Metro Denver apartments scarce as rents soar

rental rates and rentals are tougher to find....

 

Denver Post

1.31.2013

 

Metro Denver apartments remain scarce with the apartment vacancy rate in the area falling to 4.9 percent in the fourth quarter of 2012 compared to 5.4 percent in the fourth quarter of 2011.

According to a report released Thursday by the Apartment Association of Metro Denver and the Colorado Division of Housing, 2012's fourth quarter vacancy rate was the lowest reported during the fourth quarter of any year since 2000.

The vacancy rate was 4.7 percent in 2000.

However, the vacancy rate in the Denver metro area in the fourth quarter of 2012 was better than the third quarter when it was 4.3 percent.

With the lower vacancy rates, rents skyrocketed.

During the fourth quarter of 2012, the average rent in metro Denver rose to $978, increasing 4.9 percent, or $46, from 2011's fourth-quarter average rent of $932.

However, the average rent in the third quarter of 2012 was higher at $986.

Average rents for all counties were: Adams, $893; Arapahoe, $950; Boulder/Broomfield, $1,103; Denver, $985; Douglas, $1,186 and Jefferson, $941 .

Not all types of units were equally in demand.

"The average rent in efficiency apartments outpaced other types of units, rising by more than 10 percent in metro Denver," said Ryan McMaken, an economist for the Colorado Division of Housing. "This suggests that people are looking for the smallest, least expensive unit the can find in many cases, and that drives up rents for the smaller units too."

Ron Thorpe, professor of Real Estate at the Burns School of Real Estate and Construction Management at the University of Denver, said that for the past 13 quarters, the vacancy rate has fallen when compared to the same quarter a year earlier, The last time the quarterly vacancy rate rose year over year was during the third quarter of 2009, said Thorpe, the author of the report.

Vacancy rates dropped from the fourth quarter of 2011 to the fourth quarter of 2012 in Adams, Arapahoe, Douglas and Jefferson counties and the in the Boulder-Broomfield area.

However, in Denver, the vacancy rate rose in Denver where a large number of new apartment communities have been built.

As to Denver, Thorpe said there were some vacancies in "brand new communities that haven't completed the lease-up process.

"Most new construction is taking place in only a few of the most in-demand submarkets right now, so low vacancy rate will continue to be the norm for many neighborhoods in the short term," said Thorpe.

The report said that given the limited number of new additions to the apartment inventory in the last two years, and especially during the last year, the recent trend in Denver metro unemployment rate, normal seasonal vacancy changes, continued immigration and an increase in metro area population, a "continued historically low vacancy rate was expected."

"Historically, the vacancy rate is higher in the fourth and first quarters than the second and third quarters, which we see again this year."

The report noted that overall average rent for the last 10 years has increased from around $800 in 2002 to more than $978 in the fourth quarter of 2012.

Existing Home Sales Hit 5-year High in 2012

interesting article from MarketWatch/RIS Media...

Sales of existing homes ticked down in December from the month before, while the total for 2012 hit the highest level in five years, according to data released Tuesday by the National Association of REALTORS®.
The pace of sales fell 1 percent in December to a seasonally adjusted annual rate of 4.94 million, according to NAR. For all of 2012, existing-home sales hit 4.65 million, the highest level since 2007 and up 9.2 percent from 2011.
“Record-low mortgage interest rates clearly are helping many home buyers, but tight inventory

Showings Are Up Dramatically!

A recent email from a Denver/Front Range Company that sets up real estate showings for realtors.  It's a good email to see for the market.

"Another great day....busiest Saturday since mid September.

Showing activity is great., but listing inventory is really low.

REAL ESTATE RESOURCE CENTER"

What do people want from their real estate agent?

According the the 2012 Home Buyers and Sellers Survey for the Denver market commissioned by DMAR for members, 91% of buyers purchased their home through a real estate agent or broker. What do they want from their real estate professional?  

CLICK ON CHART BELOW TO ENLARGE.

 

9 tax questions homeowners must ask

an interesting article from a fellow industry professional...

9 tax questions homeowners must ask

Now is the time to start putting together records and information for your 2012 tax returns which are due April 15, 2013. Here are some tax questions homeowners need to ask:

1. What tax benefits did homeowners get in the recent 'fiscal cliff' budget agreement? Two tax provisions that ended in 2011 were reinstated for 2012 and 2013: 1. Mortgage insurance premiums are again tax deductible for people with adjusted gross income below $110,000; 2. Homeowners will continue to get tax credits for certain energy-efficient home improvements. For details, visit www.irs.gov or ask a tax professional.
2. What are the home related tax deductions people most often claim? One of them is the mortgage interest deduction (which can mean about $3,000 in tax savings for the average itemizing homeowner) and another one is the deduction for property taxes.

3. What is the #1 mistake homeowners make with their taxes? If your real estate taxes are not part of your monthly mortgage payment, you are billed by your town or county. Those tax bills often include other items like trash collection and snow removal fees. Be careful to deduct only the part of your bill that is property tax.

4. What tax deduction should I be sure to take? Make sure to deduct any points you paid on the mortgage you took out to purchase your home in the tax year you paid them. But if you refinanced, you need to amortize and deduct any points you paid over the life of the mortgage. People can easily forget the deduction after a few years.

5. What's the most important thing I should do as a first-time homeowner? Look at the HUD-1 form you received when you closed on your home. There may be fees like prepaid taxes or interest you can now deduct.

6. What should I look out for if I've owned my home for a number of years? If you've refinanced and taken out home equity loans or lines of credit, remember that the maximum outstanding home equity debt that's deductible is $100,000 and the maximum amount of deductible mortgage interest is $1 million.

7. Which home improvement records should I keep? Keep all receipts for the capital improvements you've made to the property. Tax rules let you add these expenses to your home's cost to reduce any profit you might have to pay taxes on when you sell. But most people are exempt from taxes on the first $500,000 of profit for joint filers ($250,000 for single filers).

8. What's the difference between a capital improvement and a repair? Fixing a furnace so it keeps working is a repair; replacing it is a capital improvement.

9. Will taking a home office tax deduction increase my chances of being audited? Taking the deduction shouldn't generate an audit by itself. But if your expenses are unusually large, or if it looks like you're using office costs to create artificial losses, the IRS will probably look into it.

NOTE: Always consult a tax professional for the definitive answer to any tax question.

Details as Simple as a Weird Address Can Break a Home Sale

Interesting Denver Post Article....12.30.12

 

The devil really may be in the details.

The owners of a Ridgewood, N.J., home were eager to sell because they had already bought another place. After a couple of months went by without an offer, they cut the price and stripped the outdated paneling from one room. But buyers weren't biting, and they thought they knew why: Their street address was 666, which some Christians believe is a sign of the devil, based on a biblical passage.

So the homeowners got the address changed to 668, and the place sold.

It was just one example of how seemingly minor issues can make — or break — real estate transactions. In most cases, there are only a couple of big-picture items that sellers can control when they put their homes on the market: the home's condition and its price. For that reason, sellers are usually urged to set a competitive asking price and spruce up the property by painting, refinishing hardwood floors, and upgrading the landscaping.

But sometimes, unexpected or oddball details — not always in a homeowner's control — can be the difference between success and failure.

"A home purchase is a very emotional thing," said Beth Freed, an agent with Prominent Properties Sotheby's International Realty in Ridgewood, N.J. "If you feel at home, for one reason or another, that very often is all it takes."

Jeana Cowie, listing agent on the Ridgewood house that used to be No. 666, said she was surprised when people commented that the address might be a problem. One buyer at an open house told her it was a "weird number."

To change the address, the homeowner went to Village Hall; each town has its own procedure for this, but usually the tax assessor has to be consulted to make sure there's no conflict with another address. Emergency services and the U.S. Postal Service must also be notified.

"I don't want to say that 668 sold the house," Cowie said. But she thinks it helped.

Hedy Weiss, a Coldwell Banker agent in Franklin Lakes, N.J., also closed a sale after the homeowner changed the address. The house was on a corner in Franklin Lakes, facing a busy street, but also had an entrance on the side street.

"Because people could see it was on a main street, a lot of people didn't pursue it," she said. The homeowner had the address changed to the side street.

"We started getting more showings with the new address," Weiss said.

Within two months, the house was sold.

Freed says one of her home sellers got a boost when the village lowered the speed limit on the street to 25 mph. Suddenly, the property became more attractive to families with young children, and it sold soon after.

 

Other numbers also can make a difference. Some agents have favorite pricing tricks. Orly Steinberg, a Coldwell Banker agent in Ridgewood, for example, ends her prices in "888." She started doing it 20 years ago, to catch the eye of agents paging through big multiple listing books. She wanted to be listed just ahead of the agents pricing their listings at more common numbers using 9s — for example, pricing a home at $299,888, instead of $299,900. Over time, it became her signature; her license plate even reads "SOLD888." "It gets you a little bit more attention, which is what you want," Steinberg said. Later, she discovered that 8 is a lucky number in Chinese culture. For that reason, 8s are included in 20 percent of the asking prices in real estate markets with a large Asian population, the real estate website Trulia recently reported. (And 13 is uncommon in prices everywhere, Trulia says.)

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Colorado was the 7th fastest growing state from July 2011 to July 2012

 interesting Denver Post Article...

12.20.2012

 

Colorado was the 7th "fastest growing state" between July 1, 2011 and July 1, 2012, the U.S. Census Bureau said Thursday.

During that period, the population grew 1.39 percent.

Colorado ranked ninth among the 10 states with the "largest population increase," gaining 71,300 people.

The fastest growing state was North Dakota.

Wyoming ranked fourth and Utah fifth.

In commenting on North Dakota, which is in the midst of an oil boom, the Census Bureau said the state's population climbed by 2.17 percent, nearly three times faster than the nation as a whole.

The United States as a whole saw its population increase by 2.3 million from 2011 to 2012, to 313.9 million, for a growth rate of 0.75.

Texas gained more people than any other state, 427,400, followed by California, 357,500.

Shadow inventory of distressed homes falls, a positive for housing

more great news for the market

 

Denver Post 1.2.2013

 

Residential shadow inventory fell to 2.3 million units in October 2012, a 12.3 percent drop from October 2011 and another positive sign for the housing market, according to a report released Wednesday by CoreLogic.

CoreLogic, a leading provider of information, analytics and business services, said the figure for October represents a supply of seven months and is predicted to be manageable in 2013.

Shadow inventory, also known as pending supply, refers to homes that are seriously delinquent, in foreclosure or owned by a bank but not yet on the market. Shadow inventory is typically not included in the official reporting measurements of unsold inventory.

"The size of the shadow inventory continues to shrink from peak levels in terms of numbers of units and the dollars they represent," said Anand Nallathambi, president and CEO of CoreLogic. "We expect a gradual and progressive contraction in shadow inventory in 2013 as investors continue to snap up foreclosed and REO (bank-owned) properties and the broader recovery in housing market fundamentals takes hold."

Over the three months ending in October 2012, serious delinquencies, which are the main driver of the shadow inventory, declined the most in Arizona (13.3 percent), California (9.7 percent), Michigan (6.8 percent), Colorado (6.8 percent) and Wyoming (5.9 percent).

Mark Fleming, chief economist for CoreLogic, added: "Almost half of the properties in the shadow are delinquent and not yet foreclosed. Given the long foreclosure timelines in many states, the current shadow inventory stock represents little threat to a significant swing in housing market supply.

"Investor demand will help to absorb the already foreclosed and REO properties in the shadow inventory in 2013."