Two new home sales studies show continuing good news for metro Denver’s residential home resale market, bolstering what other recent price reports showed.
CoreLogic Inc.’s most recent home price index report, covering January sales, shows sale prices increased 11 percent in January from a year earlier. That number included the sale of distressed, or real-estate owned (REO), properties.
Prices increased less than 1 percent from December to January.
Another national study of homes sales, including condos, by homes.com showed the Denver market had the highest month to month change of the 100 markets studied with a 0.78 percent increase through February, according to the Norfolk, Va.-based national real estate research website.
Other highlights about the metro Denver market, from homes.com:
• Metro Denver’s single-family resale market made the top 10 of the 100 markets surveyed in February with a 9.7 percent year-over-year price increase.
• The multifamily, or condo, market here also cracked the top 10 with a 0.33 percent monthly price increase and a 9.73 percent year-over-year increase.
The two national reports mirror other recent data showing price gains and an ever-dwindling inventory of for-sale homes. http://www.bizjournals.com/denver/news/2013/03/06/inventory-of-denver-area-homes-for.html
The homes.com index is compiled using sales data from the same homes over time, “allowing a side-by-side comparison of the same property which tracks more accurately the monthly growth and decline in home prices,” according to a company spokesman.
CoreLogic (NYSE: CLGX) data includes resales of single-family houses and condos. The Santa Ana, Calif.-based company provides consumer, financial and property information, and analysis to business and government.
Its national index showed a 9.7 percent year-over-year increase in sales prices, the biggest increase since April 2006 and the 11th straight month of increases. Denver’s market boasted 12 consecutive months of price increases through January.
“The HPI showed strong growth during the typically slow winter season,” Mark Fleming, chief economist for CoreLogic, said in a release. “With these gains, the housing market is poised to enter the spring selling season on sound footing. The improvements are materializing across the country, with all but Delaware and Illinois showing increasing HPI and 15 states within 10 percent of their peak values.”
Statewide, Colorado’s residential home sale prices, including distressed properties, increased 9.8 percent in January from a year earlier. Without REO properties, the index rose 8.3 percent year-over-year in January, the report shows.
For metro Denver, the price index excluding distressed sales rose 9.2 percent in January, compared to January 2012, and 1.2 percent from December.
“Home prices continued to gather steam across a broad swath of the country in January, continuing the positive trend we saw during most of 2012,” said Anand Nallathambi, president and CEO of CoreLogic. “Many states across the western U.S. and along the East Coast saw average price gains of more than 6 percent, which is likely to boost home sale activity into the first half of 2013.”
According to homes.com, here are the metro Denver ZIP codes with the biggest year-over-year price gains: 80111 (Englewood and Centennial), 12.98 percent; 80011 (Highlands), 10.57 percent; 80015 (just east of Golden between Sixth and 32nd avenues), 10.86 percent.
The CoreLogic report is one of several popular measures of home prices, using different methodologies, covering different housing types and geographic areas, and giving different results.
It is a rare occurrence these days to have a home’s buyer and seller sit down around the kitchen table to make a deal. In some areas, they do still sit around the attorney’s boardroom table to close the deal, but by that time, the deal is done and the ship has already sailed on any avoidable mistakes.
So in the vast majority of home sales, buyer and seller never connect in person, never talk, and never exchange insights or information except in the most formal, written formats – despite being effective business colleagues in one of the single most important transactions of their lives. And here’s the rub: buyers sit on a wealth of knowledge that sellers crave to know, most of which could be filed under how to attract buyers and make them want to buy a home (or at least, not turn them off). So, since buyers and sellers can’t get together, allow me to reveal a handful of helpful insider insights that the buyers I’ve worked with and connected with over the years would reveal to sellers, if they could.
1. You should see what your home looks like online. No, really. If you did your due diligence before listing your home for sale, met with agents and reviewed their marketing plan they use for their listings, chances are good that you chose an agent who takes online marketing very seriously and said as much during your listing interview. But somehow, there are still hundreds of listings in every major city that receive a failing grade on their online presence, once the home has actually been listed.
Every day, online listings are activated on Trulia and all across the real estate web with:
- only one or two pictures
- no pictures at all
- multiple photos that represent the home very poorly or show it in its worst light, in terms of the shots selected and included in the listing (e.g., photos focusing on the dumpster in front of the house, or the messy breakfast dishes on the table), or
- listing descriptions that bemuse us buyers, but would befuddle and even anger the homeowner, like the homes whose descriptions start off with the attention grabbing: “This place is a mess!”
Sometimes, there’s just a glitch along the production chain that it takes to get a property marketed; other times, there’s an actual error in judgment that took place. But it’s free for you, seller, to hop online and just do a quick audit of the way your home is represented in the same listings, virtual tours, and property websites that buyers will see. And it’s often the only way these glitches will get caught, brought to the agent’s attention and rectified. So you should.
2. If your home is seriously overpriced, I’ll wait for the price to come down before I even come see it. You might be thinking the best plan of action is to list your home high, planning on the fact that prospective buyers will want to bargain the price down. And, in fact, this might be true for your area – your agent can brief you on what the standard negotiation practices in your neck of the woods are, and you two can then work together to factor them into your pricing strategy.
That said, even in an area where homes generally go for below-asking, buyers are willing to do some basic negotiation. They are not, generally, interested in correcting a seller’s belief system about their home and its value that are clearly not based in the realm of reality. That seems daunting and like too much work to do – as well, there are so many properties to see, and buyers have to invest so much time, energy and emotion in making an offer, they don’t like to do that in cases where the seller’s list price is so bizarrely above-market that the chances of coming to a meeting of the minds about price are slim.
If your home is dramatically overpriced, compared to the others in the area or compared to it’s market price range, most serious home buyers in the market for a home like yours will either (a) never come see it, because it doesn’t show up in the price range they are searching online, or (b) not come see it unless and until you drop the price, because it simply isn’t worth their time and energy until you correct your pricing into the realm of the realistic.
3. There are a whole lot of fish in the sea – I only have to find one. Agents and mortgage brokers talk to buyers a whole lot about compromising, and what they can expect on the market as a whole, and such. But my reality is this: home buyers are not in the business of market analysis. They are in the business of finding a home. Only. One. Home.
Yes, ultimately, every buyer has to make some compromises. No home is perfect, and every person who buys a home eventually gets that. But even in a heating market like the one we’re in right now, there are lots of homes coming onto the market every single day. Any given buyer only has to find one that works for them. To buy your house – any house – that buyer really does need to feel inspired by it enough to feel like it could work for their family, their needs and their life as their home.
If you take shortcuts when it comes to primping and prepping your home for the market, it becomes super obvious to buyers when they scrutinize it, even if it’s really priced well. On the other hand, the homes that were well cared for, prepared and priced shine above the others, at every price point.
4. If I nitpick your house, that probably means I like it. Every buyer’s broker has a horrific moment, at some point in their career, where they realize their buyer has been trash talking a home – its nasty wallpaper, vomitrocious carpet, silly stylistic choices, etc. and so forth – and the home’s seller has managed to overhear this diatribe. The pool boy who was at the property turns out to be the seller’s son, the sellers turn out to have been next door or in the basement through the entire showing, or the teddy bear-cum-Nanny Cam has advanced audio capabilities.
Here’s why this horrifies buyer’s agents: the buyer that goes to all that trouble to dissect precisely what they would do differently if a given house belonged to them is a buyer who is thinking about making an offer on that very house.
The more questions, critiques, nitpicks, “What I would do’s” and such a buyer rattles off about a home, the more likely they are to make an offer on it. Of course, the occasional curmudgeonly amateur designer likes to just rip other’s decor choices apart for the fun of it, but many otherwise lovely individuals do this when they get serious about a home as part of the exercise of visualizing the property as theirs, and envisioning themselves, their families and their stuff in it. This is how buyers take a place that might not be perfectly move-in ready for them, and figure out how they might be able to make it work.
So if you happen to overhear a nitpicky buyer dissecting your home and verbally tearing down walls or ripping up carpet, don’t despair. They might simply be mentally “trying on” your home as their home.
5. When it comes to staging, the bar is high. Really high. HGTV. Houzz. Architectural Digest. All these outlets which constantly publish beautifully designed and decorated homes have influenced what the average American expects their home to look like – and yours, for that matter. Additionally, all the do-it-yourself publications and shows along with the advent of home improvement stores which double as DIY design emporiums have given everyday people of modest means the power to live in beautiful and functional homes, without breaking the bank.
Beyond all this, professional home staging has taken off in recent years, as data has repeatedly shown that staged homes sell faster, for more, and more certainly than homes that are not staged, nor well-prepared by their owners. So not only is your home competing with the homes buyers are seeing on TV and in the magazines, it is also competing with professionally staged homes for sale right in your own neighborhood – homes that the very buyers who will come to see your home will also have seen, possibly right before or after they view yours!
So, if you want to and can afford to have your home staged, do. If you can’t, you should still take the preparation of your home very seriously, and include your agent or a stager you hire for an hour of advice in the process, taking their input on things like:
what furniture to get rid of
which improvements will get you the most bang for your buck with local buyers
and what paint, flooring and other finish materials will appeal to the broadest buyer segment in your area.
These pros often also have contacts with local handypeople, painters, landscapers and other vendors who can get your home ready for market in a time and cost-efficient manner.
By Dennis Huspeni
Denver Business Journal
Dave Liniger, co-founder and chairman of global real estate company Re/Max LLC, suffered through an illness in 2012 that almost killed him, temporarily crippled him and left him in a drug-induced coma for months.
He’s just starting to speak to the media about his experience, which led to an motivational, self-published book titled “My Next Step,” as told to author Laura Morton, to be released in April.
The company Liniger and his wife, Gail, co-founded is in its 41st year. Re/Max has grown to have offices in 89 countries and almost 100,000 agents. It added 739 new franchises in 2012, bringing its total number of offices to 6,288.
Liniger, 67, talked to the Denver Business Journal Feb. 21 at Re/Max’s headquarters in the Denver Tech Center. Though he walks with a cane and still suffers some paralysis on his right side, he’s energetic and talks rapidly about his recovery, the state of real estate and the possibility of the company going public.
Q: So what happened to you?
A: On Jan. 28 or 29, 2012, I was in Galveston, Texas, for a Re/Max convention. I woke up at 2 in the morning paralyzed from the waist down. I managed to get back [to Denver] … and was back at Sky Ridge [Medical Center in Lone Tree] and just thought it was severe back pain and I’d get surgery Monday and the world would be great. I woke up 4½ months later. What they found out was … I had MRSA [methicillin-resistant Staphylococcus aureus, a staph infection] and it had become septic and it went through my entire body. … That started a year-long journey, which is the reason the book was written. … [Some] gave up all hope. … I was so septic, I shouldn’t have survived.
Q: Did the banking reforms put the housing market in a better place for recovery?
A: What’s happened is the pendulum will keep swinging back and forth. … From the time we started in 1973 through 2004, if you wanted an FHA house, you had to put 10 to 15 percent down. If you wanted a conventional loan, you had to put 20 percent down. Then we went to no money down, no qualifying, no anything. Now the pendulum is going back with Dodd-Frank. It was written so fast and so ambiguous, banks and mortgage companies don’t know what is an acceptable good mortgage. So you have people out there with good credit scores of 750 that can’t get a loan. Little by little, appraisals are more realistic, house prices are going up, lenders are a little more comfortable and Dodd-Frank is getting additional legislation passed, clarifying things. So you’re going to come back to a normal market.
Q: How did Re/Max fare during your absence?
A: My friends and family behaved exactly as I’d thought and came to the hospital every day. I was there surrounded by love and by friendship. My kids and my wife were perfect. My company, which is one of the biggest loves in my life, was absolutely perfectly run by Margaret Kelly, who is our CEO. She trained under me for 26 years. Vinnie Tracy, my president, has been with me since 1977. Under all these people the company ran great; the succession plan worked.
Q: What was the main lesson you learned taking Re/Max through the Great Recession?
A: Do not be afraid of change. … We had the best agents and the best brokers. They adapted very quickly. [Early on] we as a company were very aggressive going to top lenders and top asset-management companies to try to get all their relocation, referral, REO [real-estate owned], foreclosure and short-sale business. … Our international presence gave us a tremendous leg up on the competition.
Q: What’s your take on the residential real estate recovery in Denver?
A: Metro Denver’s going to do better than the nation on an average. … Last year we had a very firm bottoming out and recovery of the market. The problem we have locally is there’s not enough inventory for the number of buyers in the right price ranges. … That inventory problem is not going to get solved until house prices get back about to where they were before. And people say, “OK, well, I can afford to move. I’m just not going to take a loss.” And so because the demand is increasing, we’ll see inventory stay low and prices go up much faster than most people predict.
Q: When is Re/Max going public?
A: At some point, and we are going to be a public company. … About 10 years ago we started building an outside board of directors, mostly because some day we’ll be public. Also I have some dangerous sports. I’ve got an acrobatic jet plane. I tried to fly a balloon around the world; drove NASCAR for 10 years. And I kept saying, “Who’s going to take care of our baby?” Re/Max is our love… We got a much better CFO, and a better legal department. We’re continuing step by step to a day when we will probably be a public company, which is an inevitability with our taxes. But we have no specific plans.
Q: Did you anticipate being where you are when you started Re/Max in 1973?
A: It’s been hard work, but the most fun hard work you’ll ever do. It’s funny — 40 years later, some people look at you like you’re a fossil. In your mind, you don’t feel any different than you were at 25. My body doesn’t work quite the same way. The real estate industry is one I have passion for. Anytime you find a business as an entrepreneur you should be in love with it. … You learn. You think. You talk to other people. You say, “How do I make this better?”
I look at a business like fine painting. You’ve got this dream of what you’re painting. Your palette and all the rich colors come from years, and you keep saying, “How do I make this better?” … And we keep hiring better than ourselves.
One of the basic things we all understand about heat is that it rises. As air molecules warm up, they expand and become lighter, and that causes them to head up toward the ceiling of a room, which isn’t necessarily where you want them.
This natural rising can create layers within a room, with cooler air down near the floor, and warmer air trapped up near the ceiling. That’s especially true if you have ceiling-mounted heat registers, where your heat is entering the room at a higher level to start with. And of course, the higher the ceilings, the more that heat can rise, and the warmer the temperatures will get up near the peak.
The same is going to be the case with cooler air. When summer finally gets here and we switch back to air conditioning, cooler air is going to want to fall and settle near the floor of a room, to the detriment of those spaces on the upper levels. And here again, if you have air conditioning ducts in the floor, the effect is going to be that much more pronounced.
Stirring things up
One possibility for getting that hot air down from the ceiling and back into the room when it can do some good is to install a ceiling fan. Ceiling fans utilize large, angled, rotating blades to push air down or pull air up, which creates currents that can stir things up and move stagnant air off the ceiling. They also help draw cool air up off the floor during the summer, as well as creating cooling breezes.
Sizing things up
When considering a ceiling fan, the first order of business is deciding on the size. Fans are sized by the overall diameter of the blades, such as 36-inch, and will have anywhere from three to five blades. For the most part, the more blades and the larger the diameter, the more air movement you’ll have, although some large-diameter, industrial-style fans move quite a bit of air with only three blades.
As a general rule of thumb, a fan with a diameter of 36 to 44 inches will handle a room up to about 225 square feet, and a fan with a 52 or 54 inch diameter will handle about 400 square feet. For rooms that have more square feet than that, simply use more fans.
Ideally, the fans should be installed with the blades about 7 to 10 inches from the ceiling. Any closer than that and you won’t get a good air movement to stir up the stagnant air along the ceiling. Also, the blades should be at least 18 inches away from the wall.
Most ceiling fans have the option of multiple speeds, so this is also a consideration when choosing a size. Larger blades have the capability of moving more air at a slower speed, so if you have relatively low ceilings, that can be a real advantage when you don’t want the fan to be blowing loose papers around!
So which way is up?
If you look at the fan blades from the end, you’ll see that they’re angled in relation to the floor, rather than being exactly parallel. It’s that angle that allows them to move air as they turn, like a horizontal airplane propeller. Most fans have a reversing switch, which allows the motor to run either clockwise or counterclockwise. In one direction, the angle of the blades will pull air up from the floor toward the ceiling; in the other direction, the blades will push the air down from the ceiling toward the floor.
If you have a very high ceiling, such as a room with a two story vault, you’d like to get the warm air that’s trapped up there pushed down, so the lower floors can take advantage of it. Typically, that means that the fan rotation should be such that the blades are pushing the air down. However, in homes with lower ceilings, that downward push of air, even though it’s pushing the heat down, may also create an unpleasant breeze that actually makes you feel cold.
In that case, reverse the motor so the blades are pulling the air up. That will create a convection current of air against the ceiling, and push the warm air that’s up there outward and down the exterior walls, which again stirs things up.
The bottom line is that getting things where you want it from a heat distribution standpoint may take a bit of trial and error, with a combination of both blade rotation and blade speed.
For cooling, things are usually a bit more straightforward. Most people prefer to have the fan rotation set so the blades are pushing the air down, which stirs up the air and creates a nice cooling breeze. Set the speed at whatever level you’re comfortable with, and you should find that you can save money by cutting back on how often you run your air conditioning.