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.

Colorado Springs real estate update

October 21, 2009 by · Leave a Comment
Filed under: Colorado, Home Searches 

colorado-springs-page-memorial-park-balloon-classic-fullThings are looking up for people interested in purchasing Colorado Springs real estate, but the bustling city is not out of the dark yet.  The traditional summer season, sometimes known as the “homebuying season” is predicted to extend into the fall, says Prashant Gopal in a September 11, 2009, article in BusinessWeek.  In August, 27% of listing prices were cut in a similar fashion to several other cities like Kansas City, Atlanta, Indianapolis, Memphis, and Milwaukee.  From his point of view, Gopal sees the sales season extending into the fall as prices are more aligned with consumer demands and as people rush to meet the November 30 deadline for U.S. federal government tax benefits.

According to Rich Laden’s September 11, 2009, article in the local newspaper, The Gazette, the number of Colorado Springs homes for sale faced a slump similar to that of the rest of the nation, caused by “too many mortgages sold to buyers with poor credit histories and who fell behind in their payments.  Fred Crowley, an economist at the University of Colorado believes that the housing slump bottomed out in the earlier portion of the year and will experience a very slow and long re-growth process.  Some improvement has been noticed lately.  From June to August, single-family home building permit applications have risen, home sales increased, foreclosures are steady, and significant improvement in valuation has been noticed.

Following the release of the third annual Pikes Peak Quality of Life Indicators report on September 15, 2009, Christina Salvo’s article as part of the Colorado Springs Independent provided a great status report on real estate in Colorado Springs.  The report stated that “the city of Colorado Springs is an affordable place to live, as a large result of a slowing economy.”  Because of the worldwide recession and its lingering effects that will last for several years in the United States, the article hints that people who are just scraping by in other cities may considering finding a home in Colorado Springs to take advantage of the affordable cost of living in the area.

Boulder real estate update

October 7, 2009 by · Leave a Comment
Filed under: Colorado, Home Searches 

cu_boulderThere are mixed-reviews over the status of Boulder real estate where there is no certainty as to the current status and future of the market and economy.  As most analysts believe the United States has seen the worst of the economic crisis, many people are leaning towards the belief that Boulder will begin to see marginal increases in its local real estate markets.  Boulder, alongside a number of other Coloradoan cities was significantly affected by the global recession that led to a number of foreclosures, financing problems, a rise in unemployment, and general panic in the world economy.

In the Boulder County Business Report, David Clucas reported on September 18, 2009 that the number of Boulder homes for sale rose as a result of businesses shuttering operations or partially shifting operations away from plants and factories in Boulder.  Fresh Produce Sportswear, Inc., a retail clothing company, shifted its productions to California and took as many employees as they could with them.  These listings have been added to several other houses and apartments that have already flooded the market.  Two 390-unit condominiums have been emptied and are up for sale while another company is planning on constructing a large corporate campus that will include 216 condominium units and 26 townhouses.

As with Denver’s industrial property sector, real estate in Boulder dedicated to the city’s extensive industrial businesses has seen remarkable improvement.  While not a complete return to pre-recession status, most businessmen and realtors are quite pleased with the city’s growth of what could be considered one of its most valuable economic drivers.  In Paula Moore’s August 28, 2009 article in the Denver Business Journal, there have been a “flurry of small industrial sales recently.”  According to a local broker, a property sale is “a win for everyone because companies can grow and add back jobs while the previous owner no longer has the liability of the real estate.”  One of the most notable transactions noted by Moore was the $2.08 million purchase of a 15,000-square-foot office/industrial building by CBI 4900 Nautilus LLC and the $3 million investment of Aurora Steel Properties LLC into a warehouse.

Denver real estate update

September 29, 2009 by · Leave a Comment
Filed under: Colorado, Home Searches 

denver1In the heart of Colorado and as the life and blood of the state and its surrounding areas, Denver usually is the least affected when it comes to economic turmoil.  However, the nationwide economic recession has hit the city hard and Denver real estate has been left in shambles with hopes of a speedy recovery. As the economic downturn begins to level out and people begin regaining their spending power, most analysts believe that house purchases will begin to rise and the rate of foreclosures will return to pre-recession levels.

Aldo Svaldi and Jason Belvins’ September 16, 2009, article in the Denver Post claimed that the recession’s end would not calm the troubled waters.  According to the article, although “Federal Reserve Chairman Ben Bernanke said that the U.S. recession is very likely over,” many people aren’t so sure.  Denver was once a leader over several other similarly-sized cities in terms of income and employment growth but has since “slipped to 34th out of the 100 largest cities in terms of its economic performance.”  Michael Orlando, an economics and expert in Denver homes for sale, agreed with Bernanke’s assessment and believes that the housing crisis has “firmly bottomed out.”  Orlando cautioned, however, that while the economy might slowly be picking up, it won’t return to pre-recession levels.

While residential real estate in Denver might be beginning to mend, the commercial property side may not be doing so well, reported the Associated Press in an article published September 11, 2009 in the New York Times.  The article mentions a brand-new eighteen-story office complex that is almost completed and that upon opening will not have a single square foot of its 400,000 square feet occupied by a tenant.  This is just the least of Denver’s problems.  With businesses slashing their work force and scaling down operations, the article claims that the demand for office space will be almost zero as downsizing forces companies to reevaluate their real estate needs.  One of the most troubling facts is that according to Grubb & Ellis, “sales of office buildings are off 80 percent from where they were just three years ago.”

Colorado real estate update

September 22, 2009 by · Leave a Comment
Filed under: Colorado, Home Searches 

coloradoThe Colorado real estate has seen increasing market pressures and a declining real estate market as a result of the nationwide recession.  The fall out of the American economy has led to high foreclosure rates, dropping home sales, and an extremely unfortunate time for Colorado home sellers and potential property buyers alike.  The collapse of the sub prime mortgage crisis as well as increased business layoffs and a bursting local real estate economy have added to the already deteriorating real estate industry.  While many might predict only negative movement for the foreseeable future, there are some experts who believe things may only get better.

A September 12, 2009 article written by Sarah Mausolf of the Vail Daily claimed that not all Colorado homes for sale were part of the generalized state decline in real estate sales.  While several months ago, houses that were once listed at $3,000,000 were selling for just over $2.3 million, there appears to be a much more motivated market that is growing in Vail and the surrounding areas as a slew of residential properties have caught the interest of people looking for second homes and vacation properties in the local vicinity.  Scott Bandoni, a real estate broker with Prudential Colorado Properties in Beaver Creek, is quotes as saying “Consumer confidence is up because our economy is not getting worse.”  The article also claims that first-time home-buyers and locals are interested in homes under $500,000 while “the upcoming ski season has been driving second home-owners to buy luxury homes.”  These fancy estates sometimes sell for millions of dollars.

A North Colorado Business Report article printed on September 16, 2009, quoted that real estate in Colorado will likely face increasingly difficult conditions going into 2010.  According to research and surveys completed by the newspaper, about thirty-nine percent of analysts felt “the overall demand for commercial real estate will be worse next year,” while thirty-three percent thought that “the real estate market will remain the same.”  The article also noticed a decrease in the optimism of potential home buyers finding suitable loans and financing to commit to such a big purchase.