Insurance tips from the pros: Are you ready for Colorado’s weather risks? From hail to wildfires to tornados, there are risks to consider when it comes to insurance coverage

Always a good reminder on Homeowner's insurance for Coloradans from the Denver Post... Living in Colorado has a lot of perks, but it’s got its risks, too. The state is part of the country’s “hail alley.” It’s coming off a year that saw its three biggest wildfires on record ravage well over half a million acres. On top of those threats, on Monday, a tornado destroyed two homes in Weld County and damaged at least five more, officials said. With those risks and others in mind, the Colorado Division of Insurance put out a news release on earlier this year urging residents to review their homeowners, renters and car insurance coverage but there really isn’t a bad time to do that, experts say. Unless it’s too late. Now is the time. Before the unthinkable happens,” Carole Walker, executive director of the Rocky Mountain Insurance Association said last week. “Know what your insurance covers, know what your limits are.” Here are some recommendations from Walker and Jonnie Anderson and Oliva Hein, owners of Lone Tree-based independent insurance office Legacy Insurance Partners, as Colorado moves into another summer of abundant sunshine and potentially damaging weather. Do an annual insurance checkup At Legacy Insurance Partners, Anderson and Hein have software that alerts them when a clients’ premiums are set to increase by 10% or more so they can check if the client is satisfied or wants to look elsewhere in the market. Thanks, in part, to Front Range’s hail-prone nature (“Hail still by far tops the list as our most expensive insurance loss,” Walker said), car insurance premiums, in particular, have increased rapidly in the state over the past decade and outpace the national average, according to insurance data firm Zebra. But increasing premiums and a chance to save with a new policy are just one reason to do the annual homework. Changing life circumstances and home upgrades are also reasons to look into augmenting coverage.“A lot of people did a remodel during COVID or tricked out the yard, built a new deck,” Walker said. “Make sure you are talking to your insurance professionals. Did you do things to increase what your repair and replace costs are?” “Did you have a baby? Did you get a pool?” Anderson said of questions clients should be asking themselves. “If somebody gets a new roof, well, that could lower their premiums.” Know what’s covered and what isn’t In a state where the biggest population centers are in hail-prone areas, basic auto coverage only goes so far. In other words, be prepared to either spring for extra coverage, pay for those hail dings to be fixed out of pocket or live with the pockmarks. “In Colorado, you really can’t afford to do without comprehensive coverage,” Walker said. “It covers hail, flooding, and theft, which is way up by the way.” Many homeowners policies leave things out or undercover certain things, too, in Anderson and Hein’s experience. When snow and freezing temperatures struck the Denver area in May this year, Legacy saw a lot of clients making claims for sewer and water backups related to burst pipes. That’s something Hein and Anderson insist is part of every homeowners policy they write. “It’s something that a lot of agencies do leave off because it provides a small premium savings,” Hein said. Inventory your stuff The last thing anyone wants to do after a disaster is rack their brain to try to remember everything they lost. It’s a simple concept — and one made easier in recent years by insurers upgrading their technology offerings — but make sure you have a running list of your stuff, particularly the most valuable items. Photos and videos documenting those belongings are essential. Think of it as a home improvement project, Walker said. For the biggest of big-ticket items — say jewelry or perhaps an art collection — consider getting an appraisal and buying additional coverage beyond a homeowners policy. When in doubt, talk to your agent If you’re feeling undercovered, talk to your agent. If you’re preparing to make a claim, talk to your agent. It’s easy for Anderson and Hein to say because they run an insurance agency, but they emphasize there is a lot to know and insurance agents are licensed professionals in Colorado. Things people might not know that Anderson and Hein highlighted: You don’t have to wait until your annual renewal period to change your insurance. You can change whenever you want. And not every loss is claim-worthy. For some items, say a lost piece of jewelry, filing the claim will drive up your premiums to the point of offsetting whatever you recoup from your insurance company, Anderson and Hein said. “I think people need to be better coached that insurance is for catastrophic losses, losses you don’t have the money in your checking account to cover,” Anderson said.

Metro Denver home price gains surge past 23% for second month in a row

still a good time to sell yet the market is changing to a more balanced market for sure...call me to discuss specific changes... this Denver Post article is highlighting a trend that will soon be changing.... Annual home price appreciation in metro Denver topped 23% for the second month in a row in April and barely missed matching a record high set in March, according to a closely watched home price index. The S&P CoreLogic Case-Shiller Home Price Index for metro Denver rose 23.6% year-over-year in April after a 23.7% gain in March. Those two readings represent the highest rates of annual home price appreciation seen in Denver in records going back to 1986. From February 1999 through August 2001, the index did have a long streak of double-digit gains as tech and telecom spending boosted incomes, peaking out with an annual gain of 15% in February 2001. For 13 months now, annual home price gains in metro Denver have surpassed the prior record set in 2001. “We continue to observe very broad strength in the housing market, as all 20 cities notched double-digit price increases for the 12 months ended in April,” said Craig Lazzara, managing direct at S&P DJI in the report “A more-challenging macroeconomic environment may not support extraordinary home price growth for much longer.” The April gains came before mortgage rates on a 30-year mortgage started spiking toward 6%. The “peaking” pattern seen in Colorado was also seen in the national index, which reported a 20.6% gain in March and a 20.4% gain in April. “The slowing of monthly gains, which were up 2.1% (nationally), also suggest further deceleration ahead. Signs of a tipping point toward a greater balance between buyers and sellers are increasing, albeit only compared to some of the most competitive conditions since the early 2000s,” said Selma Hepp, deputy chief economist with CoreLogic, in an emailed statement. Hepp said the active inventory of homes for sale is starting to build up and more sellers are having to drop below their original list price to complete a deal. She said a deacceleration in monthly gains was especially noticeable in the western part of the country, where a rush to get ahead of rising mortgage rates contribute to stronger price surges earlier this year. Although strong price appreciation and higher borrowing costs are weighing on would-be homebuyers, mortgage rates at even 6% remain below the rate of overall inflation, which has gone above 8%. And potential buyers who continue to rent are seeing their costs rise as well by staying put. Annual apartment rent inflation is running at a rate of 14% nationally and 12.7% in metro Denver in June, according to a monthly update from Apartment List. The report put the median rent in metro Denver for a one-bedroom at $1,485 and $1,798 for a two-bedroom.

Housing inventory surges in June

article from Denver Post that mimics what I'm seeging.... from Denver Post July 6th, 2022.... The number of homes and condos available for sale in metro Denver surged by nearly twothirds between May and June and nearly twice as many properties are now on the market compared to a year ago, according to a monthly update from the Denver Metro Association of Realtors. Buyers, who have struggled with a record-low number of listings since pandemic lockdown orders ended more than two years ago, had four times the selection available to them at the end of June as they did at the start of the year — 6,057 vs. 1,477. But that might prove small consolation. Inventories are rising because significantly higher mortgage rates and higher home prices have priced many wouldbe home purchasers out of the market. “The stock market, inflation and cryptocurrency have all taken a hit in the last few months. Housing will eventually be a victim to the economy as a whole, but just how much is yet to be seen,” said Andrew Abrams, chairman of the DMAR Market Trends Committee, in comments accompanying the report. Abrams added it is only a matter of time before the extra inventory will impact prices, how long it takes to sell a home and the lopsided balance of power between sellers and buyers. Listings are spending an average of 10 days on the market, about the same as last year. And the median price of a single-family home sold in June was still rising, up 0.58% on the month and 12.3% on the year, to $673,873. The median price of a condo sold last month was $430,0000, flat with May and up 13.5% from a year earlier. A separate report from real estate brokerage Redfin found that 46.9% of metro Denver home sellers had to lower their initial listing price in May, the third-highest ratio in the country after Provo, Utah, and Tacoma, Wash. The number of homes and condos sold in June in metro Denver fell 12.4% from May and is down 23.6% from June 2021, according to DMAR. While the number of active listings has nearly doubled from the record-low for June of 3,122 reached last year, counts remain far below the 15,747 listings averaged for the month between 1985 and 2021. And the supply situation has a long way to reach the record high for June of 31,900 listings set in 2006 when the housing bubble was going bust.

Just a handful follow short-term rental rules in Jefferson County; officials aim to pull hundreds more into compliance

interesting article from the Denver Post on things to come in Jefferson County regarding Vacation Rentals.... KITTREDGE — Laura Hayes picked up a binder at least 2 inches thick — all of it documentation needed to rent out her house to strangers — and laid it on her kitchen table. “It’s endless, endless red tape,” she said, as permit applications and room-by-room photos of her property spilled out of the folder. “The amount of paperwork to remain compliant is non-stop and exhausting.” The worst thing about it, Hayes said, is that she is one of only 17 property owners registered with Jefferson County to legally offer short-term rentals in the unincorporated parts of the county — the vacation listings that most commonly appear on websites like Airbnb and Vrbo. Yet, the county believes that at least 500 property owners rent houses or rooms across unincorporated Jeffco on a short-term basis — only they do it under the radar. No fees, no inspections, no permits. Hayes suspects the number of non-compliant landlords in the county may be much higher. “I think everyone should have to play the game,” said Hayes, who relies on her rental property near Kittredge, dubbed Creek Stone Cottage, for more than half of her annual income. Twelve miles to the south, William Judy also plays it straight, having paid for and renewed his short-term rental permit with the county for the past three years. He rents a home he owns just east of Aspen Park for $350 and up a night. “I feel like the county should be holding these other people accountable,” Judy said. “And if everyone was playing by the rules, they could reduce the fees.” The first-year cost to offer a short-term rental property in unincorporated Jefferson County is nearly $3,000, which includes a $750 permit fee, an $800 application fee, a $200 hearing fee and a $200 review fee. The charge drops to $1,150 a year in subsequent years, a county spokeswoman told The Denver Post. That is substantially higher than what some cities inside Jefferson County, which run their own short-term rental programs, charge their residents. In Wheat Ridge, the fee for a permit is $200 a year. That same $200 will get you a two-year short-term rental license in Golden. In Arvada, the cost is $110 for an annual permit. Chris O’Keefe, planning director for Jefferson County, knows the county’s short-term rental rules aren’t perfect. “We want to find that balance where the fee is not discouraging people from applying,” he said. “Our goal is to have regulations that everyone will come into compliance with.” 22 complaints so far in 2022 To that end, Jefferson County held an online public meeting last week as part of an effort to revamp its short-term rentals regulations, which have been in place for a decade. A draft of new rules is expected to be released this autumn. Requirements today include a one-acre minimum for the property being rented, adequate parking at the site, defensible space around the house to protect against wildfire, and up-to-date water and sanitation — as most mountain properties are not on municipal water and sewer. During the meeting, county planning and zoning officials got an earful about high fees, the one-acre minimum, absentee landlords — and party houses. One man told participants in the meeting that he never rents out his property for one night only. “That means parties, parties, parties and problems, problems, problems,” he said. Cities and counties in Colorado have long grappled with the impact of short-term rentals, especially after the rise of popular vacation home listing services on the internet. Five years ago, Denver licensing officials issued more than 1,000 violation notices to landlords who broke the city’s new short-term rental rules. Several were criminally charged with felonies for falsifying documents related to their rental properties. That led hundreds of Denver property owners to surrender their licenses, and dozens more to withdraw their applications, in subsequent years. Compliance with Denver’s rules, however, has soared since City Council decided at the beginning of last year to fine booking providers like Airbnb and Vrbo up to $1,000 a day for allowing customers to book an unlicensed rental. The compliance rate across all short-term rental companies in Denver is now estimated at around 90%. And last year, Airbnb blocked or redirected potentially risky reservation attempts from more than 2,600 people in Denver who the company suspected of wanting to use a property as party central. The issue has been no less fraught in vacation-heavy resort communities in Colorado’s high country, with local governments trying to find a way to let property owners make money renting while trying to preserve the quality of life for those living there. Jefferson County, like most other local governments, operates on a complaint-based system to sniff out violators. It typically receives a couple of dozen complaints a year from residents, ranging from a five-year high of 36 in 2019 to a low of 24 last year. This year — with 22 so far — is on track to be a busier year for complaints. Darlene Kell, 76, is one of those who has contacted county officials about scofflaw properties. A resident of Sphinx Park, near Pine, Kell has seen neighboring homes rented out to vacationers where parking spaces and access to land not belonging to the property owner were promised in the listing. “Trespassing is a big issue for us,” Kell said. She and a neighbor have spent months monitoring who might be renting out properties illegally in their neighborhood. Because of the fire danger in the foothills, Kell said she gets worried when guests use fire pits at the properties — whether they are aware of or simply ignoring any fire restrictions. “Guests had built a roaring bonfire with six to seven-foot flames (last fall),” she said. “We were tinder-dry then and Jeffco initiated Stage 1 fire restrictions approximately two weeks after this incident. The guests are often city dwellers who have no idea of the danger of having an outdoor fire. They think it is just a fun ‘mountain’ activity.” Kell said she’d like to see the county’s one-acre minimum for short-term rentals stay in place “because it serves as a buffer.” At the last week’s meeting, several speakers said it was the one-acre rule that is likely keeping hundreds of property owners from registering with the county. Get on with our lives” O’Keefe, the Jefferson County planner, said it’s likely the county will amend some of its regulations, recognizing that not doing so will only result in more people operating in the shadows. “We do think the structure of the regulations is keeping people from applying for a permit,” he said. Judy, with the property near Aspen Park, said he runs a “tight ship” with his short-term rental, which is next door to his permanent home. His property is not “4/20 friendly,” requires a minimum three-night stay and allows no more than six people at a time.. On a note he leaves inside the property is a warning to quell any guest tendencies to act foolishly or unlawfully. “The good news is the owner lives next door,” the note states. “The bad news is the owner lives next door.” Hayes, in Kittredge, just wants certainty from the county’s regulations. She does all the cleaning and maintenance at her 1925-era property on Highway 74, which is tastefully decorated with old steamer trunks filled with books while boasting a modern kitchen with stainless steel appliances. The three-bedroom property, which fronts Bear Creek for 500 feet, can command as much as $550 a night during the high season. Hayes says she is largely booked through early September. “I want them to get on the rules, figure it out and publish them so we can get on with our lives,” she said.

Flood risks are up, and consumers likely to pay-State has 7th highest projected increase in properties that will need to add insurance

plan ahead if you're close to a flood zone, per Denver Post Colorado and other mountain states don’t just face a much higher risk of wildfires in the years ahead, but also of flooding, which could hit more homeowners directly in the pocketbook. Of the 10 U.S. states likely to see the biggest percentage increases in the number of properties needing flood insurance, five are in the Rocky Mountain region, including Colorado, according to a study on changes in flooding risk from Seattle- based QuoteWizard. “You have this combination of increased flooding around rivers, streams and flood plains and you have an increase in drought, which makes the ground more floodprone,” said Nick VinZant, senior research analyst at QuoteWizard. FEMA currently designates 43,332 properties in Colorado at an elevated risk of flooding, meaning they need separate insurance policies to cover that risk. But a separate study from the First Street Foundation estimates given changes in the climate, Colorado should have about 131,245 properties listed at elevated flood risk and insured. That 203% increase in properties at flood risk is the seventh highest among U.S. states, according to the QuoteWizard analysis. The four biggest increases go to Colorado’s neighbors in the mountain region: Utah, up 419%; Wyoming, up 325%; Montana, up 311%; and Idaho, up 290%. QuoteWizard also broke out the additional properties that will need flood insurance in four Front Range counties. Denver could see a 249% increase to 5,061 at-risk properties under FEMA guidelines. Arapahoe County could see a 239% increase of properties at risk to 4,306. Boulder County, which was hard hit by the 2013 floods, is expected to see a 92% increase to 7,436 properties at risk. Broomfield could see a tripling in FEMA properties at-risk, going from 122 to 366. The concern for consumers isn’t only about more properties falling within flood zones but a change in the way that FEMA determines premiums for flood insurance, VinZant said. Rather than basing premiums on the replacement value of a property, FEMA wants to take a more risk-adjusted approach. Beachfront and lakeshores homes, for example, face some of the highest risks of flooding. Those premium locations also tend to host more expensive homes. “Big properties will be paying a lot more, while smaller properties could be paying less,” VinZant said. Some homeowners are looking at flood insurance premium increases of five to seven times current levels, which has generated strong political opposition. FEMA was set to implement the new rate policy this month, until Senate Majority leader Chuck Schumer, D-NY, moved in March to slow down the changes. In Colorado, the average cost for obtaining flood insurance runs $856 a year, which ranks 22nd highest in the nation, according to QuoteWizard. Climate change is driving the increase in risk. Areas expected to flood once every 100 years are now flooding every five to 10 years, which has upended the entire flood insurance system, VinZant said. “It doesn’t matter if you believe in climate change or not, your insurance provider does believe,” he said.

Landlord licenses may be required-Proposal would mean long-term permits for about 54K properties

things on the horizon for Denver Rental Property Owners from the Denver Post By one estimate, Denver has about 54,000 homes, condos, row houses and apartment complexes that are rented out. A new proposal before the City Council would require landlords to pay for long-term licenses for each property. The measure from City Council President Stacie Gilmore would take years and hundreds of thousands of dollars to launch. But she argues it’s necessary to protect tenants, ensure landlords meet basic standards and collect basic contact information from landlords. “For the first time in the city’s history we’ll be able to track our housing stock and understand how much we have,” Gilmore said. She hopes the bill — to be heard by the council’s business committee Wednesday morning — will help the city better understand its housing stock and to target where and how to add more affordable housing. But housing advocates worry Denver’s rents will only rise with the possibility that landlords will pass the costs along to tenants, and landlords are concerned about costs and making their information publicly available. The proposal would be the largest expansion of required licensing in the city’s history, according to Eric Escudero, spokesman for the city’s Department of Excise and Licensing. For context, security guards have the highest volume of licenses in Denver with just under 6,000 active ones, he said. How it would work Denver already requires people who want to let others stay in their properties temporarily through things such as Airbnb or VRBO to obtain short-term rental licenses. The city’s Department of Excise and Licenses has had so much trouble getting companies to comply, though, that there’s a $1,000 fine for each illegal short-term rental transaction. For long-term units, applications in Denver would cost $50 and the cost of licenses would range from $50 for single-unit properties to $500 for multi-family properties with more than 250 units, Gilmore said. Landlords would have to hold licenses for each rental parcel, not per unit, according to Magen Elenz, Gilmore’s chief of staff. Rental houses will need to be inspected, but only 10% of an apartment complex’s units would have to be inspected at random, Gilmore added. Her proposal is modeled after a similar program in Boulder, which started in the 1970s. As of January, Boulder had about 9,500 active long-term rental licenses covering about 20,500 individual units, a spokesman for Boulder’s tax and special projects manager Joel Wagner said. The city’s website indicates a $190 application fee per license, which must be renewed every four years and units must be inspected upon the first application and for each renewal. Long-term licenses in Denver would also have to be renewed every four years and would require inspections, Gilmore said. Landlords would have to hire private inspectors to cut down on the city’s workload. The licenses would help keep problematic landlords in check and give tenants the ability to seek help from the city, Gilmore said. Officials could fine landlords that don’t meet housing standards and suspend or revoke licenses — though tenants would be able to stay through the end of their lease. Plus, she said, creating a database of landlords and their properties would help the city track its housing stock and communicate with property owners and tenants about rental and utility assistance, Gilmore said. The concerns First, there’s the cost: more than $430,000 to phase in the new licensing program by the end of 2024, Gilmore said, on top of an unknown amount in the years following. The proposal also creates several concerns for landlords, according to Colorado Landlords Association President William Bronchick. While landlords wouldn’t necessarily oppose the licenses, he said in an email, many prefer to remain anonymous so tenants can’t communicate with them directly. “A registration that requires this information to be public would defeat that.” Bronchick said. “For example, I once had a tenant dig up my information and post nasty things on my Facebook page!” He also questioned whether safety violations found during inspections would count against landlords even if they were caused by tenants, and noted that licensing fees “could get expensive.” The Globeville, Elyria-Swansea Coalition Director Nola Miguel is worried that landlords will pass on the costs of licensing and required improvements or repairs to tenants. Her organization tries to protect marginalized neighborhoods and affordable housing. “A lot of the most vulnerable renters are the ones living in the worst conditions,” Miguel said. But at the same time, she said, the licenses do have an upside in creating a way for the city to ensure better living standards for tenants. If the proposal passes Wednesday, it’ll move to the full council. With its blessing, landlords could apply for early licenses next year, Gilmore said, but would not be required to obtain licenses until Jan. 1, 2023.

Inventory way down, costs up

pretty accurate article from Denver Post on current state of Front Range Market... Buyers in metro Denver can almost always count on having a wider selection of homes available as the weather warms up, but not this year. The inventory of homes and condos available for sale in the region continued to shrink last month, despite rising mortgage rates, according to a monthly update from the Denver Metro Association of Realtors. In a metro area with more than 3.2 million people, only 1,921 homes and condos were available for sale at the end of March, down 5.1% from February and 66.7% from a year earlier. Last month’s inventory decline last month was the largest on record for a March, and the first February to March decline the area has seen since 2014. It came despite a 26.7% jump in new listings compared to February. Sellers showed up, only to be overwhelmed by demand. A word to frustrated buyers who held out for the spring surge in inventory: It isn’t happening. Instead, home prices are surging, further adding to the sense of desperation some buyers feel. “Theoretically, this month’s report shows that if a buyer waited just one month to buy a $500,000 property from the end of February to the end of March, they would have had to pay $35,000 more for that property,” said Andrew Abrams, chairman of the DMAR Market Trends Committee and a Denver Realtor in comments accompanying the report. The median closing price of a single-family sold rose 5.7% from February to $560,000 and it is up 15.5% over the past year. The average closing price reached $674,990, a 6.7% increase from February and a 19.3% gain from March of last year. Both of those figures are all-time highs. Median price gains were more modest for condos and townhomes, up 4.6% month-overmonth and 6.35% year-over-year to $353,000. The average closing price rose 4.4% and 8.2% respectively to $416,775. The number of residential closings shot up 24% between February and March and is up 1.2% over the past year. Half of the singlefamily home listings last month went under contract within four days, and received 104.1% of the listing price — two other markers of how hot the housing market remains. Rising interest rates, which can reduce affordability and limit demand, could start to weigh more on markets depending on how quickly they continue to move up. Rates on a 30-year mortgage started the year at around 2.65% and are now running closer to 3.2%, according to FreddieMac. “If interest rates continue to rise, we may see a decrease in buyers in the market place leading to a more normalized market. The million-dollar question is when?” Abrams asked.