We Just Took Delivery of the F-150 Lightning Electric Pickup

Regular readers know me as a committed Tesla fan, currently owning both a 2015 Model S and a 2017 Model X. But I was drawn to make a reservation for the F-150 Lightning as soon as it was announced, and last week a real estate client and I took delivery as co-buyers of a carbonite gray Lightning Lariat model.

My reservation number was still several months out, but the sales manager was able to secure this vehicle from an inventory vehicle shipped to him by Ford.  We didn’t get to choose any finishes, including color or an extended range battery, but we liked it enough that we bought it.

Initially, the Lightning was promoted with a base price under $40,000, which understandably attracted hundreds of thousands of reservations. But that was a mirage, much like the $35,000 base price for the Tesla Model 3 when it was introduced.

Today, the base price for the Lightning is $51,974, and our Lariat model came with a $74,474 price tag, plus a $5,000 dealer mark-up, which we had to accept. The base model doesn’t have two driver assistance features I’m used to on my Teslas and which I can’t live without adaptive cruise control and lane-keeping.

So, how do I like our Lightning Lariat? After putting a couple hundred miles on it, I can say that I love it. What surprised me most of all was that the ride at highway speed and on rough pavement was better and quieter than in either of my Teslas.

I love that the Lightning offers a “one-pedal” driving mode, in which you not only have strong regenerative braking, but it brings you to a complete stop, greatly reducing the need to use the brake pedal.

I appreciate the great Apple Play integration for my iPhone. Tesla’s iPhone integration is terrible – unimproved despite my complaints since my first Tesla purchase in 2014.

At first, I didn’t like the lane-keeping feature because, unlike with Tesla, you can’t change lane by using the turn signal. But I came to love it because it’s always on, such that when I do change lanes, it locks onto the new lane without asking.

Although I would have little use for it, I like that the Lightning has numerous USB and 120V outlets in the front trunk, the cargo bed and inside the cab, plus a 240V outlet in the cargo bed. One feature I’d make great use of is the large work surface that is created when you retract the shift lever and unfold the console cushion. (Photos from Ford.com)

My client loves the Lightning, too, so I am letting him buy me out and take sole ownership.

Back on the Market: Littleton Townhome Backing to Greenbelt

This end unit with finished walk-out basement at 5514 W. Canyon Trail in the Millbrook Townhomes subdivision backs to a greenbelt with a bike/pedestrian path that connects with the entire metro area trail network via the South Platte River Trail. It is back on the market for only $389,000. The master suite takes up the entire second floor. The family room in the basement could be used as a second bedroom, since it has a full-size closet and is next to a 3/4 bathroom. The home was recently painted throughout and is in excellent condition. In addition to its 2 parking spaces, there are 3 guest parking spaces across the private drive. Take the narrated video tour at www.MillbookTownhome.online, then come to our Saturday open house.

Good Mortgage Lending News for First-Time Homebuyers

There is great news this month for first-time homebuyers. The Federal Housing Finance Agency (FHFA) has made changes that will benefit up to 20% of people looking to buy.

The most significant could result in as much as a 0.5% reduction of the interest rate. When you apply for a mortgage, your rate is based upon various risk factors. If you have a low credit score, a small down payment, or are buying an investment property, your loan is at a higher risk of default than someone who has excellent credit, large down payment, or is going to live in the home. These risk factors are added into your interest rate as “Loan Level Price Adjustments,” or LLPAs.

First time home buyer programs such as “HomeReady” and “Home Possible” have always had reduced LLPAs, but this month FHFA announced that they are removing all such pricing adjustments from their most popular first-time homebuyer programs.

FHFA has also increased the income limits associated with the programs and is allowing lenders to offer up to $2,500 in grant funds to qualifying borrowers. If you have questions about a first-time homebuyer mortgage, reach out to Jaxzann Riggs of The Mortgage Network at (303) 990-2992 for answers.

A Reader Asks: Could a Reverse Mortgage Be Funded by Heirs at Less Cost?

Recently, I heard from a reader about reverse mortgages. The reader astutely observed that the costs associated with a reverse mortgage (or HECM) could be eliminated by putting a family-funded mortgage into place. This would require an attorney to draft the legal documents that would spell out and secure each family member’s future interest in the property, but those fees would likely be lower than the costs associated with a HECM.

I asked Jaxzann Riggs, owner of The Mortgage Network to weigh in on the topic. “Absolutely,” she told me, “a family-funded reverse is preferable to a traditional reverse if the homeowner has a family that is able and willing to be the lender.”

Reverse mortgage closing costs are very straightforward. A borrower should expect to pay, on average, a 1% origination fee and a 2% initial mortgage insurance premium, plus closing costs and third-party fees such as appraisal, title, settlement and recording fees.

Jaxzann told me there is a difference, however, between closing costs and the actual expense of a reverse mortgage. The expense is far more difficult to calculate because it would require concrete information about the future value of the home, the duration of the occupancy (how long will the owner live in the home), and how much the homeowner will draw now and in the future from the home’s equity. A homeowner who decides to sell the home within a few years after creating a reverse mortgage would find it to be VERY expensive.

If a borrower rolls $10,000 of closing costs into the loan balance and then sells the home after one year, the cost of selling (without calculating and adding the interest and mortgage insurance accruals) would be the full $10,000. If, on the other hand, the homeowner lives in the home for 20 years, the initial cost spread out over the life of the loan would be approximately $500 per year. The future appreciation or depreciation of the home is critically important when attempting to calculate HECM expenses because, unlike a family-funded reverse, FHA HECMs are non-recourse loans meaning that if the home is worth less than the dollars owed at the time of sale, the borrower or heirs are not responsible for the deficiency. If the home does not appreciate much (or depreciates), a HECM can be very inexpensive.

Here’s How Denver’s Real Estate Market Has Performed Since the Start of the Pandemic and the Recent Surge in Interest Rates

The charts below will not surprise any of us who have been witnessing the Denver real estate market over the past 2½ years. They do, however, document the death rattle of the seller’s market, which was killed by the Federal Reserve’s Open Market Committee, whose dramatic increases in the Federal Funds Rate were reflected in the amazingly quick increases in mortgage interest rates.

NOTE: The MLS charts above were created on REcolorado.com, limiting data to listings within an 18-mile radius of downtown Denver. That covers the entire Denver Metro area roughly within the C470/E470 beltway, but does not reach to the City of Boulder.

Back in January, when the 30-year fixed mortgage rate was just above 3%, it was hard to imagine that before year’s end the rate would be over 7%. The rates started rising in January, but they didn’t break above 4% until about the time that the FOMC started its aggressive rate increases.

(As a layman, I’ve never quite understood how inflating the cost of money is the best strategy for reducing inflation of everything else. And haven’t we noticed that that strategy hasn’t really worked yet? Some food for thought….)

Looking now at the three MLS charts, you can see that the number of sold listings exceeded the number of active listings throughout most the pandemic but sharply diverged starting around the time the FOMC rate increases began in mid-April.

The number of new listings saw no dramatic changes over previous years, but the number of listings that expired without selling was 3.24 times as high in October as it was in April of this year. Many of those new listings have sat on the MLS, as shown in the median days in MLS, which quadrupled from 4 to 16 days from April to October.

What may surprise observers is that the median sold price fell as little as it did from April to October. It is still higher than it was in January of this year when that 30-year fixed interest rate was about 3%.

What lies ahead? Homes are still selling, and buyers still need to buy, leading me to believe that we’ll see a “normal” market soon. Stay tuned!

Streaming Has Made Cable and Satellite TV Obsolete

I’m old enough to remember the days before “pay TV.”  Gradually, cable TV made its inroads and more and more people started paying for it because of better reception and the increasing number of non-broadcast channel offerings.

Eventually, satellite TV came along, dominated now by Dish Network and DirecTV. Rita and I went back and forth between the two as their introductory offers expired and we found ourselves with TV service costing well over $100 per month. The rates for cable were just as high.

But then the coaxial cable used by cable TV companies like Comcast and the fiber optic cable used by phone companies like CenturyLink created the opening for a wide range of video streaming services which can make subscribing to cable or satellite TV unnecessary.

So, here we are at a crossroads (actually past it) where the cable companies will only be providing internet service and not TV service, because customers will use that cable internet service to stream their favorite TV channels (and Netflix) from other providers, in addition to having internet service for their home computers and internet-connected devices such as doorbells and cameras and other smartphone-connected appliances.

Rita and I quickly abandoned Comcast for TV service when we moved into our Avenida apartment. What we ended up doing was using Comcast only for high-speed internet, and we now stream everything. We pay $65 for internet service (which I need anyway for business), and we pay $64.99 per month for YouTube TV.  They’re currently offering a $10 discount for the first three months. You’ll want to own a “smart TV” to simplify streaming.

Here’s what makes streaming a super-smart alternative — it’s portable. I can duplicate my home service at a second home, while camping, at work or anywhere else within the U.S. without having separate TV service at that location.

KB Home Is Building All-Electric Homes – But Not in Colorado

I have expressed dismay in the past that builders of new homes in our area are not getting “with it” when it comes to incorporating the latest thinking and technology regarding energy efficiency.

Builders boast their Energy Star appliances and lower HERS scores, but they are still, for example, installing gas forced-air furnaces instead of heat pumps, gas water heaters instead of heat pump water heaters, and gas cooktops or ranges instead of induction cooktops.

The Geos Community in Arvada provided proof of concept for the  all-electric solar-powered, net zero energy home, and homes in that small, privately developed neighborhood have been featured for several years on the annual tour of “green homes.” But no production builder here has picked up on that concept, and when another builder acquired the undeveloped parcels at Geos last year, the first thing they did was bring a natural gas pipeline into the community to serve their new homes, greatly upsetting the happy homeowners of the original net zero energy Geos homes, which purposely have no natural gas lines.

Above is one of KB Home’s all-electric homes in Menifee CA, a smaller city south of Riverside. Not only is every home in that subdivision “net zero energy ready,” but they are tied together in an electric “microgrid,” designed to power itself cooperatively should there be an outage in the larger electric grid.

In the garage you can see both an EV charger and a wall-mounted battery backup system. The small print on the sign reads: “This all-electric, solar-powered home is equipped with smart technologies and a backup battery, plus community microgrid connectivity designed to help maximize home energy efficiency and comfort.”

Meanwhile, here in Colorado, neither KB nor any other builder, to my knowledge, is even offering heat pump HVAC units or heat pump water heaters as upgrades.

What’s the Cost of Converting a Home from Natural Gas to All-Electric?

In recent columns, I have promoted the idea of eliminating natural gas and converting one’s home to all-electric, using heat pumps for heating & cooling and installing a heat pump water heater. I have also promoted induction cooktops as an alternative to gas or standard electric cooktops.

One reader asked me to provide information on the cost of making the conversion to all-electric, so I have done some research and can also speak from personal experience.

First, I asked Bill Lucas-Brown of Helio Home Inc., who installed the heat pump mini-split system at Golden Real Estate’s former office on South Golden Road as well as in our storefront in downtown Golden.

I asked Bill for a rough estimate of the cost of making a typical 2,000 sq. ft. home all-electric, and he responded with the following numbers and comments.

Note that rebates and tax incentives are available from the state, feds, utilities, and local municipalities that typically range from 15 to 30 percent off total cost. The following are costs without those rebates.  Click here to view Helio Home’s web page about the rebates and tax credits available under the Inflation Reduction Act.

  • Air source heat pump for heating and cooling your home, $22,000
  • Heat pump water heater, $4,000 
  • Insulation and air sealing work to improve efficiency, $5,000
  • Ventilation system for indoor air quality, $4,000
  • 10kW solar system PV, $30,000
  • Electric panel upgrade, if needed, $4,000
  • Electric vehicle charger, $1,500

That said, Helio Home’s average job is around $50,000. With rebates, figure $35,000 to $43,000. You can get a proposal on the company’s website www.heliohome.io.

Sadly, there are few vendors who are experienced and competent in heat pumps for heating and cooling homes. Heat pump water heaters are less of a challenge, because they are sold by Lowe’s and Home Depot, and you just need a plumber to install them and an electrician to pull a 240-Volt circuit to it. I bought a 50-gallon heat pump water heater in 2021 for $1,200 (on sale – prices are higher now) and was able to do the electrical work myself because of a nearby 240V circuit that was no longer in use. The self-employed plumber I used charged just $500, and I got a $400 rebate from Xcel Energy, so the cost was less than the figure quoted above. The federal rebate taking effect in January under the IRA makes such a purchase almost free.

You may find it more practical to leave your gas forced air furnace in place and install a ductless mini-split system. A compressor (similar to an A/C compressor) is installed outside your home, and two coolant lines are run to wall-mounted units in different rooms of your house. This works best in a one-story home. These same wall units provide both heating and cooling, because that’s how heat pumps work — they are like an air conditioner that works in two directions, moving heat out of your home in the summer and into your home in the winter. As the name suggests, they don’t create heat, they move heat, and they do it more efficiently than baseboard electric heating or heating generated by burning natural gas (or propane).

Instead of wall-mounted mini-splits, you can install a ceiling-mounted “cassette” which functions the same way. That’s what Helio Home installed in our downtown storefront, and it works just as well. (Come by our office and I’ll show it to you.) I have also seen a wall-mounted cassette which has a picture frame on it. When the heat pump is operating, the picture moves out a couple inches from the wall to allow the movement of air.

As for an EV charger, the biggest variable is the cost of bringing a 240V circuit to your garage, which depends on the distance between the garage and your breaker panel. I spent less that $300 for that, again from a self-employed electrician.

Tesla vehicles have the charger built into the car, so you only need a 240V outlet (similar to the outlet for your clothes dryer) to plug the provided cord into. Don’t buy the Tesla Wall Connector — it’s totally unnecessary for home use. Just use the charging cord with a 240V head.

Other EVs may require you to purchase a Level 2 charging station, which I did when I had a Chevy Volt. By googling “Level 2 EV chargers,” I found prices as low as $200 (Home Depot, 16 amp model), and several under $500. So your real cost depends on what your electrician charges.  Here’s an idea: If you have an electric dryer outlet available close to your garage, you could adapt that circuit for your EV at minimal cost.

Another use of natural gas that you’re probably using is for cooking and grilling. You’ll really love induction cooking if you try it, because it is so much faster. Buy a countertop unit for under $100 and play with it. For grilling, we love the George Foreman electric grill we purchased for $100.

Above all, pay attention to the tax credits and rebates that take effect on Jan. 1, 2023, under the Inflation Reduction Act. They make going all-electric more realistic.

Follow-up on Last Week’s Post About Property Tax and Sales Tax

I did a lot of research for last week’s column about property taxes in incorporated vs. unincorporated areas, but I should have done more research about sales taxes.

Instead of researching sales taxes in various counties, including Jefferson, I simply said that “I don’t know of” any county-wide sales taxes.  Oops!

I am well aware of the 1/2 percent Jefferson County sales tax which has funded our wonderfully extensive open space parks.

A couple readers did some research for me, and I got the following list of sales taxes in other counties. I’m not including Denver and Broomfield counties because those are city sales taxes and there are no unincorporated areas (that I know of) in those two city/counties.

Reader Gary Justus wrote that all metro counties except one have a county-wide sales tax, according to https://colorado.ttr.services:

  • Jefferson County – 0.50%
  • Adams County – 0.75%.
  • Douglas County – 1.00%
  • Arapahoe County – 0.25%
  • Boulder County – 0.985%
  • Clear Creek County – 2.65%
  • Elbert County – 1.00%
  • Gilpin County (none)

Most counties beyond the metro area do, in fact, have sales taxes, some of them substantial, such at Pitkin County (3.6%), San Juan County (6.5%), and Jackson & Lake Counties (4% each).

Colorado Department of Revenue Publication 1002 spells out the sales taxes which it collects for local jurisdictions. Some, like Golden, aren’t listed, because they collect their own sales taxes.

Just Listed: Fabulous Solar-Powered Green Mountain Home

You’ll enjoy an Xcel Energy bill of $45 per month, including gas, during the summer and still under $100 per month in the winter thanks to this home’s roof-mounted solar photovoltaic system. The address is 14165 W. Bates Ave., in Hutchinson’s Green Mountain Village, which is south of Yale Avenue and north of Bear Creek Lake Park in Lakewood. It has 3 bedrooms, 3½ baths, plus a 14’x16’ loft that could be converted into a 4th bedroom with en suite bathroom. It has 2,957 finished square feet plus an unfinished basement. This home is beautifully landscaped and updated inside, with hardwood floors on both levels, a gourmet kitchen, and a fabulous backyard with a free-standing Sunsetter retractable awning — great for entertaining! The walk-in closet in the master suite is a gem, which you’ll get to see in the narrated video tour below and at www.JeffcoSolarHomes.com. Open house is this Saturday, Nov. 5th, 11 to 1.