I Scream, You Scream, We All Scream For This Awesome Ice Cream!!

So I’m sitting here at my new hangout, which also happens to be Denver’s newest (and best) ice cream shop.

It’s called Red Trolley Cake and Cone, it’s located on 32nd Ave between Clay and Bryant, and (full disclosure), it’s owned by my sister and brother-in-law.

I’d say this place is fabulous even if I wasn’t related to the owners. The ice cream is homemade, created right here on the premises by one Denver’s top pastry chefs. And the flavors!! Oh . . . my . . . gosh. There’s the standard vanilla, strawberry and chocolate, of course. (The chocolate gelato is to die for.) But then things get interesting. As I sit here looking at the freezer display, I see ice cream flavors like Cassia Cinnamon, Praline Cookies and Cream, White Chocolate Chip Mint and Bing Cherry Cheesecake, as well as Lemon Meringue Pie Sherbet (with real pieces of pie crust!) In the gelato case, I see twelve different flavors – flavors like Banana Yogurt, Green Apple Sorbetto, Orange Cream, Wildberry Sorbetto, and my personal favorite, Colorado Honey Almond Orange.

There are malts, shakes, sundaes – and root beer floats that taste like they did when we were kids.

There’s a reason for that. Did you ever notice that pop (soda, soft drinks, whatever you call them) started tasting different when they stopped sweetening them with real sugar and instead started using high fructose corn syrup? It leaves a weird aftertaste. Not here. Not in anything. Nothing here contains any hydrogenated oils, artificial flavors or colors, or high fructose corn syrup, . It’s all real food. Really. In fact, they make the waffle cones right here on the premises for that very reason – they couldn’t find a supplier who didn’t use the bad stuff, so they put the pastry chef on the job and started making their own.

Let me tell you, you can taste the difference.

So here I am on a Tuesday afternoon, with my sweet little one year old niece Audrey on my lap, working. I plan to be here a lot. You might even find me behind the counter occasionally. And, to insure that I still fit through the doorway on my future visits, I’m availing myself of the greatest invention in the world – the Tiny Trolley. It’s a tiny little cone of ice cream, and it only costs a buck. Great for little kids, and for their aunts who want to be able to hang out here regularly without having to buy a new wardrobe.

So come on by and check it out. The address is 2639 W. 32nd Ave. It’s the very red building on the north side of the street between Bryant and Clay. Hours are Sunday thru Thursday, 11 a.m. to 10 p.m., and Friday and Saturday 11 a.m. to 11 p.m.

See ya there!!

The Establishment

The Proprietors The Proprietors

The Crew The Crew

Good News for Denver Home Sellers

Forbes magazine just released their list of the 10 best cities for home sellers in 2008. And guess which market came in at #7? Our very own Denver!

To assess each market, Forbes looked at unsold vacancy rates, construction starts (to see if a lot of new construction would be cropping up and making vacancy rates worse), job creation (to see if buyers would have jobs, so they could buy houses) and Freddie Mac and Fannie Mae's new conforming loan limits (to see if those buyers could get loans without having to pay premium "jumbo" mortgage rates).

Apparently Denver looks good. We have a 3% unsold vacancy rate, which is great news because last year our rate was 23%. A 20% vacancy drop is a very, very good thing. We've also seen a 2% jump in new jobs, and -- best of all -- a 49% cut in construction starts. This makes me happy. Less new homes springing up means less inventory on the market, and more buyers gravitating toward purchasing existing homes.

And, if you'd like anecdotal evidence to back up the good news, I listed a 1970's Littleton townhouse a few weeks ago, and it went under contract within a week.

If you really want to feel better about our market, compare it to some of the riskiest markets. Phoenix, for example. When I lived there in the late '90's, housing prices were skyrocketing. Now they've tanked. There are over 53,000 homes currently on the market there. Fifty three thousand. That's over a five-fold increase over the past three years. Can you imagine competing with 52,999 other homes to sell yours? And the Catch-22 is that the local economy is built heavily on construction jobs. If construction starts decline (which they really need to do, with 53,000 existing homes in current inventory), then construction jobs are lost and buyers fall out of the market. It's tough to win in a scenario like that.

Yep, we've got it pretty good here in Colorful Colorado!

Who'd have thought a zoning dispute could be so fascinating?

So there's been a battle over zoning going on in the West Highlands/Sloan's Lake neighborhood in northwest Denver. And it's really quite interesting.

The neighborhood sits just a few miles west of downtown Denver. And it's made up of a very interesting hodge-podge of architectural styles. The first homes were built around the turn of the last century. Many more were built in the 1920's and '30's, as Italian immigrants to Colorado discovered the northwest part of town and made it the "Little Italy" of Denver. The western and southern edges of the neighborhood (especially Sloan's Lake) saw most of their development in the 1940's and '50's.

It's an interesting neighborhood. Like all areas, it's gone through stages. In the latter half of the 20th century, the Highlands saw significant decline as Denver-ites headed for the newly build suburbs west and south of town. But in the 1990's, neighborhoods like the Highlands -- with their quirky architecture and central shopping districts, located just minutes from downtown -- were rediscovered. The "main street" district at 32nd and Lowell was revitalized. Homes were purchased and updated. Tops were popped.

And, inevitably, old houses were scraped away to make room for newer, bigger, fancier homes.

What's unique about the West Highlands is that the homes are small, but many of the lots are big. And many of those lots are zoned R2, which means that two residences can be built on a single lot (as in a duplex or a single family home with a mother-in-law apartment). Which has made the Highlands very attractive to developers who can tear down a single home and build a duplex in its place.

And thus the battle. The people who want to "preserve" the character of the neighborhood proposed that many of the properties zoned R2 be changed to R1. They argued that "Blueprint Denver" (a 20 year growth plan adopted by the city in 2002) had designated the Highlands an "area of stability" and that the low population density and character of the neighborhood needed to be protected by uniformly zoning the area R1. Opponents, including developers (of course), the National Association of Realtors and others, countered that tearing down old, dilapidated housing to build new homes was revitalizing the neighborhood,that that R2 zoning had been in place since 1957 and was obviously central to our "forefathers" intent for the area, and that changing the zoning wouldn't impact scraping at all -- it would only mean that the replacement homes would be single family residences instead of duplexes. Most important, they said, was that the zoning change would affect the property values of the homeowners involved, many of whom owned property attractive to developers because of its R2 zoning. From what I can tell, property owners themselves were divided on the issue. My guess would be that there were slightly more in favor than opposed. I'm also guessing that those opposing the proposal were largely the owners of older, more dilapidated structures, while those supporting it were living in the lovelier, statelier homes on blocks filled with the same.

Honestly, I can see this one both ways. On one hand, I was driving down Grove Street in the Highlands (just east of the area of proposed change), looking at the lovely brick 1920's bungalows all lined up, and thinking what a shame it is that, in a generation, this block could be completely replaced by modern structures.

On the other hand, not all of the Highlands is made up of lovely bungalows. A LOT of these homes were clearly not built to be long-lasting structures. They're small houses that were built by poor people to provide them shelter at the moment. And, 100 years later, it shows. Today, many of those homes are owned by people of limited means. For many of these people, selling to a developer at a good price will allow them to pay medical bills, get out of debt and even to retire, where they otherwise could not.

I sold one of those homes just last fall. It built in the late 1800's -- a very small house sitting on at 6200 square foot lot. And this house was not particularly worthy of "preservation." It was little and run down and not built to last. Because of the lot and the R2 zoning, the house sold in one day for over our asking price. And that financial windfall saved my client from a crushing load of debt brought on by her husband's illness.

Sure, there are a lot of homes in the Highlands I'd like to see spared. But first of all, who am I to dictate that to the owners of those homes? And second, zoning changes wouldn't do much to change it. They may slow it a little, because duplexes are attractive to developers who can sell two homes instead of one. But in the long run, it would just alter the demographic of the neighborhood to large single-family homes.

If there's going to be scraping in the Highlands, I'd really rather see duplexes on those lot than those huge, million-dollar plus single family homes that are springing up in Bonnie Brae and other older neighborhoods. The beauty of the Highlands neighborhood has always been it affordability. It's close to downtown, and yet accessible to people of lesser "means." Granted that has changed somewhat since the rediscovery of the area in the 1990's. And granted that a $400,000 duplex isn't exactly "affordable" to many Denver residents. But it's a lot MORE affordable than the seven figure McMansions that would otherwise be going up.

The initial rezoning proposal apparently went down in flames at the City Council meeting on January 16th. But I'm guessing this is just the first round. Of course, both sides have their web sites, if you'd like to learn more. www.rightzoningnorthwestdenver.com is the "pro-zoning change" site, while www.nodownzoning.com is for opponents of the idea.


Four Multiple Bids and Counting

Okay, so now I'm up to four multiple bid situations in two weeks. Still don't know whether my buyer got the property.

I was contemplating this situation, and have concluded that it indicates that buyers are indeed out there. They've just been waiting for prices to adjust -- which in some segments they have. Two of my multiple bids have been foreclosures. Another was home on a large lot in a popular "scraping" neighborhood. And the fourth was a family home in an established, suburban neighborhood.

At any rate, it strikes me as a good indication of the direction of our market!

Forbes lists Denver in Ten Best Cities to Buy a Home

They say all real estate is local. And it's really true.

Forbes magazine recently did an analysis of estimated 2008 housing inventory, sales rates and turnovers to determine where there is most likely to be an increase in sales in the near future.

Guess what city came in at #5?

The article, called Best Places for Real Estate Deals, said that a pure "buyer's market" is one where there are far more sellers than buyers. That creates a drop in demand, which leads to a drop in prices. Or, in Denver's case, a stall. The article shows Denver's price growth since 2006 at exactly 0.0%. But if that market is expected to drop further, buying may not be a good idea.

So Forbes set out, using sales and inventory models from Moody.com, to determine which markets are expected to experience upswings that will make buying today worthwhile.

About Denver, they said While other markets have experienced meltdowns, Denver has been quietly correcting its inventory glut, which at the beginning of the year was one of the worst in the country. Though prices aren't expected to rebound quickly, if Denver sellers continue to unload their properties at discounted rates, it could be a strong year for buyers, with less risk than the past two years.

So don't believe the gloom and doom you read in the local papers. Now may be a very good time to buy!

Are housing prices going to drop?

Everybody asks me. "Should I sell this year or next?" "Should I wait to buy until prices drop?" "ARE prices going to drop?"

I always tell them I don't have a crystal ball. And I don't. And neither do the people at PMI Mortgage Corp. But apparently they have much more sophisticated market forecasting tools than I do. And they have released a report detailing the likelihood of declining home prices in the 50 major U.S. markets.

It's not such good news if you live in Florida or California. But it's really not bad if you live here in Denver.

The report was based on the percent likelihood that a specific market will see declining home prices. The average likelihood across the U.S. was 34.6%. The "top" markets (and by "top" I mean "most likely to head towards the bottom" were Riverside/San Bernardino California (65.2% likelihood), Phoenix (64.6% likelihood), Las Vegas (61.4% likelihood) and West Palm Beach/Boca Raton (60.7% likelihood).

Where did Denver fall in the list? 38th out of 50, with a 15.6% likelihood of declining prices.

Real estate is local. So many people read books about falling real estate values, and they're convinced that the real estate "market" is going to fall like the stock market falls. And it just doesn't work that way. Real estate is not one "market." It's a collection of smaller markets, each of which rises and falls based on local factors. Sure, there are national trends -- recession, inflation, interest rates -- that can affect a local market. But those factors are mitigated by what's going on in that area. After all, people have to live somewhere, regardless of how the economy is doing.

So why are some areas poised to take a dive while others are relatively stable. One of the main factors is a recent history of rapidly appreciating prices. Real estate values as a whole tend to increase over time. But what goes up too fast is bound to come down. When home prices rise much faster than wages, affordability declines. The people who live there can no longer afford to buy there. And so demand dries up and prices drop. In Phoenix, housing prices have climbed steeply for the past few years. One agent there says that, two years ago, homes were appreciating at a rate of 54% annually. Last January, there were about 3500 homes listed for sale on the MLS. Now there are about 54,000.

Why has Denver been spared? Our growth the past few years has been slow and steady. Yes, we had a pretty big run on prices back in the '90's. But it was never anywhere near 54% annually. Our prices leveled off around 2001, and we experienced what experts call a "soft landing." No big price drops. We just stopped growing at 10% - 20% per year and dropped down to 2% - 5%.

I've always believed that Colorado's desirability as a place to live factors into the equation as well. Even when prices climb, people are willing to try harder to find a way to stay, because it's a danged nice place to live!

How did the Denver market do in 2006?

Well, it all depends on which index you're looking at . . .

The statistic used most often to gauge the market is "average home price." According to that index, home prices in Denver rose 2% -- from $305,000 to $313,000. That increase, however, was not spread equally across all neighborhoods. There were high increases in neighborhoods like University Park (26%) and Cherry Creek (23%), while other neighborhoods took a dive. (Swansea down 17%, Barnum West down 13%, Clayton down 12%).

The problem with calculating average home price is that the figure can be skewed if bigger or more inherently "expensive" homes are sold in one year that another. That fact might be skewing some of these higher-appreciating neighborhoods, because they're the areas where smaller houses, inexpensive homes are being scraped and replaced by larger, "take up every inch of the lot", pricier homes. It's not that the same house has actually appreciated 26%, it's the there are now larger homes being sold that command a higher price and are skewing the average up. (Which makes me feel a lot better. I sold a condo in Cherry Creek two years ago, and I'd have a pretty hard time believing it could have appreciated 23% since then!)

And, on the low end, you have the issue of foreclosures. In Swansea, 81% of the homes sold were foreclosures. In University Park, only 5% were. Foreclosures generally sell for less than similar homes being sold by their owner occupants. Unfortunately, those foreclosures DO drive down the prices in their respective neighborhoods.

The index I prefer to use comes from the Office of Federal Housing Enterprise Oversight. They use federally held or insured mortgages (Fannie Mae and Freddie Mac) to track repeat sales of the same properties. That way they are actually gauging the appreciation of individual properties, instead of just tracking averages for an area. The disadvantage to OFHEO's numbers is that they only track single family homes, and only those financed by conventional loans (loan amounts of $417,000 or less, last I checked). But still, I think it's a more accurate number.

According to OFHEO, the Denver market appreciated 1.09% from 1st quarter 2006 to 1st quarter 2007. They don't break numbers out by neighborhood, so I can't get more specific than that. They do say that the Denver metro area is 221st out of 285 markets tracked. The better news is that over the past five years, we've appreciated 14.78%.

Looking wider, housing prices in Colorado as a whole appreciated 3.30%, which makes us 38th out of 50 states (51 if you count the District of Columbia, which they do.) Over the past five years, Colorado has appreciated 21.15%.

So, any way you look at it, the market has been basically flat for the past year. Some neighborhoods are doing better than others, but all in all we're flat.

The best news is that my anecdotal reports about an energized market this spring seem to be confirmed by the facts. Average sales price in Denver as of mid-April was $330,000, which is a big jump over the $313,000 on December 31st. Again, big houses selling while smaller houses languish could skew the numbers somewhat, but I'm not going to argue too much with good news!