Golden Real Estate is proud to be a charter member of Good Business Colorado, a 3-year-old organization of now 300 companies and non-profits which share a commitment to creating a prosperous, equitable and sustainable Colorado. You can learn more about this great organization at www.GoodBusinessColorado.org.
This 1963 brick ranch has been lovingly maintained, although not particularly updated, since it was purchased by the seller in 1973. Most of the hardwood flooring throughout the main floor has been covered over the years by wall-to-wall carpeting, but the carpet has been removed from the main-floor bedrooms so buyers can see it. The full basement has a non-conforming 4th bedroom, 3/4 bathroom and laundry, plus a full-width family room. The name of the subdivision is Allendale, which is located east of Ward Road and south of 64th Avenue, making it super convenient to shopping as well as Interstate 70, while being an extra quiet neighborhood. You’ll hear no highway noise from your front or back yard! You can take a narrated video tour of this home, inside and out, and see all the interior photos at www.ArvadaRanch.info, then come to our open house this Saturday, October 24th, 11am to 2pm.
One of the many bills passed by the Democratic House which Senate Majority Leader Mitch McConnell has not allowed to be acted on in the Senate is the YIMBY Act. If, as may well happen, the Democrats take control of the U.S. Senate in this year’s election, that act could become law next year.
The YIMBY Act (HR 4351) was bi-partisan, co-sponsored by Democrat Denny Heck of Washington and Republican Trey Hollingsworth of Indiana. It was passed on a voice vote by the House of Representatives on Mar. 2, 2020. Here’s a link to the full text of HR 4351.
Here’s how the act is described and promoted at www.UpForGrowth.org:
The Yes in My Backyard (YIMBY) Act encourages localities to eliminate discriminatory land use policies and remove barriers that prevent needed housing from being built around the country.
The YIMBY Act achieves these goals by requiring Community Development Block Grant (CDBG) recipients to report periodically on the extent to which they are removing discriminatory land use policies and implementing inclusive and affordable housing policies detailed by the bill.
The YIMBY Act increases transparency in land use, zoning, and housing decisions; sheds light on exclusionary polices; and ultimately encourages localities to eliminate barriers to much-needed housing.
Background:
According to Up for Growth’s “Housing Underproduction in the U.S.” report, the United States has underproduced housing by 7.3 million homes from 2000 to 2015.
Exclusionary land use policies — including zoning and density restrictions, onerous parking requirements, and other burdensome development regulations — drive a severe housing shortage and affordability crisis.
The “Missing Millions of Homes” report from the New Democratic Coalition shows that the cost of shelter has been the single largest increase in household budgets in the last 15 years and that the median U.S. family now spends 42% of its income on housing.
Housing underproduction also increases cost of living for families, inhibits geographic mobility, burdens both renters and buyers, and stifles economic productivity. By one estimate, from 1964 to 2009, our national housing shortage lowered aggregate economic growth by 36 percent.
Many of these land use policies are rooted in racism and classism. Their continued existence perpetuates housing discrimination and contributes to the housing affordability crisis affecting large parts of the United States.
Legislative Solution:
The YIMBY Act increases transparency and encourages more thoughtful & inclusive development practices by requiring localities to fully examine and disclose their housing policy decisions.
The bill provides localities a framework for smart policymaking and regulatory practices, thus promoting more inclusive development principles.
The YIMBY Act is an important first step in decreasing the barriers to smart, inclusive growth and reducing the negative and cumulative impact of exclusionary housing policies. It is also a way to clearly demonstrate that the federal government takes seriously the challenges created by exclusionary zoning.
This proposal has not escaped the attention of conservatives, who consider it an attack on suburbia, primarily by eliminating single-family zoning. Allowing greater density and making housing more affordable means to them the introduction of lower-income and therefore racially diverse populations into communities which are historically white and upper-middle or upper income neighborhoods. It’s worth noting that it’s an argument that does indeed divide conservatives from liberals and, because of how it is being promoted, will be a factor in this year’s election.
However, we should remember that zoning laws are matters of local debate and enactment and cannot be forced upon localities by the federal government. That’s why the YIMBY Act only asks localities to consider the implications of their zoning decisions. Single-family zoning will only be modified or eliminated gradually if at all over time and only by a vote of locally elected representatives on city councils and county boards of commissioners. Voters would be wise to recognize fear mongering on the subject for what it is and to consider the underlying motives.
Moreover, it is inconceivable that an established and fully built out subdivision, especially one with a healthy housing stock under 30 or 40 years old, would see any effects from zoning changes. Instead you might see the legalizing of ADUs (Accessory Dwelling Units), which are already popular in many jurisdictions. These units can be in walk-out basements or above detached garages, and provide a great solution for modestly increasing a neighborhood’s and city’s density.
What we are already seeing in the older communities with pre-1970 bungalows is the scraping of isolated homes, making way for attached townhomes. Again, this is only done by the enactment of zoning changes by your elected officials who are not going to act in opposition to their constituents’ loudly expressed viewpoints.
No matter who is elected on the national level or what legislation is passed, housing will always be an expression and result of very localized democratic control — that’s democratic with a small “D.”
Moreover, the YIMBY Act would only apply to localities which accept Community Development Block Grants, for which no community needs to apply.
While it might be popular to think of Realtors as privileged conservatives (mostly Republicans) who put up with but are not fans of federal civil rights laws, quite the opposite appears to be true now. Liberal thinking Realtors are in ascendance.
An August 22 article from Realtor Magazine, the official magazine of the National Association of Realtors, makes this abundantly clear.
In 2018, NAR leadership laid bare at its legislative meetings in Washington, D.C., the organization’s “immutable past support of discriminatory and racist practices [link],” vowing to deepen its commitment to industry inclusivity and equal opportunity in housing.
The Chicago Association of Realtors, headed by an African-American woman, apologized last year for its “historically racist policies that persisted for decades.”
Click on that link above. Unless you miss the “good old days,” you’ll be heartened by what you read. It makes me proud to be a Realtor. The commitment to equality and justice is rock solid.
With the crazy seller’s market we’re experiencing now, it’s common for people to ask whether we’re in a “bubble” which could burst at any time.
Well, last Wednesday UBS Group released its annual Real Estate Bubble Index, and while it listed three U.S. cities (San Francisco, Los Angeles and New York) as “overvalued,” none of the seven cities listed as “bubble risks” were in the U.S.
Those seven cities with the highest “bubble risk” included Toronto (#3) and Hong Kong (#4), but the rest were all in Europe — Munich (#1), Frankfurt (#2), Paris (#5), Amsterdam (#6), and Zurich (#7).
Boston squeaked into the “Fair Valued” category, and Chicago narrowly made it into the “Undervalued” category.
I was surprised at this analysis until I read the UBS report myself instead of just the coverage of it on a real estate news service to which I subscribe.
The answer as to why more American cities weren’t on the list turns out to be very simple — UBS Group only studies “25 major cities around the world,” and the U.S. cities I mentioned above are the only U.S. cities analyzed each year in the report! Twelve of the 25 cities studied for this report are in Europe, with the rest divided between North America, the Middle East and Asia/Australia. It should be noted that the UBS Group office which creates the report is based in Switzerland, so it’s rather Euro-centric.
Click here to view the full UBS Group Global Real Estate Bubble Index.
Despite the limited number of U.S. cities included in the UBS report, there are some useful observations about our market, such as this one:
“Overall, the drop of mortgage rates to historically low levels supports house prices in the U.S. But price changes in the analyzed cities trail the nationwide average. Inner-city demand growth has slowed down as citizens move out to the suburbs as a result of affordability issues and the impacts of COVID-19. Continued migration to lower-cost and more tax-, business-, and regulatory-friendly states has accelerated this trend.”
Claudio Saputelli, Head of Real Estate at UBS Global Wealth Management’s Chief Investment Office, added the following: “The rise of the home office calls into question the need to live close to city centers. Pressure on household incomes cause many people to move to more affordable suburban areas. Moreover, already debt-ridden or economically weaker cities will have to respond to this economic crisis with tax increases or public spending cuts, neither of which bode well for property prices. Taken together, these factors amplify some longer-term uncertainties surrounding urban housing demand.”
Doing my own statistical analysis on REcolorado, Denver’s MLS, I see the trend described above. While the number of active (i.e., not yet sold) listings and days on market are at nearly all-time lows in Jefferson County, they are near all-time highs in the Lodo/Downtown Denver market. This is not a good time to sell a condo in any city center (except small cities like Golden), but it is certainly a good time to sell a single-family home (or a condo) in Jefferson County, as I have reported in previous columns.
The last time Realtor Magazine even dealt with the question of a real estate bubble was in November 2018. The consensus of real estate economists is that our country is not in a real estate bubble, but it’s hard not to worry about it as one looks at the recently increased rate of appreciation in home prices.
With no end in sight to the low mortgage interest rates and with the rich getting richer under the Trump tax cuts, it’s understandable that the real estate market is performing as it is, but such appreciation cannot be sustained long-term.
Only time will tell, and our crystal balls will at least clear up a little after the current election season ends. A Biden victory is sure to bring rollbacks of the Trump tax cuts which benefited the rich (defined as those having taxable incomes over $400,000 per year) and the super rich, which will reduce some of the upward pressure on home prices, but those rollbacks are critical to address the widening wealth gap in America and the exploding national deficit — something that used to be an important issue among Republicans!
You can view a short video report about last Saturday’s Electric Vehicle Roundup at Golden Real Estate on my YouTube channel. The shortcut for accessing my YouTube channel is www.JimSmithVideos.com.
And you can still tour the homes on the 26th annual Metro Denver Green Homes Tour by clicking on “Playlists” on the same YouTube channel.
The first Saturday of October is when the Metro Denver Green Homes Tour happens, and this year the tour is better than ever because it’s virtual. What that means is that instead of having to visit some or all of the homes between 9 am and 4 pm on a single day, you can watch short videos of each home. It’s possible you could “visit” all 16 homes and the one business in just one or two sittings at your computer and likely learn more about their sustainable features than if you had visited them in person. That’s what I call a green tour of green homes!
Since I shot all those videos myself and thereby learned all those homes’ sustainable features, you can consider me an expert on what’s new and exciting as well as what’s old and proven when it comes to making a home sustainable.
The theme this year is the Best Homes From the Last 25 Annual Tours. The home owned by Rita and me is on the tour, and since I just turned 73 I’d like to share with you how making our home sustainable also secured for us an affordable retirement — if and when I retire!
It all starts with solar power. Nowadays you can install enough solar panels on your home for under $20,000 so that you never pay Xcel or your other electrical provider more than the cost of being connected to their electrical grid. With Xcel Energy, that’s under $10 per month. The electricity you use is free, created from the sun.
You need to be connected to the grid, because the grid functions as your “battery.” Your electric meter runs backward during the day when you’re creating more electricity than you use, and it runs forward at night. Your goal is to have it run backward more than it runs forward.
Plan ahead and buy enough electrical panels so that over time you can replace your gas-fired appliances with electrical ones — a heat-pump water heater, a heat-pump system for heating and cooling, and an electric range — and replace your gas-powered car with an electric one. Now everything in your life is sun-powered!
You can buy a used electric car for under $30,000 or even under $10,000 (Google “used electric cars” and see for yourself) and never buy gasoline or pay for an oil change or tune-up again and probably never have an expensive car repair either. Buying a used electric car is smarter than buying a new one because there’s hardly anything to go wrong with an EV — no transmission, timing belt, motor or hundreds of other expensive parts that could fail. See the article at right about our electric vehicle event. It’s the only in-person part of the tour.
So there you have it. Once you’ve paid off your mortgage (or transitioned to a reverse mortgage), the only costs of living in your home will be your property taxes and water bill, plus $10 per month for being on the electrical grid.
Be sure to “attend” this year’s tour of green homes. Register at www.NewEnergyColorado.com/home-tour. It’s free, although you will be asked for a donation. Another feature of the tour this year is three video presentations.
Hear Bill Lucas-Brown from GB3 Energy on “Reducing your Carbon Footprint with an Electric Mini Split”; John Avenson, from PHIUS.org and Steve Nixon from the National Renewable Energy Laboratory discussing “New Home vs Renovation: 2 alter-native Paths to Zero Energy”; and Peter Ewers from Ewers Architecture Golden presenting “All Electric Buildings, the Key to our Energy Future.”
Below are twelve of the videos in the YouTube playlist which you’ll get to view when you register for this year’s tour.
With the continued high unemployment rate and the expiration of Pandemic Unemployment Assistance (PUA), many homeowners are hurting, so it makes sense that we may have a foreclosure crisis in our future.
CoreLogic reported recently that back in June (when the Feds were still sending $600/week in PUA to Americans) the share of mortgages with payments 90 to 119 days late had already risen to 2.3%, “the highest level in 21 years.” A rate that high could result in a foreclosure crisis, the report said. Not only could millions of families potentially lose their home, but that would also create downward pressure on home prices.
But I see the situation differently, and after consulting with Jaxzann Riggs of The Mortgage Network, here’s why I don’t expect that flood of foreclosures.
First of all, foreclosure should only happen when a seller owes more on their home than it is worth. That’s because sellers lose all their accumulated equity in a foreclosure, and most people have accumulated a lot of equity thanks for the sellers’ market we have been experiencing.
Secondly, federally mandated forbearance is in effect, which is unlike the forbearance which delinquent borrowers may have enjoyed in the past. Under the current plan, lenders add extra payments at the end of the loan instead of requiring any kind of catch-up payments. This mandate could be extended, too.
The only people likely to face foreclosure will be those who recently took out 100% VA loans or 96.5% FHA loans or conventional loans with only 3% down payment, and for whom there is hardly any equity to lose in a foreclosure action.
Being on forbearance doesn’t affect one’s credit rating even though you are not making payments (again, part of the federal mandate), but once you resume payments, you need to make a minimum of three on-time payments to qualify for a Fannie Mae or Freddie Mac loan, which will restrict your ability to sell your home and purchase a replacement home. Some lenders require six months post-forbearance loan payments.
That, too, will slow down any surge in what are known as “distressed listings.”
Inspection is the first and biggest hurdle in any contract to buy and sell a home. It’s an area in which experience by your agent really counts!
Usually the buyer will only ask for serious issues to be addressed by the seller. The seller rarely agrees to all the demands, nor is that expected. A common practice is to fix the easy items but give the buyer a price reduction or credit toward closing costs in lieu of making the big dollar repairs. When the buyer wants older appliances that are still working replaced, one solution is for the seller to purchase a home warranty covering those and other appliances.
Good luck with your inspections!
Much to the consternation of observers, the real estate market in metro Denver was hotter this August than it was in any previous August, according to the Market Trends Committee of the Denver Metro Association of Realtors (DMAR). At this rate, 2020’s statistics at year end will likely exceed 2019’s statistics.
The report covers an expanded metro area, including 11 counties instead of the 7 urban and suburban counties that you and I think of as “metro Denver.” The non-urban counties included in the report are Clear Creek, Gilpin, Elbert and Park.
Detached single-family homes sold like crazy in August—up over 6% from August 2019, despite 50% fewer active listings at month’s end. The average sold price was up 13.8% from last year, and average days on market was down 23%.
Attached homes sold on a par with last year, although their inventory was also down — 19% fewer listings at month’s end. They did sell quicker, though, with days on market down by over 27%.
Unlike DMAR, I like to define the metro Denver market as within a 25-mile radius of the state capitol, as shown here, instead of by county. Using that method, the number of detached homes sold this August was up 13.7% from August 2019, and the sold price per finished square foot (my preferred metric) was up 7.0%. Average days on market dropped by 31%, but median days on market plunged 57% from 14 days in August 2019 to 6 days this year.
Even more interesting to me is that median days on market was in double digits until March 2020 — the first month of Covid-19 lockdown — when it dropped by 40% to 6 days, and remained in the 5- to 7-day range through August. It could be said that “Stay at Home” and “Safer at Home” really meant “Buy a Home” in the real estate business!
Average sold price within that 25-mile radius rose by 13.4% to $597,290, while median sold price rose by 11.6% to $505,000. The gap between average and median is attributable to a large number of million and multi-million dollar closings. I wish others would stop focusing on average stats for that reason.
The number of active listings (what we call “inventory”) plummeted from 6,483 in August 2019 to 3,444 in August 2020, a 47% decline.
Another measure of market strength is how many listings expire without selling. That number was 777 in August 2019, but it fell by 37% to 493 this year.
The average ratio of sold price to listing price was 100% both last August and this August — suggesting that roughly half the listings sold above full price. With half the homes selling in 6 days or less, it’s to be expected that there were multiple offers and possibly a bidding war on many listings.
This week my downtown Golden fixer-upper closed at $665,000, which was $40,000 over listing price. My Lakewood listing from last week is already under contract at $55,000 over full price. Clearly, the seller’s market is still hot despite the pandemic.
If you have considered selling your home, there couldn’t be a better time than now to put your home on the market. And you couldn’t do better than call one of us listed below to talk about it. Your home would, of course, be featured in my weekly Denver Post column and on this blog.
If you let us represent you in the purchase of your replacement home, the listing commission could be as low as 3.6% and qualify you for totally free moving!
Jim Smith— 303-525-1851
Jim Swanson — 303-929-2727
Carrie Lovingier — 303-907-1278
Chuck Brown — 303-885-7855
David Dlugasch — 303-908-4835
Carol Milan — 720-982-4941
Jim Smith's Blog 