Housing Decline (Denver: to rent, homes, neighborhoods)

[MaddieClaire]

BRAVO, JazzLover....very well said.

[MaddieClaire]

Heard on the Denver local news this week that bankrupty's (sp) in Denver are up 70% over last year.

[MaddieClaire]

What is a short sale home and REO?
Thanks!

[MaddieClaire]

Formercalifornian...I really enjoy reading your post.
Very well written informative.

[jazzlover]

Statistics on sales, as they are reported in the media, don't tell the whole story. I learned a trick from a fellow who was very adept at stock market analysis--what he taught me I think also applies to the real estate market.

He said that you have to look at prices AND sales volume. He said if sales prices are still increasing, but sales volumes are weakening, it's time to start worrying about a correction. The sure sign (and usually too late to escape it) is when declining sales prices are accompanied by high sales volume, indicating forced or panic selling of an investment rapidly declining in value.

In relatively illiquid "investments" like real estate, quite often it takes a while before a slackening market translates into price declines. Sales volume usually starts to tank first. Then comes the price declines, followed by increased panic and distress sales. That happened just like that in Colorado in the early 1980's. In some parts of the state, the price declines lasted for years, the "bottom-fishers" finally starting to buy up property and stablize the markets in the middle of the decade. There are a lot of people in Colorado now (either too young or transplanted) that don't remember the drubbing a lot of people took in that real estate debacle back in the 1980's. A banker friend of mine who lived through it made this cryptic comment to me the other day, "Well, ****, I guess we're gonna get to go through it again. I wanted to be retired by the 'next time.' I didn't make it."

[CosmicWizard]

Jazzlover wrote:

Statistics on sales, as they are reported in the media, don't tell the whole story.

I might add that Statistics on sales, as they are reported in the media merely tells the story that those in control want told, and to hell with the truth and/or what's really going on.

Great post by the way...Another ACE for you.

blessings...Franco

[hello-world]

Originally Posted by sberdrow

Just bought, go a screaming deal. Was looking at a house for 229k two months ago, ended up taking my offer at 210K appraised at much higher. Yes I know I might have been better to wait, but if you intend to live in a house for 7 years, even if it goes down for a little while, it will always go back up. The more supply drops and demand rises the higher it goes. Personally, If prices values drop, Im going to challenge my property taxes. If they go up, I hope it keeps up with the other homes in the neighborhood. It was tough sitting on the sidelines waiting, renting. But I spend 2000 renting, and saved 20,000 on the house. 18000 dollar net. 9000 a month aint bad. Now lets just hope I don't lose my job in the next few years and have to move out of the area. I don't want to leave Colorado, Gods counry, Home of the Denver Broncos (are you guys sick of hearing that yet)?

i agree if you plan on being around for that long, you probably will do fine, and THEN will have made a killing in this market (you haven't made a killing in this market until you sell the place for a concrete profit, right?).

[sbd78]

Originally Posted by Mike from back east

Neumann Homes Inc. will auction 49 properties in suburban Denver on Oct. 3.

The auction includes 15 SFHs, 8 condo's and 26 homesites. The three communities involved are: Village at Harmony Park at 12901 Harmony Park Drive in Westminster; Mountain Shadows at 5850 Twilight Ave. in Firestone; and Serenity Ridge at 7245 S. Millbrook Court, in Aurora. Properties are open for viewing 1-4 PM on Saturdays & Sundays; Sept. 15-16; 22-23; 29-30. Story at: The Denver Post - Builder to auction 49 Denver-area properties

I haven't seen this method used in some time. I suspect the builder needs to get something for the properties to service the debt being carried or even to stave off bankruptcy, but I'm speculating. IMO, the auction is a sign that the current shakeout is affecting some firms quite a bit. Not sure if this is just a ploy (I've seen it before) or if the builder really is desperate and will take any offer. Will be interesting if someone has the inside skinny on what's happening.

s/Mike from back east

Your speculation was right on!
Neumann in Chapter 11 :: CHICAGO SUN-TIMES :: Business (http://www.suntimes.com/business/614868,neumann102207.article - broken link)

[Mike from back east]

Originally Posted by sbd78

Your speculation was right on!
Neumann in Chapter 11 :: CHICAGO SUN-TIMES :: Business (http://www.suntimes.com/business/614868,neumann102207.article - broken link)

Silent But Deadly 78, thanks for remembering me. I manage to get it right once in a while, must be 60 years of experience and observation. If only I could be 21 again, know what I know NOW, and with my current finances, oh what a time I'd have....

[Studiobill]

Originally Posted by MaddieClaire

What is a short sale home and REO?
Thanks!

A short sale is a sale where the bank has agreed to accept less than what is owed on loan. An REO (Real Estate Owned) means the bank has taken over the house. Used to be an REO might still be near market value, but have when things slow down they drop price to get out of the house.
Problem with REO's is while price might be lower, fico and down payment requirements are much higher which most buyers may not qualify for.
Realtors are doing a disservice to their clients buy dropping prices to compete against REO's.
A market price home may be easier to qualify for than the REO.