…The Sky Is Falling…The Sky Is Falling.

I’ve been reading a lot lately about the “real estate meltdown” and I feel like I’m missing something. All of us at LIVE Urban Real Estate are working with buyers and sellers every day. And no one is talking to us about a meltdown. We set the price of a house just like we always have. We figure out how much a buyer can spend, just like we always have. The fundamentals are the same.

Maybe the disconnect is that we’re living in Denver, and our local real estate market, as well as the rest of the state of Colorado, is faring much better than the rest of the country, according to the Office of Federal Housing Enterprise Oversight. While 43 states showed declines in the first quarter of 2008, Colorado averaged 2.29 percent home-price appreciation compared to the first three months of 2007.

The headlines and indexes we all see are skewed by rapidly falling home prices in California, Florida, and Nevada, according to the Rocky Mountain News. “Most people don’t live in a Miami condo” said Michael Englund, chief economist with Action Economics in Boulder. There’s a news flash for you.

Are there some things about a local real estate transaction that are tougher? Yes. Using a local lender who knows we’re not in Miami is key. And doing your homework on the market where you live has never been more important. Now is not the time for buyers or sellers to be unrealistic. But that’s the same as it’s always been.

After thinking about it for awhile, now when I read about the “meltdown,” I’ll remember our buddy Chicken Little and his recurring “the sky is falling” cry, then get back to reality.

I love northwest Denver. I’ve lived here for nearly 20 years now, and bought my house way before the Highlands and Berkeley were cool. Matter of fact, most of my friends and family thought I was crazy. “You’re going to live where?” they asked, “Why?

I moved here because of the same reasons most of us have… great historic homes, an interesting neighborhood vibe, a compelling multi-cultural mix, etc. We’re heard the list so many times, we all have it memorized. Its great. We know. And it really hasn’t changed. Maybe some, but for the better, don’t you think?

That’s why I get bummed when I read all those cranky letters in local newspapers from a few NW Denver residents about the rapid ‘decline and fall’ of the area because of the on-going scrape and builds. Is it really all bad?  These new homes, are by-in-large, creating  stronger, more valuable, and ‘greener’ neighborhoods. Now I’ll admit that some of the new homes aren’t well designed, and don’t quite fit in. But most of these homes are being built on large, under-utilized lots that used to have a small, crappy house on them. Frankly, they’re not worth saving. Rarely is a nice, bring bungalow or tudor torn down. (I hate that too!)

Cities evolve, grow and change. They get bigger and denser. Increasing density in city-close neighborhoods, like NW Denver, is smart. Its a fact that more and more people want to live in the city. They want to commute less, and as a result, walk and bike more. That creates more livable neighborhoods, more vibrant neighborhood business areas, and increases the value of our investments. And increasing density in these urban areas decreases urban sprawl. That’s really a good thing, isn’t it?

Your credit score: did you know that you have to have a credit score of 700-plus to qualify for a low-rate mortgage?First, your credit score is a number assigned to your creditworthiness.

Your credit score indicates how well or how poorly you’ll repay a debt. The higher the number, the more likely you’ll repay on time.

Your bill paying information on credit reports provides the basis for your credit score.

Consumers who take the time to obtain their credit score, for only about $15 under most circumstances, are more likely to have a better understanding of the scores.

That includes knowledge that mortgage lenders rely heavily upon credit scores to approve or reject home loan applications.

Informed consumers also know they can generally raise their credit score by consistently paying bills on time every time; by paying off debt and closing those paid off accounts; by not coming close to maxing out credit cards and by regularly checking their credit reports to make sure they are accurate.

Your credit report is free from AnnualCreditReport.Com. For more information about your credit score go to MyFICO.com.

Your walk score: An agent in my office told me about this website yesterday, and I think it’s really cute - type in your address, and a Google Map appears showing everything that is within walking distance of your place!

Check it out here.

OK, we all know it is a serious pain in the booty to have your house on the market.  Real estate agents call at the last minute and want to show it, sometimes they are even sitting outside, waiting for the lockbox code with buyers in their backseat - while you are trying to get the kids breakfast and clean up after last night’s supper.

But, you know what?  Those might be the buyers that BUY your house.  Then you can move on, move up, move over - whatever it is you are trying to do, and you won’t have to keep the place tidy and the personal photos packed away anymore! So, even though it might be a bit embarassing to admit that your house is not always Open House Perfect, let them in!   Gather up the kiddos, take breakfast to go, and smile as you open up the door on your way out, because those buyers are on their way in, and you want them to know that you LOVE living in your house, and they will, too!

The moral of this little rant?  Never, ever turn down a showing.  Those buyers won’t be back another day.  They are going to look at one of the million other houses just like yours that are for sale in your neighborhood that WOULD allow a showing, and they are going to buy one of those. 

P.S., it’s a great idea to rent one of those little temporary storage boxes that can sit outside your house with all of your clutter inside.  That way, you can keep your stuff close by for easy access, but potential buyers don’t have to step around the baby’s bouncer to see your gorgeous, newly remodeled kitchen - toast crumbs and all.

Houses aren’t free in Denver.  You can’t even find very many for $1.  But there are certainly crazy good deals to be found if you are looking to buy a fix-up and hold for at least 2-3 years. This article in CNN Money does a good job of explaining the best strategy for today’s investors:

Rock-bottom home prices have finally begun to lure vulture real estate investors into the fray.

Sharon Restrepo, a broker in South Florida, where home prices have dropped nearly 27% over the past 12 months, recently bought a three-family home in Cape Coral from a very motivated seller for a mere $65,000. It listed for $195,000.

She can rent the three apartments out for about $1,500 and turn a profit, while she holds on to the property until the market recovers.

“The savvy investors here,” she said, “are buying up everything they can.”

Read the rest here.

It’s a really unique time for Rehab and Rent-ers in the Denver Metro Real Estate game:  vacancies are at an all-time low, and home prices continue to drop.  I really think that now is a great time to start or build your Real Estate portfolio - whether you have a long or short-term strategy for the properties. 

In Denver, flipped properties continue to sell, but only if they are priced reasonably - those investors who are buying bank inventory at rock-bottom prices and renovating SMART - meaning that they are not over-improving for today’s market, no matter what price range they are in.

The same goes for Rehab and Rent-ers — if you can snap up a cute little property that looks like crapola, and put only enough money into it to make it a nice little rental, you are playing the game SMART - in a couple of years, when the market stabilizes and buyers outnumber renters, you can always make a few more improvements to get top dollar.

Ready to start looking for Denver Real Estate?  Connect with your inner vulture and get in the game!

Well, guidelines continue to change for Fannie Mae & Freddie Mac associated loans…this time, the change has a direct affect on how you might be able to qualify for the purchase of a new primary residence while retaining and converting your current residence into a rental property…as of August 1st, 2008 buyers who are interested in pursuing this route to build their wealth will need to provide their lender with the following in order for their newly acquired “rental income” to count towards the financial qualification of their new home mortgage: a fully executed lease agreeement, a receipt of deposit from the bank for the tenant’s required security deposit, and the big kicker, the newly converted rental property must contain at least 30% equity. If not, you guessed it, the “extra rental income” is not able to be used as part of qualifying for your replacement home purchase. You may ask why such a harsh equity requirement, well, the speculation consists of the banks’ attempt to prevent home owners from having the “new rental property” slip into foreclosure. If a home owner has substantial equity in their property, they are more likley maintain their property and have pride of home ownership. So, the morale of this story is check with your local lender about the ever changing guidelines that may affect your next home purchase.

As gas prices continue to rise on a daily basis, harried commuters are increasingly looking at moving closer to their place of work. Denver is seeing the same shift in home buying that is occuring across the country, urban communities are the place to be! Recent statistics show that home buyers are placing more importance on gas prices and commute times than any time since the energy crisis of the 1970’s.

While the appeal of urban living in communities such as Highlands and Wash Park have been attracting scores of buyers for the last several years, the latest economic conditions have started to making a move to the city more of a necessity and less of a luxury. Housing starts are at record lows in the suburbs, while building of new high-rises and townhomes continue to boom in the downtown area. Leaving the car parked while they walk to work, restaurants, the theater and shopping is looking better and better to a wider demographic of home owners.

Buyers are becoming more environmentally conscious as well, realizing that smaller can indeed be better. Heating and cooling rooms that go unused the majority of time, watering huge lawns, and commuting several hours a day are becoming a thing of the past for many living in the Denver metro area. We urbanites knew it all along, city livin’ is easy!

Zillow.com, a real estate valuation website, receives more than 4 million visits each month. In Denver, 54 percent of the homes listed on Zillow have been viewed. Zillow allows consumers to see what their home is valued at, their neighbors’ homes or even their boss’s. Just go to Zillow.com, type in an address and a wealth of information pops up. But some experts, in Denver and across the country, say they have doubts about some of that information.

“Some of the estimates offered by Zillow.com only claim to get within about $100,000 of the true price,” wrote Elizabeth Razzi in her book, The Fearless Home Seller. “Well, a Magic 8-Ball has that kind of precision. Is $435,000 the right price? Shake, shake, shake. My reply is no. How about $535,000. Shake, shake, shake. You may rely on it.”

The biggest differences appear to be in older Denver neighborhoods. “They’re probably very good in the suburbs, where you have several models that are identical, it probably is very good,” say local brokers who say its frustrating because Zillow estimates have led to low-ball offers.“They think that Zillow is so authoritative, when the truth is individual properties are so different.”

A spokeswoman for Zillow said the company is only as good as public records. Homes in older Denver neighborhoods are notorious for being inaccurate, especially since many people 25 years ago did things such as add living space to houses without pulling permits. “Obviously, no one from Zillow has ever been in these houses,” she said. “We don’t know that you might have put in a new kitchen or bathroom, for example.”

Zillow created My Estimator so a homeowner can input improvements and correct errors. Some brokers don’t like that feature because they think homeowners could exaggerate. Zillow emphasizes it is a “starting point” and is no substitute for a real estate agent or some other expert who is familiar with a particular market.

John Skrabec, principal of Live Urban Real Estate, said some house hunters trust Zillow to be more accurate than it is. “I hate Zillow,” Skrabec said. “It has gotten so much positive press, but the truth is, their estimates are often way off. Some buyers will say, ‘But Zillow says it is only worth this much.’ It can be very frustrating and is another obstacle Realtors have to deal with.”

Also, some people might not even consider a home because by Zillow’s estimate it is vastly overpriced, even though it may be very reasonably priced for that specific street and neighborhood, he said.

Excerpted from an article original published in the Rocky Mountain News.

Weather you buy or sell a home in one of the Denver neighborhoods, chances are the outside of the home is an impression you never forget. Well groomed landscapes affect the bottom line of the home prices. Typically, beautiful outdoor environments can fetch between 8-10% of the purchase price. Consider these tips that boost curb appeal:

1. Minimize the grass – especially the hell strip – the narrow strip of between the sidewalk and the street. Unkempt, barren strips are the first thing people see when they approach your property.

2. Plant Trees! Through Denver Digs Trees & The City, The Park People offer discounted & free trees for those who will plant in them along the parkways and hell strip. Old established trees need to be pruned and kept healthy. Check out theparkpeople.com

3. Work with what you have! Hire a landscape designer to identify what is valuable and what to discard. Have a big picture of the garden & tackle it area by area. A phased approach is always smart. Hire yourself, or students to turn soil, weed, & divide plants. Remember choosing the right plants are the secret to a garden transformation. Check out plantselect.org

4. Plant foundation plants first—trees, large shrubs & perennials. These materials frame the house, deck & walkways. Try fragrant shrubs or fall color specimens near windows & doorways. This will immediately welcome potential buyers!

5. Creating a landscape map with the type of plants in your garden tells the story of your investment & is a marketing tool.

6. A well planned landscape will decrease heating & cooling bills saving long term costs. It can also reduce unwanted noise & protect your asset from nosey neighbors or unsightly messes.

7. Make a statement - purchase a few significant planters. Place them near the entry ways and fill them full of colorful seasonal annuals!

8. Bring fresh cut flowers from the garden inside. Place them in the – entry, bathroom & bedside. Bringing the outside in denotes the importance of both spaces.

My favorite source for urban gardening tips? Urban Roots, located in the Golden Triangle at 10th & Acoma. Owner Diane Stahl provides horticultural solutions for small spaces. She’s serving Denver’s close in neighborhoods & city gardeners who have limited space but unlimited desire. They’re open from Monday- Saturday 10am-6pm and Sunday 10 am – 6pm.

Stop by and say hi - the LIVE Urban team will be at PrideFest this weekend, and we will be giving away another 3G iPhone! 

Our booth will be between the Main Stage and the Community Stage from 11 to 6 on Saturday and 10 to 5 on Sunday.