Neighborhood Spotlight: Parker, Colorado

Photocredit: http://www.parker-station.com

If you are thinking of moving to one of Denver’s suburbs, you should consider Parker, CO.  With easy access to I-25 and E-470, Parker is located to the Southeast of Denver-proper.  There is a lot to do in Parker, to include concerts, camps, classes, art exhibits, festivals, and recreational activities for kids and adults alike!  There are numerous recreational facilities around town, to include pools, field houses, gyms, rock climbing centers, facility centers, playing fields, equestrian trails and more.  Further, Parker has a large network of trails, to include the Cherry Creek Trail, Centennial Trail, Sulpher Gulch Trail, Tallman Gulch Trail, the Newlin Gulch Trail, and the future East/West Trail.

According to Trulia, Parker is exhibiting the current market trends:

Housing Market Trends

Market trends help you understand the movement of key price indicators. Trends in Parker show an 8% year-over-year rise in median sales price and a 2% rise in median rent per month.

Median Sales Price

The median sales price for homes in Parker for Apr 14 to Jul 13 was $402,450 based on 500 home sales.

Price Per Square Ft.

Average price per square foot for Parker was $202, an increase of 12% compared to the same period last year.

Median Rent Per Month

The median rent per month for apartments in Parker for Jun 14 to Jul 15 was $2,295.

Demographics

16%

SINGLE RESIDENTS

91%

HOME OWNERS

36

MEDIAN AGE

$100,647

MEDIAN HOUSEHOLD INCOME

57%

COLLEGE EDUCATED

Source: Trulia

Is now a good time to buy using a mortgage?

Is now a good time to buy using a mortgage? 

I am sure that you have heard over the past few months that interest rates are expected to rise as a result for the Fed’s anticipated rate hike.  However, with the global economy’s multiple crises, economic experts are expecting mortgage rates to stay the same, or to drop even further.

The Chicago Tribune reports that low mortgage rates will be something we can grow used to.  Most notably, the recent BREXIT situation has caused major players in the US to rethink their position on the state of our interest rates in the US due to an increasingly growing world economy on a macro-level.  For example, Freddie Mac’s chief economist has stated that "the turbulence abroad should continue to create demand for U.S. Treasuries and keep mortgage rates near historic lows; thereby, allowing home sales to have their best year in a decade, along with a boost in refinance activity."[1]

OK, so what does this mean for me?

Let’s compare interest rates using the annual averages for 2007, 2011, 2015, and June of 2016, assuming a 30-year fixed, $250,000 loan balance.  Rates are derived from Freddie Mac’s compiled data.[2]

Year	Average Int. Rate	P&I Payment	Savings compared to 2007 rates, annualized
2007	6.37%	$1,864.75	-
2011	4.45%	$1,511.16	$4,243.08
2015	3.85%	$1,406.42	$5,499.96
Jun-16	3.57%	$1,358.88	$6,070.44

So as you can see from this simplified chart, last month compared to the average rates in 2007 would yield homebuyers a savings in $6,070.44 in interest, each year!  This means that homebuyers can possibly qualify for homes that they wouldn’t have qualified for in 2007, or perhaps it will allow homebuyers to take that extra money that they are not spending on interest payments, and apply it to pay down debts or put it into investments for further growth.

Conclusion

As physics dictates, what goes up must come down (and in this case, the opposite- what goes down, will eventually go up!), so it is a great idea to reconsider your position.  Now is a great time to take advantage of the lower interest rates to buy your first home, or perhaps even move up to a bigger home.

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[1] http://www.chicagotribune.com/business/ct-mortgage-rates-20160714-story.html

[2] http://www.freddiemac.com/pmms/pmms30.htm

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13 Colorado cities ranked for their real estate markets

(Standley Lake, Westminster)

Colorado cities' residential real estate showed up strong on a new report that looks the nation's best housing markets.

Seven cities were in the top 25 nationally, with Thornton ranking No. 8, according to WalletHub's "Best Real Estate Market" report released Tuesday.

To compile the report, the Washington, D.C.-based financial analyst site looked at 16 metrics across three categories in 300 U.S. cities, ranging in population from fewer than 150,000 (small cities) to between 151,000 and 300,000 (midsize cities), to 301,000 or more (large cities).

Metrics measured included:

• Real estate market: percentage of homes underwater; average number of days until a house is sold; percentage of homes selling for a gain; median home-price appreciation; home sales turnover rate; rent-to-sale price ratio; foreclosure rate; mortgage delinquency rate; number of bank-held homes; vacancy rate; and building-permit activity.
• Affordability & economic environment: housing affordability (based on price as a percentage of the area's median income); maintenance affordability (based on costs as a percentage of income); population growth rate; job growth rate; and unemployment rate.

1. Thornton
2. Arvada
3. Denver
4. Greeley
5. Fort Collins
6. Aurora
7. Westminster
8. Longmont
9. Colorado Springs
10. Centennial
11. Lakewood
12. Boulder
13. Pueblo

Source: Caitlin Hendee, Aug 30 2016, bizjournals.com

Image Source: Materialicious

Metro Denver homeowners #3 happiest in the nation

It's not breaking news that Denver's home market is on fire right now.

Prices have been steadily climbing since early 2012, and last month, Denver's market was third only behind Portland and Seattle in terms of year-over-year resale price gains, with prices rising 9.5 percent from a year earlier.

But does that mean Denver homeowners actually like where they live?

Very, according to HomeAdvisor's new Homeowner Happiness Index, which found that homeowners in Denver are the third-happiest in the nation.

To compile the index, the Denver-based home improvement referral service, surveyed more than 18,000 homeowners in 36 U.S. metros to identify factors that make them happy.

• Practical commutes and access to attractions and services.
• Community diversity, safety and a vibrant neighborhood network.
• Affordability and comfort offered by a homeowner's dwelling.

"A homeowner’s quality of life is more likely to be dependent on their community and access to important attractions and services than it is on the number of bedrooms and bathrooms in their home," said Dr. Karen Ruskin, HomeAdvisor’s happiness expert and a tenured psychotherapist. "Our research shows that homeowners are happiest in urban cities with good weather, an active culture, arts scene and higher income levels."

The index assigned Denver homeowners an A- "happiness score," with eight out of

10 saying "It's the best place to live." In addition, 72 percent said their home makes them proud; 57 percent said their home is their favorite place to be; and 77 percent said they plan to say in the community for at least five years.

The affordability factor was where metro Denverites scored their happiness lowest, with just 46 percent saying the average $509,900 home price is "reasonable." Another 80 percent said they renovated their homes, and 69 percent said they were happy with their home's size and layout.

When it comes to community, a majority 75 percent of Denver residents said they feel safe and 73 percent said they trust their neighbors, but just 37 percent said they feel their community is racially diverse, while 44 percent said they feel their community is religiously diverse.
(Denver Business Journal)

Denvernomics: 10 Fascinating Fast Facts That Show Denver is Not in a Bubble

1. In 2006 Metro Denver had 7 months of supply inventory, which means it would take 7 months for the amount of buyers then to buy all the homes that were for sale. Today there is 1.2 months of inventory. A balanced market is 6 months of inventory. 1.2 months means tons of demand, and scarce supply. Before the recession we had tons of supply, little demand. 
2. From 2000-2006 homebuilders built 47,000 too many homes based on population growth, but since 2007 because many builders stopped building during the recession, builders are behind by 67,000. Building and development take twice as long today as it did 10 years ago, so builders are not keeping up. The average household in Denver is 2.5 people. The population increase of 120,000 people in the last 2 years means 48,000 new units were needed to be built. Builders only built 30,000 new units in the last 2 years. Demand for new housing is 60% greater than the supply of new homes. 
3. The foreclosure filing rate today is 95% lower than it was a few years ago. There are very few distressed sales. 
4. Just last year 103,000 people moved to Metro Denver. There has been an average of 45,000 population increase in Denver since 1994. The Colorado state demography office has determined growth by at least 50,000 people per year for decades to come. 
5. The unemployment rate is under 3.5%. It is very easy and attractive to become an entrepreneur in Colorado, and many people are taking advantage of that and being successful. 
6. There has been an average income growth of 5% in last 2 years.
7. Rental rates have dramatically increased in the last 5 years, and have doubled in the last 10. An average of 1200-1500 people are moving to Denver each WEEK. 
8. Mortgage rates are at record lows, at 3.45% right now, at the lowest rates since banks started lending in 1900.
9. Lenders since 2010 have been extremely strict on qualification per new government and industry regulations caused by bad lending before the recession. The buyers who have bought since 2010 are very well qualified. 
10. There are 800,000 millennials and counting in metro Denver. And 350,000 of them are living with their parents! This is a whole wave of buyers and renters who are going to flood the market soon in the next few years, so even if 50,000-100,000 people stop moving here (which will not happen) millennials will be more than enough to absorb supply. 

Our Denver real estate market as like a teeter totter: imagine on the demand side is a huge hungry japanese sumo wrestler, and on the supply side a very skinny model. The sumo wrestler's diet is population growth and people moving to Denver, and economic growth. The skinny model's diet is essentially more housing supply and more vacancies. With Denver's economy right now the model is starving, and the sumo wrestler is gorging. For the teeter totter to balance or go the other way, the sumo wrestler has to stop eating his diet and the model has to start eating her diet. Until either or both events happen our real estate market will not change.

Welcome to Denvernomics with The Denver House Guy :)

(Some of this material is taken from notes in economic trends classes I took from Lon Welsh and Lonnie Glessner)

How Much Does a Remodel Cost, and How Long Does It Take?

If you’re looking for a sense of how much it will cost to renovate your home, and how long it might take, we’ve got some numbers for you. The 2016 Houzz Home annual survey gathered information from more than 120,000 registered users of Houzz, including more than 70,000 who renovated in 2015. Their responses provide insight into how your own renovation project might play out.

Janet Paik

Be Prepared

High renovation costs can be surprising for first-timers. After all, it’s easy to fall in love with photos of a high-end kitchen or Sub-Zero appliances when you don’t have to pay for them. “A lot of times people have grandiose ideas or pictures of things that they’ve seen — it looks great but doesn’t fit their budget,” says Brandon Quinton of Cameo Homes in Salt Lake City. “Everyone is drawn to the most expensive stuff. Everyone has got expensive taste; they just don’t know.”

Your accounting professor (or a parent or grandparent) may have told you that it’s important to have, and stick to, a budget. If you find that challenging, don’t feel too bad. A whopping one-third of renovators surveyed began their projects without setting a budget at all.

Did they pay dearly for that? Surprisingly, no. Owners who started with no initial budget actually spent less, by about $8,000, than those who had a budget and stuck with it. It could be that the budget-avoiders were doing DIY projects, renovating over time or taking on lower-cost projects overall.

As for those homeowners who exceeded their budget, well, they spent twice as much as those who had no budget at all. And they probably had some gorgeous results for their big spend. Notably, only a tiny fraction of renovators came in under budget.

Why do people go over budget? Often because they have nice taste. As this chart shows, nearly half of the people who went over budget in their renovations said they decided to buy more expensive materials and products than initially planned, while about one-third decided to change the scope of their project.

How Much Will This Cost Me?

So how much does a renovation cost overall? Obviously, the total cost will depend on the project’s scope, the materials selected and the fees of the professionals hired to do the job. Owners who completed our survey spent an average of $59,800 on renovation projects. Keep in mind that this figure is an average for all types of projects, including basement remodels and full kitchen gut jobs. Each project is unique, and the average renovation spend figure is not intended to be the norm for every project.

That said, the averages do provide some interesting guideposts. Notably, recent home buyers spent twice as much as people getting ready to sell. “Recent home buyers tend to do more, spend more and are more likely to hire professionals to help with their renovation project than other homeowners,” says Nino Sitchinava, principal economist at Houzz.

Renovation spending also correlated with age (and presumably savings): Homeowners 55 and older spent an average of $73,300, those 35 to 54 years old spent an average of $52,100, and those ages 25 to 34 spent an average of just $24,500.

Where Does the Money Go?

Kitchens, bathrooms and living or family rooms are more likely to be renovated than any other room, according to the survey. The kitchen gets the most attention: Nearly one-third of all renovators remodeled the heart of their home, and more than 40 percent of recent home buyers did. Bathrooms are right behind in popularity, as this chart shows.

Homeowners spent an average of 12 percent more to remodel a kitchen in 2015 than they did in 2014, as more shifted to broader-scale projects. A major kitchen overhaul, which includes at least replacing all the cabinets and appliances, cost about three times as much as a minor kitchen renovation.

In addition to redoing interior spaces, many home buyers who are renovating update core functions like plumbing and electrical systems, home automation, heating and cooling, as shown here. This isn’t the glamorous stuff, but it sure makes a home run more efficiently.

The average spend on master bathrooms also grew 12 percent year over year, as more homeowners replaced at least the cabinetry or vanity, the toilet and the countertops. Getting a pro involved in a major bathroom overhaul (or a kitchen renovation, for that matter) raised the cost by about 44 percent. Nonetheless, 85 percent of renovators hired pros for help with their projects. Most of us need the help!

Another factor in renovation costs: home size. We sliced the data to assess project spend by the home’s square footage. Not surprisingly, owners of larger homes spend more.

How Are Remodels Funded? 

Given the costs of renovation, it may be surprising to learn that the overwhelming majority of renovators surveyed used savings or personal finances to pay for their projects. The youngest group of homeowners relied on credit cards far more than those over age 55.

How Long Will a Renovation Project Take?

When owners finally embark on a renovation, those projects do take time. And typically, the construction phase is only about one-third of the time for the total renovation process, including the planning phase.

This chart shows the average time in months it takes for popular renovation projects. Kitchens take the longest, at around five months, while closets are the shortest project, at about two and a half months.

Why Remodel Now? 

As the American economy has improved, owner motivations for renovating have begun to subtly shift. In 2015, slightly more respondents said their trigger was finally having the time, compared with those who said the trigger was finally having the money. Though clearly both factors are important, it’s a switch from 2014, as this chart shows, when more people cited finally having the finances than finally having the time as their renovation trigger.

Notably, the No. 1 reason people decided to renovate instead of buy was a desire to stay in their current home or on their current lot or land, according to the Houzz & Home survey. Forty-nine percent of survey respondents who renovated cited this as a reason. Twenty-eight percent said that renovating was more affordable than buying a different home.

Desire to stay in place increased with age: 26 percent of millennials (ages 25 to 34) wanted to stay in place, while 45 percent of Gen Xers (35 to 54) and 56 percent of baby boomers (55-plus) did. The data aligns with other noted trends: People aren’t trading upin housing, according to real estate data site Redfin. In 2001, the median amount of time a homeowner stayed in a home was four years. By last year, that had risen to a median of nine and a half years.

Of course, many Houzzers renovate due to outdated design.