Housing Decline (Denver, Colorado Springs, Grand Junction: rent, condos, loan)

[Katiana]

Originally Posted by formercalifornian

A house is not an investment unless you are holding it as a rental property. It's not a good investment until it's making you a profit, and that doesn't mean harvesting "equity" through a HELOC. A house is essentially a savings account with the benefit that you get to live in it. Of course, if you've financed with an interest-only loan, it's not even that. You might as well be renting.

That is a good way to put it. I'll remember that for future posts. This has been a subject of some debate on some of the other forums.

[hello-world]

in denver metro, the average selling price has decreased from something like $317,000 to a little over $310,000 compared to a year ago, while people are asking on average an INCREASED $430,000 relative to about $399,000 a year ago. while it can be hard to imagine looking into a crystal ball, judging from the low rents, amount on the market, amount STILL being built, foreclosures, etc., my personal opinion is that you might very well be better off renting in denver metro for a while to come (a year? 2 years? more?) and putting your down payment into other investments.

[CosmicWizard]

This article about the declining rate of foreclosures in Mesa County appeared in todays issue of The Grand Junction Sentinel.

regards....Franco

[formercalifornian]

An update from Castle Rock...

There are now seven houses (out of 30) for sale on my street. We're coming up on two years since they were built. Yep, right on schedule for the ARMs to re-set. I'll let you know if and when any sell, but I'm not holding my breath. A sweet little house listed at $45k less than what the owner paid in April 2006 has been sitting for months. That's a drop of 20% in one year, folks! I'm not sure what the story is, but it's a nice property at a great price: three bedrooms, three baths, wood floors, fully-landscaped. At less than $200k, it should have sold a long time ago. Where have all the buyers gone?

[gpraceman]

Where at in Castle Rock is that?

I have a friend who lives in the Hearth, here in Highlands Ranch, and I was surprised at how many homes were for sale around him. Those homes are about 2 years old as well. My friend is renting a home there and he indicates that several others on his block are rentals as well.

That is quite a contrast to my HR neighborhood, which is just a few years older. There hasn't been very many homes up for sale this spring or summer here. Less it seems than last spring/summer.

I do have to wonder what those newer areas are going to look like in a couple of years. A bunch of empty homes and rentals?

[formercalifornian]

Originally Posted by gpraceman

Where at in Castle Rock is that?

It's in Castlewood Ranch, which is on the east side of I-25 near Founders Village.

You raise an interesting point about these new neighborhoods becoming a sea of empty homes and rentals. I think there's some truth to that. Many of these houses were bought by people who were really stretching to afford them, and when their ARMs reset, they simply won't be able to hang on. Some are trying to rent their homes out, but the market supports about $400/month less than their mortgage payments. Add in HOA fees & property taxes, and it's a recipe for financial disaster unless they have reserves. Of course, if they had reserves, they wouldn't be losing the houses in the first place. I see lots of jingle mail in the future.

I've noticed something interesting going on as my neighborhood foreclosures eventually sell (at huge discounts): the buyers are all older with grown children. I think this is a result of credit tightening. The young families who were originally attracted to this area simply don't have the down payments to qualify for financing anymore, and it's changing the demographics of my neighborhood significantly.

Older communities and neighborhoods seem to be a different story. My family and I went up to Golden yesterday. It's a great little town that reminds me very much of the small town where we lived in northern California. We are thinking very seriously of buying up there when our rental agreement expires next year. Prices seem very stable, and there isn't much for sale. It's quite a contrast from the vast vanilla suburbs of the south metro area.

[jazzlover]

When you see what is going on in the mortgage markets and with foreclosures, it's downright frightening, CONSIDERING THAT THE REAL RECESSION HASN'T STARTED YET. The mortage meltdown may start it, but it will really get going when any of a number of "triggers" set it off (fuel shock, terrorist attack, government scandal, etc.). Once a real recession gets going, I think it likely that we will see a headlong real estate crash in this country--real estate will do what stocks did in the 1929 crash.

The scary thing is that many (if not most) Americans (and Coloradans) have not ever experienced a knock-down deep recession (and certainly not a Great Depression) in their lives. They will be shell-shocked. Many will find that everything they know--their jobs, their "stuff," their investments--will suddenly become a bunch of superfluous crap that an economy on its back can no longer support. And, the Colorado economy, built more and more on triviality--recreation, second homes, McMansions, SUV's, and making a business of helping people figure out how to goof off--will evaporate like the morning fog on a hot summer day.

[Market Mama]

I sure you're wrong, jazzlover.

But ... The New Money Pit: Housing Bust Gets Worse - Newsweek Business - MSNBC.com

I have two paid-for houses here in CO, and was counting on them for retirement money, but they are losing value fast. And everything just gets more and more expensive, even the basics like water, gas and food. And then there's the heating bills <sigh>

Let's all be careful out there!

[formercalifornian]

As I was driving home today I noticed a sale pending sign on a house at the end of the block. One down, six more to go!

[Noahma]

Originally Posted by formercalifornian

An update from Castle Rock...

There are now seven houses (out of 30) for sale on my street. We're coming up on two years since they were built. Yep, right on schedule for the ARMs to re-set. I'll let you know if and when any sell, but I'm not holding my breath. A sweet little house listed at $45k less than what the owner paid in April 2006 has been sitting for months. That's a drop of 20% in one year, folks! I'm not sure what the story is, but it's a nice property at a great price: three bedrooms, three baths, wood floors, fully-landscaped. At less than $200k, it should have sold a long time ago. Where have all the buyers gone?

one of the reason they might be listing low is not because the owners are trying to get out. It could be that the owners were qualified for a short sale, or the lender now owns the house, and is trying to offload it as quick as possable.