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Old 04-29-2014, 12:24 PM
 
254 posts, read 429,686 times
Reputation: 189

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Quote:
Originally Posted by Mike from back east View Post
K: When I hear these reports, I just sit and wonder where the hell people are getting this kind of money? Are they all surgeons? Drug money? I really can't imagine the salary it takes to spend like that and what type of work they do. It sounds bubble-licious to me, but maybe they have a huge existing net worth in a home they'll plow back into something ever-grander. And maybe that location (Wash Park) is worth it to them.
I wondered the same thing. Apparently the two buyers of this Wash Park home are both medical professionals. Even so, who has $600K lying around so they can make a cash offer on a house? I also wondered why anyone would scrape (or consider scraping) a brick home, but that is a possibility, according to my co-worker who sold the house.
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Old 04-29-2014, 01:01 PM
 
1,743 posts, read 1,392,296 times
Reputation: 807
Quote:
Originally Posted by SkyDog77 View Post
To me it was worth it to build a house in a neighborhood that I want to be in for a long time.

For what I spent in Wash Park, I could probably live in Oklahoma on 100 acres and have a 9,000 square foot house. In Wash Park it gets me 3,200 sq/ft on a 7,800 sq/ft lot.

I plan to be in this house for at least 20 years. If the market goes up and down over the next decade, I don't really care all that much. Most of the people I talk to to in the neighborhood have made the conscious decision that this is where we want to be and raise our kids. I do not get the impression that many people are playing the early 2000s buy/flip game. If the market does correct, I would guess that people will just hold inventory unless they absolutely have to move.

I am sure you spent a lot of money in your house that you built up , but looking at the school ratings do you think it is worth it? I see that the housing market if CO is on a big jump , but the schools all over seem to be sub par ? I am asking you , as you seem like you are very knowledgable and would look some insight if you dont mind. Not looking to hijack a thread , just wondering.
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Old 04-29-2014, 01:33 PM
 
Location: Washington Park, Denver
6,937 posts, read 6,545,853 times
Reputation: 7426
Quote:
Originally Posted by aedubber View Post
I am sure you spent a lot of money in your house that you built up , but looking at the school ratings do you think it is worth it? I see that the housing market if CO is on a big jump , but the schools all over seem to be sub par ? I am asking you , as you seem like you are very knowledgable and would look some insight if you dont mind. Not looking to hijack a thread , just wondering.
Totally fair question. Our neighborhood elementary (Steele) is excellent. The PTA raises enough money to have a TA in every class. My kids are 3yrs and 7 months so I'm set for a while. Denver Public Schools is opening a Denver School of Science and Technology in the neighborhood that will be middle and high school. The other DSST is very highly rated.

South High School is still not a great option, but with my kids being a dozen years from that things can change dramatically. There is a group of parents in Wash Park with young kids who are actively trying to help get South changed in to a great school because they want to send their kids there in a decade. I'm thinking of joining up to help.

Choicing in to East is always an option. I have a friend whose kids just graduated from East and are all heading to very good colleges (1 Ivy League) It's a fine school.

If all else fails, we could figure out a way to do private school for a couple of years. To me it's worth it not to live in the burbs.
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Old 04-29-2014, 02:05 PM
 
1,743 posts, read 1,392,296 times
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Quote:
Originally Posted by SkyDog77 View Post
Totally fair question. Our neighborhood elementary (Steele) is excellent. The PTA raises enough money to have a TA in every class. My kids are 3yrs and 7 months so I'm set for a while. Denver Public Schools is opening a Denver School of Science and Technology in the neighborhood that will be middle and high school. The other DSST is very highly rated.

South High School is still not a great option, but with my kids being a dozen years from that things can change dramatically. There is a group of parents in Wash Park with young kids who are actively trying to help get South changed in to a great school because they want to send their kids there in a decade. I'm thinking of joining up to help.

Choicing in to East is always an option. I have a friend whose kids just graduated from East and are all heading to very good colleges (1 Ivy League) It's a fine school.

If all else fails, we could figure out a way to do private school for a couple of years. To me it's worth it not to live in the burbs.
Sounds good ... Would you say living in the burbs you get a lower quality of education? I am not familiar with the are and policies so im not sure how the school districts are etc. Your post was very informative tho , and thank you.
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Old 04-29-2014, 07:06 PM
 
91 posts, read 147,332 times
Reputation: 138
Quote:
Originally Posted by ELCO5280 View Post
Here's a nice read by someone far smarter than both you and I- Confounded Interest | March Pending Home Sales Up 3.4% (Back To 2007 Levels) – The Non-mortgage Recovery?

The pretty pictures show that although the pending home sales index increased, it wasn't done via mortgage purchase applications which are stalled. The graphs showed that with the feds artificial manipulation of the housing market with their increased balance sheet made a feeding frenzy for all-cash investors... thus increasing home prices for the average Joe to afford.

Add to it the fact that "...real median household income, average hourly earnings YoY and the employment-to-population ratio all falling" compared to "Case-Shiller index [rising] 12.9% YoY], you have a slaughter of the average Joe home buyer.

Confounded Interest | Juggernaut: Case-Shiller 20 Home Price Index Rose 12.9% YoY In Feb (Too Bad Incomes Aren’t Rising That Fast!)
I'm sorry, what point are you trying to make? You claimed that Denver's market is frothy and a bubble about to pop. How does the information you posted support your position? It clearly shows that "someone" is buying houses - at a higher rate than expected. This equals demand, so housing prices rise. Supply is not keeping up, nor will it catch up anytime soon - so demand continues to outstrip supply and prices continue to increase. I don't see any factual evidence of a bubble - especially since easier borrowing (al la pre-crash days) is having little to no impact, as demonstrated in your article.

Anyways ..... don't buy a house, that's fine by me!

As an aside, I was involved in a a HUD sale recently (investors cannot purchase HUD homes). There were 12 submitted bids - all close to, or over the asking price.
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Old 04-30-2014, 01:15 AM
 
Location: Arvada, CO
13,236 posts, read 24,407,950 times
Reputation: 13004
Quote:
Originally Posted by SkyDog77 View Post
To me it was worth it to build a house in a neighborhood that I want to be in for a long time.
You sound happy there, but aside from what you explained about the schools, what else exactly makes your location so desirable, at least more so from what you could experience in a more median-priced Denver or suburban neighborhood?
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Old 04-30-2014, 05:29 AM
 
182 posts, read 281,463 times
Reputation: 117
Quote:
Originally Posted by MountainK View Post
I have two anecdotes to share, I'm sure there's hard data somewhere to help give additional insights, as these examples are not specific to Parker.

1. My neighbors down the street listed their house in Highlands Ranch for about $20K more than they planned to, based on the realtor's recommendation. In the first 6 hours the house was on the market, they received 3 offers and 2 were over asking price. (Early April sale)

2. My co-worker just sold a house in Wash Park. There were 13 showings the first day, and two offers above asking price, including a cash offer for $30K above asking, in addition to two offers at asking price. This is for a $615,000 house that has a high likelihood of being scraped. (Sold within the past 2 weeks)
Wow, I think you solidified my decision to list for sale to see how it goes and if it turns out not to be worth it we'll continue to rent it out!
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Old 04-30-2014, 06:56 AM
 
Location: Washington Park, Denver
6,937 posts, read 6,545,853 times
Reputation: 7426
Quote:
Originally Posted by aedubber View Post
Sounds good ... Would you say living in the burbs you get a lower quality of education? I am not familiar with the are and policies so im not sure how the school districts are etc. Your post was very informative tho , and thank you.
Hit or miss. It used to be that everyone left the city for better suburban schools, but increasingly, people want to stay in the city. DPS still has its issues, but is vastly improved.

Quote:
Originally Posted by David Aguilar View Post
You sound happy there, but aside from what you explained about the schools, what else exactly makes your location so desirable, at least more so from what you could experience in a more median-priced Denver or suburban neighborhood?
Way to put me on the spot! I'm not sure I have the writing capability to adequately describe what constitutes a neighborhoods character.

I guess the place to start is the park that gives the neighborhood its name. It is the crown jewel of the Denver Parks system and the most popular destination park in the city. I'm not sure I can put a value on being a few blocks away from it. It is always vibrant, even in the off hours or off season. I enjoy it when it's quiet and I almost have it to myself and I enjoy equally when it it so crowded that I can hardly find a place to sit down. The summer evening free classical music and big band concerts are so much fun to take in.

Obviously you have the great feel in the neighborhood that comes from mature tree lined streets and the mixed architecture of classic 1930s bungalows and new custom construction. While the square footage has gone up, the new construction has largely been done in brick and in the craftsman style that suits the neighborhood.

The people that live here are a great mix of old timers, young singles, and new families. As with most of Denver, I think the ethnic diversity could be better, but I think by living in the city you are exposed to more diversity than you are in the suburbs. There are more families here than in a lot of the Denver neighborhoods because the elementary school is so good.

Walkablility is another huge factor. Within a few blocks we have great shops, restaurants, bars and other amenities. I do not have to get in my car every day, especially when the weather warms up.

Central location and proximity to most of the rest of the city is another big thing. I can be downtown in a matter of minutes. I can ride my bike to Cherry Creek in under 10 minutes.

These are just a few thoughts and I'm sure that I am missing a lot of what makes this place so great. I had a friend recently relocate his family here from Phoenix. He made the comment to me that if he had never rented in Wash Park he wouldn't understand why it costs so much, but having lived here now he gets it. Maybe that's what it takes?
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Old 04-30-2014, 09:02 AM
 
3,492 posts, read 4,951,694 times
Reputation: 5383
Quote:
Originally Posted by ELCO5280 View Post
When the "all-cash investors" flee; time to lead the middle-class, mortgage obtaining, sheep to slaughter. Household incomes can't support these prices so once the investors dry up the prices will fall. I wouldn't buy in today's market especially in Denver... Though, I would sell of course

"The Economist has compared house prices with the rental cost of housing and with median household income. If over the long-run house prices rise at a faster rate than either of these two measures, it suggests that either rents or incomes must rise, or house prices must fall. When we last published our data in June 2013, house prices looked to be at or below fair value compared with rents (meaning within 10% of the long-run average) in all but two cities. Nine months later, six cities lie outside that boundary. In the frothiest places—Denver, Los Angeles and San Francisco—houses are overvalued by around 16%"

http://www.economist.com/blogs/graphicdetail/2014/02/us-house-prices
I want to love the economist because they go so much more in depth than most journalism. However, they have frequently came to incorrect conclusions following a thorough understanding of only elementary level economics.

In a hypothetical model, their situation holds true because of the clause "all other things constant". However, all other things are not constant. Specifically, the interest rates have been severely gamed by the federal reserve. The "risk free rate" has not only become riskier, it has dropped from around 5% to well under 1%. For those not familiar with economics or finance, the rate received on holding a one year treasury bill is defined as the risk free rate.

Since prices are not paid in cash, but through mortgages, it is not necessary for prices to fall if house financing is more affordable as a percentage of income. Generally housing is expected to consume 30% of "disposable income". Due to extremely low interest rates on mortgages, if housing still consumes 30%, the price would have to have increased. As mortgage interest rates rise and wages do not rise, I would expect home prices to stagnate.

The increase in housing prices we have witnessed is a function of several things include interest rate decreases and expanding qualifications. During the harsh periods of the crunch mortgage financing was virtually unavailable because the qualifications required to buy were absurd. The underwriting guidelines had massively overcompensated and people were being denied mortgages for houses they could afford. This allowed prices to fall to the point where all-cash investors were coming in. Meanwhile the interest rates for the borrowers that could get financing were getting ludicrously low because there were so few people eligible to pass the criteria to get a mortgage.

I'm not complaining. I was one of those people who worked to attain a near perfect credit score and leveraged it into that combination of low rates and low prices that could only be attained by financing guidelines artificially limiting the pool of buyers.
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Old 04-30-2014, 09:22 AM
 
922 posts, read 988,632 times
Reputation: 1077
Quote:
Originally Posted by SkyDog77 View Post
The people that live here are a great mix of old timers, young singles, and new families. As with most of Denver, I think the ethnic diversity could be better, but I think by living in the city you are exposed to more diversity than you are in the suburbs. There are more families here than in a lot of the Denver neighborhoods because the elementary school is so good.
The lack of ethnic diversity of Wash Park is the one thing that will probably result in my family moving out of the neighborhood. We want to give our son a setting where he can relate to some of the kids his age from an ethnic standpoint and that's been a factor that's been maddeningly missing from Wash Park. But other than that lack of ethnic, and economic, diversity Wash Park is an awesome neighborhood that actually feels like a neighborhood with the associated, distinctive character. Given the number of young, affluent families that are in the area, I do expect the schools to be of far better quality in the next 10-15 years than they are now. Not everyone will go to the new Byers DSST, up to East, or into the IB program at GW and that will bode well for South.

Now if only DPS could bolster their athletic programs, i.e. football, in order to crush those Cherry Creek and Dougco ****heads all would be well with the world.
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