Denver Real Estate Discussion / Opinion Thread (NO Data Charts) (high income, places to live)

[DenverBound41]

Originally Posted by MN_Ski

The funny thing is that every apartment complex does this. And I think it's actually a way to keep the median market price up, and to give management an upper hand when using the rent maximizing software.

If an apartment is going for $1,500, and has a free month rent (I've even seen 2-3 months free), it's really only about $1,375 a month.

With all the "luxury" apartments coming online in the next 12-18 months I expect the prices to drop and concessions to rise. By my count there are at least 7,000 units under construction in the downtown area. Crazy.

[2bindenver]

100,000+ per year people moving into Colorado. They all will need housing. 7,000 units is a drop in the proverbial bucket.

[DenverBound41]

Originally Posted by 2bindenver

100,000+ per year people moving into Colorado. They all will need housing. 7,000 units is a drop in the proverbial bucket.

Vacancy rates are already rising downtown (and concessions increasing), you do the math.

[2bindenver]

Sorry, I don't do math, I read reports.

like this one http://static.jres.com/LatestIssue/Apartment.pdf

[DenverBound41]

Originally Posted by 2bindenver

Sorry, I don't do math, I read reports.

like this one http://static.jres.com/LatestIssue/Apartment.pdf

Clearly reading isn't a strong suit either, from the report:

The potential exists for a continued softening of the metro market in the 4th Quarter of 2016 and
into 2017 when many of the projects currently under construction come onto the market. During
2015 developers completed construction on projects adding 10,952 units to the market, well
above demand. With 23,313 apartment units under construction in metro Denver at the end of the
3rd Quarter of 2016, and another 18,808 proposed, we see a strong possibility for deteriorating
market conditions during the balance of 2016 and into 2017, a situation that actually began
during the second half of 2015. Furthermore, depending on the fluctuations in job growth, apartment market conditions could deteriorate rather quickly. Apartment demand has been strong but slowed considerably in 2015. If the metro area’s economy expands at a slower rate that situation could combine with
overbuilding to further soften the market in 2017

[2bindenver]

Originally Posted by DenverBound41

Clearly reading isn't a strong suit either, from the report:

The potential

let's talk about reality.

In Denver County 5.1% vacancy (down from 2015); 12,493 units absorbed, 11,348 units started, 7,196 units completed, rental change rate an increase of 5.9%.

[DenverBound41]

Originally Posted by 2bindenver

let's talk about reality.

In Denver County 5.1% vacancy (down from 2015); 12,493 units absorbed, 11,348 units started, 7,196 units completed, rental change rate an increase of 5.9%.

I'm not sure why you posted a link to a Bill James article, he has been very bearish on the market for several years. But anyway...

"Vacancy, rental rate and net absorption numbers, therefore, should be
viewed with healthy skepticism.
Because of our concerns about these reporting issues we believe that the metro Denver vacancy
rate is actually in the 7% to 8% range rather than the AAMD estimated 5.1%. In addition, rental
rates are being affected by specials and concessions being offered in many properties, especially
at the upper end of the rental rate spectrum. We anticipate that the metro vacancy rate will
continue to trend upward. "

I'm fully aware of the recent past, my contention (as well as that of many local developers and investors) is that the "luxury" market is being overbuilt and caution should be used going forward. Denver is becoming unaffordable for most.

I suggest touring some of these new apartment complexes, you will see how empty they are. That is the reality.

[2bindenver]

DMAR report is out - highlights

+ Denver market ranks second in nation for rising housing prices.
+ Home values in the Denver metro area increased 45.5 percent over the past 10 years.
+ Oil giant, BP, is moving its U.S. headquarters from Houston to Denver to be closer to its Rocky Mountain operations resulting in 200 workers calling Denver home.
+ Buyers who were brave enough to search during the holidays had great experience with lower prices & less competition.
+ With robust activity in the Denver metro housing marketing, there seemed to be no slowdown between Christmas and New Year.

[Grovin2movin]

Report: More than one-fifth of Denver-area homes are overvalued | FOX31 Denver

[Tim Tim Tim]

Originally Posted by Grovin2movin

Report: More than one-fifth of Denver-area homes are overvalued | FOX31 Denver

So their idea to help house prices is to remove the builders from being responsible For the quality of their product!?

"Let's make houses cheaper by allowing people to build poor quality homes and charge less". Sounds like a terrible idea to me