Amendment 60

To begin with we understand that the taxes we are paying have become onerous beyond measure. Many voters are understandably upset with the Federal Governments tax and spend philosophy.  However, we must be careful to separate the taxes we pay for local and state government from the Federal tax burden.  According to JS Online, Colorado ranks 46 among all states for the TAX Burden on Income.  In spite of Douglas Bruce’s continual attack on Colorado’s Tax system, our state is comparatively well managed, in spite of the many conflicting Constitutional Amendments that state leadership must contend with and a healthy reduction is state revenues during the current recession.

So what will Amendment 60 do if passed?  The amendment requires school districts to cut taxes on property in half by 2020.  State enterprises such as Universities (CU and CSU) would be levied for property taxes, as would toll roads, water authorities, and housing authorities.  Amendment 60 would reset all Colorado Property taxes to 1992 levels, repealing any elected local school district and other local tax increases.  In theory school revenues lost by these changes would be made up from Colorado’s General Fund.  The estimate for this increase is 1 Billion in today’s dollars.  The only way the state could cover that deficit (Colorado does not have a billion dollars left in its budget) is to eliminate more services or raise taxes.

But what about other local tax increases?  Has your local fire district had any tax elections since 1992?  How about your recreation district?  Before you vote for this amendment, you might want to make sure that you are not damaging important local services that your life may depend on.

The effect on your property value is incalculable.  While you may save 1/2 of your property taxes (for the average house that would be around $1,000 a year in Metro Denver) your property values will fall as a result of employers leaving the state.  The connection between responsible government and corporate location seems poorly understood by most people, but the fact is Colorado is being increasingly seen by corporate America as a business unfriendly state.  Business”s do not like paying excessive taxes, but most business’s and people understand that there is a cost to operate schools and maintain a system of higher education. Business’s provide jobs.  Property values go up with full employment, and down with increasing unemployment.  Some smaller school districts in Colorado may not be able to operate at all, and larger school districts may have class sizes increase by 50% or more.

We encourage our clients to fully understand the implications of Amendment 60 before voting on what seems to be a measure to save property taxes.  We believe Amendment 60 will cause damage to the state that will affect your property value in a very negative way.

Two final points: (1) Amendment 60 is designed to amend a previous amendment known as the Tax Payer Bill of Rights (TABOR) and (2) the language of the proposed amendment is difficult to understand and makes references to the original amendment.  Most voters simply will not take the time to understand the implications of this complex amendment.

Next month we will discuss Amendment 61.

The Pulse is a review of key economic statistics that affect the real estate market.  The Pulse is offered monthly as part of The Berkshire Group’s Monthly Update, and is current based on the information  offered by the credited sources. The database is the 7 county Metropolitan Denver SMSA:

New Home Starts through June

Area Building Permits issued through June, 2010:  1920, a 64% increase vs. 1170 through June, 2009.

• Source: The National Association of Homebuilders

Average Single Family Home Sales Statistics through July, 2010:

Prices                     % of Change                     Days on Market               Year

$276,654                                                           100.37                              2009

$297,218                  +7.43%                             85.73                              2010

• Source: Metrolist, Inc.

Employment Statistics for the Denver-Aurora MSA through June:

Year                            Labor Force               Employed        Unemployed       Rate

2009                             1,410,664                1,287,332            123,332              8.2%

2010                             1,368,253                1,253,801             114,452              8.4%

• Source: Colorado Department of Labor

Mortgage Rates as of August 18, 2010

30 Year      15 Year            5/1 Arm              1 yr ARM

4.44%          3.92%                3.56%                     3.53%

All rates include a 0.7 % discount point. Rates quoted by any lender may not reflect momentary changes.

• Source: Freddie Mac National Website

Enjoy wonderful far reaching mountain views from this lovely passive-solar envelope home in close-in Conifer Meadows. Built by a builder who valued sensible construction he incorporated techniques that harnessed the power of the sun to heat the home.  The main entrance is a tile atrium where the heat is collected in the walls and garden.  It is then circulated through the envelope surrounding the living space.  The system is backed up by gas hot water 13-zone central heating system, so the home will remain comfortable during long periods of cloudy days.  Total utilities for this mountain home are far less than homes without this system, averaging $225/mo! This spacious home offers plenty of space for a small or large family.  The floorplan would even allow for a home business to be run on the lower level, with the main level remaining private for the homeowner. There are two large decks, one accessible only from the bedroom, the other is adjacent to the family room. The homeowner used the main level sunroom as a formal dining room, where at times they entertained a very large family comfortably. One huge bonus many may not notice immediately is the height of the garage doors.  Built to accommodate trucks, the doors are higher than average spanning a height of 8.5 feet – not one all 3 garage doors!  The original owner/builder sensed one day a homeowner might want to install an elevator so he built in an elevator shaft which is being used as pantry and closets at the present time.  If a homeowner were so inclined an elevator system could easily be installed! Call Kristal Kraft at 720-279-4599 for more information.

Experience classic elegance in this exquisitely renovated two story, seven bedroom, six bathroom home. With over 6,500 finished square feet, there is plenty of room to entertain. Located on the prestigious Polo Field Lane, this home is loaded with charm and more features then we can list. You must see this one to appreciate all it has. Call Angela Fox at 303-246-6629 today for more information.

 The high end condo market remains very slow due to the lack of available and convenient loan funding.

 85% of the active Denver real estate market is priced between $125,000 and $300,000.  The primary financing vehicle is the FHA.

 70% of the Condos sold in the Denver Market in 2010 have been priced under $200,000.

Updated home located on a quiet Cul-de-Sac with mountain views backing to a greenbelt. This open floor plan is bathed in light with vaulted ceilings at the entry way, living & dinning rooms. Large gourmet kitchen features stainless appliances, granite counters with stone back splash & center island. A comfortable family room is highlighted by stone fireplace and includes surround sound pre-wire. The second story loft is great for a home office or additional flex space. An entertainers dream is found in the fully finished basement complete with wet bar & pool table. With parks, trails, Grange rec center & Douglas County Schools its not hard to see why Castle Rock is nationally recognized as one of the best places in America. Call Charles Ward at 303-324-8520 for more information.

Like new, energy star, showcase home. This great floor plan is highlighted by soaring ceilings, a main floor study and upstairs laundry. The gourmet kitchen features slab granite, glass tile back splash, a large cooking island and double wall ovens. Upgrades throughout like extensive hickory hardwood floors, designer paint & carpet and wrought iron balusters. Custom features such as surround sound, plantation shutters, fireplaces surrounds & professional landscaping. This prime location feeds into Douglas County Schools and is minutes from Denver Tech Center, Park Meadows Mall & RTD Light Rail. Call Charles Ward at 303-324-8520 for more information.

Condo sales remain strongest in the low to mid price range.

While the very lowest segment of the market has become virtually non-existent in 2010, the balance of the market up to $500,00 is not dissimilar to previous years.  The $500,00 and above market still struggles, but there is life there as well.

The high end condo market struggles with little of no financing available for that price of property.  2/3 ‘s of the market is selling under $200,000.

The average days on market for Condos was at the lowest point in the past 4 years.

While the inventory of available homes for sale is still quite low, June marked the first month in the recent past where the total sales went down at the same time inventory went up.

 The residential sold price jumped in June, reflecting the highest average price since August of 2007.

 The relationship between total sales and inventory became a bit unbalanced in June, with the increase in inventory reflecting a bit of pent up desire to sell by homeowners.  The so-called “shadow market” is not yet apparent in the Denver market.