Denver Real Estate Discussion / Opinion Thread (NO Data Charts) (Durango: employment, construction)

[davebarnes]

Originally Posted by mike from back east

article says chinese buyers are paying top dollar in ca$h for homes in california....anyone seen any evidence of this in denver or colorado?

不是在我家附近。

[2bindenver]

International buyers and recent immigrants purchased homes throughout the country, but four states accounted for 55% of the total reported purchases – Florida,California, Arizona, and Texas. Florida remains the destination of choice, claiming a 23% share of all foreign purchases. California comes in second with 14%, Texas with 12% and Arizona with 6%.

According to realtor.com, the top five cities searched online by
international buyers in 2014 were Los Angeles, Miami,
Las Vegas, Orlando and New York City. Foreign buyers
take many factors into consideration when deciding
where to purchase abroad, such as proximity to their
home country, the presence of relatives and friends,
job and educational opportunities, and climate and
location. European buyers are generally attracted to
states with warmer climates such as Florida and Arizona
while the West Coast tends to attract Asian purchasers.
Indian buyers tend to gravitate towards states that are
home to large information technology companies, such as
California, New York and North Carolina. Within markets
in an individual state, it is not unusual to find
concentrations of people grouped by nationality,
possibly indicating that word-of-mouth and shared
experiences influence purchases.

Mortgage financing tends to be a major
problem for international clients due to a lack of a US
based credit history, lack of a Social Security number,
difficulties in documenting mortgage requirements and
financial profiles that differ from those normally
received by financial institutions from domestic
residents. Most homes purchased by foreign buyers,
about 42%, are used as a primary residence.
Non-resident foreigners are limited to 6-month stays in
the US, so these buyers largely use the property for
vacation or rental purposes or as an investment.

Approximately 65% of purchases involved a single-family
home. Nearly half of international clients preferred
properties in a suburban area, about a quarter
preferred a central city or urban area, and about 13%
choose to purchase in a resort area.
International buyers come from all over the world, but
Canada, China (The People’s Republic of China, Hong
Kong and Taiwan), Mexico, India and the U.K. accounted
for approximately 54% of all reported international
transactions. Canada maintained the largest share of
purchases, dropping from 23% in 2013 to 19% in 2014;
however, China held the lead in dollar volume,
purchasing an estimated $22 billion with an average
sale cost of $590,826.

China was also the fastest
growing source of transactions, now accounting for 16%
of all purchases, up 4% from last year. Mexico ranked
third with 9% of sales and India and the U.K. both
accounted for 5%.

[Pesare]

This foreign buying also has an indirect effect on the Denver housing market since a person that sells their home in one of the above areas like in California to a foreign buyer and moves here would in most cases have a lot of cash to buy a home in Denver. This is assuming the transaction amount is significant which it looks like it is since according to the above article the average sale cost is $590,826 for Chinese buyers. So it looks like the indirect effect is national and helps prop up the prices of homes.

[2bindenver]

NAR analyzed 100 metro areas that have a large
millennial presence, solid local job market conditions
and strong migration patterns of young adults moving to
that particular area to determine the best purchase
prospects for young buyers. Housing affordability and
inventory availability were also considered. The best
purchase markets for aspiring millennial homebuyers are
(listed alphabetically):
- Austin, Texas
- Dallas
- Denver
- Des Moines, Iowa
- Grand Rapids, Michigan
- Minneapolis
- New Orleans
- Ogden, Utah
- Salt Lake City
- Seattle

[mauliebaba123]

Those millennials must be getting downpayment money from their parents or have crazy mortgage terms. How else can you explain multitudes of twenty and thirtysomethings with $90k cash? This assumes that you put the traditional 20% down on a $450K property. The bulk of new construction I've seen in Denver's more popular areas STARTS at "in the 400s."

Rentals may be different. It's possible to pay $2K or more in rent and still hang on there. You won't have any savings and you may have to share a house, but it's doable.

[Mike from back east]

Discussion on CNBC today was that mortgage applications are at a 14-year low. When I heard that I did a double take. Key excerpts:

- Just a slight trend higher in interest rates was enough to stall both potential home buyers and borrowers looking to refinance

- Applications to refinance ... decreased 11% from the previous week, seasonally adjusted, to the lowest level since November 2008.

- Applications to purchase a home fell 3% from one week earlier, to the lowest level since February 2014. Purchase applications are now 12% below where they were one year ago. ... The purchase application numbers are particularly troubling, as all-cash buyers move out of the housing market, leaving mortgage-dependent buyers to pick up the slack...


All that being said, I wonder how this plays in the Denver market. Here in COLO SPGS homes have been slow sellers for years and this year is no exception. Two of my friends had homes on the market this year and had to pull them off MLS.

[headingtoDenver]

This should be interesting for the Denver area.

Denver unveils 5-year affordable-housing plan - Denver Business Journal

[ShampooBanana]

Metro Denver Luxury Home Sales Up 4% This Year

Metro Denver luxury home sales up 4% so far this year - Denver Business Journal

[AmFest]

Has there been any discussion on whether the construction defect law is going to be modified or replaced anytime soon? Looks like the overall housing market has finally cooled down, but I'm curious about the condo segment which is unique in denver for a few reasons, most notably this particular law.

[davebarnes]

Originally Posted by AmFest

Has there been any discussion on whether the construction defect law

You need to wait until mid-February (at the earliest) to see what if any ACTION will be taken.