What’s Holding Up Construction In Denver?

Posted on: September 9th, 2016 by Lori Smith

In 2008 when the housing market crashed, many Denver area home builders had to find a new career. It was a tough time for many people as homeowners were defaulting on loans and losing their homes. Eight years later the same market is booming, but there aren’t enough experienced builders to go around to keep up with the demand.

This article by Reuters posted on Fortune.com describes the what’s holding up construction in Denver and its outlook for the future:

A Construction Worker Shortage Weighs on a Hot U.S. Housing Market

http://fortune.com/2016/09/06/housing-construction-worker-shortage/Eight years after the housing bust drove an estimated 30% of construction workers into new fields, homebuilders across the country are struggling to find workers at all levels of experience, according to the National Association of Homebuilders. The association estimates that there are approximately 200,000 unfilled construction jobs in the U.S. – a jump of 81% in the last two years.

The ratio of construction job openings to hiring, as measured by the Department of Labor, is at its highest level since 2007.

“The labor shortage is getting worse as demand is getting stronger,” said John Courson, chief executive of the Home Builders Institute, a national nonprofit that trains workers in the construction field.

The impact is two-fold. Without enough workers, residential construction is trailing demand for homes, dampening the overall economy.

And with labor costs rising, homebuilders are building more expensive homes to maintain their margins, which means they are abandoning the starter home market. That has left entry-level homes in tight supply, shutting out may would-be buyers at a time when mortgage rates are near historic lows.

Nationwide, there are 17% fewer people working in construction than at the market peak, with some states – including Arizona, California, Georgia and Missouri – seeing declines of 20% or more, according to data from the Associated General Contractors of America.

The labor shortage is raising builders’ costs – and workers’ wages – and slowing down construction.

Read the complete article here:  A Construction Worker Shortage Weighs on a Hot U.S. Housing Market

The first couple minutes of this video is from the point of view of Dan Moyle, a real estate agent with Amerifirst Home Mortgage, about the same article as above. He mentions that people might have the construction loan to build the home they’ve always dreamed of, but there aren’t enough skilled contractors to fill the demand. It’s interesting to hear how the shortage of home builders affects the people selling the homes as well as those buying them:

This tweet is advertising the need for construction workers in the Front Range area. The hashtags say it all.  It’s great for contractors such as roofing companies in Denver because of the constant flow of work, but bad for the individuals wishing to build their dream home:


As 2016 is closing in on the end of the busiest period with home building, it will be compelling to see what 2017 brings. Will the hot housing market cool down? And will Denver be able to support the growth with skilled laborers?

Down Payment Options for Home Buyers

Posted on: September 3rd, 2016 by Lori Smith

If you are at a point in your life where you are thinking about buying a home, keep in mind the 20% you have to put down when applying for a mortgage. Depending on where you live, this might some time to save up for. But if you live along the Front Range of Colorado, it can be a significant amount.
In this article by Emilie Rusch of the Denver Post, she points out that there are options to help people trying to set aside the amount of money it takes in the Denver real estate market:

Down payment assistance is there, but does it matter in Denver’s housing market?


Image from denverpost.com

Saving for a down payment can be a challenge, so challenging, in fact, that 25 percent of first-time buyers told the National Association of Realtors last year it was the most difficult part of the entire homebuying process.

After all, as the standard wisdom goes, you’re supposed to put down 20 percent of your home’s purchase price. In a market such as Denver, where the median sale price in July was $354,000, that can easily exceed $60,000.

“There are plenty of borrowers out there with good credit quality and the desire to be homeowners,” said Cris A. White, CEO of the Colorado Housing and Finance Authority. “They generally have the cash flow, the ability to make monthly loan payments, but it’s the down payment portion that has been tougher.”

But before you throw in the towel and resign yourself to renting forever, there is help out there — to the tune of 3 to 4 percent of the purchase price — and many people may be surprised to learn they qualify.

Metro Mortgage Assistance Plus, a program established by the city of Denver but offered in 29 cities throughout the metro area, provides 4 percent down payment grants for borrowers earning up to $95,880 for one- to two-person households and $111,860 for larger households.

Read more about this article here:  Down payment assistance is there, but does it matter in Denver’s housing market?

This infographic is a little dated and unrealistic since there are very few homes available for $100,000. But it does give an idea of what type of down payment you need to be ready for depending on the category of loan. If you are going for a $300,000 loan, then you can triple all of the amounts:

Down Payment Infographic

The bad news is the cost of purchasing a home has risen so quickly in the Denver area that it is a hardship to save that much money. The good news is that there are options that can make it easier on your budget.  Especially if you are a first time home owner.

In this post by Ray Martin of CBS Money Watch provides some down payment options for home buyers.

Mortgage options for first-time homebuyers – CBS News

Still, first-time buyers can find some reasonable loan options that require lower down payments, some as little as 3 percent. Using a mortgage with a smaller down payment has advantages. You’re less apt to spend all of your liquid savings on the down payment, therefore less likely to become “house poor.” It’s especially important to go into home ownership with adequate cash reserves for emergencies and unexpected repairs.

Here are a few of the most popular low down payment mortgage options:

FHA Loans: Offered through participating lenders, these mortgages have typically been the choice for most first-time buyers. The most Mortgage and Money Signpopular FHA loan is the 203(b) loan, a government-insured loan that allows a down payment as low as 3.5 percent and is widely available from lenders across the country. You’ll need a credit score of 500 (which is very low) and a history of making on-time payments on other loans. But condo purchases have some restrictions.

Home Possible mortgage: Issued through Freddie Mac, this loan allows a down payment of 3 percent to 5 percent. Requirements include that you use the home as your primary residence (no second homes, investment property, etc.), and you cannot currently own or share ownership in another house. You’ll also be required to complete an online home ownership education program before you get approved.

Conventional 97: Issued through participating lenders, this mortgage program allows just 3 percent down, as long as you apply for a fixed-rate loan of less than $417,000. This can be used only for single-family homes. At least one of the purchasers must be a first-time buyer, and you’ll have to complete a homeownership education program.

HomeReady loan: This mortgage loan is provided through Fannie Mae and is another option that requires as little as a 3 percent down payment. Its unique feature is that it allows non-occupant borrowers to apply. So parents can apply for this mortgage for an adult child who might still be working on establishing or improving his credit.

Here’s something to keep in mind when you get a mortgage with less than 20 percent down: You’ll pay a higher interest rate (about 0.25 percent to 0.5 percent more), and the additional monthly cost of private mortgage insurance (PMI). But as long as your home is appreciating, it’s possible to eliminate PMI in a few years by refinancing the mortgage.

Read the whole article here:  Mortgage options for first-time homebuyers – CBS News

It’s hard enough to be fresh out of college with a lot of debt and still be motivated enough to save money to buy a home, but there is no better investment than real estate. Be sure to examine all of the potential options and shop around for the best interest rate. Prepare ahead and ask a lot of questions of your mortgage company so you fully understand what you are getting into.


Promising Neighborhoods in Denver to Buy a Home

Posted on: August 27th, 2016 by Lori Smith

As the housing issues in Denver continue to be in the news, there are areas that are growing because of the lack of affordable homes. Smaller cities outside of Denver are part of this growth, but certain neighborhoods within the Denver area are also benefiting. Most of these up-and-coming hot spots are already major hubs, making them easy to attract people looking for a home they can afford.

Like this article from US News.com points out, because of its location, Denver still has room to expand. Writer Katie Hearsum describes five neighborhoods that might be worth looking into if you are moving to the Front Range area:

5 Up-and-Coming Neighborhoods in Denver to Look for a Home | US News Real Estate

An influx of residents and scarcity of housing inventory is forcing people to get creative when house hunting in Denver. As a result, many Denver CO Skylineneighborhoods that once flew under buyers’ radars are gaining new attention, accommodating newcomers and those who’ve been priced out of the pricier areas. Savvy real estate investors are viewing these up-and-coming neighborhoods as golden opportunities to get in on the action without breaking the bank, and potential homebuyers should take note.

“Established neighborhoods continue to evolve, but for those who see themselves as early adopters of a cultural movement, it’s worth having a look at [up-and-coming neighborhoods],” advises Adam Moore, a real estate broker with Mile Hi Modern and LIV Sotheby’s International Realty. “Buyers shouldn’t be afraid to try something that isn’t necessarily the hot topic.”

Unlike other major metropolises such as New York City and Chicago, Denver still has a lot of room to grow within its city limits. Meanwhile, the ongoing expansion of the Regional Transportation District (RTD) bus and light rail system is sure to contribute to the development of popular residential areas, and the anticipated development of retail and commercial developments will also add value to the area’s real estate.

“Typically, planned retail will drive housing development,” says Deviree Vallejo, a real estate agent with Kentwood City Properties.

To weigh in on which neighborhoods will become the next hot spots for home buyers, we consulted with some of Denver’s top real estate agents as identified by OpenHouse Realty, an agent referral company (and a U.S. News partner). Here’s what they had to say.

“I don’t believe Sunnyside is anywhere near its peak,” says Jeff Plous, a real estate agent with ONE Realty. “If I were an investor I’d be looking at East Sunnyside because the zoning is good, it’s affordable and you can get to the Fox Street station easily.”

Sunnyside offers a mix of residential housing options that range from charming, historic bungalows and mid-century ranch homes to modern townhomes – most of which are more affordable than similar structures in nearby Berkeley and Highlands neighborhoods.

Cole. The Cole neighborhood is getting noticed because it shares a border with the River North Art District (RiNo), an area chock-full of trendy restaurants and shops, and with limited residential opportunities. To the north, outside of Cole, sits the Denver Coliseum and National Western Complex, which recently got approved for a massive overhaul to become a major events center which will likely increase traffic and visitors to the area. This neighborhood also offers proximity to downtown amenities and attractions as well as the expansive City Park, where plans for a revitalized golf course are getting underway.

“Cole is an emerging [neighborhood],” Vallejo says. “RiNo has so much commercial development that the land is so expensive, so people who want to live in that area are pushing into Cole, where the land is more affordable.”

The median price for a single-family home in Cole is around $350,000. Homebuyers will also see that there is a variety of reasonable priced row houses, attached single-family homes, in this area.

Mayfair. Another area anticipating a major revitalization is Mayfair, located within the larger neighborhood of Montclair. Mayfair will benefit from the nearby redevelopment of the former campus of the University of Colorado Health Sciences Center at 9th Avenue and Colorado Boulevard. The area will feature a number of parks, plazas, residential buildings, offices, shops, hotels and restaurants – all within walking distance of the Mayfair area. The project is expected to help significantly raise home values in the area upon completion in 2018.

Read about the other areas here:  5 Up-and-Coming Neighborhoods in Denver to Look for a Home | US News Real Estate

This video shows the highlights of another area in Denver that is coming on strong as far as promising neighborhoods in Denver to buy a home.

This tweet links to an article that maps the housing costs for Denver. It is a very helpful guide for anyone who is looking to rent a home.


Pricing Map for Denver Housing

The downtown area is definitely the highest in cost. This is one of the main areas of concern because of the lack of homes for people with service-type jobs. There is a lot of discussion about the new affordable housing that Denver is planning to build, so it will be interesting to see how long this housing boom lasts.

What’s Up with the Growth in Windsor CO ?

Posted on: August 12th, 2016 by Lori Smith

Even though the growth has created issues for Front Range cities because of a shortfall of lots and homes that are out of the average person’s price range, the city of Windsor is showing expansion in the housing arena. Windsor, a smaller city located in Northern Colorado and approximately half way in between Fort Collins and Greeley, has a record number of single family home permits being issued.

These smaller cities outside of the main Front Range Urban Corridor areas are attracting more and more people because they are not only less prone to crime, pollution, and rush-hour traffic, but also because they are still offering affordable homes that the median salary can manage. The cost of living is a big issue along the Front Range and service workers are struggling to find a place to call home.

This article from The Coloradoan explains more about what’s up with the growth in Windsor CO and what they can expect as far as continued development.

Windsor new home building outpacing Fort Collins

While Fort Collins home builders have been plagued by a lack of inventory and rising costs, Windsor is on pace to issue more single-family home Windsor CO Housingpermits than ever before.

In the first half of the year, Windsor issued 317 single-family home permits, more than Fort Collins, Loveland and Greeley. For comparison, Fort Collins issued 288 permits during the same time period.

If the trend holds, this could be the first year since 2011 that Windsor has issued more permits for new single-family homes than Fort Collins, according to the town’s July Community Development Report. Already this year, Windsor has doubled the number of single-family building permits issued for the same time period last year.

“Obviously that’s good news, and we definitely use those statistics when we’re trying to attract and retain retailers,” Windsor Director of Economic Development Stacy Johnson said. “We’re showing them growth is coming.”

Much of the new housing development in Windsor has come from the Village East and Peakview Estates subdivisions, Windsor senior planner Paul Hornbeck said. Homes listed on the Village East subdivision website had prices ranging from $274,900 to $283,875. Homes listed on Peakview Estate’s website had asking prices between $329,900 and $369,000.

Windsor’s construction boom comes as Fort Collins’ single-family building permits have sunk to a four-year low thanks to rising construction costs, lack of inventory and increasing sale prices. Windsor, however, has plenty of available land and lots ready for development, Johnson said.

As the market recovered from the Great Recession, developers snapped up platted lots that had been put on hold when the economy tanked. After they built on those lots, developers needed to bring new lots online and get them ready for construction. Johnson said the past few years in Windsor have been “building years” for developers as they go through the platting process and get new lots ready to go. That buildup of inventory has helped contribute to the spike this year, she said.

Hornbeck said it is hard to predict how many building permits the town will issue in the future, but said he is not sure the dramatic increase is a long-term pattern.

“We’re probably kind of catching up a little bit (from the recession),” he said. “I don’t think we’ll see quite this strong of permit numbers continuing for a number of years, but the market is still strong.” Windsor new home building outpacing Fort Collins

This Tweet links to an article about the Colorado Housing Connects Hotline and how they are helping to link up people in the area to affordable housing options. They have taken over 24,000 calls already this year.

Shortage of Construction Workers along the Front Range

Posted on: August 5th, 2016 by Lori Smith

If you have any desire to learn a new trade, this is your chance to do it for free.  Starting on August 3, 2016, enrollment for a construction training program at Emily Griffith Technical Collage in Denver began. The actual month long class kicks off on September 12 and is free to anyone interested with no experience necessary.

This program is due to an effort by the state of Colorado to alleviate the shortage of construction workers along the Front Range. This article in The Denver Post provides more information about the construction training program.

New construction training program launched to meet growing need – The Denver Post

http://www.denverpost.com/2016/07/20/new-construction-training-program-launched-to-meet-growing-need/Lt. Gov. Donna Lynne joined the Associated General Contractors of Colorado and other politicians and construction groups Wednesday to launch a program to help fill some of the 30,000 construction jobs that will be needed in the next seven years.

Construction Careers Now will train people just starting out in their careers and older adults changing industries, educating participants on various construction-career paths, basic math, safety and blueprint reading, along with other basics at the Emily Griffith Technical College in Denver.

“Our goal in continuing to attract top companies to the state of Colorado has to be recognized in that we could potentially have a workforce shortage,” Lynne said. “And programs like this are in fact recognizing the importance of developing a great workforce.”

The month-long night program is free for participants, who are not required to have experience or a GED. AGC president Michael Gifford said his organization as well as the Colorado Contractors Association and Hispanic Contractors of Colorado are starting the program together, covering the $500-per-student cost.

The program also includes a hiring fair with construction companies that need workers. Enrollment begins Aug. 3, and the program starts Sept. 12. Participants can sign up on BuildColorado.com.

The contractor groups and Emily Griffith received a $1.1 million grant from the state to fund outreach and recruitment. The grant is part of the 2015 state Work Act, which set aside $10 million over three years for various industry programs partnered with a two-year or technical college or apprenticeship program.

“With the rising cost of college, we’ve got to start making our careers and training more affordable for our youth and for those who may have been laid off in some other industry that need a new skill to feed their families,” said Rep. Angela Williams, who co-sponsored the bill.

In the past year, Colorado construction employment has grown by 10,500 employees, or 7.1 percent, according to AGC. But that’s not enough to keep up with the new construction demanded as Colorado population booms to 8.7 million in 2050 from 5.4 million last year.

The problem has been more stubborn in part, Gifford said, because K-12 education has phased out shop classes over the past 30 years. Now fewer high school students consider construction as a career or learn even basic skills.

New ConstructionOne of the companies picking up the flurry of construction projects is Saunders Construction. Brad Marsh, vice president of human resources for Saunders, said that the company has been fortunate to avoid the shortage problems.

The large commercial construction company currently has 515 employees, half of whom work on the job site. Marsh said new hires must have experience and are typically referred by current employees or are found through the union.

Marsh said the company also has a high retention rate, largely due to additional training offered to employees, a friendly and safe culture, and desirable benefits. He said all these factors mean they are rarely posting job openings online.

“We don’t feel the shortage, but we feel busy,” Marsh said, adding that he expects the construction business to remain steady for at least the next five years.

Marsh said Saunders has been talking with AGC about creating a curriculum partnership with Construction Careers Now, offering either time or content from their training experts.

This is not the first initiative trying to get more people involved in the construction industry. AGC and CCA started the construction job portal BuildColorado.com in 2014.

New York-based Markle Foundation and LinkedIn announced Skillful in Colorado and in Phoenix earlier this year. The program is designed to develop workers for so-called middle-skill jobs, which require more than a high school diploma but less than a four-year degree. New construction training program launched to meet growing need – The Denver Post

This video offers some insight to Emily Griffith Technical Collage in Denver and one of their entrepreneurship programs they have offered. They have dozens of options for starting a new career in a shorter amount of time than a college degree takes. You can learn bricklaying, carpentry, and many other skills that look good on a resume.

Housing Concerns In Colorado Springs

Posted on: July 31st, 2016 by Lori Smith

It seems that all across the Front Range of Colorado it is a seller’s market no matter where you look. For people wishing to buy an affordable home at around $250,000 – $300,000, there is a major shortage and tons of competition when one does come on the market. In fact, sellers are getting over their asking price because of bidding wars.

Colorado Springs, CO, home of the Olympic Training Center, Pikes Peak, and Garden of the Gods, is no different. Based on a recent report by U.S. World & News, it ranks #5 in the U.S. as “Best Places to Live in America” for factors such as affordable housing, access to well-paying jobs, a low cost of living, good schools, and quality healthcare, with nearby neighbor Denver ranking #1. This kind of status perpetuates the housing concerns in Colorado Springs.

This post by the Colorado Springs Gazette gives more information on the pros and cons of being so popular. Colorado Springs CO

Colorado Springs’ hot housing market isn’t without its problems | Colorado Springs Gazette, News

Colorado Springs’ resale housing market remains red hot, but not problem free.

The pace of buying and selling in the just-concluded first half of 2016 signals this could be a second straight record-setting year for single-family home sales in the Pikes Peak region. Many sellers of lower-priced homes put their properties on the market and field multiple offers that exceed their asking prices – sometimes within days or even hours.

But bidding wars, delays in getting appraisals, a tight supply of homes in the $300,000-and-under range and an oversupply of half-million-dollar-and-up properties are among problems that have led to head-banging frustrations for buyers, sellers and even their real estate agents.

“The hot market has caused all these side problems, these issues, and Realtors are kind of pulling their hair out, trying to keep it all together,” said Hank Poburka of The Platinum Group Realtors and former Pikes Peak Association of Realtors board chairman. First, the good news.

Slow sales, stagnant prices and record foreclosure numbers in the Colorado Springs area are a thing of the past; those conditions were products of the Great Recession and a lending climate in which too many borrowers with shaky credit histories took out interest-only and other riskier, non-traditional mortgages.

Now, the Pikes Peak region’s stronger economy, rising home values and historically low mortgage rates that have remained below 4 percent throughout 2016 for long-term loans have combined to fuel a robust housing market.

Among its strengths:

– Single-family home sales in Colorado Springs and nearby areas totaled 1,497 in May, a record high that lasted just one month until it was broken in June when 1,651 homes were sold, Pikes Peak Association of Realtors figures show.

– Home sales in the first six months of the year totaled a little more than 7,300, putting the area on pace to break last year’s annual sales record of 13,250.

– The median price of homes sold hit a record high of $262,000 in May, only to be topped by another record of $262,500 in June. Prices also have risen for 19 straight months on a year-over-year basis.

– In the second quarter of 2016, El Paso County homes spent an average of 31 days on the market before selling. In the same period last year, homes took an average of 74 days before selling – more than twice as long.

“The market is strong and I think it’s continuing to strengthen,” said Tiffany Lachnidt, a real estate agent with Re/Max Properties.

Carl and Susan Olson found out just how strong when they listed their four-bedroom, two-bathroom Briargate-area home on the city’s north side in April.

The Olsons had owned their home for a little more than 20 years when they decided to move north to be closer to Susan’s parents, east of Aurora.

Before they put their home on the market, the Olsons made some improvements – rebuilding the kitchen, installing new carpeting and repairing a deck, Carl said. The property also was professionally staged – furniture arranged, clutter removed and other touches to improve its appearance for sale purposes.

The Olsons asked $275,000, which matched the sale price of a similar, nearby home that sold earlier in the year, Carl said. The home hit the Realtors Association’s multiple listing service at 11 a.m. on a Monday. Two days and 12 to 14 showings later, the Olsons had three offers in hand by Wednesday night at their asking price or higher, Carl said.

On Thursday of that week, the deal was done; the Olsons agreed to sell their home for $282,000 – $7,000 more than they asked. The extra money went, in part, to cover the Olsons’ roughly $3,400 in closing costs.

“Everything was completely done – offer, counter offer, counter offer, counter offer, accepting – by 11 o’clock Thursday morning,” Carl said. “We went from being on the market to completely locked in, contracts, escrow money, everything in 72 hours.

“The words that I used at the time, were ‘this is too good to be true,'” Carl said. “It’s been my experience in life in general that, if it’s that way, there’s got to be a catch. But there wasn’t.”

Colorado Springs Garden of the GodsWhile the Olsons’ sale was quick and relatively painless, buyers Brian and Samantha Wildes saw the market from the other side.

Set to retire in March 2018 after a 20-year Army career, and seeking to move from a townhouse at Schriever Air Force Base, Brian and his wife began looking for a home early this year. The couple was in a bit of a time crunch; Brian said they wanted to find something before his retirement and while his Army income could be used to help him qualify for a VA mortgage.

They wanted a house in the $200,000 to $260,000 price range, with three bedrooms for them and their two children, a large enough kitchen for Samantha who likes to cook and a basement where Brian could have a man cave and Samantha a craft room.

It wasn’t easy. The Wildeses looked at more than 20 houses, Brian said, and encountered disappointments along the way.

They went under contract on one home, only to walk away after an inspection revealed it was infested with mold, Brian said.

A second house came on the market on a Monday, and the Wildeses told their agent they wanted to make an offer just one hour after walking through it. Too late; it already had gone under contract with another buyer.

“There were houses we wanted to go and see, and before we could make an appointment to go and have a showing, the house was off the market,” Brian said. “Houses would come on the market, and within 48 hours, they would be gone. It was to the point where we were feeling like we had to go and see the home and within 24 hours we had to make a decision whether to buy it.

“It was a very stressful time for us because of that window of having to buy the house before March of next year,” he added. “We definitely didn’t want to settle. We wanted to find something that we were excited about, that we wanted to live in.”

Finally, they did.

They were preparing to write an offer on a third property when the second house they liked came back on the market. The real estate agent for that home warned the Wildeses’ agent the couple probably would have to compete with at least one other buyer.

The Wildeses decided to make an offer immediately and agreed up front to pay the sellers’ closing costs as well as the full $249,000 asking price, Brian said.

It worked. On May 11, the Wildeses closed on a three-bedroom, 2½-bathroom home in Stetson Hills on the Springs’ northeast side. The house, with new paint and other upgrades, was in great condition, Brian said.

“We are so happy being in the house,” he said. “We absolutely love it.”

But happy endings belie the problems of today’s market.

The supply of homes listed for sale totaled nearly 2,650 in June, the highest since October. Yet, June’s listings were almost 17 percent below the same month a year earlier – indicative of a tight supply that’s plagued the market since the start of 2015.

As a result of a tight inventory, competition – especially for buyers seeking homes at $300,000 or less – is especially cutthroat.

Of nearly 1,600 homes that sold in June in the Springs and surrounding areas, six out of every 10 were priced at $299,999 and below, according to Realtors Association figures.

Bidding wars triggered by the tight supply have left some buyers feeling like they’re paying more than they want, Poburka said. Buyers looking in lower-price ranges often need to bid at least 5 percent over the asking price, he said.

And there are other market problems:

– Even after finding the house in their price range, buyers might realize it’s not necessarily in the best condition for the asking price, Poburka said. “There’s a lot frustration on the buyer,” he said. “They like the house, but if it’s the only one available, then they’re kind of getting stuck with a house that may not have been their highest choice.”

– While some buyers might settle for a house in less-than-perfect shape, others believe that paying top dollar means they should get a house in topColorado Springs Olympic Training Centercondition, Lachnidt said. As a result, some buyers “nitpick everything on the inspection. They want every screen repaired. They want everything done so the house is perfect,” she said. If a seller won’t make every repair, but has another buyer in tow, then the deal bogs down, a stalemate ensues and the seller goes back to square one, Lachnidt said.

– The pace of sales has been so furious that buyers and sellers often must wait two to three weeks – and possibly longer – for the property to be appraised, Poburka said. An appraisal determines the value of the home and how big of a mortgage a buyer can obtain. At the same time, home prices have increased so quickly that appraisals aren’t keeping up and appraised values are lower than they should be – potentially delaying deals, Poburka said.

– Once they decide to move up or downsize, sellers can’t always find a home they want. So, they must be sure that homes are out there for them to buy before they put their home on the market, Poburka said. If sellers decide to rent instead of purchase, rental homes are tough to find, while rents for homes and apartments are rising sharply, he said. Many landlords also require a minimum one-year lease for a home – and sometimes a two- to three-year commitment, Poburka said.

– Despite the demand for lower-priced homes, the higher-end market – $500,000 and up – remains slow, Lachnidt said. Sellers of those properties are increasingly frustrated because they keep reading the market is so strong, she said. “Not every segment of the market is flying off the shelf,” Lachnidt said. “Over certain price points, we jump from having six months of inventory to 38 months of inventory…We talk sometimes to sellers in those price points that are incredibly frustrated because they can’t understand why they’re not flying off the market. It’s because nobody’s talking about it.”

– Owners of more affordable homes sometimes can’t understand why their properties aren’t selling, Lachnidt said. In spite of the demand for lower-priced homes, properties still must be priced to reflect the market; a home that’s too high by just 3 percent to 4 percent won’t get the offers it should, she said. Homes also must be in good condition, and marketing them for online viewing and in-home walk-throughs is key, Lachnidt said. A dirty home or the smell of smoke will turn off buyers. “Sellers and agents can’t get lazy,” she said. “You still have to have staging, you still have to be priced right and you still have to have good marketing. Otherwise, you’re still not going to sell in any market.”

So, what’s ahead for the rest of 2016? Colorado Springs’ hot housing market isn’t without its problems | Colorado Springs Gazette, News

This tweet provides another ranking factor for Colorado Springs. Lots of good things happening in our great state but with the good, there is always some bad.

Rising Building Costs Fort Collins

Posted on: July 22nd, 2016 by Lori Smith

The growth along the Front Range of Colorado is also causing rising building costs. Because of this, the number of building permits dropped significantly. The reason is that most people can’t afford the prices in the bigger urban areas, so they are building homes in smaller nearby towns that haven’t been affected as much by the housing bubble. 

This post by the Coloradoan gives more details on the reason Wellington CO is growing so quickly.

Fort Collins home building permits sink to 4-year low

http://www.coloradoan.com/story/money/business/2016/07/07/fort-collins-home-building-permits-sink-4-year-low/86804668/Building permits for single-family homes hit a four-year low for the first half of 2016, the result of increasing land and water costs.(Photo: Valerie Mosley/Coloradoan library)Buy Photo

The number of single-family home permits issued in Fort Collins hit a four-year low at the end of June, the result of disappearing inventory, rising construction costs and escalating sales prices.

Through the first half of the year, the Fort Collins building department issued 288 single-family permits, the fewest since 2012, when home starts began rebounding from the Great Recession.

Fort Collins has run out of the developable lots that began to stack up like cord wood and sold at below-market prices during the recession. Now, “next-generation lots are more expensive,” said Larry Kendall, co-founder of The Group Real Estate in Fort Collins.

Combined with the rising cost of water, new home costs hit $100,000 before builders start pour the foundation, Kendall said. “The net effect is new construction in Fort Collins in the $400,000 range on up.”

That lack of affordability continues to send many potential home buyers to Wellington, where new home construction is booming. “It’s purely a matter of affordability,” Kendall said. As Fort Collins becomes more pricey, more buyers look out of town, depressing demand for new construction within city limits. It’s the same pattern Boulder County experienced.

“We’re 10 years from that, but it’s the same cycle. … We’re just in the early stages now,” he said.

The competition for homes priced at less than $350,000 is well documented, with buyers fighting each other to put in the best offer and homes selling for more than list price before they even hit the market. Kendall calls it a “mosh pit” market. “You jump into the mosh pit with lots of pushing and shoving and hope to come out with a house.”

In the past 29 months, from December 2013 until the end of May, the average Fort Collins home price increased from $279,111 to $373,626, a nearly $100,000 increase, according to statistics from The Group. Loveland experienced the same price escalation from an average $258,347 to $357,492.

“It’s stunning,” Kendall said. “The result will be a slowdown in the number of homes sold because of lack of inventory and lack of affordability.”

In terms of inventory, there is virtually nothing under $400,000 within city limits, he said. Fort Collins has less than a two-month supply of homes for sale, which translates into a sellers’ market. A six-months supply is considered a balanced market.

The inventory of higher-priced homes listed for more than $700,000 is 13.3 months, a buyers’ market. Kendall said it’s the best “move-up market” he’s seen in his 43 years in real estate. “You can sell your $400,000 house in a few days and go buy a $700,000 house and be in a buyer’s market and close it at less than a 4 percent interest rate,” he said.

All that means is Fort Collins is likely to see a prolonged slowdown in residential building while Wellington booms.

“The attraction for Wellington,” Kendall said, “is it’s fairly close and … it’s in Poudre School District. A lot of buyers up there are young families or couples that plan to have families or have kids in PSD and want to stay in the school district. They don’t even consider outlying areas.” Fort Collins home building permits sink to 4-year low

 Maybe the home featured in this tweet could be an alternative to buying a home in Fort Collins? This home on wheels looks like a great choice for someone who doesn’t need much space. 

Development Fees for Denver Building Contractors

Posted on: July 17th, 2016 by Lori Smith

Denver has been in a housing bubble for quite some time now. The cost of renting and owning a home have increased dramatically. This is causing a shortage of housing for people who can’t afford the high costs.  So, Denver is planning to build 6,000 new lower income units to help with the problem.

But this created another problem. The city needs to raise around $150 million over 10 years to help fund the program. Denver Mayor Michael Hancock recently announced a proposal to raise the money through a property tax increase and by charging development fees for Denver building contractors. As you can imagine, there is some opposition by the developers and this article from Construction Dive explains more. 

Denver builders battle city over proposed affordable housing development fees | Construction Dive

http://www.constructiondive.com/news/denver-builders-battle-city-over-proposed-affordable-housing-development-fe/422676/Affordable housing advocates are in favor of the plan — estimated to cost an average of $1,500 per new single-family home and hundreds of thousands of dollars for big residential or commercial projects — and said the Denver fees would be less than those imposed in other cities.

Some builders in favor of the plan told the Denver City Council’s Safety and Well-being Committee that charging developers a fee is a fair move because they benefit so much from the finished property, while some opponents suggested that 100% of the proposed affordable housing program be funded through the property tax increase.

Mandates that require developers to include a certain number of below-market units in each project have been a popular way of boosting a city’s affordable housing stock. San Francisco, which is facing skyrocketing rents and a housing shortage on an ever-increasing scale, recently more than doubled the number of affordable units builders are obligated to include in their developments of 25 units or more, although they can also have the option to pay a fee instead. California homebuilders sued the city of San Jose, CA, over a similar mandate in 2010 but lost that fight when the U.S. Supreme Court declined to review the California Supreme Court’s decision to uphold the requirement.

Other cities like Portland, OR, have adopted a plan similar to the one proposed in Denver and charge a flat fee, which is then funneled into an affordable housing building fund. Portland recently enacted a 1% construction excise tax on most new construction projects of more than $100,000. That tax is expected to raise $8 million each year and was made possible by the lifting of Oregon’s ban on affordable housing mandates earlier this year. Denver builders battle city over proposed affordable housing development fees | Construction Dive

 The Denver Post has a more positive take on the proposal to raise the $150 million.  You can definitely see both sides of the argument, but at the end of the day, someone has to pay for the plan. The homeowners have already paid a premium price, whereas the developers are the ones making most of the profit.  It will be interesting to see how the issue is resolved. 

Denver’s affordable housing plan is a good fit

https://www.denverpost.com/2016/07/15/denvers-affordable-housing-plan-is-a-good-fit/An affordable housing plan announced earlier this week by Denver Mayor Michael Hancock, while it will raise costs for most everyone, seems a good fit for the progressive-minded city.

The plan seeks to raise more than $150 million over 10 years through a mix of developer fees and increased property taxes that average $1 a month for owners of a $300,000 home. In describing the plan, Hancock said the desire to create 6,000 income-restricted rentals and for-sale homes hit “at the heart and future vitality of our city.”

It is a big-hearted goal, made possible by Denver voters who agreed to free the city from property tax restrictions under the state Taxpayer’s Bill of Rights in 2012, a move we supported.

The Denver Post’s Jon Murray has reported that other cities with expensive housing markets — including Boston, San Francisco and Seattle — have tried to create more affordable options with state and local cash.

Of course there are trade-offs. Fees charged to developers — and not all of them are happy about this plan — are expected to raise the cost of a new 2,500-square-foot house by $1,500. We doubt that increase will stick to new construction, however. The affordable housing scheme no doubt will raise the floor price for all homes going forward. And developers of commercial property will almost certainly pass along their costs, too.

But we understand the spirit of the ask. Hancock and City Council members Albus Brooks and Robin Kniech, architects of the plan, say the developer fees are low compared to those in other cities. They point to a study that claims the fees won’t risk the profit potential of new developments. They say providing housing for the low-wage earners who do the city’s hardest work is only fair, and that the burden for creating that housing rests with us all.

The plan’s structure divides the costs roughly 50-50 between developer fees and residential property taxes. And developers have the option to avoid the impact fees by building affordable housing units.

The proposed fees would be assessed by square foot. For example, for new single-family and duplexes, the cost for developers would be 60 cents a square foot. For multifamily buildings, $1.50. For hotel, office and retail, $1.70. Industrial and other uses would face 40 cents per square foot.

Some critics of the city’s plan wonder if it is ambitious enough, given the current rate of Denver’s growth. But perhaps starting modestly will keep the focus on accountability.

In releasing details of the plan, Hancock said, “We can’t afford not to do this. This risk is too high, and the status quo isn’t an option anymore. This is a fair and balanced approach. We tried to make it as simple as possible. It’s equitable, and it’s a communitywide approach so that everybody can participate in addressing this very critical issue in our city.”

We hope it helps. Denver’s affordable housing plan is a good fit

This is a good article about the announcement by the Denver Mayor Michael Hancock, giving additional details on the proposal. He states that it is a huge priority for the city to find a way to make housing more affordable for people in the services industry. 

High Housing Costs in Denver

Posted on: July 3rd, 2016 by Lori Smith

If you live in the Denver Metro Area, you know that the cost of housing has gone up significantly. The median home value has gone up 10.4% in the last year alone and is predicting to continue to rise. Because of this, Denver city leaders have started construction on a complex for the Downtown Area that is supposed to be more economical.

The Front Range as a whole is experiencing a boom in the economy, but this is making housing scarce and because of the demand, it’s quite expensive. This article gives a more in depth view of what the new housing facility will offer.

Construction starts on new affordable housing complex in Denver | FOX31 Denver

http://kdvr.com/2016/06/30/construction-starts-on-new-affordable-housing-complex-in-denver/DENVER — City leaders broke ground on a new affordable housing complex on Thursday, but the project will do little to stop the sharp rise in rental prices across the city, especially downtown.

Developers have been working for years to keep pace with Denver’s population boom and increased demand for city living, but as new developments grow there still don’t seem to be many signs that prices are going to shrink.

A study by DenverInfill.com found that once current construction is complete, there will be nearly 13,752 new units within a 1.5 mile radius of downtown Denver since 2010.

But many of those new units are catering to a high-end clientele and those who can afford some pretty high prices for Denver.

Prices were checked on four recently completed rental complexes in neighborhoods surrounding downtown.

*Joule (Golden Triangle) Studio: 500 square feet starts at $1,600 One bed/one bath: 800 square feet starts at $2,200

*One City Block (North Capitol Hill) Studio: 500 square feet starts at $1,500 One bed/one bath: 700 square feet starts at $1,700

*The Douglas (Ballpark Neighborhood) Studio: 500 square feet starts at $1,400 One bed/one bath: 800 square feet starts at $1,900

*The Platform at Union Station (Lower Downtown) Studio: 500 square feet starts at $1,600 One bed/one bath: 800 square feet starts at $2,600

“I worry that we’re going to see concentrated poverty and areas of concentrated wealth, so that the segregation of the city just grows greater,” said John Hayden, who has worked to promote sustainable growth in the city for more than 20 years.

“In order for downtown to be a vibrant place to live, you need families and you need the elderly and you need students and those are groups of people who often can’t afford to pay $1,400 for a studio apartment.”

Hayden said he believes the rent prices will begin to level off as the more new projects are completed, and he said the continued urban development is a part of the solution, not the problem.

“If we just continue to sprawl out into the Plains, then we’re building a city that, ultimately, isn’t sustainable,” Hayden said.

Hayden said this is likely one of the busiest construction seasons in decades and there is some evidence to support that.

DenverInfill recently counted 23 tower cranes working on projects across the city, which is more than double the count in 2013.

Here’s a look at how those cranes and other planned projects will be transforming the Denver skyline.

Hayden said he’d like to see the city continue to add affordable housing all over the city, including downtown, and he hopes the cranes remain on the horizon for years to come.

“It really is those cranes and all the construction that will help bring those prices to a level that people can afford,” Hayden said. Construction starts on new affordable housing complex in Denver | FOX31 Denver

This tweet puts an exclamation point on the effort to attract people to Denver.

In this report on Channel 7 News, a Zillow analyst feels that even though Denver is in the top 3 in the country as a sellers market, the housing bubble is trending back to normal. Prices are still going up, but not as quickly as last year. In Denver, you can expect to pay around 20% of your income for a mortgage, whereas in San Francisco you pay up to 40%. Yikes!


Growth in Downtown Denver

Posted on: June 10th, 2016 by Lori Smith

The Downtown Denver Skyline is continually growing with construction cranes as a perpetual part of the view from many of the downtown buildings.  There are many reasons for the growth, as the front range of Colorado is many times high on the list of best places to live in the U.S. With an average of 300 days of sunshine per year and the Rocky Mountains as the backdrop, you can’t blame companies for wanting to make the Denver area their home.

In an article by the Colorado Real Estate Journal, there is a lot of funding to help create this boom via the Downtown Denver Business Improvement District.



The Downtown Denver Partnership issued its 2016 State of Downtown Denver report. The annual report, funded in part by the Downtown Denver Business Improvement District, details increasing investment, strong office market fundamentals, a growing and highly-educated workforce and residential population in downtown Denver.

“Our center city’s strong economy and dynamic energy creates a place where people want to live and work, and as a result, it’s a place where companies want to locate,” said Tami Door, president and CEO of the Downtown Denver Partnership. “Downtown Denver is a model for what a great city can be as a result of our collective strategic, place-based economic development strategy and the long-term vision and commitment of public and private-sector leaders.”

The report noted:

Development and Investment Developers are responding to increased demand propelled by a strong population and job growth, as well as key public-sector investments. $2.5 billion of investment is under construction or planned for downtown Denver, on top of more than $634 million of investment in 2015 that included 15 projects to create an additional 511 hotel rooms, 1,901 residential units and 333,000 square feet of office space.

Office Market and Employers Downtown Denver is an ideal place to start or grow a business. In the past 24 months, 24 companies have relocated or expanded, and office market fundamentals remain strong with a 9.5 percent direct vacancy rate and $33.14 per square foot direct average lease rate. As of the beginning of 2016, an additional 2.8 million sf of office space was planned or under construction. Billions of investment under construction, planned in downtown Denver – Colorado Real Estate Journal

Another part of Denver that is expanding is the Light Rail Line as reported in Clean Technica, helping the southeast suburbs with more options for transportation. This will hopefully help relieve some of the heavy traffic in the area.


Rail map without Lone Tree extension.

The new Southeast Light Rail Line extension will see service extended from the current Lincoln Station terminus down to Lone Tree. The extension into Denver’s southeast suburbs will expand the line from its current length of 19 miles up to a 21.3 mile length.

As part of the light-rail line’s expansion, 3 new stations will be built in suburban Douglas County, and a 1,300-parking-space park-and-ride facility will be constructed as well.

The Denver Post provides more information:

In April, the US Department of Transportation awarded a $92 million grant to RTD (Regional Transportation District), which represents about 41% of the $223.6 million total project cost.

The addition will run along the west side of I-25 from the Lincoln Station and then cross over to the east side of the interstate and end at RidgeGate Parkway in Douglas County. The extension will include an end-of-the line station at RidgeGate with parking. Two neighborhood stations will be added: one adjacent to the Sky Ridge Medical Center, near I-25 and Sky Ridge Avenue, and the other at the planned Lone Tree City Center east of I-25 at Lincoln Avenue.

Recent years have seen Denver’s light-rail system expanded greatly, and further additions are currently in the works as well — with the intent being to eventually serve most heavily traveled transport corridors in the city’s suburbs.

Image by RTD Construction Has Begun On Denver’s Latest Light-Rail Line Extension | CleanTechnica