The Future of Heating is Heat Pumps, Not Gas Forced Air

Here in Colorado, as in much of the country, the typical home heating system is gas forced air. A gas flame heats up a plenum across which a fan blows air through ductwork into the various rooms of a house.  For cooling, the same ductwork and fan are used, but instead of the flame heating that plenum, the air passes over a set of coils beyond the plenum with super-chilled fluid created by an outdoor compressor.

Gas forced air, however, is relatively inefficient and is only common in the United States because of our exceptionally low cost of natural gas and other fossil fuels.

Elsewhere in the world, heating is done using heat pumps. What is a heat pump? Your central air unit is a heat pump, but it operates in only one direction—extracting heat from indoor air and dissipating it outdoors. A heat pump heating system simply reverses that process, creating heat by extracting heat from outdoor air and dissipating it in your home, either through your existing ductwork or through wall-mounted “mini-split” units. Unlike gas, a heat pump moves heat instead of creating it.

How a heat pump works to heat and cool a home using wall-mounted mini-split units heated and cooled by an exterior compressor.

Rita and I replaced our gas furnace in 2012 with a hybrid system by Carrier. It heats our home using the heat pump unless the outdoor temperature falls below freezing, at which point a gas burner kicks in. With our solar panels providing the electricity for the heat pump, our highest mid-winter Xcel bill is under $50. Meanwhile, at Golden Real Estate’s office, as described in my Jan. 4, 2018, newspaper column, we got rid of our furnace and ductwork and installed a ductless mini-split system (like in the above diagram), also powered by solar panels. As a result, our Xcel bill is under $11/month year-round.

Last Call for a Unique & Historic Golden Property

On January 1st, our listing at 623 14th Street goes off the market for a couple months. This 1867 home, built before Colorado was a state, and the lot behind it in downtown Golden represent a terrific opportunity.  There are two parcels to this listing, a rectangular lot with the historic home, currently zoned commercial, and a vacant triangular lot behind it. That lot has a wind turbine and an electric vehicle charging station on it. View the narrated video tour and drone footage and read the history of this home at www.HistoricGoldenHome.com, then call 303-525-1851 for a private showing.

Denver’s Winter Real Estate Market Isn’t Slowing As Much As Reported

Here at Golden Real Estate, we are used to having a pretty active real estate market during the winter months, but recent news reports suggested that the market has slowed dramatically, with sellers more reluctant than in the past to put their homes on the market. Statistics show that analysis to be overblown.

Below is a chart showing 6 years of June and November listing activity on REcolorado.com (Denver’s MLS) limited to the City & County of Denver. (Further down I analyze Jefferson County statistics.) December numbers are not available yet, so I’m only showing November activity. It’s not exactly winter, but the trend over 6 years is still useful for the purpose of this analysis.

What the analysis shows is that there was in fact an increase of sales during November over the previous year and nearly as many new listings. The number of active Denver listings in November was less than last year’s peak but still higher than the four previous Novembers. Both median and average days on market were only slightly higher, and the median sold price was much higher than last November. Moreover, the ratio of sold price to listing price was even higher this November than it was in November 2018.  As for this month, there have been 384 new listings through Dec. 16th — exactly the same as during the first 16 days of December 2018.

In contrast to Denver and the full MLS, Jefferson County showed a slight slowdown in every metric except the number of sales and the median sales price, as show in these statistics garnered from REcolorado:

While the number of November closings in Jefferson County this year is comparable to previous years, the number of new and active listings this November is markedly lower than last year, and the median and average days on market are markedly higher. Despite the slowdown, the median sold price is higher—a new record for November—but the ratio of sold price to listing price is lower than all five prior years..

As for this month (through last Sunday) we have 257 new listings here in Jeffco, compared to 250 new listings for the same 15 days in December 2018, so that’s unchanged, but almost every agent I’ve spoken to senses a slowdown in real estate activity that is greater than we typically experience at this time of year.

As I’ve written before, winter is, in fact, a good time to sell a home, but it’s true some sellers continue to think otherwise. If a home is not overpriced, it can sell quickly in the winter months for a variety of reasons, the biggest one being that there is less competition from other listings, but there are countless buyers still getting alerts from the MLS, Zillow and other websites when a new listing matches their search criteria.  Sellers also appreciate that only serious buyers ask their agents to show homes at this time of year. Lookie-loos are really a fair-weather phenomenon.

Call one of us at 303-302-3636 for a market analysis, including localized winter statistics. By the way, Golden Real Estate, although based in Jefferson County, is also active and successful in the Denver market. Please consider us when it’s time to sell or buy!

Golden Real Estate Uses an App to Protect Clients From Being Scammed

For over a year, we at Golden Real Estate have had access to an app that is only available to licensed real estate professionals for the purpose of protecting our clients (and us) from would-be criminals or scammers.

The app is called Forewarn, and it enables us to trace any phone number within seconds to verify the age, address, criminal record and other information about the caller.

At right is a screen shot from the app when I enter my own cell number, showing the many categories of information available for any person identified using the app. I urge my broker associates to use the app themselves or ask me to use it when they want to verify the background of any stranger who asks them to set up a showing. Any Realtor who joins Golden Real Estate has free access to this information to assist clients and for their personal safety.

We originally subscribed to this service to protect ourselves — especially our female agents — following the murder of a Louisiana agent by a person posing as a buyer. However, we have learned that it’s a service that could help clients and us from being scammed.

This app is not available to people outside the real estate profession, and any agent who applies for the app is also screened so the tool does not get into the hands of the wrong people.

We use this app to protect our clients from scammers who are increasingly targeting homeowners as well as home buyers.

As explained by Forewarn, fake internet listings, fake homeowners or sellers, and fake investors are just some of the reasons working with a real estate agent who has purchased this app can help buyers and sellers avoid scammers and avoid potentially losing thousands of dollars.

According to the FBI, there were 11,300 victims of fraud involving real estate in 2018, with victims losing almost $150 million  We can use the app to verify the identity of anyone pretending to be a landlord, seller, buyer or renter.  If we don’t have a phone number for the person, we can use the app to look them up by their name and city. If it’s an unusual name, we don’t even need the city, just the state.

Perhaps you, like so many, have received phone calls, letters or postcards from investors or individuals offering to buy your home. Homeowners have very few resources for verifying such a person’s identity or legitimacy. With this app, we can help you verify a buyer’s identity, and verify their financial history (bankruptcies, liens, judgments), while helping you get the best price for your home. On the other side, there are real estate investors being scammed as well. Being able to quickly verify identity and property ownership may help reduce the chance of fraud.

There are plenty of fraudulent activities in the real estate industry. Using the app, not only to verify prospects but also the other parties involved in a transaction, can reduce financial risk for you as well as bring to light fake identities.

There are so many kinds of scams that we can help you avoid. It’s one of the ways that our broker associates and I can add significant value to each real estate transaction and to our community.

As Realtors, we have many other resources available to us, such as an app which provides detailed information about properties anywhere in America, including the name of the owner(s) and estimated valuation.

This is another reason to work with a broker from Golden Real Estate.  Call one of us today!

Putting Your Heirs on Title so They Inherit Your Home May Not Be the Best Strategy

It’s a common practice for seniors to add their children or other would-be heirs to the title of their home, but that well-intentioned act could end up costing those heirs increased capital gains taxes when they sell the property later on.

Let me explain.

I’m not a tax advisor or accountant, but I’ve learned the following. If you add an heir to the title of your home as “joint tenant with right of survivorship” and you die, the heir becomes the owner once your death certificate is filed with the county clerk and recorder. But that heir also inherits the “basis” for your home.

The basis is what you paid for your home when you bought it, plus any capital improvements made over the years. When your heir goes to sell your home after your demise, they will be subject to capital gains tax for the increase over that basis.

Let’s say you purchased your home in the 1960s or 1970s for $30,000.  It may be worth over $500,000 now.  Even if the basis is increased to $100,000 thanks to improvements plus the cost of selling it, your heir will pay capital gains tax on $400,000. That comes to about $80,000 in combined state and federal taxes on that $400,000 gain.

However, if you don’t add that heir to the title of your home and let him or her inherit the home through your last will and testament, the basis is stepped up to the home’s value at the time of your death, and that capital gains tax liability disappears.

Talk to your tax advisor and a lawyer about this issue. It is easy to remove your heir from the title to your home through a simple “quit claim deed.”  The form is widely available online.

Reader Asks: Should I Spend Money on Home Staging?

There are two kinds of home staging: 1) vacant home staging where you rent furniture and accessories; and 2) rearranging your furniture and other “stuff” to make the home show its best.

The jury is out on the former (which can cost a lot of money), but the latter is essential and doesn’t need to cost you anything. At Golden Real Estate, we provide staging consultations free to our sellers. One of our broker associates, David Dlugasch, is a Certified Home Stager®. Like all our associates, I can give general advice on staging your home, but I hire David to provide a full staging consultation free to my sellers.

Property Tax Is the Original ‘Wealth Tax’

Like you, perhaps, I was surprised and not quite sure what to make of the proposal from more than one presidential candidate to impose a wealth tax, not simply an income tax, on the super-rich. 

Then it occurred to me that it’s really nothing new. Homeowners already pay a “wealth tax” in the form of  property taxes, but it’s not a graduated tax paid only by the super-rich, as proposed by Elizabeth Warren and others.