Denver Condos and Lofts Bargains

January 20, 2010 by · Leave a Comment
Filed under: Colorado 

Will the price slashing continue at the downtown luxury buildings?

John Stegner – Contributing editor, All Denver Real Estate

2020lawrenceIn the past decade downtown Denver’s skyline has seen a dramatic change with the rise of many luxury loft and condo buildings.   The Denver urban dweller now has more options than ever if they want to live in an amenity rich building.  Purchase a loft or condo and enjoy the roof top pool, state of the art work out facility, private movie theater, wine room, business center, lighting quick internet, 24 hour concierge, and the list just goes on.  When the Glass House and the Beauvallon were built they were unique with respect to these types of amenities, but more recent projects like the Pinnacle, One Lincoln Park, Spire, Ritz Carlton and Four Seasons have upped the ante.  Now you can own a loft or condo and enjoy fully luxury hotel amenities by ordering room service or enjoying a nightly turn down that leaves you a little chocolate on your pillow to enjoy before calling it a day.  However, as the options have increased, so have inventory levels, creating pricing pressure, especially in the higher end units.  Now the bargain hunting for these luxury lofts and condos is in full swing.  The question becomes is now the time to buy or will prices drop further as the new buildings like the Spire and Four Seasons come online?

First, some examples of the types of bargains we are currently seeing and why.  When the Spire first hit the scene, there was a feeding frenzy of activity and speculation about where pricing on this theater district property would head.  Sales were very brisk at first, but then special incentive started rolling out to maintain the sales momentum.  Recently a $35,000 incentive was offered to buyers that they can use to lower the purchase price or to buy appliance upgrades, parking or extra storage (source: Denver Business Journal – Denver’s Spire skyscraper finished early and under budget).  This was over a 10% price drop for many of the lofts.  At the Beauvallon, financing became almost impossible due to litigation surrounding construction defects.  The lack of available financing led to many foreclosures and short sales that were snapped up by cash buyers for as little as 50% of the original sales prices.  Now the litigation has been settled and at the price tag of $17 million with financing available again the values rapidly are on the climb (source: Denver Post – Swanky Denver condos getting new skin).  Inventory levels at the Glass House soared to new levels this year and some units sold for over $100K below their last sales price.  New pricing sheets came out at One Lincoln Park and the Pinnacle for the unsold builder inventory and the higher end units saw price reductions well in excess of $100K as well.   Across the board, supply is out of balance for units above $500K and that is where the real bargains are.  A balanced market has 6 months of supply and currently some estimates put inventory levels for the higher end units well above 20 months.  In the lower end of the luxury market (under $300K) inventory levels are not as out of balance, but new FHA lending guideline could limit financing (source: Denver Post – It’s and uneasy wait on new condo-loan rules) and impact sales volume.

Understanding the current situation, the question becomes, is now the time to buy or will better opportunities be on the horizon?  To answer that question, you have to remember what city we are talking about.  Denver is “a city that ranks high on most of the lists…It’s a new city, a growing city, a younger city on what most people would perceive as the doorstep of God’s country – the Rocky Mountains.” (source: 9news – Pew Research Center Survey says Denver is most popular place to live) Denver’s population continues to increase and city center living is more and more popular among young environmentally conscious professionals wanting to avoid the gas guzzling commute.  Denver has a downtown venue for every major professional sport.  The cultural scene is thriving and a just approved $14 million dollar makeover of the theater district will benefit buildings like the Four Seasons and Spire.  The light rail system continues to grow and funding is in place for an extension from downtown’s Union Station to DIA.  The list goes on as Denver is thriving.  These positive local factors are very important when you realize that there will not be any new inventory created in the Denver loft and condo market for years to come.  Currently, there is no talk about any new projects in large part due to the instability with the national commercial lending banks.  It is unlikely that Denver’s skyline will see any additions for the next 5+ years and thus, current inventory will be absorbed and prices will climb.  The situation could be significantly different by the end of 2010, so find a good Realtor who knows downtown Denver and start shopping to find not only a real bargain, but a property that will be a dream to call home.  You can get started by reviewing the most comprehensive inventory of Denver’s loft and condo buildings at www.denverloftsandcondosforsale.com.  This site provides an overview of what each of Denver’s luxury hi-rise buildings has to offer as far as current pricing, location, amenities and floor plans.

Finally, remember that now is a special time in history to buy any real estate in Denver.  First time home buyers and step up buyer’s alike can qualify for the homebuyer tax credit if they contract prior to the end of April, 2010.  Interest rates are currently at a truly historic low.  Further, savvy investors are moving their money into real estate as a vehicle to take advantage of the potential that the national economy may be heading towards an inflationary period.  The final word from this author is that the window of opportunity for bargain hunting remains wide open at the moment, but it may begin rapidly closing over the course of the next 12 months.

Oakland Real Estate Update

January 13, 2010 by · Leave a Comment
Filed under: California 
City and County of San Francisco
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Real estate experts are optimistic that the recent improvements in the Oakland real estate market provides signs that the Bay Area real estate market is recovering from the struggles it has faced since 2007, prior to the economic recession of 2008, which only worsened the real estate problems.  Over the past several months, the Bay Area has posted gains in both home sales and median prices, and the declines in home values in many markets are stabilizing.  Although foreclosure rates are still high, real estate experts believe that the rate will decline and the smaller inventory of foreclosed properties will result in an increase in the Bay Area median sales price.

According to DQNews.com, the Oakland real estate, as well as the entire Bay Area in California, has shown major improvements over the past few months, with sales and median price levels topping the previous year’s levels, despite a slight dip experienced in October.  In November, the median sales price for new and resale houses and condos in the Bay Area was $387,000, which was a 10.6 percent increase from $350,000 in November of 2008.  Before October, the median sales prices hadn’t risen on a year-over-year basis since November of 2007, but the current median sales price is still41.8 percent below the peak of $665,000 reached in the summer of 2007.  In November, the Bay Area posted a total of 6,878 new and resale home and condo sales, a 19.5 percent increase from the of the same month during the previous year.  Real estate experts believe that the large inventory of “bargain” priced homes has been a major incentive for prospective buyers.

The San Francisco Chronicle has also noted the promising signs of the Oakland real estate market with the slowing decline in property values in the Bay Area real estate markets.  According to the Chronicle, the Bay Area suffered from a $38.1 billion drop in property value in the first eleven months of 2009, however, that’s small in comparison to the $233.1 billion decline seen in 2008.  Real estate experts are optimistic that the general affordability of the Bay Area real estate and the federal tax credit will play a major role in improving the real estate market in the coming months.

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Columbus Real Estate

January 4, 2010 by · Leave a Comment
Filed under: Ohio 
ole towne east columbus ohio
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The state’s capital, Columbus, Ohio, has seen effects on its housing market similar to those in other Midwestern cities. Though the market for real estate in Columbus was not hit as hard as areas on the coast, particularly in the West or the Gulf, residents have seen their home values decline, and many have been forced into foreclosure by the tough economic times. But lately the market shows signs for optimism.

According to the Columbus Dispatch, home sales in October were up by 25.6% from the same period in the previous year, with 2.021 sales, the highest number since October 2006, when the market was in full boom. Most of this increased activity in the Columbus real estate market can be attributed to buyers looking to take advantage of the government stimulus program offering tax rebates of up to $8,000 for qualified first-time home buyers, which has since been extended to a broader swatch of buyers.

The supply of homes for sale in Columbus has also fallen, down 30% from last year as the inventory is snatched up by buyers looking for a bargain. The market in late November stood with a 6.9-month supply of inventory, considered a balanced level, compared with 9.8 months in 2008.  and

Prices, however, have yet to recover. The average sales price was $160,000, down from nearly $164,000 in 2008, a decrease of 2.3%. Year to date, the average sales price is down 2.6% from 2008’s figures, at $164,268 from $172,063. The average price remained virtually unchanged from September, however, showing the market is at least stabilizing in price.

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