Karl Lueders: The Active Rain Blog

In the past 30 days, the following has happened to my buyers and listings:

- One buyer lost out on two houses because of multiple offers on houses in Wheat Ridge, a western suburban off-shoot of the Denver metroplex. He finally found a house that had been on the market less than two weeks because it needs a bunch of cosmetic work. Price point: $230-250k.

- One buyer lost out on two houses in Denver proper because the houses both had offers the first days they were on the market. She was able to secure one because she agreed to a back-up position on it and the buyer backed out. The seller has also agreed to fix nearly EVERYTHING on the inspection list. Price point $180-200k.

-Half-duplex went under contract in one of Denver's hottest upcoming markets, Sloan's Lake, in two days (one day, technically). This is one day longer than the duplex around the corner from this property that went on the market two weeks prior. Price range $190-210k.

- Finally, one buyer got in a bidding war on a property in the Denver Highlands on a house that was originally listed at $275k and dropped to $265k. She bowed out of the war, which ended up bringing the price of the house back to near its original list price.

I'm truly amazed at how hot the action is in this price point. None of these buyers are investors. All but one are getting FHA loans, and the people selling are moving up to higher price points. The sweet spot, at least in Denver, is anything under the $417k loan ceiling, and if you're a first-time home buyer, more power to you.

Using this data as an indicator of the future, I have to imagine that the people selling these $200k-ballpark houses are moving into $300-400 houses, you would think. That's at least where my clients are moving to, once they sell their places. And once they buy, those sellers have to move somewhere else, and so on, and so on...

Theoretically, once all the "lower" price point inventories have been thinned enough to create a balanced sales market, then the buyers should eventually be heading into the higher price points. Of course, this type of organic stimulation won't reach the $1million-plus levels for quite some time, but logic points us in this direction.

That is, unless there is so much inventory at the $300-500k range that all the displaced sellers from the first-time homebuyers can't make a dent in one of the higher price ranges. Which doesn't afford a trickle-up opportunity and all this homebuying frenzy in 2009 stops at midfield and the resale sector of the residential real estate market has to punt in 2010.

The other road block is the inability for buyers to get jumbo loans. We had a speaker come to one of our sales meetings recently and try and get us pumped up about the high-end market and the signs of life there. The next week, we were provided with a chart by one of the more prevalent real estate consultants showing the jumbo-loan flatline starting around November 2008. To complement that chart, a mortgage officer from a fairly well-known national bank spoke that while he has seen some million-dollar deals come by his desk, the buyers are ponying up their own cash to get their loan under the conforming level.

The problem is that the average $600,000 homeowner that's looking to get to the next level doesn't have that kind of jack to get his loan under $417k.

For those of us in real estate sales, I would love to see 2010 improve upon 2009, simply because 2009 has shown some amazing signs of life, but I'm dubious about seeing the money flowing uphill.

My Firefox opens to The Denver Post's home page - kind of my nod to the news since I cancelled my hard copy subscription years ago. I don't need it for sports, since I have that in my ear on the radio, nor do I use it for the weather (what's more unreliable than the TV weatherman?... what the TV weatherman writes for the paper!). It's more to get a snapshot of the world at a given moment. The Web allows "newspapers" to become organic beings. Good for the end-user, if done properly.

Unless, of course, you want to start your day off poorly. Here were the slate of headlines that sit in the middle of the Post's site as of 8:15 a.m., MDT.

11 Headlines: 3 that do not imply death, disease or financial shortfall. Read them top to bottom. The last one becomes funny, then.

The Twitter headline is more of a throwback to the days when the newspapers were simply behind the curve on trends - nostalgic, even. Westminster obviously has smaller fish to fry and of all the headlines above, the only "positive" headline is about the successful transplant, but only after a hair-raising journey. If you thought that the $18M award to the paralyzed kid is an uplifting story... someone's paralyzed and a bankrupt company is on the hook.

So that's how my day started. I think I'll go for a run and be thankful for what I have.

This article came through The Denver Post this morning regarding a 46% percent drop in foreclosure notices in Q1 of 2009 over that same period in 2008.

Check it out here.

It says that while metro Denver has eased considerably, national activity has risen 23% and notorious foreclosure hot spots like Las Vegas have doubled from 2008.

I'm happy for headlines that have "foreclosures" and "drop" in them, but I'm thinking of a tsunami right now. As in, you're lying on the beach soaking up some rays and all of a sudden you watch the waterline suck back into the ocean at about 20 ft/second. Next thing you know, Q2 foreclosures are at a record high (Q1 2010, more likely).

I don't want to sound like a sore winner, but I'm dubious about this cycle.

There is a message here, bear with me... I cancelled my buyer appointments today as you will soon find out why.

I do miss these days. It reminds me of Chicago and why I love that city but will never go back. Currently, central Denver is getting pounded mercilessly by a sleet/snow mixture that should let up sometime next week. Last night it rained because it was too warm to snow, but now it's sticking. Denver is an odd town weather-wise. I read in USA Today how Denver gets backloaded with all of its snow in March and April,

which shouldn't be surprising, since the two of the three worst snowstorms I've ever experienced have been in March in Denver. Granted, I've only been here 10 years, but living here seems to validate one of my half-baked theories from my younger days.

I remember this one particular summit amongst my Chicago friends - that all-too-common conflagration where four or five of us would solve every problem thrown our way, only to realize that we didn't have the staff to delegate the implementation of any of these ingenious ideas. To get an idea of how long ago these summits occurred, one out of five people had a cell phone and the other four would laugh at that guy as he made weird gyrations trying to hear the person on the other end.

Anyway, I postulated that - I had no scientific backing, just 30 years of observation - that the seasons were oblivious to the calendar and that by 2045 (50 years from my proclamation) summer in the northern hemisphere would be more in line with the autumnal months and winter would start infringing on the traditional spring stretch. I had been seeing warmer Septembers and whiter Aprils for a while now, and it doesn't appear to resetting, and the idea of a white Christmas seems almost nostalgic, unless you live in Buffalo (or Denver, specifically).

Granted, this weather doesn't do us any favors as Realtors (I'm preaching to my Colorado brethren), but I'm beginning to think that while Denver's selling season doesn't have the sharp dip of the Eastern seaboard cities, we also shouldn't assume that the selling season begins after the Super Bowl ends. I've had several listings in the past three years get false-started on the market because prolonged snow storms have stymied their debut. Yes, when your sellers are ready to go, weather isn't much of a factor, but if you're teeing up a listing for maximum effect, May 1 appears to be a safer bet than March 1.

It can stop snowing anytime now...

Karl Lueders is a Denver-based Realtor who loves cold, snowy days just as much as his black labrador Sadie does. Except that Karl won't roll on his back in a three-foot snow drift. Find out more about Karl here or how Karl and Sadie are helping Denver's pet community stay healthy at The Goethe Fund. Look for this logo on future Karl posts:

Since my last look into our neighborhood's sales performance (2007-2008), I was able to conclude that while the rest of the world seemed to be drowning in sorrow, Driving Park Historic District was decidedly middle-of-the-road sales wise. I'll take normal over recession any day of the week, but that's pretty where we've been for the past 6 months, and that's where we appear to be right now, even after a few distressed sales.

Based on the latest sales data from Metrolist Inc., Denver, as a whole, has about 6 months worth of inventory currently for sale. What does 6 months of inventory actually involve? For example, within Driving Park Historic District, where I live, 17 homes sold in 2008. That comes out to 1.41 homes sold per month. Currently, we have 9 active listings in DPHD, which, divided by the average sales per month, puts us right at 6 months as time it will take to clear out our current inventory. In actuality, three homes have sold in DPHD so far this year: 571 High, 450 Williams and 484 Lafayette, which means we're slightly behind the 6 month curve, but the balance is there, which is good.

To get an idea of the houses that are currently for sale, go to my search site and check out the addresses listed in the chart below.

The average sale price isn't so much of an indicator of neighborhood performance as is the sale price - to - list price ratio. Currently, we are holding steady at 94% of list price (that's based on the last list price, sale price - to - original list price is around 90%, which is also normal, but shows the inevitable price drop). Disregard the average sale prices for 2009, as 571 High really threw off the balance, dropping nearly $500,000 between its original list price and eventual sale price.The reason why I don't look at sale price for DPHD is because we have houses that sell between $250k and upwards of $2 million within a 14-block area.

If you have any questions about the chart below or about this neighborhood, feel free to contact Karl Lueders at 720-971-8267. You can also reach him at his Web site, www.KarlSellsDenver.com. Karl lives in Driving Park Historic District on Humboldt St. The neighborhood runs from 4th Ave to 6th Ave, and from Marion to High St. It is surrounded by Alamo Placita, Seventh Avenue and Country Club historic neighborhoods.

If you're interested in the historic significance of the Driving Park Historic District, give me a call or drop me a line. You can find more sales data at Denver Real and Beyond.

Now, I'm not going to teach you how to get out of parking tickets. I'm going to help you save your clients a mountain of frustration when they approach their car in the morning and find a nice little present accompanied by a bitter yellow envelope tucked under the wiper blade.

Let me set this up for you: I grew up in downtown Chicago before moving to central Denver 10 years ago. A lot changed between the two cities: most notably the weather and severe drop-off in good Thai restaurants, but there's one thing about city living that followed me from Chicago to Denver and haunted me until yesterday: if you don't move your car by 8 a.m. on street cleaning day, you will get a ticket.

Granted, the idea of moving your car from the street in front of your house may sound like a foreign concept to the covenant-controlled, attached-garage masses, but everybody that lives in a major metropolitan area gets to abide by the absolutely inflexible rules of their friendly neighborhood Streets and San. And one of those rules is getting out of the way of the sweepers. I kid you not: I have been in front of my house in Driving Park at 7:59 a.m., getting into my car and seeing the meter maid at the end of the block warming up her pen. I have been able to grant clemency for a couple of my neighbors here and there, but at least in my neighborhood, if you haven't hit the gas by 8, you might as well reduce your spending money by at least $25.

I've lived under the shroud of the Denver Public Works' mobile profit center for 10 years, and I average about 2 tickets a year. Yes, I'd like to have that $ back, but it's absolutely the principle of the thing. I know how to read a calendar and I know that the first Tuesday of every month is street cleaning on MY side of the street, and it's Wednesday for the other side of Humboldt. Not a difficult concept. To add insult to injury, the street cleaning sign is in MY front yard.

The worst part is that I'm not alone. My entire neighborhood likes the convenience of parking on the street as opposed to making the three-point turn into the alley garage. Plus, we're a front yard neighborhood so we know when people are home. That makes for a great neighborhood - actually, a lucrative one for the city. April 1 is the first day our street gets cleaned, and the occasion is marked by 4 to 5 tickets flapping under wiper blades. I've seen neighbors move their cars to the wrong side of the street two days in a row and end up $50 lighter. Pathetic.

That is, until now. Unlike Chicago, Denver actually wants you to move your car so they can clean the gutters. As a result, they signed on with www.MyMotorMaid.com. My Motor Maid is an automated reminder service that anybody in Denver can sign up for to remind them when the next street cleaning is coming down their street. It takes about 30 seconds to sign up and once you've received the confirmation email, you'll be alerted with plenty of time to move your car.

I just forwarded this link to all my clients and prospects in Denver.

The bad news: My Motor Maid is only in 10 cities across the country, all but Denver are in California. But that shouldn't stop you from helping out your urban, garage-challenged clients from getting nabbed by the meter maids. If you don't live in one of these cities, set up an email distribution list of all your clients/prospects/farm that live in street-sweeping zones. Usually, street sweeping occurs the first week of the month, so put a reminder in your Outlook, whatever, to send an email to your clients reminding them about the impending street cleaning.

Easy as that! And that's how you become a hero without leaving your desk.

If you want only good news about home sales these days, stop reading at the end of this paragraph. Driving Park Historic District average sales prices skyrocketed 20% from 2007-2008!

But you know there'll be a catch.

Read the rest at my company blog or Denver Real Estate and Beyond!

This client was referred to me about three months ago and I had the pleasure of showing homes to her and her two daughters on several occasions. About three weeks ago, she gave me the bad news that she couldn't pull the trigger on buying a house. This wasn't the first time that happened, but she was such a positive person that I was bummed that I wouldn't be spending more time with her.

Last night, I got this letter from her, and I swear I didn't coach her into writing it...:)...

" I would like to share one of the most positive experiences I have had with a professional recently. A few months ago, my elderly parents and I had been discussing their potential move from California to live with me in Denver. With such an uncertain arrangement, I had been hesitant to enlist a realtor. Yet, when I explained the situation to Karl Lueders, I was pleasantly surprised when I was met with encouragement and understanding.

He welcomed the opportunity to help me with the house search, despite knowing the purchase was highly contingent on my parents uprooting themselves from a home they’d happily lived in for over forty years. To entice Mom and Dad, I had added definite challenges to Mr. Lueders' search. This house I was looking for not only had to be perfect for myself and my two young children, but also for two elderly parents with unique needs and extremely narrow tastes. Not once did Karl flinch, balk or voice any apposition to my crazy ideas. Instead, I found him persistently researching my ideas and even asking me more questions to determine more details. He combed and re-combed the market for each of the demands I made: privacy, bright and roomy basement with it’s own kitchen, cul-de sac, this type of ceiling, those type of doors, wide hallways, big trees… the list went on and on.

Karl proved quite knowledgeable in the types and ages of houses, price ranges, locations, and so much more that I would never have considered. To my astonishment, he managed to find a spectacular array of selections for us to view. But, poor man, my pickiness became even more meticulous– too small, too big, ceilings too high, kitchen too… and so on, and so on. Yet, throughout each house viewing, Karl Lueders strove to learn even more of our expectations, obviously honing in on getting an ever stronger picture in his mind as to what we wanted. Surprisingly, the search only lasted a few weeks - and, it was my schedule that kept us from progressing faster, not his. Karl always found time for me, even during the crazy holiday hectics.

I can confidently say that Karl succeeded in his daunting task. He actually found that perfect home – in fact, perhaps even two. One, especially, had nearly everything - plus a few unexpected bonuses! Had it been only up to me, I wanted to place an offer on the spot. My parents, however, elected not to take the life-changing move to Colorado, making the entire excruciating search for naught. Despite this disappointing news, Karl still maintained a pleasant, professional attitude. I would like to highly recommend Karl Lueders' knowledge and services as a real estate agent! Throughout our “house hunt”, Mr. Lueders certainly demonstrated his strengths as a real estate agent. He listened, he researched, he explained. He was always friendly, cheerful, and professional. He made the house search an enjoyable and highly positive experience. In the future, when I have needs to pursue another home, I will certainly seek his expertise again. Again, thanks so much to Karl for all the work he placed into my portfolio."

That made my day. Week and month, too!

Two schools of thought on finding out that Denver was named the \top city to live in by the Pew Research Center:

• Keep it to yourself! Despite our seven-year highway widening project, there are too many cars (and way too many bad drivers) and not enough places to put them. Besides, if half of the people that move here ski, we'll be looking at 4-hour drives to cover the 90 miles from Vail back to Denver.
• Y'all were going to find out sooner or later, so give me a call when your clients pack up the truck for Rocky Mountain High!

(Click on the photo for a quick Denver opinion of the poll.)

They say timing is everything and learning this news about Denver actually renewed all the reasons why we moved to Denver in 1999.

It's been a curious six months for a lot of us and it appears that the weirdness isn't winding down. In fact, just last night, the wife and I discussed worst-case scenarios (if you haven't had one of these, they're very depressing, but probably necessary) because our family derives its income from real estate and the financial sector... good times, good times.

So it dawned on us that we should consider a fallout shelter strategy so we talked about all angles of what happens when the s**t really hits, including moving away from Colorado. Apparently, Mrs. L reads the papers more than I do. "Unless we're moving to Paris," Mrs. L said, "you can't go up from here! Besides, we can literally run for the hills if it gets bad enough." Then I thought about all of her cousins that live in Detroit and soon felt this wave of calm wash over me...

...so, like I said, when the trucks start heading this way, I'd be happy to help.

KarlSellsDenver.com

You heard it here first: Unless a Steeler superstar is arrested/found in Mexico/passes out the night before the Super Bowl and misses the game, Pittsburgh will win 27-17 (next best guess 26-17).

The game will be close until the end of the game when Arizona turns the ball over which is returned for a late Pittsburgh TD.

Let's hear it.