Thursday, May 24, 2012

5280 Priority Report

5280 Q&A +  8 things potential buyers and sellers should be thinking about as they navigate the housing market now.

5280: Q: What is it about Denver’s real estate that makes things so much better than in the rest of the country? 
A: There are a couple of things: In home-price metrics, Denver’s been in the top five, at least, for the last couple of years. A guy on CNBC just sent me something saying Denver is the place he’s telling investors and real estate pros to buy property. We have a migration happening, and it’s in the right demographics. We’re third in the country in migration, but in the key demo of 25- to 44-year-olds, we’re number one. Those people are moving here not necessarily for jobs, but for lifestyle and a better housing market. It’s relatively stable and healthy, and it doesn’t look skimpy to them. The markets on the coast are getting healthy enough to let people get out of them. 
Q: How did the downturn affect people’s assumptions about home ownership?
A: You’d think that the dream of home ownership is dead, especially among the millennials. But survey after survey says the millennials want home ownership as much as any other generation. It’s smaller, smarter, not so much fix-and-flip, but they really want home ownership. 
Q: But they’re going about it differently?
A: Right. It’s gotta be smart and well-researched. They’re way savvier, and they know the market. They’re really cautious, and rightly so, all the way through the transaction. What’s great about that is that they make great sellers later on, because they bought right. They’re not underwater, or in a bad house with a bad floor plan, or on a bad street.

1) Location & Size
What: Sure, you can get more for your money in the ’burbs, but do you really want to live there?
Why: “There’s continued migration into the city, where people want pedestrian-friendly areas, don’t want to deal with commutes, and would rather have 1,600 square feet in a sensible, great location rather than 3,000 square feet farther out.” 
—Liz Richards, Kentwood City Properties
2) Upcoming Elections & Market Realities
What: Think the November elections will fundamentally change the housing market? Think again.
Why: “We’ve run data during congressional and presidential election years, and an election year doesn’t change anything. Look at what’s actually happening in the market, not at this hocus-pocus stuff.” 
—Charles Roberts, Your Castle Real Estate
3) Denver & The Rest of the U.S.A.
What: National trends mean little in your own backyard, but there’s nothing wrong with hometown pride, and Denver is the envy of most other markets nationwide.
Why: “Denver’s been in the top five, at least, for the past several years. It’s not great yet, but it’s not falling off a cliff like a lot of other markets.” 
—Lane Hornung, 8z Real Estate
4) Lifestyle & Quick Returns
What: The days of fix-and-flip are over for almost everyone but the fix-and-flip pros. And that’s all right.
Why: “People have adjusted their paradigm and now realize that their house is more of a home than an investment. People want to be smart, but they’re buying it more for the emotional connection than because they think it’ll be worth more in a few years.” 
—Liz Richards
5) New Renters & Old Renters
What: Being a renter once pegged you as struggling, young, unreliable, and thus undesirable. No longer.
Why: “My perception of today’s renters, especially in areas like Highlands, is that they’re affluent and high-end in ways that can only improve a neighborhood.” 
—Liz Richards
6) Affordability & Greenness
What: Sure, we want better windows and efficient water heaters; they just can’t be too exotic.
Why: “People think things like solar are really neat, but they aren’t as willing to spend money on it because it takes so long to pay back the investment.” 
—Tarl Ford, Highland Renovations
7) Smart & Cheap
What: Just because you can afford a home doesn’t mean you should buy it.
Why: “A sub-$275,000 market may not put you in a sexy neighborhood like Highlands, but more of a bread-and-butter kind of neighborhood. But this will be hard to find while we’re all waiting for the shadow inventory to be released.”
—Lane Hornung
8) Fix it up & Move On Up
What: The credit crunch is motivating homeowners to go the renovation route because it’s easier to find money for incremental improvements.
Why: “People are increasingly interested in investing in their homes; they’re willing to spend more [on a new kitchen or addition] because they’re in it for the long haul.” 
—Tarl Ford