Denise Wambsganss
Realtor Your Castle Real Estate

Monday, April 26, 2010

Shadow Market in Denver (Real Estate)

Hello Everyone: Below is an overview from a person in the company I work for... Your Castle Real Estate concerning the "Shadow market" in Denver, Colorado. Note: This is only estimate of what will happen with the Housing market in Denver market, However, he is usually pretty much right on.

In today’s Wall Street Journal there is an article (copied below) about the size of the shadow foreclosure market. This economist pegs it at 1.1 million homes. The Denver metro area is about 0.8% of the overall US population, so as a really rough guess, we would have 8,800 of those homes. That’s only a rough guess of course.

We sold 38,100 DSF + 11,600 CND in 2005 (total = 49,700 resale homes, not counting new construction). This declined to 29,100 DSF + 8,230 CND = 37,339 resale units sold in 2009. In the unlikely event the shadow market homes were dumped on MLS tomorrow morning, we could sell what we sold in 2009 AND all of the shadow homes and still be under the sales volume in 2005!

Here’s another, more realistic way to look at it. Most of the shadow homes will likely under the median sales price. That’s $210K for DSF and about $165K for CND. For this least-expensive half of the market, we have 2.3 months of inventory for DSF (six months is normal) and 4.3 MOI for condos. Blended, it’s 2.9 MOI, a pretty strong seller’s market. If you dumped all 8,800 shadow units on the market tomorrow, we’d increase to 8.7 months of inventory. That is a slight buyers market. More likely, the shadow market will be trickled slowly onto the MLS over months, if not years.

Tuesday, April 20, 2010

Tons of Information about Denver, Colorado


I have been talking with a lot of people relocating to Denver, Colorado and discussing Real Estate. However, I also share the info below about Denver, Colorado. Thought you all would be interested too.

Denver's Population:

Denver has more than doubled in population since 1960. The City & County of Denver had a population of 554,636 in 2000, making it larger than the entire population of Wyoming (which has 480,000 people). The six-county metro area has a population of 2.4 million. Denver's metro population has increased by 29.8% since 1990. Denver is the 20th largest metro area in America, and has the 10th largest downtown area.

The City & County of Denver has a diverse ethnic population including 11.1% African American; 31.7% Hispanic; 2.8% Asian and 1.3% Native American. Metro Denver has an ethnic population of 5% Black; 18% Hispanic; 3% Asian; 1% Native American and 3% multi-racial. All of Colorado is experiencing a population boom with over 1,000,000 people moving to the state in the last decade. Colorado's population grew 30.5% from 1990 to 2000 with a current total of 4,301,261 residents. It was the third fastest growing state in the last decade.
Highest Educated City:

Denver is the most educated city in the U.S. Denver has the greatest percentage of college graduates of any major metropolitan area in the U.S.; 92.1% of the population in the metro area have high school diplomas and 35% have at least a bachelor's degree, according to the U.S. Census. The national average is 81.7% for high school diplomas and 23% with a college degree.
Baby Boomer Capital:

Denver also is the nation's baby boomer capital, with the highest percentage of boomers of any major city, according to the 1998 U.S. Census. One third of the city is between age 35 and 54. Including small cities, only two had a higher percentage than Denver -- Santa Fe and Anchorage. Among major cities, percentage of boomers is: Denver 32.8%; Seattle 31.5%; Atlanta 31.4%; Washington 31.4%; Portland OR 31.4%; San Francisco 30.8%.
Thin City:

Denver is also the "thinnest" city in America and Colorado is the thinnest state. A study by the American Cancer Society in 2002 found that Colorado is the only state in the nation in which fewer than half the people are obese. Only 48 percent of Coloradoans are overweight or obese; every other state had more than 50 percent of their population in this category. The active lifestyle in Colorado, the great weather, the abundance of recreational opportunities and the high education level are credited for this fact. A 1996 federal study of weight by cities found similar results with Denver being listed as the "thinnest" city.

The State has a population of 4,301,261 in 2000, a 30.6 percent increase since 1990 with more than 1 million people moving to Colorado in the past decade, an average of 276 new residents every day for the past decade.
Contrary to popular belief, Denver is not in the mountains -- it is near them. The "Foothills" (a gentle series of peaks ranging from 7,000 to 11,000 feet high (2,133 to 3,353 meters high) start to rise 15 miles (24 kilometers) west of the city. Slightly beyond that is the Continental Divide and a series of peaks soaring to heights of 14,000 feet (4,267 meters) known locally as the "Front Range." Denver itself is located on high, rolling plains.

Although considered "Western" in character, Denver is actually located in the center of the country, just 346 miles (557 km) west of the exact center of the continental United States. With the exception of Kansas City, Denver is closer to the exact center of the nation than any other metropolitan area. The 15th step on the west side of the State Capitol Building is exactly 5,280 feet (1,609 m) -- one mile -- above sea level.

Denver was founded during the Pikes Peak Gold Rush in the Kansas Territory in 1858. That summer, a group of gold prospectors from Lawrence, Kansas arrived and established Montana City on the banks of the South Platte River. This was the first settlement in what was later to become the city of Denver. The site faded quickly, however, and was abandoned in favor of Auraria (named after the gold-mining town of Auraria, Georgia) and St. Charles City by the summer of 1859. The Montana City site is now Grant-Frontier Park and includes mining equipment and a log cabin replica.

Photo: Former Kansas Territorial Governor James W. Denver visited his namesake city in 1875 and in 1882 On November 22, 1858, General William Larimer, a land speculator from eastern Kansas, placed cottonwood logs to stake a claim on the hill overlooking the confluence of the South Platte River and Cherry Creek, across the creek from the existing mining settlement of Auraria. Larimer named the town site Denver City to curry favor with Kansas Territorial Governor James W. Denver.

Larimer hoped that the town's name would help make it the county seat of Arapaho County, but ironically Governor Denver had already resigned from office.
The location was accessible to existing trails and was across the South Platte River from the site of seasonal encampments of the Cheyenne and Arapaho. The site of these first towns is now the site of Confluence Park in downtown Denver. Larimer, along with associates in the St. Charles City Land Company, sold parcels in the town to merchants and miners, with the intention of creating a major city that would cater to new emigrants. Denver City was a frontier town, with an economy based on servicing local miners with gambling, saloons, livestock and goods trading. In the early years, land parcels were often traded for grubstakes or gambled away by miners in Auraria.

The Colorado Territory was created on February 28, 1861, Arapahoe County was formed on November 1, 1861,and Denver City was incorporated on November 7, 1861. Denver City served as the Arapahoe County Seat from 1861 until consolidation in 1902. In 1865, Denver City became the Territorial Capital. With its new-found importance, Denver City shortened its name to just Denver. On August 1, 1876, Denver became the State Capital when Colorado was admitted to the Union.

Between 1880-1895 the city experienced a huge rise in city corruption, as crime bosses, such as Soapy Smith, worked side-by-side with elected officials and the police to control the elections, gambling, and the bunko gangs. In 1887, the precursor to the international charity United Way was formed in Denver by local religious leaders who raised funds and coordinated various charities to help Denver's poor. By 1890, Denver had grown to be the second largest city west of Omaha, but by 1900 it had dropped to third place behind San Francisco and Los Angeles.

In 1901 the Colorado General Assembly voted to split Arapahoe County into three parts: a new consolidated City and County of Denver, a new Adams County, and the remainder of the Arapahoe County to be renamed South Arapahoe County. A ruling by the Colorado Supreme Court, subsequent legislation, and a referendum delayed the creation of the City and County of Denver until 1902-11-15. Denver hosted the 1908 Democratic National Convention to promote the city's status on the national political and socio-economic stage.

Denver was selected to host the 1976 Winter Olympics to coincide with Colorado's centennial celebration, but Colorado voters struck down ballot initiatives allocating public funds to pay for the high costs of the games, so the games were moved to Innsbruck, Austria. The notoriety of becoming the only city ever to decline to host an Olympiad after being selected has made subsequent bids difficult. The movement against hosting the games was based largely on environmental issues and was led by then State Representative Richard Lamm. Lamm was subsequently elected as Colorado governor in 1974.

Beat icon Neal Cassady was raised on Larimer Street in Denver, and a portion of Jack Kerouac's beat masterpiece On the Road takes place in the city, and is based on the beat's actual experiences in Denver during a road trip. Beat poet Allen Ginsberg lived for a time in a basement apartment on Grant Street (no longer standing), and Kerouac briefly owned a home in the Denver suburb of Lakewood in the late spring and summer of 1949. In addition, Ginsberg helped found the "Jack Kerouac School of Disembodied Poetics at Naropa," in nearby Boulder at the Buddhist college Naropa University, then Naropa Institute.

Denver has also been known historically as the Queen City of the Plains because of its important role in the agricultural industry of the plains regions along the foothills of the Colorado Front Range. Several US Navy ships have been named USS Denver in honor of the city.

Denver is a clean, young and green city with over 200 parks and dozens of tree-lined boulevards. The architecture reflects the city's three boom periods: Victorian, when silver was discovered in Leadville; turn-of-the-century, when gold was discovered in Cripple Creek; and contemporary, when the energy boom added 16 skyscrapers to the downtown skyline in a three year period, 1980-1983.

Unlike some Western cities, Denver has a central downtown area. Here, within easy walking distance, are 5,200 hotel rooms, the city's convention complex, performing arts complex, and a wide variety of shops, department stores, restaurants, and nightspots. Also within easy walking distance are some of the city's top attractions including the Denver Pavilions, Denver Art Museum and

Colorado History Museum. A mile-long pedestrian mall cuts through the heart of downtown Denver and is surrounded by a series of parks and plazas that soften the towering skyscrapers and provide viewpoints from which to see and appreciate the modern architecture.

Lower Downtown (called "LoDo" by locals) is on the northern edge of downtown Denver and offers one of the nation's greatest concentrations of Victorian buildings and warehouses, many of which have been refurbished to house restaurants, art galleries, offices and shops. This is the center of the city's brew pubs, with six large brew pubs and micro breweries, each brewing six to eight exclusive beers, all within easy walking distance of each other. Downtown is also the home of Auraria Campus where three colleges have over 30,000 students.

In May of 1995, Six Flags Elitch Gardens moved to downtown Denver with a year-round amusement park similar to Copenhagen's Tivoli Gardens offering 48 thrill rides, formal gardens, restaurants and shops. Also in May 1995, downtown Denver unveiled a new 50,000-seat stadium, Coors Field, for the Colorado Rockies, Denver's Major League Baseball team. Another large attraction in this area is Colorado's Ocean Journey, a large aquarium that features salt and fresh water animal life, which opened on June 21, 1999.

The Mile High Trail is a series of six walking tours throughout the downtown area. Copies can be obtained from the Denver Metro Convention &: Visitors Bureau Information Center in the Tabor Center, located on the 16th Street Mall.

Aviation history was made when the $4.3 billion Denver International Airport opened on February 28, 1995. Covering 53 square miles (137 square kilometers, twice the size of Manhattan), Denver International Airport has five full-service runways and has established a landing rate of 120 planes an hour in good weather--36% higher than the good weather rate of 88 planes an hour at Denver's previous airport, Stapleton International. DIA can be expanded to 11 runways capable of serving 110 million passengers a year.

The tented roof of DIA was designed to resemble the snow-capped Rocky Mountains.
Photograph of Denver International Airport's signature fabric Roof. Photographer: Doc Searls
Currently DIA is the fifth-busiest airport in the United States and the 10th-busiest in the world. Twenty-two airlines offer 1200 flights including non-stops to 120 American cities and according to the Federal Aviation Administration, for the past three years, DIA had the fewest delays of any of the nation's 15 busiest airports.

Denver International Airport was designed to move your body and your mind. DIA has the largest public art program in American history with a $7.5 million budget for local and national artists to create works specifically for this unique setting. The art focuses on several themes including western life, travel, light and space.

The 1.4 million square foot main terminal building has become Denver's most distinctive architectural landmark. The roof is Teflon-coated fabric shaped into 34 different peaks, symbolizing the Rocky Mountains, which can be seen on the horizon through huge glass windows. Inside the Great Hall, there is an atrium longer than four football fields and illuminated by soft, shadowless light that filters down from the 126-foot high translucent roof.

A quarter mile of ticket counters eliminates ticketing congestion and there is more than double the concession space found at Stapleton. DIA has 48 restaurants, snack shops, bars and grills and 60 stores and shops. In 1996, DIA was the most efficient airport in the nation with the lowest number of air traffic control delays. In 1997, DIA served 35 million passengers, the most to ever use a Denver airport in a single year. DIA is the second largest hub of United, the largest airline in the world, and United plans to greatly expand their Denver operation.

Denver is also a major hub for inter-city buses with over 60 daily arrivals and departures and is on the main east-west route for AMTRAK with three arrivals a day.
Denver’s Climate:
Nothing about Denver is more misunderstood than the city's climate. Located just east of a high mountain barrier and a long distance from any moisture source, Denver has a mild, dry and arid climate. The city receives only 8-15 inches (20.3 - 38 cm) of precipitation a year (about the same as Los Angeles), and records 300 days of sunshine a year -- more annual hours of sun than San Diego or Miami Beach.

Winters are mild with an average daily high of 45 degrees Fahrenheit, 7 degrees Celsius in February, warmer than New York, Boston, Chicago or St. Louis. Snow does fall, but it usually melts in a short time. Golf courses remain open all year and have been played on as many as 30 days in January. Chinook winds (a wind blowing down from a mountain that gains heat as it loses elevation) can bring 60 degree F (16 degrees C) weather to Denver at any time throughout the winter.

In summer, dry relative humidity makes Denver feel cool and comfortable, offering natural air conditioning. Fall is a particularly delightful time to visit the city and make day excursions to the mountains to view the colorful changing of the aspens, an event that takes place from mid-September until mid-October.


Denver has some of the finest museums in the West with a wide variety of historical, western, artistic and horticultural emphasis

Black American West Museum
The Black American West Museum tells the forgotten story of African American cowboys, who made up as many as one third of all the cowboys on the great cattle drives. Housed in the home of Dr. Justina Ford, Denver's first African American doctor, the museum has exhibits, historic photos and artifacts that tell the story of the many contributions made by Blacks in settling the West. (303) 292-2566.

Buffalo Bill's Grave and Museum
Buffalo Bill's Grave & Museum is filled with memorabilia honoring the famous frontier scout, showman and Pony Express rider, William F. Cody. Gun collections and posters from the Wild West Show are some of the items found here. A beautiful view of the mountains and the plains is visible from his grave site. (303) 526-0747.

Butterfly Pavillion and Insect Center
Butterfly Pavilion & Insect Center features a lush tropical forest filled with up to 1,600 free-flying butterflies. There is also an insect center and gift shop, as well as outdoor gardens and many fun, educational exhibits. (303) 469-5441.

Children's Museum of Denver
The Children's Museum of Denver is a unique participatory museum for children and families to experience hands-on, interactive exhibits and activities. Children can learn to ski on KidSlope, shoot baskets, compare measurements in SizeWise, sample the latest in computer software in CompuLab, and shop in the grocery store. (303)433-7444.

Colorado History Museum
The Colorado History Museum offers a series of dioramas and exhibits that trace the colorful history of the Indians, explorers, gold miners, cowboys and pioneers that have called Colorado home. Exhibits include an outstanding collection of William Henry Jackson photos and a large diorama of Denver as it appeared in 1860. Call for information on special exhibits. (303) 866-3670.

Colorado Ocean Journey which opened in June 1999, is a world-class aquarium that immerses visitors on two journeys, from the Continental Divide in Colorado to Mexico's Sea of Cortez, and the other from an Indonesian rain forest to the Pacific Ocean. The Rocky Mountain West's only aquarium will also show visitors how all water and water life are inter-related.(303) 561-4450.

Colorado State Capitol
The Colorado State Capitol stands a mile above sea level with a plaque on the 15th step to mark the spot that is 5,280 feet (1,609 m) high. The dome is covered with 200 ounces of pure gold and offers a beautiful view from the rotunda of the entire Front Range, from Pikes Peak, all the way north to the Wyoming border, a distance of over 150 miles (241 km). Free tours on weekdays of the beautiful rooms and appointments. (303) 866-2604.

Coors Brewery
The Coors Brewery offers free tours of the largest single brewery in the world. Colorado brews more beer than any other state and this Golden brewery brews more beer than any other place on the planet. Free tours of the entire complex, from brewing to bottling, with free beer samples for those over the age of 21. (303) 277-2337.

Friday, April 16, 2010

Postponing a Home Purchase

Waiting for Home Values to Decline Further

May Price You Out of the Market
Article by SR VP Chief Economist with Stewart Title Company
U.S. home prices have declined across the nation in the past year—albeit at varying levels. Latest national price declines (and again I invoke the TINSTAANREM Clause — There Is No Such Thing As A National Real Estate Market) range from as little as 4.5 percent (Dallas, Texas) on a year-over-year basis in February to as great as 35.2 percent (Phoenix, AZ) according to S&P’s Case-Shiller Home Price Indices.
It is the anticipation by many prospective buyers for further home price erosion that keeps them on the sidelines and from participating in homeownership despite the lowest interest rates since Freddie Mac commenced the statistical series in 1971.
While further price declines may be realized, I believe the likelihood of rising interest rates makes purchasing now a better option than waiting for further potential value declines. Simply stated, there is a greater possibility of interest rate increases than potential value declines. Even with the price decline, the interest rate increase may result in the buyer no longer being able to qualify for a loan on a home they wish to purchase for which they qualify today. Despite facing a potential in declining home values, now may be a better time to buy.
To make the comparison simple, let’s assume a loan amount today of $100,000 with a 30-year fixed-rate residential loan at 5 percent. Nationwide at the time of this writing, the average 30-year rate was 4.85 percent per Freddie Mac. Fannie Mae forecasts an average rate in all of 2009 of 5.13 percent. So the 5 percent is a reasonable assumption.
A buyer today at 5 percent interest borrowing $100,000 has a monthly principle and interest payment of $536.82. If prices decline 5 percent (and the loan amount does also) and interest rates rise just ½ of 1 percent, then the monthly payment remains the same ($539.40).
So if rates go up just 1 percent to 6 percent per year, then prices must drop at least 10 percent for that same buyer to qualify for the same monthly payment. A 1.5 percent increase in rates to 6.5 percent requires a 15 percent price decline, and a 2 percent increase necessitates a 20 percent price decline to qualify. Note: This 1 percent interest rate change to a 10 percent price change is only true when interest rates are 5 percent as they are today.

Admittedly, at the same loan-to-value ratio, as prices decline so does the down payment. Since, however, many buyers select the price range of homes they consider buying based on their monthly payment potential, rising rates may force future buyers into less expensive homes and hence properties they find less desirable.

Why do I expect rates to increase in the future more than price declines? Aggregate 20-city prices have already declined 29.1 percent since peaking in July 2006. I believe much of the price decline has already taken place. And why do I anticipate rate increases? There are several reasons. Interest rates are the lowest in recorded history. But perhaps most important is the record deficit spending by Congress and the Administration and the expectation for that to continue. Borrowing a couple of trillion dollars this year coupled with a now-projected decade of deficits of at least $1 trillion per year sets the stage for a weakened dollar and corresponding rising interest rates. In plain speak—the massive deficit spending has a high potential to drive up inflation and hence interest rates.
If you agree with me, quote me. “Postponing a home purchase waiting for home prices to decline further may price you out of the market.” Ted C. Jones, PhD, Senior Vice President—Chief Economist, Stewart Title Guaranty Company.

If you have any questions, please call DENISE WAMBSGANSS at 303-880-8771 or email