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
A reader wrote me last week complaining that some homes in her subdivision are being sold privately for less than they should, without putting them on the MLS. It bothered her because doing so creates lower comps that could affect what she is able to get for her own home when she sells.
Just as important, there are buyers who would like to move into her neighborhood who are frustrated when a home is sold before they can submit their own offer for it. And, of course, sellers are not getting the highest possible price for their home, as I’ll explain below.
Among the culprits are fix-and-flippers and “iBuyers” such as Open Door and Zillow Offers, who convince sellers to take a cash offer, claiming to save them the cost and inconvenience of listing their home on the MLS. More about them below, as well. (See my Jan. 2, 2019 and my Aug. 22, 2019 columns about iBuyers.)
If anyone offers to buy your home for cash without listing it, there’s one thing you can be certain of: they’re going to pay you a price that leaves lots of room for profit. That is money that could be yours if only you exposed your home to the full market by putting it on the MLS.
The worst thing you can do in a “sellers market,” which is what we have now, is to sell your home off the MLS. The next worse thing you can do is, after putting your home on the MLS, to sell it to a buyer who quickly offers you full price. If someone offers you full price on day one, you can be sure that there are other buyers who’d be happy to pay even more. Four days should do it.
But there is something worse than both those scenarios, and that is to put your home on the market at a price which does not attract any offers. I tell my sellers that they can overprice their home, but they can’t underprice it, because a low price can trigger a bidding war. An experienced Realtor like myself can help you set the perfect listing price. Just remember not to accept the first offer — unless that offer comes long after you put your home on the market, because you overpriced it.
What I see all too often is sellers putting their home on the market at a wished-for price, then lowering the price reluctantly over several weeks, and ending up getting only one offer, not multiple offers, at a price that’s lower than what they might have gotten if they had priced the home right initially.
It’s tempting, I know, to accept an unsolicited offer to sell a home without paying 6% commission, but I can’t even remember the last time I charged 6% commission. Remember, 2.8% of any listing commission goes to the buyer’s agent. Typically, sellers who try to sell “by owner” end up paying that 2.8%, so they only save the difference between 2.8% and the full listing commission, which is 5.6% on average. At least that is what I charge, and I reduce it if I sell the home myself, and I reduce it further when I earn a commission on the purchase of the seller’s replacement home.
If you factor in the totally free moving which I provide (locally, of course) when you sell and buy with me, it’s hard to justify not putting your home on the MLS with Golden Real Estate, thereby exposing it to all those bidders in this still-hot seller’s market.
Our Denver MLS, REcolorado, is now enforcing a new rule called “Clear Cooperation,” which was voted into being by the National Association of Realtors last November. It requires MLS members to put their listings on the MLS within 24 hours of promoting their listings in any way.
The rule is very simple: If a listing agent promotes his or her listing in any way — with a yard sign, tweet, Facebook post, or newspaper article, etc. — the listing must be on the MLS, either as “Coming Soon” or “Active.” If it’s “Coming Soon,” the sign must say so, and it can’t be shown, even by the listing agent himself. Once shown, it must be changed immediately to Active status, making it available for showings by all members of the MLS. Prior to Sept. 1st, REcolorado only issued warnings, but fines are now being levied for violations.
So, yes, there can be off-MLS sales, but not involving an MLS member unless there was no marketing at all, not even emails to his/her clients. With “pocket listings” now banned, the focus now turns to the iBuyers, companies like Open Door, Zillow Offers and others which directly solicit homeowners to purchase their homes, charging a 7% “service fee,” with the intention of flipping the home for a profit.
Only time will tell whether this new rule, with fines being levied, will make a big difference, but it surely will make some difference.
As I write this, I have just completed shooting videos of the 15 homes on this year’s Metro Denver Green Homes Tour.
The tour, currently in its 25th year, takes place on the first Saturday in October. Normally, you would register for $10 and get a book describing the homes, along with a map. Armed with that, you create a self-guided tour of the homes which interest you. You’d have to complete your tour by 4pm that day, followed by a reception and expo.
Because of the pandemic, this year’s tour will be totally virtual, which is actually better because you’ll get a link to view detailed videos of every home on the tour and not miss any of them due to time constraints. We won’t release the URL for the tour until October, but when we do you’ll be able to take your time to view all 15 — and the virtual tour is free! I’ll publish that URL in my October 1st column.
Meanwhile, let me share one particular lesson that you will learn from viewing the 15 videos: that gas forced air furnaces, no matter how efficient, are obsolete.
One thing you learn really quickly in the sustainability arena is that America is far behind other countries when it comes to energy-efficient technology. That’s because our fossil fuel costs have always been lower than in Europe and Asia, specifically Germany and Japan, where you’ll find the most innovation and product development. Just look at this chart from statista.com of electricity costs in different countries:
With our cheap energy, higher standard of living and higher incomes, Americans have long been able to waste money and energy with abandon. The result has been to leave it to other countries to create more energy efficient and less costly products.
Since home heating and transportation are the most energy-intensive aspects of modern life, that’s where we have seen the greatest innovation abroad. We in America continue to play catch-up and hang on to old technology. Our continued use of gas furnaces is an example of hanging on to old technology.
For a long time, I thought that higher efficiency gas forced air furnaces was the direction we should go to reduce our carbon footprint. However, after viewing the videos of highly efficient net zero energy and even energy positive/carbon negative homes, I think you’ll agree that it is time to abandon altogether that method of heating our homes.
When Rita and I purchased our current home in 2012 and installed the maximum solar photovoltaic system allowed by Xcel Energy (10 kW), we looked into how we might heat our home using the free energy we were creating from the sun. That’s when we learned about and purchased the Carrier Hybrid Heat® system, which uses an air source heat pump paired with a gas furnace to heat our home in the winter and cool it in the summer. It looks just like a gas forced air furnace, but the gas flame only comes on when the outside air is below the temperature at which the heat pump can generate heat from outside air.
Although Carrier still sells its hybrid system, heat pump technology has advanced far enough that gas back-up is no longer needed in our region. However, since our hybrid furnace uses natural gas so seldom, we won’t replace it anytime soon.
When your gas forced air furnace needs replacing, don’t make the mistake of replacing it with a newer and better gas forced air furnace. Instead, look into the many alternative ways of heating your home, which you’ll learn about when those 15 video tours are released in October. (If you can’t wait, Google “heat pumps” and investigate the options.)
Heat pump systems (Wikipedia link) can use your existing ductwork (as in our home), or they can be ductless (like at Golden Real Estate’s office). My January 4, 2018, column (link) described the transition to the ductless system at our office.
Solar thermal (Wikipedia link), using both flat panels and evacuated tubes, is another technology, typically augmented by electric and heat pump units, which can provide heating as well as domestic hot water. A few of the homes on this year’s tour have solar thermal systems.
Geothermal heating (link to vendor), present in other homes on the tour, takes advantage of the earth’s temperature below the surface. In our latitude that subsurface temperature is about 55°F year-round. It is extracted by running a liquid-filled loop 300 feet or so into the earth and using a heat pump to heat that 55-degree liquid for radiant floor or forced air heating, or using it at 55 degrees for cooling in the summer. That takes less energy than our air source heat pumps, which take much colder air from outside and extract heat from it in the winter, and can then cool your house (like A/C) in the summer.
The thing to remember about heat pumps is that they don’t create heat (such as from burning fossil fuels), they move heat. The difference between a traditional A/C system and a heat pump system is that a heat pump moves heat in two directions, not just one.
There is so much more to learn about efficient heating and cooling of your home. But first, to provide the highest return on investment (and lowest heating cost), you will want to improve your home’s insulation. A blower-door test (energy.gov link), conducted by an energy efficiency professional, identifies where the leaks are in your home, so they can be sealed. A heat recovery ventilator (HRV) (Wikipedia link) can then help you bring in fresh air without losing your home’s heat. (A heat exchanger within the HRV transfers the temperature of the outgoing air to the incoming air.)
Thermal mass (Wikipedia link) can play a big role in reducing the energy needed to heat a home. You’ll see thermal mass applications in many of this year’s videos. Concrete, brick, water and even dirt can function as a thermal mass to accumulate heat from the sun and then release it slowly after dark. (There is an example of a “climate battery” (vendor link) using dirt on this year’s tour.) With the proper roof overhang on south-facing windows, your thermal mass is shaded from the sun during summer months but exposed to the sun in the winter, when the sun is lower in the sky.
The best way to heat and cool your home may be different than the best way to heat and cool someone else’s home, and it’s hard to do justice to this subject in a single article.
Here are a couple vendors I’ve used who would, I’m sure, be happy to give you some free advice about the best heating system for your home.
Readers have asked me how I manage to come up with new topics to write about each week, so this week I’d like to share my sources of ideas, information, and inspiration.
My primary source of topics is from my daily work with buyers and sellers and answering their questions about the market, contracts, and other topics. I frequently take a moment and enter a topic that just occurred to me on my iPhone’s Sunday calendar. When I sit down to write my column on Sunday, I look there.
This week I was inspired, as I often am, by the narrated video tours I made of the 15 homes on this year’s Metro Denver Green Homes Tour.
I also get email newsletters from Realtor.com, REcolorado (our MLS), my Realtor association, the National Association of Realtors (NAR), and Realtor Magazine, as well as from Zillow, Redfin, Re/Max, and other real estate entities. I also subscribe to Inman News Service, which has a daily newsletter. Lenders, inspectors and other industry partners have their own newsletters which often spark a topic idea for me. I have also attended multiple national NAR and Inman conventions/expos, as well as a couple Re/Max conventions when I was at Re/Max Alliance, which generated lots of topics for columns.
It’s also important to stay informed on local and national issues and current events, including politics. Real estate (especially real estate statistics) is a common topic of interest in those non-real estate media. I subscribe to email newsletters from the Denver Post, Colorado Sun, Colorado Public Radio, New York Times, Washington Post, Atlantic Magazine, and The New Yorker. (I love the daily satire emails from Andy Borowitz of The New Yorker!)
My radio diet is limited to Colorado Public Radio (90.1 FM), which suddenly has the biggest Colorado news staff thanks to its merger with The Denverite and KRCC. I do, however, switch to KUNC (91.5 FM) when CPR has its overly long pledge drives. Both stations carry National Public Radio and other public radio programs. I even listen to CPR programs (mostly Morning Edition and Colorado Matters) during my daily dog walks! As much as I love music, I don’t spend my free time listening to music with all that’s happening in our world. Yes, I’m a “news junkie.”
When it comes to television, 9News, (especially Next with Kyle Clark) is the station Rita and I favor for early evening news, although we watch Channel 4 News at 10 since 9News at 10 often repeats segments from earlier news programs. For humor and insight we like to catch Steven Colbert’s monologue and usually watch The Daily Show with Trevor Noah.
For national news we watch the both CBS Evening News with Nora O’Donnell and NBC Nightly News with Lester Holt. It’s interesting how many secondary stories are unique to one or the other. (We fast forward through the common ones.) We watch CBS This Morning six days a week, and our Sunday morning viewing includes CBS Sunday Morning, Reliable Sources and Fareed Zakaria GPS (both on CNN), and Fox News Sunday with Chris Wallace. Also, of course, 60 Minutes in the evening. I record Meet the Press and Face the Nation to see if there’s a guest I want to see interviewed. CNN has some really great Special Reports which I always record and frequently watch.
Evenings are largely reserved for relaxation and entertainment, except Sunday and Monday evenings, when I write my columns. Our prime-time viewing is mostly limited to the reality TV shows, although we also watch movies on Netflix. We love to watch the competition shows – The Voice, America’s Got Talent, So You Think You Can Dance, American Idol, American Ninja Warrior, The Bachelor/Bachelorette, etc. That’s a pretty heavy diet when combined with the news programs we follow, but everything we watch is recorded on a DVR, so we can skip through all the commercials.
We get home delivery of the Denver Post Thursday through Sunday, but only to get a hard copy of YourHub containing our ads. Any subscription to the Post includes access 7 days a week to their Replica Digital Edition, which is easier to read than the printed paper. For that reason, I wish I could just subscribe to Thursday’s paper. Also, the newspaper’s email newsletters alert me to stories I would want to read without having to look for them in the printed paper.
Book reading (on iPad or Kindle) is reserved for bedtime. It’s usually a book about current events/politics. Rita prefers novels.
While residential real estate is booming, the prognosis for commercial real estate must be pretty bad, especially since the Covid-19 pandemic has inspired many companies, big and small, to let their employees keep working at home permanently. And, of course, many companies, especially in the hospitality industry, have called it quits. Also, the oil and gas industry, a big part of Colorado’s economy, has suffered greatly from the reduced value of oil on the world market and we’re seeing big cut-backs in their operations. BP, for example, recently announced a 15% cut in personnel by year’s end.
This means that there will be a lot of vacant office space, and many commercial landlords, seeing a shrinking demand for commercial space and a rising demand for residential units, are thinking of converting their buildings to residential use.
This trend could “free up a lot of commercial space, which can be converted to affordable housing,” HUD Secretary Ben Carson told Fox News in a June interview.
An Aug. 12 article by Clare Trapasso on realtor.com is headlined “As the Pandemic Empties Office Buildings, Can Those Spaces Help Solve the Housing Crisis?” The article quotes realtor.com senior economist George Ratiu as saying, “Office-to-residential conversions would be a win-win solution in some cities where you’re seeing declining lease renewals and a massive shortage of housing.” The building shown here, which once housed the office of East Ohio Gas, is now an apartment building.
I have witnessed such conversions — in both directions — first-hand, long before Covid-19. Back in 1991 I purchased a building that had been built in 1905 as a 28-unit apartment house. It had been converted to an office building before I bought it, but after I sold it in 2007, it was converted back to apartments.
During Denver’s 1980s oil bust there were many vacant office buildings in Denver and elsewhere, but they weren’t converted to residential use because the residential real estate market at that time was also depressed. Now, with the residential real estate market booming more than ever, I fully expect to see some of those high-rise office buildings converted to apartments or condos in coming years, some of them as mixed use (only partly residential).
Homelessness is an increasing problem in Denver and around the world, thanks in part to the financial effects of Covid-19, including rising unemployment. Like me, you have probably seen news reports about homeless encampments in Denver, wondering what can be done to address what appears to be an intractable problem.
As a committed capitalist and entrepreneur, as well as a would-be philanthropist, I know there are solutions to this social challenge, so I was pleased to come across a Fast Company article with the headline, “45 innovative solutions for beautiful, easy-to-build housing to help cities with the homelessness crisis.”
That article was inspired by the Rapid Shelter Innovation Showcase, “a clearinghouse for smart ideas on how to lower construction times for cities in need of new housing for people living on the street or after a disaster.” You’ll find the showcase on the website of The Housing Innovation Collaborative, created in 2019 by several Los Angeles non-profits committed to addressing homelessness in L.A. and around the world.
According to their website, “almost one million people [in L.A.] live on the verge of homelessness, and 60,000 people are homeless on any given night. Just to sustain ourselves, we need to build over 500,000 affordable housing units and increase our current housing production by 4.5x.”
The cost per bed of the 45 concepts, many of which are described as “in stock,” ranges from under $1,000 to over $100,000. Others are described as “con-ceptual ideas only” or “nearly ready.” with days required to set up each product ranging from 1 to 90 days. Eleven were described as ”built prototypes only.” Each has a link to its own web page with complete information.
Previously I have written about the “tiny home” movement, and I’ve visited several tiny homes, including one on the annual Boulder Green Home Tour. A few years ago, several tiny homes were displayed in the parking lot next to the Golden Public Library, and last year there was a display of them (which I missed) on open land off Pena Boulevard.
Tiny homes are intended to be permanent housing. They have complete kitchens and bathrooms, requiring hook-ups to water and sewer, although some are available as trailers requiring only the occasional RV hook-up. But most of the solutions displayed on the collaborative’s showcase are intended to get homeless people out of tents.
It’s hard to describe the variety of technologies and styles in the showcase, so I’ll show just a few of them here, but each picture below is a link to that entry’s web page.
Not mentioned in the showcase is a British charity called ShelterBox, which I learned about as a Rotarian. Their containers, easily carried by two persons, are warehoused around the world, ready to be deployed quickly to disaster locations. They contain a tent and other aid items such as mosquito nets, water filters, water carriers, solar lights, cooking sets, blankets and mats. It is a charity worthy of your support. Learn more at www.ShelterBoxUSA.org.
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