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Old 02-24-2010, 08:39 PM
 
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The "big crash" has yet to hit the Colorado real estate markets, though I believe it is coming. Some areas are already seeing significant price declines, but the main feature of the markets so far has been a collapse in sales volume. That is usually a good harbinger that a big price decline is coming in fairly short order. Between bailouts, TARP, and all of the other nonsense being promoted to try to reinflate the bubble, the lenders--banks especially--have not been real enthusiastic about initiating foreclosures, even when it is abundantly clear that some loans are in complete default and are highly unlikely to ever be repaid. The lenders simply don't want to turn a "paper" loss into a real one. The banks can only play that game with non-performing loans for so long, though, and I think a lot of them are reaching the end of their rope. I personally know of a couple of banks that have played that game for well over a year now, but are now beginning to actively foreclose on defaulted loans and declare the deficiency in the foreclosure. As that spreads, it will likely precipitate "the next leg down" in the real estate markets. I read a newsletter from a bond underwriter this morning that discusses the ominous statistics for the last quarter in FDIC bank takeovers and a serious decline in consumer confidence in the last month. That newsletter predicted no significant economic recovery until 2013 at the earliest, with significant risk of further economic decline between now and then.

People also tend to ignore the "affordability index"--the relation between home prices and carrying costs, and local incomes. That was way out whack in Colorado before the economy turned sour. The deteriorating economy coupled with home prices that have yet to fully correct to reflect the moribund real estate market has only made that affordability index worse. Proof in the pudding of that is that many local banks are literally awash in money, but refuse to mortgage lend because they perceive the risk of borrower default and collateral market depreciation as far too great. It has gotten to the point that two local banks that I know of are now refusing to take large institutional deposits--they have nowhere that they feel secure in lending that money back out. Where are those large institutional deposits going now? Well, into US Treasuries, of course, since the Fed is having to borrow money like a drunken sailor to fund the gargantuan budget deficit. Also, of course, the Fed will be lending some of that money to home buyers apparently too risky for a prudent banker to lend to. So, the Feds are lending money that the taxpayers are paying interest upon to risky borrowers who--if they default (and many will)--will leave the Feds, meaning the taxpayers, holding the bag for the deficiencies. Could anyone, in their worst nightmare, conjure up a more ****ed up mess designed to destroy savings and the economy? It had to have been thought up by lawyers, real estate "professionals," and politicians. Nobody else could be that demented.
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Old 02-24-2010, 10:12 PM
 
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Originally Posted by vfrpilot View Post
(snip) Then I read Jazz's comments about the economy and wonder why anyone would invest that kind of money in a city where a lawyer can't make a decent living Do you see what I mean?
Yes ... I see where you're coming from.

But here's an alternative view ... there are other financial priorities in life now for many people besides all their prior perceived needs for legal services when they could afford to be litigious at the drop of a hat and it was no big deal to retain counsel with multi-thousand dollar retainers in the hopes of winning an action and getting a payoff. Or a whole bunch of other services that the legal community provided to various sectors, say business deals ... isn't as active a market because there aren't as many business deals going on right now.
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Old 02-25-2010, 09:53 AM
 
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Originally Posted by sunsprit View Post
There's a big difference in Denver locations when you start talking about suburbs compared to core Denver neighborhoods. My 3 bd/3ba 2,200 sq ft suburban house in the Ken-Caryl area is now a $350,000 house ... but it's about a 50 minute commute in good conditions at rush hour to downtown Denver even with the improvements on Santa Fe Drive. And it's certainly not a house that one would rate "middle to upper class" ... it's a low middle class entry level house that's showing it's age now, as is the rest of Williamsburg 1.

Having spent as much time, effort, and energy to seek out similar affordable housing to what the OP was asking for in the current Denver market ... I've got a reasonable handle on what it takes today. I'll stand by my original comment that $300,000 is only a good downpayment on "middle to upper class" housing in the Denver metro market today.
I've been taking a break from C-D, but I had to log in to respond to this gem of a post.

Class is a touchy subject, and Sunsprit and I have very different perspectives on what constitutes middle class. Three hundred thousand dollars will most certainly buy a pleasant middle class existence in many suburbs around Denver, although it won't go nearly as far in the city, as noted. I'll make a guess that what the OP is really asking is whether or not it's possible to find a house for $300k in a neighborhood with other highly-educated residents, rather than whether or not that money will buy a house on a half-acre with mile-long granite counter tops. If his goal is the former, the answer is an unequivocal yes.

Ken-Caryl is a fine area (my in-laws live in the valley). Sure, many houses are starting to show their age, but that doesn't make it a lower class existence. Hardly. And, if Sunsprit thinks so, his/her values are tragically skewed. There are plenty of great middle class areas around the Denver metro that don't require a 50-minute commute to a job in the city. I would know, since I live in one of them. I suggest that the OP take Sunsprit's post with a grain of salt and ask 2binDenver for a little guidance. I'm sure she can provide excellent advice.

I can't speak to opportunities for attorneys in the area, except to note that my neighbor is an attorney who recently relocated to Colorado from the midwest and didn't seem to have much trouble securing employment. My neighborhood elementary school recently hired a couple of teachers, so perhaps the OP's girlfriend could look at Cherry Creek school district.

Last edited by formercalifornian; 02-25-2010 at 10:16 AM..
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Old 02-25-2010, 10:47 AM
 
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Originally Posted by formercalifornian View Post
(snip)

Ken-Caryl is a fine area (my in-laws live in the valley). Sure, many houses are starting to show their age, but that doesn't make it a lower class existence.
Apparently, formercalifornian ... having "in-laws in the valley" doesn't equate to having knowledge of the specific subdivisions of the KenCaryl development.

Williamsburg 1 filing ... the first of the areas to be developed, and the most easterly ... was built by Medema Homes as the intended lower cost area. While the houses were initially larger at the entry level prices in the low $60,000 range (which is what I bought my house there for on a pre-build promotion) ... the next filing to the West was higher priced and downsized by about 10-15% in sq footage. The initial filing had memberships in the planned Club facilities in the Valley at a nominal additional couple thousand dollar fee, but with it not yet built and no time frame for it's construction, very few, if any of us original K-C buyers bought into that option.

Anyway, the Williamsburg 1 construction quality by Medema was decidely less than good, and the site prep/soils tests (as well as the design & execution of the homes) didn't address the substantial problems with bentonite soil to be found in the area. Despite having a one-year builder's warranty, as well as a HOW longer term warranty upon each house, there were substantial structural problems with many houses in the subdivision which showed up very quickly. Many houses were out of kilter internally due to the structural problems, and we used to see houses where doors couldn't close because the frames had gone out of square so badly ... interior and exterior doors. You could see garage doors that had 12" to 18" gaps when one portion was closed to the ground because the ground had heaved so badly under the slabs ... which were typically the same slab as the family room level of the bi- and tri- level homes.

Added to the design/build problems was that many people didn't follow the builder's instructions NOT to alter the grading of their sites which was originally intended to promote water drainage away from the houses. By leveling their sites to allow greater utility ... my backyard, and those of my neighbors ... had a large drop-off for about 1/2 the square footage and was unusable except for landscaping. Many folks, especially the second owners who came in within a year or two of the first owners ... these houses were re-sold quickly .. and didn't know about bentonite soils and the groundwater issues ... regraded their sites to flat back yards. Which aggravated the bentonite soil issues and structural damage to the houses.

The soil/damage problems were so widespread that the subdivision gave a really bad reputation to the area. This development predated most of what you see in the area now, as it was a fairly remote subdivision when it was built. There was no commerce and few houses in the last 8 miles Southward from Denver when it was built.

Further, when the lawsuits against Medema were finally heard, and HOW and Medema were forced to start addressing the repairs ... many houses were simply patched up. Some were in such poor condition that Medema bought the houses back and the houses were demolished and the sites were left undeveloped again. You can drive through the subdivision and see those homesites even today where they have not been re-built.

Overall, the size and scope of the financial issues bankrupted the HOW corp. So only the first houses to be "repaired" or the homeowners to be bought out got full settlements. The rest of them who didn't get into the first rounds of repairs were left with only partial settlements on the dollar to "fix" the problems with their houses, and that typically only fixed some of the cosmetic issues and rarely got into the structural underlying concerns. That means that the bentonite soil caused problems would be continuing depending upon the groundwater moisture issues in the future which are anybody's guess each year.

Even with these defects, these houses are still bringing $250,000-$300,000 in today's market. I lived in mine for 12 years and was lucky to sell it for $130,000 because of the adverse publicity about the area ... and my house was one of the very few that was on solid ground and did not suffer the bentonite soil problems. But my adjacent next door neighbors houses did ... and it was really obvious how far out of kilter the foundations had skewed. They were stuck with their places ... couldn't sell them for what they'd bought them, and couldn't live in them without spending a lot of money to repair ongoing damage issues and couldn't get money from the bankrupt HOW corp.

ALL of these issues, however, changed by the time the Valley area was built.
Bentonite soil was now a known problem, and proper site foundation and mitigation and construction details were attended to ... as well as the county zoning authorities knowing that the area had a problem and soil and compaction tests were much more closely watched.

So when you get to the "Valley", the homes are a whole 'nother level of construction quality ... and what formercalifornian doesn't mention ... a whole 'nother level of price points. I've been in a number of them that were mid $600,000 to $850,000 homes in the late 1980's ... and they appreciated a lot since then. Even if there's a softening of the marketplace right now in the area, they're still a lot of close to 7-figure homes. Hardly the stuff of $300,000 housing in the Denver area, IMO.

OF course, formercalifornian knows all about this history of the area, the problems of the houses in Williamsburg 1 ... and is able to pontificate about how it's such a nice middle class area even though he's never lived there and knows folks who live in a close-by totally different subdivision that's much more upscale and priced accordingly. You do know that "the Valley" at K-C is a whole different area than the eastern K-C portions, and the builders were of much higher quality and the price points were much higher ... don't you, formercalifornian? And you're so well acquainted with the folks that live there, too ... to be able to assert your value standards?

Your equivalencies are on par with asserting that Crestmoor is equal to Park Hill is equal to Capitol Hill is equal to Denver Country Club is equal to Cherry Creek is equal to Globeville is equal to the Union Station redevelopement area ... all because one area is really nice means that the adjacent areas are comparable. It simply isn't so ...

PS ... as I have to be in Denver for a lot of my business trips, I routinely visit and stay overnight with friends in the area. Some in Williamsburg 1, some in the Valley, and some who have moved up the canyons to the West of the area. So my familiarity with the area is still current and recent ... like as of a couple weeks ago.

Last edited by sunsprit; 02-25-2010 at 11:11 AM..
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Old 02-25-2010, 10:51 AM
 
Location: Foot of the Rockies
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Originally Posted by sunsprit View Post
And while there's been a definite softening of the employment market, and certain job sectors are laying off and not paying real well, and some small businesses are closing their doors and other bigger outfits are consolidating office space and shrinking ... Denver isn't into the "total economic calamity" situation we read about in places like Detroit.
Well, Detroit is an issue all of its own. The last I read, Boulder's unemployment rate was rising. Haven't heard any numbers from Feb. yet. They will be out in a week or so, I guess.

We got a flyer from a realtor recently. It seems that housing prices in our little 'hood in Louisville have gone down about 20% from their peak. FWIW.
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Old 02-25-2010, 12:32 PM
 
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PS ... as I have to be in Denver for a lot of my business trips, I routinely visit and stay overnight with friends in the area. Some in Williamsburg 1, some in the Valley, and some who have moved up the canyons to the West of the area. So my familiarity with the area is still current and recent ... like as of a couple weeks ago.
So, let me get this straight: you don't even live here anymore, but because you stay with friends a couple of times a month, you're the resident expert?

I appreciate your further explanation about the differences in the K-C neighborhoods, of which I was already aware but did not mention because I didn't consider it relevant. Your post, while an interesting look at the issue of substandard construction in one corner of Ken-Caryl, fails in speaking to the OP's question about whether or not it is possible to live a middle- to upper-middle class lifestyle in the Denver metro region on a $300k budget. Unless he believes that an upper-middle class lifestyle is synonymous with a 4000 sq. ft. McMansion, it is absolutely possible, and I would encourage him to investigate his options further.

Also, the '80s-era Deer Creek houses in the valley built by Village Homes are currently selling in the low- to mid- $300s. While obviously the low end of valley residences, the neighborhood hardly qualifies as lower middle-class. It is a very upper-middle class area. The size and age of one's house isn't a reliable indicator of one's social class. Furthermore, as you implied, the Williamsburg neighborhood isn't representative of the entirety of K-C, anymore than it's representative of all the neighborhoods offering $300k houses in the metro area. The OP's budget opens up many possibilities for him to own a lovely home in a great neighborhood here in Denver.

Last edited by formercalifornian; 02-25-2010 at 01:57 PM..
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Old 02-25-2010, 01:23 PM
 
Location: Rockport Texas from El Paso
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Sunspirit I'm sure glad I don't have your attitude about life. I've always asked "Where do I want to live ?" and then that's where I would go and I never starved. Made some no so great choices for places but they were all adventures. The couple in California who wants to come and is unhappy there should go for it!

I live on the ocean ( well 53 ft back) in Rockport TX now - moved here like so many other places including Las Vegas, El Paso, California without knowing a soul, but have always managed.
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Old 02-25-2010, 02:02 PM
 
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Originally Posted by formercalifornian View Post
So, let me get this straight: you don't even live here anymore, but because you stay with friends a couple of times a month, you're the resident expert?
And I would infer that you consider Jazzlover to have no interest or valid observations of conditions as seen in his travels around the region, either?

Correct, I don't live in the K-C area anymore. No secret there, I've disclosed that many times on threads in the C-D forum for years. I even documented on the forum my long drawn out horror tale of getting Medema to build me a house ... where it was signed off by the inspectors with a CofO and the Medema closing department was threatening to have me forfeit my earnest money deposit ... at a time when they hadn't even finished building the shell, let alone the interior of the house. But my neighbor's houses had been completed and occupied for several months ... and the construction crews had moved on to other areas in the subdivision. It took a lot of work and getting an attorney involved to actually get somebody from Medema to go look at the property and ascertain that they hadn't yet built a house .... and then it took another 6 months before they completed it to a point where I could consider doing a walk-through. It was sloppily built and I had problems with it as a result, especially exterior finish work ... for years.

However, I'm still an active investor in that area for income producing properties, and have bought and sold more houses there on my own there than most people will ever own in a lifetime. This is a topic upon which I've disclosed my activites in the area many times ... and I'm a RE investor in Vail, too ... having bought in there in the distress times of the early 1980's. My places are paid for, no mortgages, and kick out pretty steady positive cash flow. FWIW, I do the same investing in Wyoming with farms and ranches ... again, frequently disclosed on the C-D forums.

Which means I watch the price points and the offerings on the market fairly closely. As an absentee landlord/investor, it makes sense for me to buy properties in places where I can be there fairly frequently to keep an eye on things, and the K-C areas work for me. The key is buying properties back of the market which require a little sweat equity and better marketing presentation, and I don't have time pressures or the need to get greedy. Typically, I can buy places and re-sell them after a modest investment and still be at the bottom end of the price range ... or can hold onto them as lease properties if the numbers can cash flow on that.

With the recent downturn in the Denver housing market, there's been some good buys in distress situations and repo's. But as noted in some other threads on the Denver housing market, individuals trying to buy these are in competition with active investors who are capable to act. I don't need to qualify for a loan in my price points, don't need to ask my wife or my banker for approval ... I can write a check for my purchases, and having the "cash offer" in hand with a flexible but quick closing gives a substantial advantage to the investors these days if multiple offers are coming through to a desperate seller. I've put a lot of bids in, low-ball offers ... most of which haven't been accepted, but that's OK ... I'm in the game and get lucky now and then.

I wouldn't assert that the OP was seeking a McMansion, but I'd bet they were looking for a more affluent area of Denver ... hence, "middle to upper class" housing ... and not what I'd perceive as mostly middle class housing in the 'burbs with almost an hour commute to Denver.

Last edited by sunsprit; 02-25-2010 at 02:33 PM..
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Old 02-25-2010, 02:26 PM
 
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Originally Posted by ocean2026 View Post
Sunspirit I'm sure glad I don't have your attitude about life. I've always asked "Where do I want to live ?" and then that's where I would go and I never starved. Made some no so great choices for places but they were all adventures. The couple in California who wants to come and is unhappy there should go for it!

I live on the ocean ( well 53 ft back) in Rockport TX now - moved here like so many other places including Las Vegas, El Paso, California without knowing a soul, but have always managed.
No worries. I've done the same thing ... moved to places when I didn't know anybody and didn't know what I was going to do to survive ... but always (well, almost always ....) was able to find food/shelter, friends, and a sufficient income to "make it" work. Always found a place to set my sleeping bag and airmattress, always found people wanting to eat the food I cooked and invite me back to cook more meals, always found a demand for my tech services and always found time to be camping, fishing, sailing, flying, bicycling, diving ... whatever was the attraction to explore in the area.

But that's history ... today, when a professional couple seeking a level of lifestyle commensurate with their education and job levels is heading out to a new place, they're not looking for "an adventure" ... IMO, from the professional people I've known. They're looking for a secure base of operations consistent with the income levels they've grown acclimated to receiving. They're not college kids anymore willing to crash in houses with compatible strangers so they can live the "ski bum" life in a resort area ... they're looking for the affordable housing given the income that's available.

Perhaps I'm totally wrong, given your viewpoint as a starting "place" for the OP. Maybe they are willing to come out to Denver as an adventure ... and set themselves up for a big opportunity which may ... or may not ... present.

So, I can play your game, too ...

C'mon out folks ... there's tons of opportunities just waiting for you in Denver and there's plenty of affordable housing at your price point in the quality of neighborhoods you want to live in and there's plenty of jobs waiting for you. All you have to do is c'mon out, and it's here for you if you're willing to work at it for awhile. Don't pay any attention to the layoffs and the foreclosures and the cutting back of workforces and the hiring freezes and the significant decline of sales tax revenues in the area and the slowdown in new housing sales and the defaulting home builder construction loans ... it's all in the imagination of the gloomsayers .... why, you'll be just fine. You can have the lifestyle you want just for coming on out here. Just follow your dreams and you'll be OK.

There now, does it feel any better ... ocean2026? Or do you have any special insight into what's going on in Denver today with attorney jobs in the OP's specialty and his wife's teaching specialty that will give them some modest assurance of success and happiness here? C'mon ... where's all the people on this thread telling us that teaching jobs are readily available and the school districts are hiring at good wages? or maybe ... just maybe ... there aren't any and even getting a substitute teaching job is pretty slim pickings these days?

Last edited by sunsprit; 02-25-2010 at 02:41 PM..
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Old 02-25-2010, 02:38 PM
 
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So, Sunsprit, is your position that the OP will find it impossible to locate a middle-class + neighborhood on his budget within a reasonable commute to Denver? I think he can do it, if he's financially well-prepared for relocating, secures employment ahead of the move, and is willing to put time and effort into researching his housing options. I would never suggest somebody just throw his stuff in the back of a U-haul, head for Colorado, and hope for the best. That's a recipe for disaster no matter what the final destination, but I doubt that's what the OP is planning.

Last edited by formercalifornian; 02-25-2010 at 02:54 PM.. Reason: typos...ugh!
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