Real Estate Reports & How Micro-Markets Define The Case

If anyone saw the S&P/Case-Shiller Composite yesterday, you’d probably ask “what’s new”?  And that “Real estate took another dip nationally”.  Per Composite:
- An annual price fall of .8% (October 2009-October 2010)
- 1.3% price fall from (September 2010 and October 2010)

But Same Old Gloom and Doom For Denver Real Estate?

No — better yet…I should say ”it depends”. as a DC Metro realtor, I had good reason for some some excitement  as the Metro area was just one of four “regions” to see annual appreciation per the report.  San Diego, San Francisco, and Los Angeles rounded out the list of Metropolises.

What Does This Have to Do With Denver?

I noted in a post this morning that “Denver fared well” in this study despite 1.8% depreciation.  In my humble opinion, any area in this study without more than a two percent depreciation rate could argue their market is stronger”.  What was that, you ask? If you’re starting to question my basic familiarity with math, bear with me

 

When Denver margins demand more definition

The Real Estate “Micro-Market” – The Real Barometer of Market Strength

I understand national data based on comparisons of “mega-tropolises” are engaging but I call them fundamentally flawed.  No, this does not help me communicate optimism in the DC Metro area. But, in my opinion, the large market studies (in which the margins are so nominal) are just “noise”.

There are many outlying DC Metro areas that have seen depreciation over the October 2009/October 2010 time-frame defined in the study.  But much of DC and the surrounding close-in suburbs pulled the averages above par.

I’m not a Denver expert by any means but I’d be willing to bet that a quick market study during this same period would show appreciation in many of the micro-markets.

While it’s exciting to give consumers confidence, in my opinion it’s also important to continue to remind them that real estate cannot market cannot be defined these “mega-tropolises”. They often can’t even be measured by zip codes, or towns, or cities.

Micro-markets can best be defined as a  study in real estate trends on an almost a block by block basis. It’s also heavily defined by property types that lie in particular areas. For example, there is a crying need for large condos in close-in DC. And there are plenty of people willing to pay a premium for it.There are also neighborhoods in high demand because of certain amenities, proximity to public transportation.

So while the S&P/Case-Shiller study may show Denver in the “negative” — even an East coast boy like me realizes that Denver has some neighborhoods that are more than holding their own. And this is precisely what is wrong with the gross generalizations that are the product of these studies.

Thoughts?

Licensed in Virginia, Maryland, and D.C., Kevin Koitz from The Koitz Group @ Coldwell Previews International specializes in Washington DC Luxury real estate and surrounding fine DC Metro suburbs. Visit his Greater Bethesda Maryland real estate blog if you’re looking for more close-in DC Metro info…or just want to say hey!

Banner photo by pbo31, available under a Creative Commons Attribution-Noncommercial license.

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Broadband Internet service is no longer a luxury. It is has become a necessity for most people over the past decade. And more and more it’s become a significant factor when it comes to making real-estate decisions.  Areas with better and faster broadband have become more attractive to potential buyers than areas with slow access. Or no access.

It seems a trend has developed where potential deals fall through once the buyer discovers a home doesn’t have broadband Internet access. Roughly 55 percent of Americans have broadband connections in their homes, according to the Pew Internet and American Life Project. However, many more have service available to them and choose not to buy it.

But the growth of broadband is slowing, and providing broadband connections to the remaining 10 percent of homes still without it will be expensive, since these homes are located more typically in small communities, or remote locations. Even in developed areas, broadband has become an important factor for many people in deciding where to live, particularly if they work from home.

Wireless broadband services and coverage from cellular carriers is growing, but still major roads and population centers take precedent. The standard in luxury apartment buildings is to have at least two options for broadband Internet access, said Henry Pye, director of resident services and technology at JPI Partners LLC, which owns buildings throughout the United States. Pye’s job is to ensure the buildings have broadband connectivity, “because you can’t rent out apartments without it”, he says. “It might as well be water,” he told the Associated Press.

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Things aren’t as bad as they say they are.

Oh, I know it’s hard not to take everything you hear on the news to heart. But if you’re  selling a home, you may have more to say about whether it moves, than you think. Of course, supply and demand and marketing and presentation play their parts, but let’s be honest, the responsibility for getting your house ready for the open market rests primarily with you.

Here are some things to consider:

Presentation – Housework is something we do that nobody notices, until you don’t do it. Your home should be clean, and without clutter. Visitors should be able to move freely from room to room without feeling like they’re going from pillar to post. If you have pets, you know the drill: remove all traces.  Pet odors can cost you a second visit. Make sure your home is easy for the Realtor to show. A 24 hour notice  with a one hour window on Tuesdays only,  between 3 PM and  5 PM is not the path to a quick sale. Too many stipulations on showing your home can send a lot of the wrong messages about what doing business with you might be like.

Marketing – This can be one of the most important issues involved in getting your home on, and off the         market with a sale. Make sure you and your Realtor are on the same page when it comes to just how your home will be presented to potential buyers. If it’s a “scrape”, or a ” fixer-upper” present it that way. Every home is not a show home, and people realize that.

Location – Location is where you find it. Maybe you’re next to a busy freeway, or some other not-always-popular setting. Don’t worry about it. Do what you can about things you can do something about.

Price – Finally we come to what may be the most important issue, when it comes to selling your home. In today’s market, the least little bit of over-pricing can mean your home stands in line with others who are making the same mistake. With the number of homes on the Denver market currently at an all time high, buyers can get a pretty good idea of whose overpriced and whose not, pretty quickly. If you feel like you’re getting a good number of showings, but no offers, consider that your asking price might be a little too high. It doesn’t hurt to do a little of your own research on comps in your area. Use the Internet, consult your broker go to open houses. These are all things that you can do to insure that your property, and the price you’re asking for it remains competitive.

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When it comes to Denver / Cherry Creek real estate the name of the game is supply and demand. If you haven’t done a thorough examination of your property’s presentation, marketing materials, location and price, you probably have at least some of the answers to why your home’s not selling.

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The Denver housing market has generally been on the decline over the past couple of years.
We all know that, and of course we’re not alone. But one of the best kept secrets in the local real estate market is that the value of homes in certain neighborhoods has actually increased over the same time period.

It seems homes near light-rail stations along the southeast line, which opened in November 2006, have increased by an average of nearly 4 percent over the past two years, according to local analysts, while the rest of the Denver market has declined an average of 7.5 percent.

Apparently, the closer a home is to the station, the more its value increases. Homes less than a half-mile from a station increased an average of 17.6 percent, while those 1 1/2 to 2 miles away increased just 0.1 percent on average. The data varied widely among stations, however.

Under its FasTracks program, the Regional Transportation District plans to create six new commuter-rail and light-rail corridors and extend three existing corridors by 2017, potentially creating other pockets where values are driven by proximity to rail and its stations.

In other markets with rail lines, single-family home values have increased anywhere from 2 percent in San Diego to 32 percent in St. Louis for example, according to data gathered by the Regional Transit District.

Transit is just one component pushing values up however. The structures and facilities developers create around the stations go a long way in helping drive the trend. And of course soaring gas prices also fuel demand for housing near transit.
Bottom line seems to be that as local transit gets bigger home prices in and around those areas will naturally increase.

Photo by pbo31, available under a Creative Commons Attribution-Noncommercial license.

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