Then again, National Real Estate News is Just Not That Helpful in any specific market. Why? Because when we generalize, we are generally wrong.
February 23, 2011
By Greg Tomlinson
Yes, the market’s tough, nationally and locally. But are you in a position in which you want or need to make a housing move, but everywhere you turn in the media you get confusing and often conflicting reports? Trying to make sense real estate news can be frustrating.
We all do it. We read or listen to a national real estate news story and sink further into uncertainty.
One day things are recovering, the next day it seems that Glenn Beck is assuring us all of our nation’s universal destruction and downfall just around the next corner. Most of the time it appears that the national media is not too sure exactly what to say. But what does any of that really have to do with Colorado? In a way, not very much. Let’s all agree: nationally, nobody knows what the heck is happening right now in real estate. The media can’t admit that, so they just keep on talking, cranking out whatever story they can. That’s what they get paid to do and good for them. But, real estate news is generally useless. And “whatever story they can find” is continuing to feed uncertainty in the minds of real people who want and need to buy or sell a home right now.
You want to buy, maybe even sell then buy again, but what, when and where?
Believe it or not, there are many opportunities right now in Colorado real estate. The smart money is acting, and you can do the same while working with us, Realtors with no higher calling than your complete satisfaction.
Lately the National Association of Realtors is reinforcing the point that every market is different. We could not agree more. In other words, the Denver and Colorado Springs markets are not the national market, and vice-versa. Yes, staying informed of trends across the nation is important to virtually everyone who intends to purchase a home or already owns one. However, a reasonable person will inevitably download a dour perspective if all they feed upon is a steady diet of AP stories focusing on the worst. Or worse yet, reports of “recovery” one day and then reports crushing all hope the next.
Note: Eight weeks AGO, Colorado Springs was supposedly worst job market in the nation, according to Forbes. today CNN praises Colorado as a “Best Recovery Bet.” We Appreciate that. But make up your minds news people! So, what is the truth? Here’s what I live by:
For the most part, what we experience every day are the realities that WE MAKE HAPPEN in our own lives. (Not the garbage we read in the News.)
The truth about Colorado. This state has weathered the storm fairly well compared to many. Colorado builders watched inventory levels closely and slowed down building as early as mid-2007. They helped prevent the disaster here. It took almost a full year for the wave of dying markets to spread inland from both coasts. As much as some folks dislike home builders, it could have been way worse here in Denver and Colorado Springs. These companies could have said, “That can’t happen here” and added to a glut of empty homes, collapsing prices even further. Miami, Atlanta and Phoenix are perfect examples of getting it wrong here. The truth is that this scenario has happened in Colorado before, not all that long ago. Colorado real estate was depressed in 1996 and 1997. A glut of homes became a factor driving that downturn. For many builders, the pain of that time helped in not repeating the sins of the past. This time around, lower housing inventory levels in Denver and Colorado Springs helped to prevent that worst case scenario seen in other major metro areas.
Another factor in the better outcomes in Denver and Colorado Springs real estate simply has to do with the stability of Colorado. People like living here, so there really has not been a mad dash to “get outta here.” The 2007-2009 exodus from places like Vegas and parts of California never materialized here. This has helped with the stability issue. Lastly, companies are continuing to relocate highly paid associates to Denver and Colorado Springs, in an array of disciplines.
Yes, there are segments of the Denver and Colorado Springs markets that have been hit fairly hard, but generally the decline in pricing has been limited to between 15 and 22 percent, with pricing stabilizing in some areas. Hardly stellar, but better than many places.
A huge factor in this discussion deals with the price point of the home itself. In general, a $200K home has seen more price stability than say a $500K home a mile away. It’s not hard to understand why. That $200K home is entry level housing, a market floor so-to-speak. There will always be a demand for it. A $500K home has become seen as a luxury home by today’s strained standards. Therefore, someone does not “have” to buy it. Even in this downturn, many who can afford $500K are choosing to limit their risk and buy less expensive homes until things become clearer. Moving up the price points, what does a million dollar buyer do when they want less risk exposure in a time of uncertainty? They buy at $650K to $750K instead of a million. Catering to this phenomenon is the exact strategy of one of Denver’s best builders, Celebrity Custom Homes in The Overlook at Heritage Hills.
Keep in mind that not everyone is concerned with risk and fear – they know the facts instead. Savvy investors are scooping up homes in many areas and price levels. A recent report stated that 1/2 of buyers in some areas are investors. What do they and others know that most people don’t? A few examples:
- Some are accepting $50K less for their homes than “peak” 2007 pricing, in order to turn around, buy and ultimately save $100K+ on a distressed property that they normally could not afford to buy at all.
- How about buying a $150K, positive cash flow rental house within easy driving distance of Fort Carson in Colorado Springs? Its just a “no brainer” investment for many. (Fort Carson is expecting almost 10,000 additional troops in the next few years.)
- Some investors are buying distressed luxury properties. They know that some of these homes can never be reproduced for the current low offer prices, not even close.
- Some have used the market low as an opportunity to move from a negative equity position on a previous home to positive and comfortable equity position on a recently acquired home.
Do any of these possibilities sound interesting to you? If so, congratulations! You are already thinking outside the box of the real estate news media.
Sitting, Waiting, Wishing
So it is all about point of view. If you are sitting, waiting, wishing for some good news, I have it: Real estate, like everything else is exactly what you make of it. Don’t assume that something can’t be done just because the real estate news anchor at CNN says so. Schedule a free consultation with me today to explore the possibilities for turning your situation around. Sure, sometimes nothing can be done, obviously we all know that. But often, something absolutely can and should be done.
Find expert real estate services right here for Castle Rock and Colorado Springs.
