district is found nearby on the 700 Blocks of Corona and Marion. 7th and Williams Street contained a stable for horses. The 700 Blocks of Franklin and Gilpin were homes to flourishing greenhouse businesses.

7th Avenue Historic District home statistics include: 23 homes have sold in this area in the past 6 months at an average price of $727,817. The Median income per household is $99,744 and the average age is 56. For more real estate information please send me your questions or call me at 303-246-6629.

Both the Denver Country Club and 7^th Avenue Historic districts offer fine dining or a fun evening out at one of the many local restaurants and bars all centrally located around these neighborhoods. Whatever type of food you are in the mood for, this area has it covered! Here are just a few of my favorite choices:

Elway’s Steakhouse, Cherry Cricket Bar and Grill, Hapa Sushi Grill & Sake Bar, Cucina Colore Italian food, Bombay Clay Oven Indian/Pakistani, and Piatti Italian

Cherry Creek Shopping Center is located in the heart Denver. With a total of 160 shops, restaurants and services, Cherry Creek is Denver’s premier shopping destination and a favorite tourist attraction in town. This enormous shopping center has premier stores such as Neiman Marcus, Saks Fifth Avenue, Nordstrom, Macy’s, Tiffany & Co., and Burberry. The Grand Opening of the Nordstrom’s of Cherry Creek is Friday, October 19, 2007 at 10:00AM. Be sure to get there early for the Cosmetic Tailgate Party from 8:00-9:30. This Grand Opening celebration is sure to be a hit! Maybe I’ll see you there! Be sure to let me know what you think of the Grand event if you do dare the crowds and join in on the fun!

Written by Angela Fox - Visit Website Sphere: Related Content