real estate

The 2008 HBA Denver Parade of Homes is in full swing and being hosted by Solterra a Carma Community located in Lakewood, CO. The community which is set to include approximately 1,400 residences is modeled after European hillside villages. The natural landscape fits the theme well and highlights the amazing views.

As with any showcase there are certain trends that jump out & make you take notice. Texture was the reoccurring theme this year. Everywhere you look & touch a new texture, some more familiar then others. Hand trowel walls were the norm with quite a bit of Venetian plaster as well. One home even featured natural straw as a wall texture. You may have seen granite but how about honed and leather finishes? Distressed wood and patterned carpet ruled when it came to floors. And of course that’s just on the inside. Stucco, stone and brick were on all of the exteriors in very rustic weathered styles and color.

I encourage you to take some time and tour for yourself you too may find that while many of the materials look familiar they sure don’t feel the same!

Most people seeing a tornado for the first tend to stand still and stare at the awesome power of nature.

Real Estate's Perfect Storm

Something like a deer caught in the headlights of an oncoming car. The second time most people see a tornado, they run for shelter, because they remember the mess made from their first experience. In Colorado, it’s been 20 years since the real estate industry weathered a difficult market. Most people in the industry today, Realtors, lenders and title insurers all are still staring at the market like a deer in the headlights. Those of us that have that second time around experience need to lead the industry forward.It’s time to move on. It is too late to seek shelter, and it really is time to get moving again. While the capital markets are still recovering and mortgage loans are certainly not easy, they are not impossible either. The FHA is now heavily funded, so Realtors should find a lender that gets FHA, and start selling houses using FHA financing. The entire industry needs to get on the phone and start talking to people about buying. It’s hard work, fraught with rejection and MUST be done. NOW! Smile, get your attitude arranged, get over that hang-dog look, and get to work. To the frightened and lethargic public reader of this blog, if you need a home, go buy one. The reasons to buy a home are still the same as they always were: security, empowerment,a hedge against inflation (not an ATM machine), a secure place to raise a family, and a tax shelter.

I did a quick survey of a thousand homes purchased in July in the Denver area with a sold price between $100,000 and $200,000. 14% were purchased using cash. ( I expanded an earlier effort of 100 homes.) I believe it is reasonable to assume that the cash buyer in that price range in the Denver market place is an investor; buying low with an expectation of selling high for a sizable profit in 3 to 5 years. If savvy investors get it, why isn’t it true for the average Joe that needs a home?

With home builders on the sidelines for the near future, the previously owned home inventory will begin to appreciate in value as competition enters the market. Even today, many bank owned homes in good condition are receiving multiple offers.

Today, in the United States, there are over a million Realtors. If each Realtor begins a relentless effort to show potential buyers how to buy now and win, we can change the attitude and move the economy forward.

Or, we can stand still watching the oncoming tornado (or headlights) and get run over. Seems like simple choice.

Read more on this topic:

Housing’s Perfect Storm (part 1)

The Upside of a Foreclosure Market

I am dropping out. Out of the negative. Tuning in to the positive. Turning on to the idea that the media is not where I want to be.

With apologies to the 1970’s counter culture, I have dropped out of the media quote game. Just like many other people, I like to see my name in the newspaper, and have enjoyed seeing my name in lights many times lately. But stroking my ego is not helping me, my company, the market, or the consumer. I know the local Denver dailies will miss me (not) but there are plenty of other industry professionals that will continue to damage their own business and the market by feeding the media lots of great info that will be printed as negative. Good luck to all.

Please understand that I do not have rose colored glasses. The national economy is hurting, and housing/lending practices are a big piece of why that is true. Residential home sales values have declined 13% since late 2005. Capital market losses are large, and when the dust settles, we may find out just how much capital disappeared.

So having acknowledged the obvious, let us move on. The United States today is a consumer economy. Simplistically, that means the economy functions well if all of us have money and are spending it. Today all of us have less money for a variety of reasons well documented in the media, and therefore we are spending less money. But are things really that bad? I think not, so please consider:

The gross domestic product (GDP) in the second quarter of 2008 was $14,256,500,000 That is up $144,000,000 from the first quarter of 2008. In spite of the negative press, we are still making scads of money. And we are still the largest economy in the world, by a bunch. There has not been a decline in present dollar GDP since WWII.

69.1% of Americans owned homes in the first quarter of 2005. That was the highest percentage of American home owners on record.

68.1% of Americans owned homes at the end of the second quarter of 2008. That is a loss of just ONE PERCENT!

The 1% loss of consumer ownership did not mean a loss of the homes. It just means the ownership of those homes was transferred. To Banks. Or, more specifically, to the Real Estate Owned (REO) Departments of various financial asset organizations. The REO’s will sell those homes (with a reduction in value, or loss of capital) to investors and new homes owners.

According to Realty Trac, which keeps up with these things, 99% of American homes are NOT in foreclosure. They choose not to say it that way, but 99% not having a problem sounds a bit more positive than focusing on the negative.

Home owners that do not need or have to sell at his time are not affected by any losses in value. Losses are realized at time of sale. And some markets across the country are having value increases.

Hang on people, the market will recover.