Our Downtown Location Doubles as a Gallery for Noted Golden Photographer Todd Caudle  

In this picture, Todd Caudle mounts one of six large-format photographs in our new office at 1214 Washington Ave. He lives in Golden proper and is well-known for his photos of such local landmarks as Castle Rock. (See one of them below.) His popular desk and wall calendars, books and note card sets are sold at Red Wagon, 1118 Washington Ave., but our office is the only place you’ll find his large-format photographs.

All six of the photos displayed above our desks are for sale. As they sell, other photographs by the noted photographer will take their place. His collection features Colorado scenes, and we’ll feature his Golden photographs.

You can view all his many photos at www.SkylinePress.com/gallery/fine-art-prints/. Here’s a screenshot from that website.

We are welcoming you to come look at the photos, not just talk to one of our broker associates or me about real estate. Todd is a Golden treasure, and we are delighted to provide a brick-and-mortar outlet for his work. His photos are adding a splash of color to our office.

What Is the Effect of Today’s Surging Inflation Rates on Real Estate?  

With everything costing more these days, from groceries to gasoline to natural gas, what is the effect on the real estate market?

No doubt, you’ve heard that the year-over-year consumer price index increased by 6.8% in November, the highest increase in 40 years.

You also know that real estate prices and rents have increased too. So how do those statistics compare, and is buying still a better choice than renting?

Home prices have actually increased more than consumer prices over the last year, making real estate ownership the best hedge against inflation. In the Denver metro area (excluding Boulder) as of Sept. 30, 2021, according to the National Association of Realtors (NAR), the average sold price of homes was $614,800, an increase of 21.5% over the prior year. The average apartment rental price was $1,689 per months, an increase of 12.5% over the prior year. If you had a mortgage, the average monthly cost of ownership of that average home purchase was an astounding $4,126 per month for a single family detached home, making the rental of an average apartment much more affordable.

But, of course, the money you spend on rent is money down the drain, whereas the homeowner may find that the value of his/her home increases by more than the monthly mortgage payment. To me, there’s no comparison to owning vs. renting, but I understand that renting makes sense for many families.

So, what’s the prognosis for home ownership in 2022?  Because of the inflation rate, we can also expect mortgage rates to rise from around 3% to 3.7% in 2022 according to NAR, but if you already own your home, your low interest rate is locked in. Mortgage rates currently average 3.1%, according to Freddie Mac. 

A higher interest rate, however, could affect what you might sell your home for, if that’s in your plans. Compared, however, to the increase in value you’ve already experienced, I don’t think the effect of higher interest rates will be too much of a downer for you, should you choose to sell.

Unless you’ve switched to heat pump heating and cooling and have installed solar panels to generate the electricity, your home heating cost will increase in 2022. The cost of natural gas has already increased by 25%. The nice thing about electricity is that its cost can only increase by a vote of the Public Utilities Commission, and those increases are more gradual.

Gasoline costs have skyrocketed, but, again, the electricity to power EVs has not, and if you installed enough solar panels, you probably pay nothing for your car’s fuel. I suspect that solar installers are doing a good business nowadays. The cost of solar has plummeted, so call an intaller for a quote.

Interest-Only Loans Make a Comeback. Is One Right for You?  

Interest-only mortgages are making a comeback. Having a full appreciation of how interest-only loans work is key to determining whether this type of loan is the best fit for you. I spoke to Jaxzann Riggs of The Mortgage Network to break down these loans for me.

Well, let’s first answer the question: What is an interest-only mortgage? 

An interest-only mortgage allows you to pay only the interest due on the loan during the first 10 years of the loan – making your monthly payments lower when you first start making mortgage payments.

How do interest-only mortgages work?

A fully amortizing loan requires you pay an amount toward the interest and the loan balance (called the principal) for a set term, usually 15, 20, or 30 years. Lenders often refer to this as the P&I payment (principal and interest).

Interest-only mortgages, however, allow you to make monthly payments that equal only the interest due on the loan, for the first 10 years of the loan. At the beginning of the 11th year, you will begin paying both, the interest due on the loan and a portion of the loan balance.

For example, if you take out a $500,000 interest-only fixed rate mortgage at 4%, with an interest only period of 10 years and a fully amortizing period of 20 years, you’d have to pay about $1666 per month for the first 10 years. When the interest-only period ends, you will still owe the entire $500,000 and your monthly payment amount will almost double to about $3,029 with the inclusion of both principal and interest payments. 

What are the Pros and Cons of an interest-only mortgage?

According to Business Insider, there are many pros and cons to think about. 

Pros:

The initial monthly payments are usually lower: Since you’re only making payments towards interest the first several years, your monthly payments are lower compared to some other loans. 

May help you afford a pricier home: You may be able to borrow a larger sum of money because of the lower interest-only payments during the introductory period. 

Increase to your cash flow: Lower monthly payments can leave you with extra dollars in your budget. You can use that money to put towards other investments, home improvements, or you can start paying down the principal early.

Cons:

You won’t build equity in the home: With an interest-only loan, you aren’t building equity until you begin making payments towards the principal.

You can lose existing equity gained from your payment: If the value of your home declines, this may cancel out any equity you had from your down payment, making it difficult to refinance or sell.

Low payments are temporary: Your low monthly payment won’t last forever — when the interest-only period ends, your payments will increase significantly.

Interest rates can go up: Interest-only loans usually come with variable interest rates. If rates rise, so will the amount of interest you pay on your mortgage.

There are many homebuyers that may benefit from an interest-only mortgage. People who aren’t planning to stay in their home long term can take advantage of the lower monthly payments for several years, and then sell their house before the higher monthly payments kick in. Buyers who are just starting in their careers may appreciate the lower payments while they are making an entry level salary. If your finances are strong and you’re not worried about building equity, this may be a great option for you.

As with any large financial commitment, it’s important for all prospective buyers to seek expert advice. Reach out to Jaxzann Riggs at 303-990-2992 with any questions.

It is important to note, however, that once the initial interest-only term ends, you’d continue making payments toward the loan with both principal and interest included.

Just Listed: 3-Bedroom, 2.5-Bath Home in Arvada’s Wood Run III Subdivision

This home at 9710 W. 82nd Place enjoys the largest lot in Wood Run III, and is convenient to many amenities, including the Dry Creek Trail, Standley Lake Library, Wood Run Park, Fireman’s Park and Pomona Lakes 1 & 2. If allergies are an issue for you, you’ll appreciate the lack of any wall-to-wall carpeting. The upper level with the 3 bedrooms is all parquet flooring except for the tiled bathrooms. Other features include a wood-burning fireplace, new skylights in the living room, lots of real wood walls, including cedar, a whole-house steam humidifier, newer clothes dryer and fencing, large covered deck, and mature trees pruned earlier this year. You can look forward to a new community pool in 2022. Seller says the neighbors are wonderful. You can view a narrated video tour with drone video by clicking on the YouTube thumbnail below or at www.ArvadaHome.info. Open house will be this Saturday, Dec. 18th, 11 am to 1 pm.

https://youtu.be/vfHb-y26iPo
created by dji camera

Realtor Magazine Features All-Electric Home Trend  

This week’s email from Realtor Magazine featured “13 Home Trends Stealing the Spotlight in 2022,” and I was pleased to see that trend number twelve was “All-Electric Homes.”

I could have written it myself! I can’t improve upon the wording, so here it is, verbatim:

     More homeowners understand the importance of “decarbonizing” everything from products to transportation, and especially their homes, says Chicago- and Boulder, Colo.-based architect Nate Kipnis of Kipnis Architecture + Planning. “The way we can best do this is by eliminating all fossil fuels use from houses and including induction cooktops rather than gas for cooking, which offers safer, faster, and more even cooking,” he says. Kipnis recommends using either an air-source heat pump (mini-split) for the HVAC system or a ground source system (geotherm-al). The big payoff, he says, is that renewable energy has become the cheapest form of electricity generation.

Housing Trends Reflect Pandemic’s Influence  

The effect of pandemic lockdowns has triggered more interest in working at home, a trend that will be long-lasting and possibly permanent.

Early in the pandemic we saw a surge in real estate activity as buyers sought more space for working from home. Compounding that was a desire for more at-home entertainment and exercise. People want not only a home office, but a home theater and a home workout facility. These are features that will, in my opinion, dominate home design and buyer demands for at least the coming decade.

People feel safer at home, but they don’t want to feel cloistered. They want elbow-room.

Lockdowns also triggered more separations and divorces as couples who weren’t really in love found that being cloistered together at home didn’t work for their relationship. This also contributed to the real estate boom of 2020 and into 2021.

Real estate was considered an “essential service” in the early days of Covid-19 lockdowns, and we Realtors certainly relished the lack of traffic and traffic jams on local highways.  Those days of free-flowing traffic may be gone, but there is still a widespread appreciation of working from home and doing less commuting. This means continued buyer activity focused on finding additional home office space.

Some homeowners are finding that additional space at home instead of trading up to a bigger home. There’s increased interest, for example, in building ADUs over detached garages, not to create rental income (a great idea) but for the homeowner’s own use as a studio or office away from family distractions.

An attached garage can offer great potential for additional living space, not just as a workshop, but as a home office, art studio, workout room or even a bedroom if necessary. Heating and cooling, on top of improved insulation, will be job #1 before improving the flooring, walls and ceiling. Rather than extending your home forced-air furnace ductwork, consider installing a single-unit heat pump mini-split system.  I saw this on a garage in north Golden—a perfect application of this technology.

Click here for the Realtor Magazine article which inspired this article.

BONUS FEATURE:

Here’s an article submitted by Tina Martin about transforming your garage into a great work space:

Work-from-home jobs have become much more prevalent in recent years, with many people looking for remote opportunities or even starting their own businesses from the comfort of their houses. If you’ve just started working from home or are planning to in the near future, you’ll need a quiet, dedicated space for an office, and one place you may not have thought of to create a setup is your garage. With a few simple changes, you can transform this area into another room that comes with plenty of benefits–including more privacy and fewer distractions. You can also look for ways to make the transition to working from home a little easier at the same time.

Come prepared

If you’re going to be working from home at your own business, it’s a good idea to be as prepared and organized as possible to make the process a smooth one. This means taking steps to ensure that your company has all its bases covered legally, including creating an LLC so you can keep track of your tax responsibilities and remain in good standing with the IRS. A limited liability company comes with less paperwork and more flexibility than a corporation, so you can stay on top of things and run your business the way you want. Every state has its own rules for formation, so look up the steps for creating a Colorado LLC before jumping in.

Set up your workspace

Once you have the details figured out, it’s time to think about how to turn your garage into a room you can work in throughout the seasons. Of course, you’ll need access to wi-fi and electricity, but never try to handle electrical work on your own–hire a pro if you have to add wiring to your garage. If you already have wi-fi in your home, a simple and affordable signal extender could help you bring service to your new workspace. You’ll also want to make sure you have access to cool and warm air for the different seasons and that the garage is well-ventilated. Add shelving and a desk so you can keep things neat, and don’t forget to bring in a comfortable, supportive chair.

Let some light in

Once you know where your desk will be, think about how to make sure you have the right light for your needs. Many garages have overhead fluorescent lighting, which can be tiresome to your eyes for long periods of time. Look for a small lamp or two that will provide task lighting to the right areas and diffuse the overheads for your comfort. If your garage has a window, even better! Natural light is beneficial for working in an office because it can help to prevent disruptions in the circadian rhythm and boost your mood. If you don’t have a window, take breaks throughout the day and step outside for some fresh air.

Keep distractions out

Once you have your office space set up, it’s time to keep the distractions to a minimum. There are several ways you can achieve this, but you might start by replacing the garage door with a regular one that locks. Keep your new office space dedicated to business-only; the more it looks and feels like home, the easier it will be for you to put off work. It’s also a good idea to keep devices out of the space unless they’re necessary for your job.

Creating a home office out of a garage doesn’t have to be time-consuming or costly. With a few simple moves, you can turn this space into an entirely new room and give yourself the workspace you’ve always wanted in the process.

Must Read: ‘From Homes to Cars, It’s Now Time to Electrify Everything’  

Every now and then I read an article that I am compelled to share, because it simply “nails it.”

Such was the article by Saul Griffith, published Oct. 19, 2021, on the Yale School of the Environment website, http://www.e360.yale.edu, and re-posted Nov 30, 2021, on GreenBuildingAdvisor.com.

Here’s a link to the full article: https://e360.yale.edu/features/from-homes-to-cars-its-now-time-to-electrify-everything.

The thesis of that article is summarized as follows: “The key to shifting away from fossil fuels is for consumers to begin replacing their home appliances, heating systems, and cars with electric versions powered by clean electricity. The challenges are daunting, but the politics will change when the economic benefits are widely felt.”

The diagram above right shows what can be electrified in a home. Rita and I are most of the way there. This fall I purchased an electric snow blower to complement our electric lawn mower, weed eater, leaf blower and automobiles. Earlier this year I purchased a heat pump water heater to complement our heat pump hybrid furnace. (Hybrid, because it still burns natural gas when the outdoor temperature dips below 30° F.)

All these electric devices are powered by the sun, thanks to our 10-kW solar PV system installed when we bought our home in 2012.  Because we still cook with gas and occasionally burn gas in our furnace and fireplace, our Xcel bill is still around $35-40 per month, but we’re doing our part to “electrify everything.”

You can do that, too.

The central thesis of Saul Griffith’s article is that we have little control over the supply side of energy, although there are encouraging signs of it becoming less dependent on fossil fuels.  But we have total control over the demand side of energy:

“We don’t have a lot of choice on the supply side, but we have all of the choice on the demand side. For the most part, we decide what we drive, how we heat our water, what heats our homes, what cooks our food, what dries our laundry, and even what cuts our grass. This constitutes our ‘personal infrastructure,’ and it is swapping out that infrastructure that will be a key driver of the global transition from fossil fuels to green energy.”

According to Griffith, who co-founded the non-profit Rewiring America, there are 280 million cars and trucks in America, 70 million fossil-fueled furnaces, 60 million fossil-fueled water heaters, 20 million gas dryers, and 50 million gas stoves, ovens and cooktops. Until now, the conversation has been about making each of those fossil-fueled appliances more efficient, earning “Energy Star” ratings.

But the real goal should be to replace them with electric appliances burning the increasingly green electricity which is being generated by our electric utilities.

A common refrain from people regarding electric cars is that they are not really zero emissions because of how the electricity is generated. I myself was originally reluctant to buy an EV because I didn’t want to “switch from burning gas to burning coal.”

However, that argument overlooks the relative efficiency of electric motors.  In a fossil-fueled car, only 20% of the energy in the fuel is propelling the car. The rest is waste energy, primarily creating heat which then requires more fuel to cool it. In an EV, 90% of the energy from the battery propels the car. There’s almost no waste energy.

An suitable analogy to the gas-powered car is an incandescent light bulb, in which light is a byproduct of heating the filament. It’s no surprise that the LED light bulb uses about 20% of the electricity of an incandescent light bulb for the same amount of light, because light is the primary product of the LED, not a by-product of waste energy.

Because of its relative efficiency, even if an EV is charged from electricity created entirely by coal, its carbon footprint is far below that of a fossil-fuelel vehicle. The same applies to today’s highly efficient heat pumps for both space heating (and cooling) and for water heating.

Griffith’s point is that more efficient fossil-fueled appliances won’t get us where we need to be to save the planet from catastrophic climate change. We need to get to zero emissions, which is only possible by going all-electric in our homes and vehicles as our electric utilities make their inevitable transition — whether incentivized by government or simply by the economies of renewable energy — to clean energy.

You, like me, will love the effects of this transition to all-electric living. Imagine a future where carbon dioxide is not a household poison; where motorcycles don’t disturb the peace and quiet of our streets and canyons; where semis slow down quietly because they are putting energy back into their batteries instead of using loud and polluting engine braking; where our neighbors aren’t disturbed by loud lawn mowers, snow blowers and leaf blowers; and where children no longer suffer health problems from their own school buses or playgrounds next to highways.

You, like me, will appreciate the ease of use and near-zero maintenance of electric devices. My snow blower, lawn mower, and leaf blower start by pushing a button or pulling a lever and never need a tune-up, refueling or oil change.

Griffith is not arguing that everyone should immediately swap out their fossil-fueled cars or appliances but rather avoid replacing them with newer ones. Cars, for example, can last for 20 years, and gas furnaces for 15 years. When they need replacing, make the smart choice and replace them with their electric counterparts. You’ll be glad you did five or ten years later when their resale value has evaporated due to public recognition that they became obsolete before you purchased them.

Recommended Video: Are We in a Housing Bubble?  

This is a question that seems to be on everyone’s mind, especially after a year which has seen double digit appreciation in home prices.

Finally, I found a focused discussion on this topic by highly knowledgeable persons that I can recommend. Here’s a YouTube link for that discussion. The panelists are Nick Bailey, president of Re/Max, LLC, Lawrence Yun, chief economist for the National Association of Realtors, and Ward Morrison, president of a mortgage franchising frim. The consensus of these experts is that 2022 will see most appreciation (3 to 5%, says Yun) but no crash. The main reason is the imbalance of supply and demand and mortgage rates projected to be no higher than 4%, which is still quite low.

The record job growth is also a critical factor. Foreclosures will remain low because only 2% of homeowners have negative equity. Watch the 28-minute video on our blog. You’ll learn a lot, as I did.

Come Visit Us at Our New Downtown Golden Office, 1214 Washington Ave.  

The broker associates at Golden Real Estate and I are truly excited about our new office in the heart of downtown Golden. It has been over 14 years since we launched Golden Real Estate in the former restaurant building at 17695 S. Golden Road.  We would have liked to be in downtown Golden, but we needed a place to park our free moving truck where it could be seen by passersby as our “billboard on wheels.” 

When Rita and I bought that building, I was a broker associate at RE/MAX Alliance, and I wanted it to be a satellite office for that brokerage, but RE/MAX International wouldn’t allow us to display a RE/MAX sign because of the other franchises in the area. I liked the building more than the brand, however, so that’s when I decided to create Golden Real Estate, securing the corporate name and the URL www.GoldenRealEstate.com for our website. And, as they say, “the rest is history.”

A downtown storefront has the advantage of more walk-by and walk-in traffic. Before signing the lease on our storefront, I checked the transaction volume of the other real estate brokerage on the street and discovered that their ratio of buyer sides to listing sides was 2:1, whereas our ratio on S. Golden Road was 1:2.  We look forward to increasing our buyer representation in our new location.

The left half of the picture above is a visualization of the TouchPoint Systems display that will be installed this week. It is a through-the-glass touchscreen unit which allows passersby to  search the MLS real-time, featuring Golden and Jefferson County listings in a slide-show format when not being actively used. The closest similar installation is in the window of an Olde Town Arvada brokerage.

Sharing our office is Wendy Renee, a loan officer with Fairway Independent Mortgage Corporation. Would-be buyers will appreciate being able to meet with a lender in conjunction with their home search without leaving our office.

Although we can’t park it downtown, we’ll still be offering our free moving truck to buyers and sellers and to local non-profits such as BGoldN, the Christian Action Guild, and the Golden Chamber of Commerce, of which we’re a long-time member. It will still be parked at our former office on South Golden Road, which Rita and I still own, and which we’re converting into a one-stop shop for “all things sustainable” under the name The Net Zero Store.

Several readers, upon learning of our move downtown, called me last week to ask if we’re still accepting Styrofoam for recycling. I assured them that nothing has changed in that regard.  As a matter of fact, we took a truckload of the material to the recycling center just this week and expect to continue doing so twice a month from the “Styrofoam Corral” behind our former office,

Aside from this column, which I have been publishing on page 3 of this newspaper for over a decade, we are best known, perhaps, for the live-action narrated video tours and drone videos which we create for each of our listings. I enjoy creating the narrated videos so much, I offer to do them for our broker associates, although some of them choose to do their own. They are so effective that we have sold listings to out-of-town buyers who only saw the home in-person when they flew in for the inspection.

For out-of-town buyers interested in homes listed by other brokerages, we have shot video tours for their eyes only, often resulting in a signed contract without those buyers seeing the home in person prior to inspection.

For sellers, we provide a free staging consultation to help their home show its best. We also have an in-house handyman to work on those things that need to be handled before going on the market.

My Favorite Home Improvements When Purchasing a New-to-Me Home  

This column is adapted from my July 18, 2019, column on this topic.

Energy efficiency is very important to Rita and me, so the first thing we did when we purchased our current home was to pay for an energy audit to identify opportunities for making the home more air-tight. One result of that test was to blow additional cellulose insulation into walls and ceilings and to caulk around windows. We considered installing an energy recovery ventilator (ERV) to bring fresh air into the home using a heat exchanger that warms outside air in the winter and cools outside air in the summer. Instead we installed a fan in our powder room that runs 24/7 at a very low volume, but higher when occupied.

I love bringing sunlight into a home, with sun tunnels. Rita and I had Mark Lundquist of Design Skylights install a Velux sun tunnel in our garage and another one in our laundry room. (He installed four more at Golden Real Estate.)

Speaking of sunlight, we replaced every light bulb in our home with LEDs which are “daylight” color.

Installing solar photovoltaic panels is a no-brainer now that the cost has dropped so much. Your roof doesn’t have to face due south. Southeast and southwest are good enough. Since everyone will be driving an electric car eventually, install as much solar PV as Xcel Energy allows to cover that future load.

Don’t you hate climbing a curb to enter your driveway? Developers install mountable curbs the entire length of residential streets, because they can’t know where each driveway will be. One of the first things we did at our home was to remove the mountable curb in front of our driveway.  It cost about $2,000 for our 3-car-wide driveway, but we love it every time we enter from the street!

When your gas forced air furnace needs replacing, consider replacing it with a heat-pump or hybrid furnace. And when your gas water heater needs replacing, I recommend buying a heat-pump water heater. We bought a 50-gallon Rheem unit for $1,200, but it came with a $400 rebate. Once you’ve replaced both, you will have eliminated the most common sources of carbon monoxide poisoning in your home. 

Other improvements I’d recommend: Replacing any bathroom carpeting with ceramic or porcelain tile; replacing regular double-pane windows with Low-E windows on south-facing windows; replacing fluorescent fixtures (as we did in our garage) with flush-mount LED panels sold at Lowes for about $100.  Love ’em!