Don’t Miss the Metro Denver Green Homes Tour on Saturday, Oct. 1st

If, like many people, you have back-burnered your plans to buy a new home, now might be a good time to think about updating your current home. Making improvements that reduce the cost of ownership might be pretty appealing, too, and that’s what you’ll accomplish by adding solar panels, improving insulation, and maybe getting rid of natural gas or propane. 

This Saturday, October 1st, is your opportunity to visit a dozen metro area homes which have done just that. That’s because the first Saturday in October is the date of the annual Metro Denver Green Homes Tour. I’m on the steering committee for the tour, and I can assure you that you’ll learn a lot from this year’s selections.

The event runs from 9 a.m. to 7 p.m. and includes a “green expo” at the American Mountaineering Center (AMC) at 710 10th Street in downtown Golden.

It’s a self-guided tour. You pay $10 in person at the AMC or at  www.MetroDenverGreenHomesTour.org. If you register online, you can pick up the book describing each home plus a map to find them either at the AMC on Saturday morning or on Friday, Sept. 30th between 10 a.m. and 6 p.m. at the office of Golden Real Estate, 1214 Washington Ave., also in downtown Golden.

The homes themselves are open only until 4 p.m., after which you might want to visit the Electric Vehicle Roundup in the parking lot of The Net Zero Store (Golden Real Estate’s former office) at 17695 S. Golden Road. That event runs from 2 to 6 p.m. (See article below.)

You’ll also want to visit the “Growing Dome” at 509 9th Street, a short walk from the AMC, between 3 and 5 p.m.  There will be a “tiny home” in the AMC parking lot all day for you to visit, too.

All of that is followed by a Reception and Green Expo inside the AMC from 5 to 7 p.m. At the expo you’ll be able to visit with exhibitors who sell and install some of the sustainable upgrades which you learned about during the tour, while enjoying complimentary appetizers, local beverages and live music.

If you’d like to carpool to each of the homes in a Tesla or other electric vehicle, inquire at the AMC between 9 and 10 a.m. and they may be able to set that up for you, thanks to volunteers from the Denver Tesla Club and the Denver Electric Vehicle Council.

Leading up to Saturday’s tour, we have created a series of free lectures, the last of which is this evening, Thursday, Sept. 29th, at Jefferson Unitarian Church, starting at 7 p.m.  The speaker is Conor Merrigan, who is Sustainability Program Manager at Spirit, an environmental consulting firm. His topic is “Scaling Up Green Homes to Green Neighborhoods.”

My own contribution to the tour has been to shoot narrated video tours of each home on the tour.  I haven’t been able to shoot all of them yet, but I’ve done several of them, and you can find them as well as the video tours from prior years at www.NewEnergyColorado.com.

I’ve been committed to promoting sustainability and net zero home construction for as long as I can remember, but each and every year I find that I learn something I didn’t know — a new technology or new use of an older technology — and I get to capture what I learn on those videos so you can learn about them.

The broker associates at Golden Real Estate and I are among the most knowledgeable real estate professionals you will find when it comes to buying and selling sustainable homes as well as making a home you buy more sustainable, so feel free to contact any of us for your real estate needs. We look forward to serving you!

People Ask: “How’s the Real Estate Market?”

My short answer is “chaotic.”

One thing is certain: the seller’s market is now history. We’re at least in a balanced market and probably moving to a buyer’s market.

This chart tells a large part of the story. It is limited to the past 7 days of listing activity within 15 miles of downtown Denver.

There are currently about 4800 active REcolorado listings within that radius, ranging in price from $139,900 to $24,700,000.  Just under 600 of them are priced above $1,000,000, and the median price is $595,000.

Here’s the statistic that really tells the story of today’s market: the median days on the MLS of those 4800 active listings is 32 — over a month! This time last year, it was 4 or 5 days.

Roughly a quarter of the active listings have languished on the market for 2 months or longer, and about half of those for 90 days or longer.

Obviously, the surge in mortgage interest rates has played a big part, but I think it’s deeper than that. Buyers are being told that homes are overvalued, but sellers are still listing their homes based on recent comparable sales.

But recent comparable sales may have been overpriced, too, and buyers are happier on the fence than jumping into a market which they (and many professionals) don’t understand and can’t accurately predict.

I still laugh when I recall that the conventional wisdom among real estate and mortgage professionals back in January was that interest rates might reach 4% by the end of 2022. On 9/22, Freddie Mac quoted a 30-year fixed rate of 6.29%.

The stock market needs to be factored in because the 20% or more of buyers who pay cash for a home purchase are reluctant to sell stocks that have dropped in value. They don’t want to liquidate those investments until they go up again, which they will — eventually.

What Can You Do to Make Your Home More Energy Efficient?

In a previous column, I pointed out that making your home more energy efficient can save you money immediately if you finance the improvements, because the monthly payments could be less than your monthly savings. The recently enacted Inflation Reduction Act has some very generous tax credits and rebates that make such improvements even more practical and affordable. My intention this week is to give you a “roadmap” for doing so.

The logical starting point is to hire a professional to do an energy audit of your home — to identify the “low-hanging fruit,” meaning the quickest and easiest changes you can make or improvements you can install that will give you the most “bang for your buck.”

That low-hanging fruit is typically better insulation, and the energy auditor normally begins by performing a blower door test of your home. That involves installing a computer-calibrated fan in a doorway which sucks air out of your house. By depressurizing your home in this manner while all your other windows and doors are closed, the auditor can identify all the leaks which allow cold air into your home in the winter. That way you know where to caulk to make your home less “leaky.”

When it’s cold outside, the auditor can use an infrared camera pointed at your walls and ceilings to assess where you could improve your in-wall and in-ceiling insulation.

You’ll get a written report from you energy auditor with suggestions of things to do and how much benefit you will get from making those changes, whether it’s blowing insulation into your attic and walls, replacing your old gas furnaces and gas water heaters with heat pump versions, or installing better windows. Most recommended improvements will earn you a 30% tax credit under the Inflation Reduction Act.

There are more “roadmap” items, but you will learn about most of them by attending the Oct. 1 tour of green homes. See the blog post.

If you or someone your know is an energy auditor, let me know. We expect big demand for your services!

Coming October 1st: Metro Denver Green Homes Tour & EV Roundup

If you’ve ever wanted to reduce the carbon footprint of your home, you won’t want to miss the October 1st tour of metro area homes which have done just that.

You’ll learn about new forms of insulation, improved window designs, replacing natural gas with heat pumps, and so much more. After touring the homes, don’t miss the expo of vendors from 5 to 7pm.

Think of it like a Parade of Homes, but where some of the homes were built sustainable but where most of them are older homes that have been made super-sustainable.

The 9am to 4pm tour starts with registration at the American Mountaineering Center in downtown Golden, 710 10th Street. For $10 per adult, you receive a guidebook and map for your self-guided tour. If you would like to ride in an electric car to the different homes, we have volunteers who will make that happen in their own Teslas or other EVs.

After touring the homes, come to the 3-5pm EV Roundup happening in the parking lot of The Net Zero Store, 17695 S. Golden Road, where Helio Home Inc. will be holding demos and answering questions about what you can do to make your own home more sustainable or even “net zero energy.”

You can register for the tour at NewEnergyColorado.com then pick up your guide book and map at Golden Real Estate, 1214 Washington Ave. on Friday, September 30th, 10 to 6. Register for the EV event at www.DriveElectricWeek.info.

Cash Sales Are Up Less Here Than Nationally

By JIM SMITH

Like you, I’ve read reports from Zillow, Redfin, the National Association of Realtors, and others about the surge in investor purchases and the percentage of transactions that are all cash, but I can rarely confirm those reports when I do statistical searches on REcolorado, Denver’s MLS.

For example, Inman, the leading real estate news service, reported the following last Saturday: “All-cash home purchases in the U.S. hit 31.4 percent of all transactions in July 2022, up from 27.5 percent the year before, and just shy of an eight-year high reached in February, according to data released Friday by Redfin. Since the beginning of 2021, all-cash purchases have surged thanks to a pandemic-housing rush, reaching an apex in February when 32.1 percent of all transactions were made without financing, according to Redfin.”

Compare those numbers with the chart below, created from REcolorado, based on closings within 25 miles of the State Capitol.

The pandemic took root in April 2020, but there is only a modest increase in the percentage of cash transactions well into year two of the pandemic. A more significant increase can be noted in 2022, but the peak was well before the increase in mortgage interest rates which only showed up in April, and the percentage of cash sales actually dropped a little as those rates increased.

Regardless of those fluctuations, the percentages are well below the national percentages reported by Inman.

Prices Reduced on 2 Golden Real Estate Listings

Now listed at $625,000

This home at 8785 W. 67th Place is located on a corner lot in quiet Scenic Heights, west of Carr Street and south of 72nd Avenue, close to the Arvada Center for the Arts. Also nearby are the Indian Tree Golf Course and Majestic View Park, as well as Old Towne Arvada with its light rail station. The seller is only the 2nd owner of this 1961 brick ranch, having lived there since 1987. It has a 4th bedroom and bath in the fully finished basement. There are hardwood floors throughout the main level, although there is carpet over the hardwood in two of the bedrooms. The landscaped yard with large shade trees, peach tree, blueberry bushes and roses is served by an irrigation system installed in 2019. You can view a narrated video tour at www.ArvadaHome.info.

Now listed at $840,000

This home at 3740 Tabor Court is in the highly sought after Applewood Village neighborhood. It has a newly renovated interior with all new stainless steel appliances, quartz countertops, oak hardwood floors, and custom tiled bathrooms. The main level has a primary bedroom with a 3/4 bath and two other bedrooms with double closets and a full bath in the adjoining hallway. All 4 bedrooms have new carpeting. The new furnace and A/C will keep you comfortable year-round. The yard is fenced and there’s room for an RV. Close to parks, trails, shopping and schools. More details and pictures can be found at www.ApplewoodHome.info. Listed by David Dlugasch, 303-908-4835.

Looked at Correctly, It Costs No More to Build (or Buy) a Sustainable Home

“Conventional wisdom” says that it costs more to build a solar powered, highly sustainable or net zero energy home, but that’s not really true if you look at the issue a little differently.

As you surely know, such improvements reduce the operating cost of a home. Solar panels, for example, can virtually eliminate your electrical bill, if your system is sized correctly. They can even provide free fuel for your cars — if they are powered by electricity.

Super insulating your home can reduce the cost of heating it, whether by natural gas or electricity (using a heat pump system). Ditto for installing triple-pane Alpen windows and doors.

If you go all-electric, you not only save on the natural gas or propane you consume, you can have your gas meter removed, saving on the base cost of being connected to the gas distribution network. As a commercial customer, Golden Real Estate, saves over $600 per year from having removed our gas meter, since that’s what Xcel Energy charges before a business uses a single cubic foot of natural gas.  The savings is lower for residential customers.

So, yes, it may cost more to go all-electric, but the return on investment is substantial over a pretty short period of time.

But consider the following. Whether you build or buy a home with these cost saving features, and whether or not you pay a premium for them, you will likely be financing your home with a mortgage.

Let’s say, conservatively, that you pay an extra $50,000 or even $100,000 for those features, and it adds that amount to the principal of your mortgage. Your monthly savings from those solar panels or that heat pump system or those Alpen windows and extra insulation will be far in excess of the increased monthly payment for your mortgage.

And if you make those improvements in a home you already own, you can take out a Home Equity Line of Credit (or HELOC) to pay for them, and the monthly payments will again be less than your monthly savings.

Looked at it this way, does it make any sense at all to build a home powered by fossil fuels, that is not solar powered or that has “normal” insulation and have higher monthly cost of ownership, starting from day one?  Of course not.

You can apply the same reasoning to the purchase of an electric car. You could go with the conventional wisdom that electric cars are more expensive and you should wait until the price comes down, but that thinking substantially misrepresents the cost of ownership.

I haven’t purchased gasoline for my electric cars since 2014, during which time I have saved tens of thousands of dollars on gasoline as well as on repairs on components that don’t exist on an EV, such as transmission, engine, fuel pumps, water pumps, timing belts and so much more.

And I have never had a catalytic converter stolen — or lost any sleep after reading about the epidemic of such thefts in my city.

Forgetting for the moment that there are indeed EVs which cost no more than their gasoline-powered equivalents, even if you paid $10,000 more for an EV than you might for a gas powered car, the cost of financing that difference is far less than what you’ll save on fuel and repairs.

If I have changed your thinking about making your home (or transportation) more sustainable, here’s what you can do.  First, attend this year’s Metro Denver Green Homes Tour on October 1st. You’ll be able to visit a dozen or so homes whose owners have taken steps to make their homes more energy efficient or even net zero energy. You’ll also visit a home builder who is building net zero energy homes. If you can’t visit some of these homes in person, you can view the narrated video tours which I have created for most of them.

(You can also — right now — take video tours of 16 homes that were on this tour in previous years!)

You can register for the tour — and see those videos — at www. NewEnergyColorado.com.

And if I have changed your thinking about the cost of buying or owning an electric vehicle, plan on coming to the Electric Vehicle Roundup (mentioned below) which occurs the same day, October 1st, as the Metro Denver Green Homes Tour.  If that date doesn’t work for you, there are many other EV roundups in October around Colorado. Find those other events online at www.DriveElectricWeek.org.

Come to Our Presentation About Options for Seniors

This coming Sunday, Sept. 18th, I’m the guest speaker, along with Jenn Gomer of CarePatrol, at the Sunday Night Club West meeting at Lakewood’s Clement Center, 1580 Yarrow Street. All are welcome.

Jenn and I were invited to speak about “Aging in Place vs. 55+ Communities.” As you may know, my wife Rita and I moved into an “active adult” community called Avenida Lakewood, with the help and advice of Jenn Gomer, whose business it is to provide that service for seniors. We told her what we were looking for, and she found it!

If you’d like to attend our presentation, call Barbara Stannard at 303-987-8200. Come for dinner at 6:00, or just show up for our presentation, which starts at 7:00. We look forward to sharing what we know!

Here’s More Info on Incentives in the Inflation Reduction Act

John Horst of the National Renewable Energy Lab read last week’s blog post about the Inflation Reduction Act’s impact on the building sector and provided some valuable additional information.

For starters, he made me aware of the White House website, which has a listing of tax credits and grants under the IRA which pertain specifically to each state. Click here to view the IRA tax credits and grants that apply to Colorado. It’s a two-page PDF with paragraphs about those financial incentives plus job creation, manufacturing, cleaner air, rural opportunities and “resilient communities.”

One new incentive that hasn’t gotten a lot of coverage is the $4,000 upfront discount on the purchase of used electric cars and trucks. In the past, there was no incentive for purchasing a used EV, and the $7,500 incentive for a new EV came only as a tax credit on the following year’s tax return.

Making both incentives an “upfront discount” will make both incentives much more attractive and useful to car buyers and will accelerate the adoption of electric vehicles.

John also provided a link to a list of 59 state and federal tax credits (both personal and corporate), loan programs, grant programs, rebate programs, sales tax incentives, regulatory policies, energy standards and more — each with its own link for further information. (The above link gives the information for Zip Code 80401, but you can select a different ZIP Code anywhere in the country on that website.)

Interestingly, ‘Seller Concessions’ Can Benefit Both Buyers & Sellers

If you’ve been following my “Real Estate Today” column, you know that homes are taking longer to sell, and in some areas sales prices have decreased slightly.

Jaxzann Riggs, owner of The Mortgage Network, has been serving Colorado borrowers for 37+ years and she has witnessed more market fluctuations than I have in my 20 years. I asked her what “old and new” marketing and financing strategies she suggests for both buyers and sellers in this dynamic market.

   Her response: “First, buyers need to understand their highest priorities. Is investing the smallest amount of cash their priority, or are they more interested in minimizing the monthly housing expense in the early years of the loan? If they expect to own the property for many years, having the lowest possible 30-year fixed rate may be the highest priority. Buyers who are fortunate enough to be paying cash for a home are normally looking for the lowest possible purchase price, in which case seller concessions won’t matter to them.”

Let’s analyze each goal and how a seller concession built into a purchase contract can help you.

Goal #1:  Lowest Cash to Close

If your income is good and you are not concerned about your monthly housing expense, but you don’t have much cash to work with, a popular seller concession is one that covers your closing costs. That way, you only need cash for the down payment.

Goal #2:  Lowest Payment in the Early Years of Your Mortgage

If your income is likely to increase in the near future, and you want to minimize your monthly housing expenses until your pay increases or you receive an expected bonus, a temporary interest rate buydown funded by a seller concession might make sense. The simplest explanation of this strategy is that the buydown subsidizes a reduced monthly mortgage for the first one or two years of the mortgage.

Goal #3:  Lowest Interest Rate for the Term of the Mortgage

If this is a property that you expect to own for many years, it makes sense to ask for a seller concession that is utilized to buy the interest rate down on your mortgage for its full term.

So, the next question is, what is a reasonable dollar amount for a borrower to request from the seller as a concession? Each borrower and seller circumstance will vary, so there is no set rule, although Fannie Mae and Freddie Mac underwriting guidelines limit the seller to a contribution of 6% of the sales price (or 3% if the borrower is making a minimum down payment).

Seller concessions may only be utilized to offset closing costs, reduce the interest rate on a temporary or permanent basis, or to prepay mortgage insurance on behalf of the borrower. Seller concessions may NOT be used to reduce the down payment made by the borrower.

It might surprise a prospective buyer to understand the different impacts that a seller concession versus a price reduction can have on the monthly cost of their mortgage. And it might surprise sellers to learn that offering a concession in the form of an interest rate buydown can increase the pool of prospective buyers.

I am happy to explore buyer and seller wants, needs, and goals. Structuring a seller concession so that both buyer and seller benefit is possible once all parties agree upon the anticipated appraised value of a property. Of course, this is best done with the assistance of an experienced Realtor like me who knows how to evaluate the market trends in a particular community.

    If you are buying or selling and have questions about the different possible concessions, call Jaxzann at 303-990-2992.