Thanksgiving 2022 – In Spite of Everything, Much to Be Thankful for

First of all let me thank The Denver Post for making it possible for me to reach its many readers for well over a decade in this YourHub ad. I estimate that we get 90% of our real estate business from people who read this column and are inspired to contact us when they have a real estate need. Although we pay for this ad and for its placement on page 3 — the best ad location in any newspaper — they don’t need to sell it to us, and I thank them for letting me advertise here.

The feedback I get from many readers is that this is the first place they turn to when they receive this newspaper. What a great compliment that is, so my second “thanksgiving” is to you, my readers for following this column each week and thinking to call us when you have a real estate need. You can count on me to continue writing this column week after week and year after year so long as The Denver Post keeps it affordable!

By the way, should you move or stop subscribing to this newspaper, remember that I send it by email to over 1,400 subscribers (free, of course), and I would be happy to add you to that list.

Next, I am thankful to Golden Real Estate’s broker associates who continue to excel in serving our clients year-round. They share their commission earnings with the brokerage, of course, but are compensated for that    in various ways, including having their listings featured in this ad and being themselves promoted at the bottom of each week’s ad. They are all excellent Realtors who share our company’s values, an example of which is that the majority of them drive Tesla cars! I am blessed that they choose to be associated with Golden Real Estate and am happy to share with them many of the leads which come to me from readers of this column.

(By the way, we welcome applications from other licensed agents, as long as they share our values and are Realtor members.)

One of the unexpected secrets to Golden Real Estate’s success has been my personal outspokenness politically, which has meant disparaging former President Trump and his MAGA allies in my Talking Turkey column. There was initially some concern that we would lose business, but the opposite has been true. Readers who have appreciated my political stand have chosen Golden Real Estate as their brokerage because of my writings. The gained business has far outweighed the lost business, which I hope inspires other Realtors and brokerages to be less shy about sharing their patriotic beliefs, whether left or right. As citizens, let’s put country before self, however that looks.

In that regard, I am especially thankful for the results of the midterm elections.  And I’m guessing that next year I’ll be thankful that Donald Trump has entered the 2024 presidential race. May he do even more damage to the MAGA cause that he has already done!  More importantly, however, may his candidacy contribute to the revival of the mainstream Republican Party,  re-earning its designation as the “Grand Old Party.” That was the party of my father, and I miss it!

As always, I continue to be thankful for the contribution made by the National Association of Realtors (NAR) to protecting and promoting home ownership and the real estate industry. Only half of licensed real estate agents pay dues to NAR through their local Realtor association, but NAR continues to serve the entire industry as well as the general public by lobbying against negative legislation and government regulation on both the national and state level. Thank you, NAR!

I am grateful, too, to the Golden Chamber of Commerce and all metro area chambers of commerce for all they do to serve the business community, and I’m proud that Golden Real Estate pays dues to our own Chamber, regardless of the direct benefit we may gain from membership. It’s our way of giving back to the community by providing sustenance to an organization that serves the community.

We are also grateful to have made the move to downtown Golden, now occupying a storefront next to Ace Hi Tavern. Come by and say hello, perhaps during December 2nd’s candlelight walk!

I also thank Wendy Renee of Fairway Independent Mortgage Corporation for choosing to office inside Golden Real Estate’s storefront. She adds important expertise to our office and helps us to serve the many walk-ins we are welcoming in our new location.

Last but not least, Rita and I are thankful for our relationship with each other and our extended family. Happy Thanksgiving to all!

Back on the Market: Solar-Powered Home In Green Mountain Village

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, which is seller-owned. The address is 14165 W. Bates Ave., south of Yale Avenue and north of Bear Creek Lake Park. 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. Narrated video tour at www.JeffcoSolarHomes.com.

Just Listed: Sprawling 4-Bedroom Applewood Ranch Home

This sturdy brick ranch at 13955 W. 31st Ave. is in that special section of Applewood Ranchettes which is south of 32nd Avenue and east of Eldridge Street. Built in 1961, it was home to the seller for 52 years, and the love with which it was maintained is evident throughout! The seller moved out of state and is including lots of furniture which the buyer can keep or ask to be removed. It has hot water baseboard heating combined with ducted central air conditioning from an air handler located in the attic. All the major components are from 2009 or later, so it’s unlikely there will be many inspection issues. In the huge backyard is a 12’x36′ RV parking slab, plus a newer 8’x12’ Tuff Shed. The oversized 2-car garage has a storage room behind it, too. There’s a 2-sided wood-burning fireplace in the living room and a free-standing wood-burning fireplace in the family room. The kitchen was updated in 2006 with slab granite countertops and stainless appliances. Take a narrated video tour at www.ApplewoodHome.info, then come to our open house Saturday, 11 to 1.

Redfin Shuts Down Its iBuyer Unit. Will Opendoor and Offerpad Survive This Down Market?

The big news in real estate last week was the announcement by Redfin that it was shutting down its fix-and-flip unit called Redfin Now and has terminated 13% of its employees.

The end of the seller’s market has left iBuyer outfits like Redfin’s with homes they paid too much for and can only sell for a loss. A good example of that is Opendoor’s listing at 2090 Braun Drive in Applewood, which I mentioned in my column on August 11, 2022, under the headline, “Looking for Good Deal? Opendoor Is Slashing Prices to Clear Its Inventory.” As the MLS chart below shows, Opendoor purchased that home on Sept. 3, 2021, for $638,300, tried to flip it 4 months later for $652,000, and had already reduced its price to $620,000 by August. That home is still sitting on the market in November, now priced at $562,000 — $76,300 less than Opendoor paid for it over a year ago.

Opendoor currently has 165 unsold listings on REcolorado, the Denver MLS, and the median days on the MLS without selling is 115 — nearly 4 months. Once a home has been active without selling for about a month, Opendoor starts reducing the price, and pretty soon, their profit margin has disappeared.

In the last 30 days, Opendoor has closed on 68 listings, and the median days on the MLS for them was 90.  That median listing that was unsold for 3 months was purchased by Opendoor for $692,700, listed at $760,000 and sold for $650,000, representing an even bigger loss when you factor in the co-op commission paid to the buyer’s agent, renovation costs, and staff costs, not to mention the carrying cost of their investment in the property, property taxes, and more.

The company reported a $928 million loss for the third quarter ($573 million of which was from revaluing its unsold inventory), laid off 550 workers, and saw its stock price fall to just above $1. If it falls below $1 for a month, it will be delisted from NASDAQ.

How much longer can Opendoor and Offerpad, its one remaining competitor, (whose stock price is already under $1), sustain such losses? We’ll see, won’t we?

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.