Denver Real Estate - Lane Hornung's Real Estate Market Update

The market continues to build momentum as we move into the prime Spring selling season. These months often set the tone for the remainder of the year. This is a market in transition. We are emerging from the weak post-bubble market that began in 2006, and we appear to be entering a new market cycle. The overall market is no longer bouncing along the bottom and is actually on the upswing. However, a market that is in transition is characterized by hyperlocal market conditions that vary widely. Some hyperlocal markets at the neighborhood level moved off the bottom months ago and have quietly caught fire, while other hyperlocal markets remain mired in an oversupply of inventory and have yet to move. Before we take a look at these divergent local market trends, let's review the overall composite market stats that aggregate the hyperlocal markets.

Across the entire Front Range, the volume of real estate sold in February was up 10.7% compared to February of last year. Inventory levels along the Front Range constricted slightly to 5.7 months of supply as new listings coming on the market did not keep pace with an increase in closed sales. In fact, the total number of active listings actually decreased in February, an uncharacteristic move since this is typically a time when many sellers decide to list. The volume of real estate sold in the Denver proper market increased 16.1% year over year in February. The supply of inventory remains tight at 4.1 months. These aggregate statistics are useful barometers of the market as a whole, but they do not tell the stories that are unfolding at the hyperlocal neighborhood level.

In many neighborhoods, despite what they are reading in the national headlines about housing, home owners are beginning to notice signs of a market that is heating up. Rather than becoming permanent fixtures on the block, for sale signs are going up and coming down relatively quickly as homes sell. Furthermore, there are just not a lot of for sale signs and inventory is tight. The markets in these neighborhoods are actually hot and have already made a transition from markets that favor buyers to sellers' markets. In these neighborhoods, the percentage of active listings that are under contract at any given time is 50% or more, often as high as 80% or 90%. To put that in a real world perspective, if you are a prospective buyer in one of these hot neighborhoods and there are ten listings on the market, you might be a bit disappointed to find that you can only see one or two homes since the others are no longer available. Most of these hot neighborhoods are comprised of homes in lower price ranges where demand is highest.

Of course, not all hyperlocal neighborhood markets are on fire. Some remain frozen in a post-bubble market malaise bouncing along the bottom. In particular, luxury markets with higher price points have inventory levels well over 6 months. Until some of this inventory gets absorbed, these markets will remain buyers' markets. In addition to luxury markets, neighborhoods where the supply of inventory has mushroomed due to distressed properties hitting the market, either through short sales or foreclosures, are also struggling. But there is hope for these colder markets. The hyperlocal markets are all connected. If the hyperlocal markets that are hot already heat up even more, today's colder markets will benefit. Buyers whose first choice is a hot neighborhood, and who may have already made offers but been beaten out by competing offers, or buyers that would like to be able to choose from more than one or two active listings, will turn to other neighborhoods. We will have to wait and see if there are enough buyers to generate sufficient demand to fuel an uptick in the colder markets, or alternatively, if the demand will fizzle and today's hot markets will turn cold. Indications at this moment point to things heating up across the board.

Dispatch from CO to rest of US: "This is what a recovery in housing looks like."
A monthly market analysis capturing the observations and insights of the 8z Team The experts are searching for signs of economic recovery, particularly in the housing market. Many think housing must lead the way. One place the economists might want to look for evidence of this assertion is in Colorado. Our market is showing unmistakable signs of recovery and offers a clear picture of how a recovery in housing in other states might unfold.

The first sign of recovery is an increase in demand measured by the volume of real estate being sold. Along the Front Range, the volume of real estate sold has increased each month for seven straight months. The increase in volume in January 2012 over last January was 9.2%. The Boulder County market was up 9.4% year over year in January and has experienced volume increases in 5 of the last 7 months.

The second sign of recovery is shrinking inventory as supply struggles to keep pace with increasing demand. This is exactly what we are seeing in Colorado. The inventory of homes for sale along the Front Range began the year at 6.1 months of inventory in January and has been near the six month bellwether of a healthy market for almost a year. If anything, inventory levels may be getting too tight at the lower end of the market. Buyers are having difficulty finding homes to purchase and this may actually be constraining the market. At the upper price ranges, the market is still working through an oversupply of inventory and supply levels are higher. This is the case in Boulder County where inventory is at 9.0 months and has ranged from 7 to 9 months since last Fall.

Following increased volumes and tightening inventory levels, the third and final indicator of a recovering market is rising home values. Our market is just entering this phase of its recovery. Although home values remain flat and relatively soft at the upper price ranges, properties in the lower end price ranges are appreciating and prices are increasing. There simply is not enough supply to meet demand, and sellers are recognizing this disparity and raising their prices accordingly. According to the Federal Housing Finance Agency (FHFA) data that was just released, Boulder area home values are within 0.75% of last year's values, essentially flat, but values are trending up, gaining 0.63% in the fourth quarter of 2011 over the third quarter of 2011.

Our Colorado market can serve as a roadmap for the rest of the country of how a recovery in housing might unfold. It is a step by step process that moves along slowly, sometimes painfully slow. However, a recovery has clear milestones along the way and is essential for our overall economic health and prosperity. We can all be thankful that we are much further along than other markets.

The market ended 2011 in a manner that has become typical during the slow motion housing recovery that we are now two years into. It's not all that dramatic and does not make for great headlines, but the market continues to grind along showing modest improvement. The total volume of real estate sold in Dec across all Front Range markets was up 1.1% over Dec 2010, ending the year with a run of six straight months posting a positive year over year gain.For the entire year, Front Range sales volume in 2011 topped 2010 sales volume by 0.8%. Not a huge, headline grabbing gain, but certainly a positive, solid sign of recovery. The inventory of homes for sale along the Front Range dropped even further in Dec and ended the year at a shockingly low 4.6 months of supply. There simply are not enough active listings to satisfy demand at the lower price points. In the Denver proper market, the volume of real estate sold in Dec was up 6.8% compared to Dec 2010, a strong finish to the year. The number of active listings in Denver proper decreased dramatically in Dec, resulting in a very tight supply of 3.5 months and a market that is beginning to favor sellers.

So that wraps up 2011. What will the Colorado housing market look like in 2012? The short answer: "A lot like 2011." Specifically, we are predicting the following for 2012:

#1. Sales volume up 1% to 5% in 2012
Demand will continue to grow. Colorado home buyers are gaining confidence as they realize that our housing market is much healthier than the national housing market they read about in the newspaper. However, an acute lack of supply at the lower end of the market will mean many ready and willing home buyers will have a difficult time finding a property to purchase. This inventory shortage will actually hold the market back in 2012, resulting in modest year over year increases in volume. Note- more inventory, including the much feared but yet to be seen flood of "shadow inventory" from bank foreclosures, might actually help the market meet demand, resulting in sales volume increases of more than 5% in 2012.

#2. Home values flat, plus or minus 3% in 2012
2012 home values and prices will look a lot like 2011, and 2010 for that matter. Overall, home values have been bouncing along the bottom within a narrow range of plus or minus 5% for more than two years now. Of course, there are exceptions in specific markets and price points, both positive and negative, to this generalization. For instance, luxury homes in areas where developable land is plentiful have seen more than a 5% drop in value in the last two years. On the flip side, homes in neighborhoods with low price points and few foreclosures have appreciated more than 5%. Many of these same market segment themes will continue to play out in 2012. Overall though, prices will remain stable, if not ticking up slightly, as measured by macro pricing models such as the Case Shiller index that combine all market segments.

Note - 2012 may be the year in which we see appreciation of greater than 3% in the lower price ranges. A lack of inventory, coupled with high demand from investors who are attracted by soaring rental rates and first time buyers who are escaping those same rental rates, may result in significant appreciation at the low end. A 2012 appreciation surprise to the upside in the lower price market would eventually work its way to the middle market and increase home values more broadly.

#3. Colorado outperforms national market in 2012
Colorado will continue to be a market that leads the housing recovery. If the so-called national experts want to see what a recovery in the housing market looks like, they should book the next flight to DIA. When they arrive, they may not be blown away by what they see, but this recovery is not about double digit increases and sizzling hot markets. It's about slow, incremental gains.

Bottom-line: 8z's outlook is a stable market in 2012. Of course, as a real estate professional, I can only make predictions; I cannot control what the market will do. However, what is in my control is my commitment to keep you informed and to tell it like it is, both good and bad, as the market unfolds. You can count on me for that!

November was another positive month for the Colorado real estate market. The total volume of sales across all Front Range markets was up 11.6% over the same month last year, marking the fifth straight month with a positive year over year gain since data unaffected by the home buyer tax credit became available in July. Year to date volume finally caught up to last year's volume, and is now up 0.8% over volume through the same point last year. Inventory continued to shrink, especially at the lower price points, and now stands at 5.4 months of supply along the Front Range.

In the Denver proper market, the volume of real estate sold in November was up 15.2% over last November, signaling strength in the market. The inventory level of the Denver proper market overall was a tight 3.9 months of supply in November. The market is beginning to favor sellers. However, this is only true in the lower price ranges. The supply of inventory in the upper price ranges remains high, typically much greater than the 6 month benchmark that indicates a balanced market.

As we come to the end of 2011, let's take a look back and see how we fared in our market predictions. The headline of last year's December newsletter was "2011 Forecast: With training wheels off, market goes from wobbly to stable." We went on to predict that "a stable market in 2011 will look a lot like the market in 2010: flat prices and flat year over year sales volumes....The difference between 2010 and 2011 will be that similar results were achieved without the home buyer tax credit." Fortunately for Colorado, that is exactly what came to pass in 2011. In short, the market stabilized.

Sales volumes are up slightly through the end of November and will end the year within a percentage point or two of 2010's volume. Home prices are down 1.48% from last year according the latest Case Shiller data, but have been gaining ground on last year's comparables the past few months and may end the year flat by the time the December data posts in February. In any event, like sales volume, prices are within one or two percent of last year, and generally flat and stable.

For the past few years, the relationship between the real estate market and the stock market has been a rocky one. The real estate market has been blamed, rightfully so, on a regular basis for dragging down the stock market along with the rest of the economy.

In August, that dynamic seems to have undergone a role reversal. It now appears that the stock market is dragging down the real estate market. Certainly the wild stock market gyrations that began in earnest in early August completely drowned out any good news from the real estate market as the first post tax credit data rolled in. Which is too bad, because there was actually some good news in the real estate market, especially at the local level. In fact, the post tax credit market that revealed itself was quite solid.

The volume of real estate sold in July across all Front Range markets was up 18% compared to last July. This is the first year over year increase since January. On a month over month basis, the market slowed a bit, with a drop of 4.7% from June's volume. NOTE: A midsummer dip in July is a common pattern in Colorado markets.

The supply of active listings increased slightly to 5.5 months in July from June's 5.3 month supply reflecting a drop in closed transactions that outpaced a small decline in the number of active listings. The market remains below the 6 month level indicating relatively tight inventory.

In the City and County of Denver, year over year sales volume was also up, increasing a healthy 34.3% over July 2010. Like the Front Range, Denver County experienced a midsummer dip of 1.5% compared to June. Unfortunately, all this good news on the local real estate market front was completely lost in the noise of the stock market's wild ride.

So what exactly is the connection between the equities markets and the stock market? There is no question that the two markets are interrelated, but in ways that may not be completely obvious.

First off, the crashing stock market caused a flight to safety, and the yield on 10 year Treasury notes dropped to record lows. As a result, mortgage interest rates followed right along and dropped accordingly, with 30 year fixed rates approaching 4%. Low mortgage rates attract new home buyers who understand that changes in mortgage rates can have a bigger impact on their monthly payment than fluctuations in home prices.

While low mortgage rates may be good for the real estate market, the volatility of the stock market certainly is not. The connection here between the stock market and the real estate market is largely in the mind of the consumer, but it cannot be underestimated. The reality is that very few home buyers rely on, or tap into, their stock portfolio to purchase a home. However, the psychological effect of going online to check out your stocks or your 401K balance, and seeing a 10% or 15% haircut to your net worth doesn't exactly inspire confidence to go out and buy a home. This is particularly true for potential buyers of luxury homes who often have a larger portion of their assets tied up in stocks. While some of these luxury buyers may react to a tanking stock market by shifting dollars from stocks to real estate and purchasing an investment property (not a bad idea with vacancy rates at record lows), most will simply hunker down and retreat to the sidelines.

As a result, the stock market gyrations of early August may be felt in September in the luxury home market, erasing the momentum that had started to build this summer. In fact, luxury home sales were up 38% year over year in July, but that may be prove to be just a blip if the stock market continues to slump.

Of course, the stock market is driven by national and international news and macro-economic trends, and is highly reactive on a daily, hourly, and minute by minute basis. Fortunately, the real estate market in Colorado is much less volatile and is based on longer term fundamentals like employment.

And believe it or not, there is some good news on the employment front in Colorado. The State's unemployment rate was 8.5% in July, compared to 8.8% last July, and lower than the current national rate of 9.1%. It's hard to get too excited about an unemployment rate that high, but the trend is positive.

As we enjoy the last days of summer and head into fall, 8z's outlook for the real estate market is a continued balanced market in which relatively low inventory levels, coupled with higher year over year sales volumes, will keep home prices flat to moderately increasing. If the US economy enters a double dip recession, that forecast will require some revision. In either case, the 8z Team will keep you informed with the real story.

The moment has arrived. June is the last month in which the market data will be significantly impacted by the "skew" of the home buyer tax credit of 2010. We will finally have "normal" year over year comparisons, and the true market will reveal itself.

First the June data. Our final year over year comparisons in which we measure this year against last year's tax credit fueled market are actually quite strong. The volume of real estate sold in June across all Front Range markets was down just 3.3% compared to last June. Volume was up 14.4% from May of this year. The supply of active listings across the entire Front Range became even tighter, dropping to 5.3 months in June. The volume of real estate sold in June across all Front Range markets was down just 3.3% compared to last June. Volume was up 14.4% from May of this year. The supply of active listings became even tighter, dropping to 5.3 months in June. In the City and County of Denver, year over year sales volume was down 5.5% in June, but was up 10.7% compared to the previous month. The supply of inventory in the greater Denver metro area decreased to 5.3 months in June, a slight drop from May's 5.6 month supply.

What can we expect to see when the July market data is tabulated? Some good news. We will see a surprisingly healthy market that is balanced. The term balanced as it pertains to the real estate market means a market that does not favor buyers or sellers.

Important note (and a bit of a disclaimer) - We are describing the overall real estate market. As we are all well aware, real estate is local. As a result, the overall market may be balanced, but in any given neighborhood, pocket or specific price range, the market might be sizzling hot or cold as ice. With that disclaimer out of the way, let's look a bit closer at this balanced market.

First off, this is not a "sellers' market." In a sellers' market, almost any listing sells because there is an acute shortage of inventory. In our current market, only the listings that are in top-notch showing condition and are priced realistically are selling. These listings are often generating multiple offers, while listings that are over priced or in poor showing condition are languishing on the market.

This is also not a "buyers' market." In a buyers' market, there is an acute shortage of buyers, and active buyers are an endangered species that can almost name their price for those sellers who have to sell. In these conditions, properties close at 60 to 80% of list price. Think Vegas or Miami a year or two ago.

In our current market, this is not the case. Properties are selling for 96% plus of list price on average. Buyers who have been reading the national headlines are often surprised to find that the majority of sellers are willing to negotiate, but are simply not going to "give it away" and accept an offer of 70% or 80% of list. More often than not, the seller won't even counter such an offer. Also of note, the banks are standing firm on their prices for short sales and foreclosure properties.

A balanced market is a healthy market, especially in the context that the primary reason to own a home is to have a nice place to live, and secondarily as an investment. Since you are a reader of this newsletter, you won't be surprised when you see headlines declare "home sales are surging" and "prices are rising" in August and September as the post tax credit market data unfolds. The reality behind those headlines is a bit less dramatic. We have a balanced "Goldilocks" market ... not too hot and not too cold. And after the roller coaster real estate market of the past decade, a stable, balanced market sounds just right.

Overall, the market is stable...despite what you may read in the headlines. The same trends we saw last month continued to drive the market in April. Specifically, slightly increased sales from the previous month that outstripped the sparse supply of new listings, causing the months of inventory supply to drop from 6.4 months to 6.2 months.

We will explore the possible causes underlying the shrinking inventory in a bit more detail later, but first let's dive into the data. When it comes to year over year comparisons, the market still can't escape the skewed year over year comparisons as a result of last year's tax credit. In fact, the comparisons are entering their most skewed phase since tax credit activity peaked in April, May and June of last year.

For all the markets along the Front Range (Colorado Springs to Denver to Fort Collins and out east to Greeley and the communities of the Plains), closed sales volume this March decreased 17.9% compared to April 2010, but was up 7.6% compared to March 2011.Across the Greater Denver Metro, year over year sales volume was down 17.2% in April, but was up 6.8% compared to the previous month. In the City and County of Denver proper, sales volume was down 14.2% this April compared to last April, but was up 1.3% compared to March.

The supply of inventory in Denver County was 4.6 months in April, compared to March's supply of 5.8 months. The number of active listings at the high end remains quite large and is dragging the overall supply up, but we are still below six months of inventory, typically considered a healthy market.In general, the supply of new listings overall continues to lag the increasing demand represented by sales volume. Of course, when demand grows faster than supply, prices eventually tend to rise.

This begs the question: Why is the supply of inventory down? The obvious answer is that many home owners who could sell, but don't have to sell, are simply choosing to wait until they feel the market is stronger and they can get a better price. That is certainly a reasonable strategy. Beyond the homeowner who is simply choosing to wait, we are starting to see another type of homeowner who is related, but with a slight twist. These are the folks we call "the Collectors."

The Collectors are home owners who have decided that now is a good time to buy due to attractive interest rates and prices. However, rather than selling their existing homes, they are in the fortunate position that allows them to hold onto their homes and turn them into rental properties, thereby starting their own property "collection".

The reasons to become a Collector are compelling. First off, the rental market is tight, so the likelihood of finding a good tenant is high. According to a May 24, 2011 report from the Colorado Division of Housing, vacancy rates and days on the market for rentals are at all time low. Boulder County actually recorded a vacancy rate of 0.0%.

Due to high demand and limited inventory, rental rates are rising. In some areas, the market is becoming frenzied, with stories of folks responding to postings on Craigslist within minutes and putting down deposits on properties sight unseen.The ability to find a tenant who will pay a healthy rental rate, coupled with a low monthly mortgage payment at a great rate, results in positive cash flow and is creating an entirely new group of residential landlords.

The market continues to struggle to keep pace with last year's market, one that was fueled by the home buyer's tax credit.

On a national front, February's home sales report was weaker than expected. The month over month drop of 9.6% in sales grabbed most of the headlines, but the more relevant data point is probably the 2.8% decrease in sales compared to last February. Either way, this is a market that is stabilizing, but fighting to hang on.

Here in Colorado, the solid start to 2011 we experienced in January grew weaker in February. For all the markets along the Front Range, closed sales volume this February decreased 7.8% compared to Feb 2010. In Denver County, the market posted a similar year over year drop of 7.7% in February.

Inventory levels remain relatively stable as the current level of demand was able to absorb new listings as they came on the market. The supply of inventory at the close of February along the Front Range stood at 9.2 months, indicating a buyer's market on a macro level. In Denver proper, the inventory supply was 11.1 months, up from 10.0 months a year ago. (NOTE: supply of inventory is based on how many months it would take to sell all the active listings at the current sales pace. Six months of supply is considered a balanced market that does not favor sellers or buyers. Anything over six months favors buyers, and a supply of less than six months favors sellers.)

Prices continue to hold fairly steady. The median price of a single family home that sold in the greater Denver Metro area was $220,000 in February, down slightly from the Feb 2010 median price of $220,750. In Denver County, the median price of homes and condos sold in Feb was $196,900 compared to $196,000 last year. The historical, lagging data points cited above, of course, reflect what has already occurred in the market; they do not offer any insight into the underlying trends and forces that may shape the market in the future.

Two trends that are not commanding any attention in the headlines, but may prove quite important in the long run for the real estate market are affordability and the comparison of renting vs. owning. Specifically, two related trends are unfolding: 1) the affordability of buying a home is reaching record levels and 2) owning is becoming less expensive than renting as rental rates soar.

First, affordability. Affordability is a measure of the relationship between home prices (which dictate the size of monthly payments), and disposable income (which dictates one's ability to make those payments). According to the economists at PMI Mortgage Insurance, 35 states actually have home prices below what they should be based on disposable incomes, and are very affordable. PMI cites Colorado as a state where home prices are in line with incomes. In effect, we did not experience the big home price increases of the bubble market, and our disposable income has kept pace with the modest appreciation we've seen in Colorado.

Second, renting vs. owning. A recent survey from Deutsche Bank showed that renting a home is now more expensive than paying a mortgage. "That's the first time in 20 years that this nation has seen that, and yet the rental market continues to surge," says CNBC real estate reporter Diana Olick.

Both these trends, affordability and renting vs. owning, are long term trends. Don't expect them to move the real estate market tomorrow. However, they are underlying market forces that, if they remain in place, could support a sustained recovery in the nation's housing market.

Prior to the housing crisis, when real estate across the country was a growing bubble market, there were two experts that foresaw the real estate downturn. These two experts that spoke out before the bubble burst were a professor and the other an investor. As they both had the foresight when others were off on their predictions, it's worth taking a look at what they are saying now about real estate, more than 5 years after their predictions.

First the professor. Karl Case teaches economics at Wellesley and is co-creator of the Case-Shiller housing index. In his New York Times op-ed piece this fall titled "A Dream House After All," Case said "buying a house now can make a lot of sense." Case went on to say, "Housing has perhaps never been a better bargain, and sooner or later buyers will regain faith, inventories will shrink to reasonable levels, prices will rise and we'll even start building again. The American dream is not dead."

The other housing market bear-turned-bull is investor John Paulson. Paulson's bet that the housing bubble would burst was chronicled in Michael Lewis' best seller "The Big Short." Today, Paulson believes housing is poised for a rebound, and he isn't just talking, he's betting billions of dollars on a housing recovery. The man who went short is now long. Speaking to a standing-room-only crowd last September, Paulson said, "If you don't own a home, buy one. If you own one home, buy another one, and if you own two homes, buy a third and lend your relatives the money to buy a home." Paulson believes this is the best time in 50 years to buy a home because "your debt and interest payments get locked in at record lows, while the price of your home will rise."

Are these guys right? Of course, no one knows for sure, but they were both right last time around. Now let's take a look at the January Denver real estate market statistics.

2011 is off to a decent start. For the entire Denver metro area, closed sales volume this January fell slightly, dropping 0.6% compared to Jan 2010. In the City and County of Denver, closed sales volume was a bit weaker, decreasing 1.5% this January compared to Jan 2010.

Prices remained stable with a year-over-year increase of 3.7% in the median price for the entire Denver metro area this January. In contrast, the most recent Case-Shiller index, which lags a month, says Denver area home prices dropped 2.4% from Dec 2009 to Dec 2010.

From the statistics we can say the market remains stable as we bounce along the bottom. There is a great opportunity for those considering purchasing investment properties. With rental rates rising, now may be the time to act.

Before we jump into a full review of 2010 and see how accurate my market predictions were, let's do a quick review of the December market data.

2010 ended strong as the trend of an unusually high level of buyer activity continued in December. For the broad market containing the greater Denver metro area, closed sales volume in Dec edged up 1.3% compared to Dec 2009, and jumped 11.4% from the previous month's volume in Nov 2010. In the City and County of Denver proper, closed sales volume in Dec increased 2.2% over the previous month. So the market ended 2010 on an upward trend, but how did the market fare overall in 2010 and how accurate were my predictions?

Prediction #1 - Sales Volume Stable (+/- 5% year over year)

In the February 2010 market update, I predicted, "there will be enough demand over the course of 2010 to keep the housing market stable if not on the upswing." In June as the tax credit expired, I reiterated that forecast with "higher priced homes in the middle market and the luxury market will fill the void left by the expiration of the tax credit, so the number of transactions will fall post tax credit, but the sales volume will remain stable."

And the data says...

2010 closed sales volume was down 1.9% for the greater Denver metro area compared to 2009. Even though the market was not quite strong enough post tax credit to end the year in positive territory, sales volume did stabilize in 2010 (for comparison, volume dropped 15% in 2009), so Prediction #1 goes in the "win" column.

Prediction #2- Prices stable with moderate appreciation

In the February 2010 newsletter, I predicted, "prices will probably seesaw up and down within a plus or minus 3 to 5% range as the market continues to stabilize." In April, I was even more bullish about prices, asserting "we will actually see home values and prices increase in 2010. Not the hyper appreciation rates of 10% plus seen in the past decade. Just nice solid appreciation rates of 2-5%."

And the data says...

The median price of all homes sold in the Denver metro area in 2010 increased 7.3% to $235,000 from $219,000 in 2009. In Denver proper, the median increased 11.5% in 2009. Looks like I am batting 2 for 2!

Prediction #3- No double dip

In the ongoing national dialog about housing, one of 2010's hotly debated questions was whether or not there would be a double dip in home prices. According to Case Shiller, a double dip is defined as "seeing the 10- and 20-City Composites set new post-peak lows." In March, I stated that despite national market weakness, "I do not believe our market will experience a double dip."

And the data says...

According to the latest Case Shiller index, the greater Denver area, has not experienced a double dip in home prices. Let's call it 3 for 3! In fact, the most recent report says Denver home prices are 4.0% higher than the post-peak low hit in Feb 2009. 8 markets have already double dipped, including Atlanta, Charlotte, Detroit, Las Vegas, Miami, Portland (OR), Seattle and Tampa. Denver is the strongest market between the coasts.

It is yet to be seen if the Case Shiller index for Denver will fall in 2011 and eventually go below that post-peak low. Even though the index has fallen for four straight months, I believe these declines will be reversed and the index will rise again in early 2011 due to the uptick in market activity this winter.

I predict we will avoid the double dip in 2011, thereby making Feb 2009 the official housing bottom of the Great Recession. As a real estate professional, all I can do is give you my honest market assessment to help you make informed real estate decisions. That said, it's always nice to go 3 for 3!

The market in 2010 was like a child learning to ride a bike. After the national real estate downturn, government programs, from tax credits to loan modifications to Fed monetary policy, have propped up the housing market like the training wheels on a child's bike. The idea was to get the market to a place where it can coast along on its own. Overall, the training wheels did their job. The market was a bit wobbly in 2010, swerving erratically back and forth, especially with the tax credit, but it never fell over or crashed.

As we move into 2011, the training wheels are being removed. Is the market ready? Current data indicate that the market, at least in Colorado, is ready and will be able to stay upright and stable on its own in 2011.

One indicator is that the market continues to show a surprisingly high level of counter seasonal activity; that's a fancy way of saying there are more buyers in the market this winter than is typical. In fact, the dollar volume of properties placed under contract along the Front Range (from Castle Rock to Fort Collins) in December through the 22nd was up just slightly (under 1%) over the same period last year. That is not a big increase by any measure, but considering that we no longer have the tax credit training wheels on, it is encouraging.

As many of our readers know, under contracts are a forward looking indicator of where the market is headed, whereas the more commonly cited closing data is a trailing indicator of where the market has been. Speaking of closes, as predicted, the November closing data was ugly. A quick reminder that this year's closing data is being compared to November 2009 data when the market was fueled by the original tax credit expiration deadline.

In the Denver metro area, closed sales volume was down 25.9% year over year in November. In Northern Colorado (Boulder to Fort Collins), November sales volume was down 16.5% year over year.

The closing data may be a trailing indicator but it is also a reality check. This market is still bouncing along the bottom and storm clouds still threaten, from the recent up tick in interest rates of nearly a full percentage point to the inevitable surge in distressed inventory as the banks release these properties for sale. However, even with these storm clouds, 2011 will still be stable. And a stable market in 2011 will look a lot like the market in 2010: flat prices and flat year over year sales volumes, with monthly fluctuations up and down of 1% to 5% that ultimately will smooth out and be seen as short term "noise" in retrospect.

The difference between 2010 and 2011 will be that similar results were achieved without the training wheels.

The most interesting dynamic currently unfolding in our real estate market is an unanticipated uptick in activity as we move into the typically slower winter months. One could liken it to an unexpected wind shift that has brought warm Chinook winds out of the South to our market rather than the customary chilly winds from the North at this time of year.

Normally at this time of year, market activity falls off rather sharply as the days get shorter, the temperatures drop, and people turn their attention to family and the approaching Holidays. This drop in market activity is quite predictable and common to all US real estate markets, with the fall off growing more pronounced as you move north in latitude, i.e. the winter dip is understandably more dramatic in frigid Chicago than mild San Diego. However, this autumn, market activity is actually increasing rather than decreasing. Granted, we have had an especially mild (and beautiful!) fall, with the first snow along the Front Range arriving well after Oct 19, the average date of the first snow according to the National Weather Service.

Counter Seasonal Data

Mild autumn or not, the market is definitely behaving counter seasonally; a "warm market wind is blowing." Specifically, the amount of real estate that was placed under contract in the Denver metro area was up 3.8% in October this year compared to September. One important note. Normally, month over month data, such as comparing Oct to Sept in the same year, is less valuable than year over year data comparisons, such as Oct 2010 vs. Oct 2009, because real estate markets fluctuate with the time of year and year over year comparisons account for this seasonality. However, due to aberrations in the market caused by the various iterations of the tax credit, year over year comparisons are less valuable until the effects of the tax credit are completely behind us. For example, the first phase of the tax credit expired on Nov 30, 2009. Closings in Oct and Nov of 2009 were quite strong as buyers rushed to close before the first expiration date (which was subsequently extended into 2010). As a result, year over year comparisons for Oct 2010 vs. Oct 2009 are a bit misleading due to the inflated tax credit closings in 2009. Not surprisingly, the year over year data is not pretty.

For the entire Denver metro area, sales volume that closed was down 21.3% year over year in October. In the city and county of Denver proper, where the tax credit fueled the market last year, closed sales volume was down 33.4% year over year in Oct.

The November year over year comparisons will probably be equally negative since last November's sales were pumped up by the initial tax credit expiration. However, as a reader of this newsletter, you will know the real story behind the inevitable "housing market collapse" headlines that will follow. And again, right now, the more illuminating data can be found in the month over month under contract data, which as previously noted was up 3.8% in Oct compared to Sept in the Denver metro area.

In Denver County, the counter seasonal trend was even stronger with a 26.6% increase in under contract volume from Sept to Oct 2010. Under contract data points are a leading indicator of where the market is headed since these contracts are next month's closings.

Prices Stable, Supply Shrinking

Prices continue to bounce along on the bottom, fluctuating in a narrow band of +/- 3%. The most recent data is provided by the Federal Housing Finance Authority (FHFA) Housing Price Index published on Nov 24 for the third quarter which shows prices in the Denver metro area are up 0.19% year over year in the all transactions index or down 2.27% in the purchase only index. Prices are basically flat.

We also said that keeping an eye on the supply of inventory would be an important indicator. The supply of active residential listings in the Denver metro has dropped from a peak in July of more than 23,450 listings to 21,360 at the end of Oct. Supply normally drops in the fall, but the earlier trend of increasing supply has clearly reversed for now and it appears that the market is absorbing new listings as they come on the market, including distressed inventory.

Window of Opportunity

Overall, the market seems to be presenting a window of opportunity for buyers that may not last indefinitely. Of note, interest rates recently climbed a quarter to a half point, instantly wiping out 2.5 to 5.0% of purchasing power. A little reminder that today's low rates probably will not last forever, and when rates move, they can move in a matter of days, if not hours. Furthermore, savvy investors have long known that the time between Thanksgiving and Super Bowl Sunday has historically been a great time to buy because the market favors buyers over sellers. Why? For the simple reason that in the deep dark cold of winter, legitimate buyers can be few and far between, and sellers who do not have the luxury of waiting until the spring market may be more open to negotiation.

So, if you have thought about buying a home to accommodate your life needs, this winter may not be a bad time to buy....not a bad time at all.

Before I delve into the monthly stats, I thought it might be worthwhile to share my view of how the real estate market works on the most fundamental level. Sometimes real estate professionals like myself can get a bit carried away and over analyze the market. We focus on a particular trend or one time event and forget that the real estate market is ultimately the result of three overarching forces: jobs, interest rates, and the supply of homes. Think of these as three legs of a tripod that either support the real estate market, or cause the market to be shaky, or at worst, topple over. From a basic economics perspective, two of the legs, jobs and interest rates, determine demand, and the third leg, listing inventory, determines supply.

So is the current real estate market tripod solid or on shaky footing? Let's take a look at each leg on an individual basis.

First the jobs leg. The employment picture is split. For those who have a job, recent employment data indicate that these folks will be able to keep their jobs as the worst appears to be behind us. Unfortunately, for those without a job, the data presents a bleaker picture. Anemic job growth numbers indicate that landing a new job remains quite difficult.

Conclusion: the jobs leg of the real estate tripod is as strong as it's been in a couple of years, but overall this leg remains shaky. Conversely, the interest rate leg of the tripod could not be any stronger. Rates continue to hover at or near historic lows (and by historic, I truly mean since the data has been tracked). And contrary to what you read in the media, these great rates are actually accessible to most home buyers. So from a demand perspective, we have one solid Interest rate leg and one somewhat shaky, but stabilizing, jobs leg. Unfortunately, the supply leg of the tripod is headed the other direction and becoming more precarious. Specifically, since the expiration of the tax credit, the supply of listings on the market in Colorado has ballooned from about 6 months of inventory to 8 months or more. A supply of 6 months is generally considered a healthy, stable market.

Up until now during the recession, the market has been able to absorb all the new listings as they have entered the market, including foreclosures and distressed properties. In fact, this Spring, the supply of active listings on the market was actually shrinking and was well under 6 months in many markets, particularly the lower price ranges. However, transactional volume since the tax credit expiration has slowed, causing listings to sit on the market longer and supply levels to increase.

In addition, many home owners who realized that the value of their home was actually up not down decided it was finally safe to sell and put their homes on the market, further increasing inventory levels. In fact, the number of active listings increased about 10% between April and August. Of course, some of this inventory increase is due to the typical seasonal pattern of listings increasing through the Summer and then decreasing in the Fall, but the growing supply cannot be ignored and will ultimately put downward pressure on prices.

Overall, the real estate market tripod is precarious right now. The listing supply leg is getting weaker not stronger. We will need to keep a watchful eye on listing count this Fall. One thing that could "eat up" the increasing listing supply: relocators. 8z's website COhomefinder.com is often the first stop for relocators considering a move to Colorado, and in the last month, our team has been flooded with relocators on the web site...and many of them are transferring with jobs.

Now the market data for August. For the entire Denver Metro area, sales volume for single family homes and condos was down 15.7% compared to August 2009, less than the post tax credit year over year drop of 21.3% in July, but still a significant decrease. The market Denver proper slowed a bit more than the broader market, posting a decrease of 22.3% in August 2010 compared to August 2009, again less than the 29.2% year over year drop in July.

Parting Note: if you have ever considered investing in real estate, now may be the time. Rents are up significantly and forecast to continue rising, purchase prices have flattened with deals to be had, and interest rates are ridiculously low. The end result: compelling potential investment returns. Call me if you want to discuss your options for different investment scenarios.

The real estate market update this month is really a matter of two different views. One view is the equivalent of looking in the rear view mirror to see where the market has been. The other is the view through the front windshield to see what lies ahead for the market. At this moment, these two views are quite different.

First, the view in the rear view mirror. As I've been saying in this newsletter for months, the tax credit was driving our market and June was no different. On a broad front, for the entire Denver Metro area, sales volume for single family homes and condos in June 2010 was up 2.3% compared to June 2009, and up 0.3% from the previous month. The markets in Douglas and Arapahoe Counties posted results similar to the broader market, with a decrease of 7.1% in Douglas County, and an increase of 17.1% in Arapahoe in June 2010 compared to June 2009.

Note: These modest year over year increases were a significant drop from the year over increases earlier this Spring of 25 to 50%.

What these data indicate is that the last minute surge of tax credit closings at the end of June did not fully materialize. Perhaps some closings were pushed into July and August when the tax credit closing deadline was extended to Sept. 30 by Congress at the eleventh hour. However, my read is that the tax credit was simply petering out and the closing extension will not have much of an impact.

Which brings us to the view through the front windshield of what lies ahead for the market. As your trusted real estate advisor, you count on me to tell it like it is, and quite frankly, I have been surprised by the abruptness of the market slow down post tax credit. As I stated in last month's email, I fully expected "transaction volume to fall dramatically post tax credit." That said, it feels a bit like someone slammed on the brakes and our faces our pressed up against the windshield glass. Within this context, I felt it was important this month to gather data from leading indicators to find clues to what lies ahead.

The most telling leading indicator is the number of homes being placed under contract. These are the transactions that will close 30 to 60 days from now and become the picture in the rear view mirror. In short, the under contract data is not pretty.

In the greater Denver metro area, the number of properties that went under contract in June fell 13.7% compared to June 2009. The total volume of real estate that went under contract was down less, 8.9%, because the fewer number of properties that went under contract were at a higher average price, $247,000 compared to $234,000 last June.

In Douglas and Arapahoe Counties, under contracts fell a similar amount in June, down 1.5%, and 7.1% respectively from last year in units and 0.4% and 8.4% respectively in volume. Again, the drop in volume was less than the drop in units due to higher prices homes making up a larger portion of the market mix, with an average price of $350,000 this year compared to $345,000 last year in Douglas County, and an average price of $220,000 this year compared to $217,000 last year in Arapahoe County.

On a positive note, the three demand drivers that last month I predicted would fill the gap left by the tax credit, namely 1) relocators, 2) local move-up buyers, and 3) ridiculously low interest rates, are all having an impact in the market. However, I may have to revise my prediction that the total volume of real estate sold post tax credit will stay even, plus or minus 5%, on a year over year basis.

Based on the leading indicator of under contracts, it appears that the volume of real estate sold in July, August, and through the end of the year may drop on a year over year basis. Even though higher priced homes are making up a larger part of the market mix, these more expensive homes just won't be able to offset the drop in the raw number of transactions during the tax credit honeymoon.

For now, prices are holding steady and even increasing, but if demand falls and volume drops significantly, the laws of economics will not be abrogated and prices will eventually follow. I am not yet ready to revise my long term outlook of a stabilizing market in 2010 with modest price appreciation of 3 to 6%, but the macro economic trends in the last 30 days indicating a slower overall recovery may ultimately put that prediction in jeopardy.

As we bid farewell to the home buyer tax credit, the long term question becomes: what "true" market will emerge when the tax credit driven closings wind down at the end of June?

Before I address that question, let's talk about the here and now. The market continues to gather strength and build momentum. The April 30 deadline to put a home under contract for the tax credit fueled a flurry of buying activity at the end of April. These buyers will flock to the closing table in droves in May and June to beat the June 30 closing deadline. Last month, I said the market was surging. The April market data did not disappoint.

First, sales volume for single family homes and condos in the Denver metro area in April 2010 increased 32.7% compared to April 2009, and was up 16.4% from the previous month. In addition, middle market buyers in the $300,000 to $600,000 price range continued to enter the market and helped boost the average price of properties that sold by 7.6% compared to last year.

The latest Case-Shiller Index just out (for March not April due to the lag in calculating the index) also posted healthy year over year price appreciation. Home prices were up 4.1% for the Denver area. This is the fifth month in a row that Denver home prices have increased in the Case-Shiller Index. This price increase trend may continue based on the the increase in the number of propertes that were placed under contract in April. Under contracts in April in the Denver area were up 27.6% over last April. These are the transactions that will be closing over the next couple of months.

So what market will emerge post tax credit after June 30? Initial indicators, both quantitative and qualitative, are positive.

First, the quantitative. Home buyer activity on the Internet remains strong. Specifically, because my team's website COhomefinder.com is the most popular real estate website in Colorado, it serves as a leading indicator and de facto barometer of the state's real estate market. Visitors to COhomefinder did not fall off at the end of April and into May as the tax credit expired; the number of visitors actually ticked up slightly.

On the qualitative front, I am hearing anecdotally from my own clients and from other 8z brokers across the Front Range that buyers who started their home search to take advantage of the tax credit, but didn't make a purchase prior to the April 30 deadline, are staying in the market. These buyers are relieved that the pressure of the deadline is off, and they like the remaining low interest rates and the new selection of listings that are hitting the market as warmer weather (finally!) arrives.

These initial indicators bode well for the post tax credit market. Undoubtedly, there will be a fall off in sales volume after June from the huge 25% to 50% tax credit fueled gains we are seeing now. I think we will see more reasonable, and sustainable, sales volume increases of 5% to 25% through the late summer and into the winter.

This sustained demand will continue to translate into modest price and home value increases of 3% to 6%, with pockets of higher appreciation, when the dust settles at the end of the year.

At the risk of sounding too enthusiastic about the market, I have no other choice than to acknowledge the data and declare that our Spring real estate market is surging. On a broad market front, the closed sales volume for single family homes and condos in the Denver metro area was up a surprisingly strong 20.9%in March 2010 compared to March 2009. In addition, the average price of properties that sold increased 7.22% compared to last year, as middle market buyers in the $300,000 to $600,000 price range continued to enter the market. Another positive market indicator was the increase in the number of properties that were placed under contract in March. Specifically, the number of under contracts in March in the Denver area surged 22.4% over last March. Under contracts are leading indicators that provide a glimpse of where the market is heading a month or two from now.

Last month, I predicted that the Front Range housing market will not experience a "double dip" in 2010 with drops in sales volume and home prices after months of increases since last fall. With one more month of data behind us, I feel even more confident in my "no double dip" prediction. Our market is not weakening. In fact, it's quite clear that the market is gathering strength. No question, some of this surge is being driven by the impending April 30 deadline for the home buyer tax credit. However, there is more to this surge than just the tax credit.

Home owners who bought prior to 2005 and have equity in their home, but may have been holding off on selling their home and/or purchasing a new home due to the general feeling that this a bad time for real estate, are coming back to the market. They are realizing that now is not a horrible time to sell. Many markets are quite strong and are actually sellers markets. In the lower price ranges, there is an acute shortage of inventory and homes are selling in weeks not months, always a great thing if you are seller.

Looking ahead in 2010, I am becoming increasingly confident that prices will do more than just stay flat. As I look at the leading indicators in the market (under contracts, showings, activity on www.COhomefinder.com, I think we will actually see home values and prices increase in 2010. Not the hyper appreciation rates of 10% plus seen in the past decade. Just nice solid appreciation rates of 3-5%; rates historically quite typical for real estate. A stable, healthy, balanced real estate market in 2010 would be great for Colorado's economy and as a result, great for all Coloradoans, whether you're buying, selling, or just spectating from the sidelines.

Our local market continues to stabilize, if not show signs of strength. On a broad market front, the sales volume for single family homes along the Front Range in February 2010 compared to February 2009 was up a solid 9.3%. Drilling down a bit into the Denver metro market, sales volume was even stronger, posting a year over year increase of 11.3% in February. That is a very significant uptick in market activity. Not only is sales volume up in the Denver metro, we are starting to see prices follow the volume upward as well. Buyers are getting more active in the middle price ranges (250,000 to $500,000) causing the average sold price for single family homes in the Denver metro in Feb 2010 to jump 13.5% to $247,471 compared to Feb 2009. All that said, recent national housing market data has made the possibility of a "double dip" in home prices the hot topic of debate.

What is a "double dip?". Basically, many analysts are beginning to predict that home prices will begin to fall again after months of solid increases. However, if you peel back the data a bit, it becomes quite clear that the possibility of a double dip is much less likely in Colorado and the Denver metro than in other parts of the country. The National Association of Realtors home sales report released on March 24 indicated that existing home sales dipped 0.6% in February from January, but were up 7% compared to the same month last year. In the Western region, of which Colorado is a part, home sales actually rose 3% from January to February.

I do not believe that our market will experience a double dip. I continue to stick with my prediction that sales volumes will rise as buyers take advantage of the first time buyer tax credit and the move up tax credit by getting under contract prior to the April 30th deadline. As the market continues to stabilize and we bounce along the bottom, prices will seesaw up and down within a 3 to 5% range. After June and the end of the tax credit, we will see if demand can be sustained and spur prices to bust out of this narrow range and post solid appreciation. I believe that local buyers who see interest rates rising and realize there is a cost to waiting, and relocators, who begin moving to the area as companies start hiring again, will fill the demand gap left when the tax credit expires, thereby causing prices to rise.

With the limping economy dogging most of the US, home values had been driven down in most communities, resulting in a loss of homeowner equity. That spells bad news for a lot of Americans, especially those who bought at the top of the market, and are finding themselves motivated to sell now. That also sounds the start of a different story for a new kind of home buyer, a new segment of real estate players who may find themselves presented with an interesting opportunity--the flip side of crisis. It's described by crossing the price point gap, and entering the next higher tier of the market right in your own neighborhood, without risking as much as would have been traditionally required. You could also call it hyperlocal buying.

If you live in a neighborhood of a few different price points, like most of us do, you'll find yourself with a hotbed of hyperlocal buying opportunities. Let's say the average asking price in 2009 of the homes in the high-priced zone is $1M; the homes in the middle zone are at 500; the homes in the lowest-priced zone are in the 300s. Knowing that homes in the sub-350 market are still selling relatively well in Denver, for example, at closer to asking price than higher end properties, sub-350 home owners can put their properties on the market and stretch their closing times. Knowing that homes above 500 are struggling more, they can make an offer on that next-level home a few streets over at a more lateral price, with vertical benefits in square footage that the new buyer is likely to capitalize on later. Because the neighborhood is familiar, there’s none of the pain or expense that accompanies a crosstown or cross-country relocation.

Whatever the numbers are–selling into the 200 market and buying into the 400 one, for example–hyperlocal buying is a new take on the old concept of upward mobility, at a deep discount. It’s selling on one side of the chasm, and buying into the other, without spending the same amount it would have cost you five years ago. To learn more about making sense of taking advantage of today's conditions and market, make sure that you vet your real estate specialist carefully, and that he or she is an expert in the neighborhood and community in which you're interested.

If you've ever wondered if a neighborhood was right for you and your family before committing to it by buying a home, you've probably done a fair amount of research. You've looked into the school district, the taxes, the water and energy bill averages. You've surveyed the streets by driving by, taking note of the landscaping, the care with which your prospective neighbors take with their properties. You've asked a REALTOR or two about the market values and conditions, and you've even met and spoken with some residents. Maybe you've event spent some time hanging out at the park, or walking down a few streets, especially during hours when people are likely to be home. Bonus point if you've looked into local neighborhood groups and/or the HOA.

Neighborhood groups can be as formally or casually structured as you would imagine, and often provide a social experience for residents. They can enhance residential life in a section of a community by providing location-based or virtual opportunities for getting to know your neighbors and neighborhood. Social gatherings in a neighborhood group are often flavored with activities that maintain or improve the overall neighborhood atmosphere, such as a designated cleanup day. Virtual neighborhood groups (online) usually serve residents by providing a platform for referring each other to service providers, spreading news (such as mountain lion sightings or crime reports), and arranging meetups and sub-groups. Most neighborhood groups post at least some information online; search for them or ask your REALTOR about them, and browse their Web site or call one of the officers or organizers to learn more about a neighborhood's inside scoop.

An HOA, or homeowner's association, is a formally organized entity charged with duties pertaining to a community or development. These duties vary widely from place to place, but you should be able to judge an HOA's involvement by reading the bylaws and speaking to an officer of the HOA. Your REALTOR will be able to provide you with the necessary details. Not all neighborhoods are subject to HOA governance, and while some communities are technically under an HOA's covenants, the actual organization may be too loosely structured or defunct to influence the residential experience.

Getting to know a community while shopping around is one of the easiest ways to make an informed decision on a home. While it won't be the only data point in your evaluation, the quality of life in a new home and other intangibles are just as important as the stuff you can enter into a spreadsheet.

If you've looked at real estate listings online this year, you may have noticed one more measurement characterizing homes and neighborhoods. It's a number from 0 to 100 called Walk Score. The way it works, according to the Web site, is simple: "Walk Score calculates the walkability of an address by locating nearby stores, restaurants, schools, parks, etc. Walk Score measures how easy it is to live a car-lite lifestyle—not how pretty the area is for walking." It's also worth pointing out that Walk Score doesn't tell you what those restaurants and stores are, nor does it rate them. But if you're wondering weather that two-bedroom bungalow in Corey-Merrill spells out an existence of living in your car, or being able to walk with your family to Joe's Pizzeria for a dinner slice, give it a try.According to Walk Score, ten of Denver's most walkable neighborhoods are Lodo, Golden Triangle, Capitol Hill, Cherry Creek, Baker, Alamo Placita, Five Points, City Park, Highland, and University. If you're considering a relocation to Colorado, ask around and see if your own research matches up.

Perhaps the widespread social emphasis on reducing carbon emissions, and home buying trends favoring community, sustainability, and connection between the people of a neighborhood or section of town, created a demand for understanding how walk friendly an area is. While it's up to each home owner to decide how important a home's "walkability index" is, it looks like the feature is getting some attention. From the gist of a recent Money/CNN article, it looks like people are putting their money where there feet are by paying more for walkable homes.

Your REALTOR or real estate Web site can chime in with some of the additional information Walk Score can't tell you, such as whether you're in for a rude awakening with your school district, overall neighborhood vibe, or how involved the homeowner's association is or isn't. Walk Score is a raw number, perhaps somewhat arbitrary, and a kind of sterile indicator of a neighborhood's character, so make sure you're using a healthy amount of human-driven data in your decision making. As always, balance facts and indexes with your own intuition, judgment, and experience, along with some expert opinion--from a real person, not an algorithm.

Speaking with home buyers across the nation, the quality of schools in their communities is always a concern raised by parents, and even home buyers without children. It's true that a solid school district is a win for families with school-aged children, but the same solid school district can also be found to relate to solid home prices and market interest.

That's because good schools can lead to neighborhood desirability. It also can mean slower speed limits, a more involved neighborhood association, invested homeowners, a more pleasant neighborhood atmosphere, and slower turnover. Good schools are good for everyone in the community, not just the children who attend, but it's an intangible that's easy to miss--if you're not paying attention to it.

Before and during your next home search, ask your Realtor about the school districts in your neighborhoods of interest, and check out the Colorado Department of Educations, school rankings and report cards. Categorize the listings you're considering by elementary, middle, or high school, and map out which properties interest you. If you're able, call or visit neighborhood schools, especially if you have children who may attend. Don't overlook school rankings and locations when conducting your home search. The results may make all the difference in the long and short terms. Back to school time isn't just for students anymore; it's for home buyers, too.

Downtown, LoHi, Highland, LoDo: Relocating to Colorado must sound like Morse code to the newcomer. Before you drill down to specific neighborhoods, of which there are many, try getting a macro view of Denver's real estate market first.

For example, the inventory of homes in the central part of Denver tend to be older homes built in the 1800's and early 1900's. The great majority of these homes are the craftsman style bungalow, Denver square style or Victorian. Most of the homes utilized a brick construction because the threat of fire was still a very real concern even forty years after the Great Denver Fire of 1863. However, a relatively small inventory of brand new custom homes have been built in the older neighborhoods of Denver. The original home on the lot is remodeled or completely rebuilt from the ground-up. You will see a few of these homes in the listings that you receive.

You'll find that as you move toward the center of Denver (the downtown area around the Lower Downtown or LODO), the price per square foot for housing increases. Also, as you move closer to the Cherry Creek Shopping District, the price per square foot also increases. In the core of Denver, homes sell for $275-$500 per square foot.

The price per square foot drops dramatically as you move out from the center of Denver to the neighborhoods on the outskirts of Denver proper, and even less in the outlying neighborhoods just outside of the Denver city limits. ($200-300 per square foot)

Although there are too many Denver neighborhoods and metro areas to mention here, some of Denver's top-performing, most active neighborhoods include:

• Cherry Creek
• Washington Park
• Cherry Creek North
• Park Hill
• Stapleton
• Lowry
• Hilltop
• Windsor Gardens East

For a full list of Denver real estate communities, which you can sort through and save according to your preferences, visit our Web site or give us a call.

Denver real estate isn't just about the places; it's also about the people and the things that go with them. Now that the snows melted, thoughts are turning away from that face plant you took at Copper Mountain, and toward what will happen to the bulbs you planted in your garden. (Darned deer!) Salting the walks has given way to salting the margaritas. Can you hear the siren song of the deck outside your favorite neighborhood hang?

Augment your Denver home tours by taking the opportunity to soak in some of Denver's fine happenings along the way. Here are just a few events in Denver that are going on this spring and summer around your location, location, location:

• 27th Annual Cherry Creek Sneak--April 26.
• Furry Scurry--May 2, Denver's Washington Park.
• Cinco de Mayo Celebrate Culture Festival. May 9-10, 2009. Civic Center Park--Broadway and Colfax Avenue.
• VIP Evenings at Denver Center Theater productions of Monty Python's Spamalot, May 15; Wicked, October 16; Little House on the Prairie, December 27.
• 27th Annual Highlands Street Fair. June 20, 2009. Highlands Square--32nd Avenue and Lowell Street.
• Cherry Creek Arts Festival. July 3-5, 2009. Cherry Creek North Shopping District--299 Milwaukee Street.
• Parade of Homes--July 29 through Labor Day, at Promontory at McKay Shores.

Near Cranmer Park, where the dog-walkers, strollers and pee-wee soccer leagues roam, and over near Graland Country Day School, founded in 1924, is one of Denver's most regaled historic neighborhoods: Hilltop.

Often mixed in with other neighborhoods for its proximity to Crestmoor, Mayfair, Cherry Creek, Bellvue, Belcaro, and Montclair, Hilltop is in the mix of old and new business and lifestyle developments in Denver. It's near some of Denver's most renowned restaurants, and is a long-time companion to the arts and culture scene. Today, the face of Hilltop is, like most other places, changing. While many small homes have been razed and rebuilt, or enlarged to accommodate today's tastes, some of the historical flavor and architecture remains, despite the trend toward lot-splitting that took over neighborhood real estate conversations around 2000. A few lots are being consumed almost in their entirety by large homes, but the number of these corner-to-corner builds are pretty limited. For now, Hilltop is a mature neighborhood of, for now, mature residents. Childless couples and empty nesters have dominated the Hilltop landscape for many years. What kinds of demographic turns the neighborhood will take is unfolding now.

What's Nearby
Its one geographic shortcoming is also perhaps a strength: Because it's located in the lower right hand quadrant opposite the I-70/I-25 intersection (aka "the mousetrap"), it lacks the handy access to either interstate highway. You can call that a bug or a feature, depending on how much time you want to spend navigating the surface streets to or from the north or west during rush hour. Architecturally, besides the Crestmoor and Glendale communities, there's George Cranmer's residence, the mayoral home (also known as Cableland), the modern splendor of the Shangi-La mansion, and other nameless, yet spectacular homes. The area is also home to established community landmarks such as Temple Emanuel, Assumption Greek Orthodox, and Epiphany Episcopal. And because Hilltop is in the center of it all, the neighborhood is within minutes of downtown and within an hour of destinations such as DIA, Boulder, and Colorado Springs.

From West 6th Avenue to Alameda Avenue and from Federal Boulevard to Sheridan Boulevard lies a little Denver neighborhood with a big history. In 1882, P.T. Barnum — yes, THE P.T. Barnum — purchased 760 acres of Denver dirt as a winter hiatus hot spot. While he was at it, it's been said that Barnum took the liberty of naming many of the streets in the neighborhood after show-biz folk, although in this day and age, it's hard to tell who's who. With street names like King, Newton, and Perry, people of the Generation X persuasion are likely to assume that the corresponding first names might be Larry, Wayne, and Steve, but who's counting?

Annexed to the city of Denver in the late 1800s, Barnum listings are relatively plentiful now, especially considering the rest of the west Denver markets such as Sloan's Lake, Highland, and Lakewood. With home prices from the 50s — yes, THE 50s — to a max of about $275K, Barnum is perhaps the most approachable starter neighborhood in the Denver metro family. Barnum Elementary, a school of about 480 students, was built in 1921 in a Spanish Colonial Revival style, and is surrounded by their other historic folks, such as the Bowman house at King Street and West Fourth Avenue, and the 1890s retail building at West 1st Avenue and Hooker Streets.

Whatever your Denver area of interest, consider what's most important to you in a neighborhood. Is it diversity? Is it the schools? Is it the atmosphere, the views, the amenities, or the community cohesiveness? In this buyer's market, there's an unprecedented opportunity to study your Denver neighborhoods carefully and weigh in with your REALTOR. The time is right; is the neighborhood?

What It Is: Clement's Addition is a little sliver of old Denver; it's the oldest intact block of housing in Denver, along with Curtis Park, which remains remarkably intact north of 23rd Street. South of the line, however, there isn't much residential remaining with any regularity. The exception is the Arapahoe Square area, with what is becoming a less sparsely-housed neighborhood just west of Clement's. Clement's Addition proper is the one surviving block that staved off the bulldozers and wrecking balls of the mid-70 that made way for the 1976 Winter Olympics Housing. It's also often lumped in with another historic Denver neighborhood: Uptown.

Where It Is: Southeast of Lower Downtown between 20th and 22nd Streets, from Tremont Place to Glenarm Place.

What's Nearby: Benedict Fountain Park, Curtis Park, Arapahoe Square, Ballpark, Central Business District, LoDo, Park Avenue Addition, and numerous lightrail stations. Also theThomas Hornsby Ferril House on 2123 Downing Street, now home to the Lighthouse Writers Workshop and formerly other fine nonprofit organizations in service to Denver and its people. (Ferril was Colorado's Poet Laureate from the late '70s until his death in 1988.)

What you'll find in housing: A new 32-story luxury high-rise at 1950 Welton Street, Historic single-family homes, Historic office conversions, Brand-new, one-of-a-kind brownstones at 2137 Glenarm Place, and more.

There's a tendency when in Denver to look west. It's where the natural beauty of the mountains are, which is still the way that some residents figure out which cardinal direction they're driving. During the daytime, that it. But there's the other side of Denver, the east side, and one of those sections of Denver that's east of center is an historic and celebrated part of Denver known as Park Hill.

Park Hill, hemmed in by Colorado Boulevard on the west, East Colfax Avenue on the south, Quebec Street on the east, and East 52nd Avenue on the north, is often further dissected by the City and County of Denver into three administrative neighborhoods: South Park Hill, North Park Hill, and Northeast Park Hill. Montview Boulevard and Monaco Parkway are main thoroughfares, recognized by their wide lanes and tree-lined medians. And for those of you who remember when Denver's airport was a little closer to downtown, you know that Park Hill as the close, older neighbor to the Stapelton community, named for its predecessor, Stapelton International Airport.

It's also three miles from the Central Business District and just a scoot eastward from the Denver Museum of Science and History. It's a top Denver subdivision, served by Park Hill Elementary, Montclair Elementary School, Hill Middle School, Park Hill Middle School, Smiley Middle School, East High School, George Washington High School, and others. Today, the Park Hill neighborhood, a top Denver suburb holds a median price of $427,000, with a Minimum price of $99,900, and a maximum price: $1,925,000.

Neighbors, businesses, and the city and county government often keep in touch with each other by way of The Greater Park Hill Community (GPHC), a non-profit neighborhood organization formed in 1961 which also organizes an annual tour of the historic architecture still found in the area today.

Because Denver's history has taken so many twists and turns--including a gold rush, a silver rush, epic storms, and a big, big fire--Denver's rich tapestry trickles down to its architecture. Most homes utilized a brick construction because the threat of fire was still a very real concern even forty years after the Great Denver Fire of 1863. However, a relatively small inventory of brand new custom homes have been built in the older neighborhoods of Denver; the original home on the lot is remodeled or completely rebuilt from the ground-up.

Among the streets and alleys of Denver's fine homes are many an architectural style. All in one city, you'll find examples of all these:

• Art Deco--Found in the Bonnie Brae and Hilltop neighborhoods, and at the Cruise Room at The Oxford Hotel.
• Beaux-Arts--The Richard C. Campbell Mansion at 909 York Street and The Weckbaugh Mansion on 450 East 9th Avenue, along with some of the homes in the Country Club neighborhood.
• Bungalow--Found in the Washington Park, Congress Park, Park Hill and the West Highlands neighborhoods.
• Colonial Revival--Found at The Thomson Henry Residence at1070 Humboldt, The Tears McFarland House at1200 Williams Street, The Governor's Mansion, the Phipps Mansion, and more.
• Dutch Colonial Revival--Found at the Pearce-McAllister House at1880 Gaylord Street, and in the Cheesman Park neighborhood.
• Denver Square--Found practically everywhere, but particularly in Capitol Hill, Cheesman Park, City Park and West Highlands.
• Spanish Colonial Revival--Washington Park, Polo Club, and Capitol Hill neighborhoods.
• Queen Anne--Found throughout the Curtis Park neighborhood, and at The Molly Brown House at 1340 Pennsylvania.

Other styles found in Denver include:

• International
• Italian Renaissance Revival
• Mission Revival
• Neoclassical
• Prairie Style
• Pueblo
• Tudor and English Revival
• Victorian

The good news is that it's not too late to find your own unique piece of Denver history in one of these Denver neighborhoods. Or in any of these other popular Denver metro areas:

• Washington Park - the community park is filled with fit, young professionals and families of all kinds.
• Park Hill - up and coming neighborhood with a lot of redevelopment activity.
• Cherry Creek - Cherry Creek Mall and world class restaurants are a short walk or bike ride away.
• Stapleton - new construction with a new urbanism theme. Denver proper's newest neighborhood.
• Highlands - less expensive than Wash Park and a great place for the urban professional looking for a single family home.
• Lowry - redeveloped earlier than Stapleton and a bit closer to downtown.
• Bonnie Brae - like to walk to latte AND ice cream? This is your neighborhood.
• Hilltop - hub of building activity, scrape offs, and new custom mansions.
• Crestmoor- right next door to Hilltop in East Denver, this is the hot neighborhood for stately custom homes.
• Country Club - architecturally significant homes on wide tree-lined streets in a central location.
• LoDo- Nightlife out your door, hip urban loft living.
• Capitol Hill - neighborhood of single family homes closest to Downtown Denver and in the center of Denver's live music scene.
• Polo Club - Typical prices 2 - 4 million....enough said.

Happy hunting, and don't forget to stop and smell the many varieties of Denver roses. (But that's another article.)

Known as "Wash Park", the area of Washington Park is nestled between I-25 (to the south), Cherry Creek Drive / East Alameda (to the north), University Boulevard (at the east end), and Downing Street (at the west). It's also been tapped by experts, agents, and buyers as a reliable buy in what has otherwise proven an unsettling market. This desirable pocket of Denver is a great demonstration that a close-up view of the market is usually the more accurate one. When considering markets, use a microscope, not a telescope; national data is unhelpful to the individual home buyer, especially in Colorado, where certain Front Range neighborhoods are famous for bucking wider US trends.

There was a price hike in the Washington Park neighborhood from '06 to '07; about nine percent, with park-side houses taking top dollar. Those streets are South Downing, Louisiana Avenue, South Franklin, and East Virginia Avenue. Off-Washington, the pricier streets are Corona and Ogden.

This longtime best-loved and best-bet neighborhood enjoys a long-standing reputation of good neighbors and good deals. It's got charm, good schools, accessibility to Downtown, and a 165-acre park of, not coincidentally, the same name.

From its incorporation in 1861 to the 21st century, Denver's come a long way, baby. And now that environmental considerations are topping the list of things that make a city great, Denver continues to deliver on its reputation of going the distance. And it's not just the clean water and wilderness areas that make it a Rockies gem.

Construction
In a demonstration of one Denver citizen's commitment to the environment and historic preservation, developer Evan Makovsky will spend almost $1 million to replace 76 windows with energy-efficient ones in the historic Fontius building along the 16th Street Mall. Currently, Denver has 17 LEED-certified buildings, with 73 more in the certification process. That includes Aardex's Signature Center in the Denver West Office Park, perhaps the greenest private office building in the country. The EPA building in LoDo has been awarded LEED Gold level certification, meaning it has been built and designed to be one of the nation's most environmentally friendly buildings. And when the Westfield Development Company finishes its office tower at 1800 Larimer Street, it may be the most energy-efficient building downtown, with state-of-the-art under-floor air delivery and other heating and cooling features. Other notable green building sites on the docket for Denver include the Denver Justice Center, the Leeds School of Business at the University of Colorado, and the Museum of Contemporary Art in downtown Denver.

Transportation
With a tax-funded plan in place to build more light-rail lines to augment the two well-used systems that criss-cross the metro area, Denver leads the nation in terms of new rail projects in dollars per capita. Despite highly-publicized opposition, the public overwhelmingly voted for light rail even before the phrase "carbon footprint" existed. The former Mile High Stadium, demolished in 2002 to make way for the construction of Invesco Field, still lives on in the form of steel reused in tracks for the metro area's T-REX light rail expansion.

Green Homes
Which neighborhood is a good candidate for "green" building? Well, any neighborhood, really, but in particular, it's notable that: Bicycle lanes have been installed along 18th, 19th, Wynkoop, Lawrence, Arapahoe, and Glenarm Streets downtown. In 2005, the pedestrian-bicycle bridge over the Platte River at 3rd Avenue was completed, easing safe travel along the Platte River Trail. In 2006, a ped-bike bridge over I-25 connects North Denver's Highlands neighborhood and downtown Denver. Nearly 30 percent of what used to be Stapelton International Airport are dedicated to parks and open space--over 4,700 acres. Nearby shopping, Energy Star® certified homes, access to public transportation, and other features have made the Stapleton residential development a model for smart growth.

When we see the mountains from our homes and offices, and consider our weekends on the ski slopes or wide open outdoors, it's no wonder Denver is such a green city. Enjoy.

Does Downtown Denver have multiple personalities? Maybe, in a good way. Or you could say that this urban community consisting of eleven distinct neighborhoods is the city that keeps reinventing itself. For the true city slicker, there are high-rises, lofts, and condos, where window boxes are the most you'll have to water. And for the urbanite who takes pride in a stretch of manicured lawn, there are plenty of charming turn-of-the-century homes on tree-lined streets. And it's also the place where the new-new and the Old West make friends. So here are some highlights from a sampling of downtown Denver's finest.

Ballpark--Where you'll find funky warehouses near a major league baseball field, the city's best flea and farmer's markets, and the gambit of homes. Because Ballpark's rail yard history makes it ideal for classic loft conversions, most of the original warehouses have been stripped and updated into converted lofts. New construction and apartments are in abundance, and many more are planned here, guaranteeing continued growth and development.

Capitol Hill--The neighborhood that offers the city's widest range in housing types and price ranges. Think high-rise apartments and single-family homes, apartments in historic mansions, and lofts in renovated commercial buildings. Commercial buildings have been transformed into mixed-use housing projects, and vacant lots have given rise to new construction housing developments.

Curtis Park--Super accessible, it's the oldest residential neighborhood in the city. You'll find single story duplexes next door to recently renovated grand Victorian mansions. Denver's flat-roofed row homes stand proudly beside classic, two-story Denver Square brick houses, and Denver's ubiquitous Queen Anne-style homes with second floor porches.

Central Platte Valley--Denver's new frontier neighborhood between the river and I-25. Made famous by Jack Kerouac when he wrote about the rail yards of Denver in "On the Road" in the 1940s, you'll find red-bricked buildings with ground floor retail and restaurants and residential lofts above. Riverfront Park is the largest planned community in the neighborhood, consisting of condos, lofts, penthouses, townhomes and Brownstones. WaterTower Lofts, Jack Kerouac Lofts in Prospect Place, and several other historic warehouses in the Prospect area northeast of 20th, make themselves useful here.

Golden Triangle--A mixed-use neighborhood located in the middle of it all, between Speer Boulevard, Colfax Avenue and Lincoln Street. Just to the south of Downtown, you'll find both luxurious, modern, and architecturally eccentric choices. Find funky row homes and classic Denver bungalows, and modern high-end condominiums and lofts. It's where the art culture shakes hands with home and hearth.

Highland--It may be over the hill (from downtown) but its citizens aren't. It's the place to be for younger couples and families wanting to own homes close to Downtown. Check out row houses, duplexes, apartments above retail shops, grand Victorian and Queen Anne mansions, and post-WW II era single family detached houses. You'll also find some lofts, condos, studios and small offices in the form of warehouse renovations.

Lower Downtown--Nearly lost forever when many of its historic buildings were demolished in the '70s and '80s, Lo Do is home to million dollar lofts and apartments built above historic buildings, with retail and entertainment below. But the neighborhood also has some new loft buildings, and new construction residential projects are becoming more common as fewer vacant buildings are available for renovation.

Uptown--East of downtown, Uptown is up-and-coming. Denver Squares, Victorians, bungalows, Queen Anne-style houses with second-story porches and much more are Uptown's staples. And it's a little roomier, with more single family homes on tree-lined boulevards that separate sidewalks from the street.

If you're raring to become a part of Colorado's whirring center of culture, commerce, and community, the news is good. Generally speaking, Denver's affordable, with entry level homes starting in the mid $100s. In fact, while home prices in the Denver area slid by 5 percent in January, it's the seventh best-performing city out of 20 nationwide, which is why home buyers and realtors alike are proclaiming that it's a good time to buy in Denver.

It's a rite of spring and early summer in our transient society: from coast to coast, for-sale signs crop up like wildflowers on the lawns of subdivisions. Yard sales in which "everything must go" proliferate. Kids finish another year of school, and await the new school culture and friends they'll encounter in the fall. And it's during the spring home shopping season when a certain kind of homebuyer is more likely to get out into the nicer weather and maybe plans to use his tax refund to fund a down payment. And although parts of Florida, Colorado, California, and other regions of the country don't follow the traditional sale season, historic data from the National Association of REALTORs indicate that April through July outpace the balance of the year in sales.

That means that there is more home inventory and variety then; it also means that all the other fair weather home shoppers are out and about looking at the same properties. The days may be getting longer, but it's no time to dally. It's to those home buyers with a chunk of tax money and are hankering to play horseshoes or Frisbee somewhere other than the kitchen that we highlight some of Denver's popular "Park" neighborhoods.

Washington Park is great, but it isn't the only game in town.  There are the Hilltop and Crestmoor neighborhoods that border Cranmer Park, a popular park with zippy access to the rest of the metro area, but with a quiet, intimate atmosphere. Platt Park, with the shops and restaurants on Pearl Street nearby, is a neighborhood with something for families and socialites alike. It's between the triumvirate of Cheeseman Park, Congress Park, and Denver City Park that you'll find some of Denver's most charming and popular neighborhoods.

The good news is that the Internet has added a nonseasonal dimension to homebuying. Virtual tours, accompanied by a wealth of neighborhood, zip code, school and property value data, can speed along the Denver home searching, browsing, and decision-making processes well before other prospective homebuyers hit town. And that leaves more time for a bike ride, picnic, or barefoot walk in the green, green grass of Denver. Enjoy.

A host of new market indicators were published last week, and....drum roll please...

The Denver Metro real estate market is still flat as a pancake!

Here's the data for the Denver metro market:

• Case/Schiller Index for June 2007: home prices down 1.0% from a year ago, but up 1.6% in 2007.
• Office of Federal Housing for June 2007: home prices up 0.76% from a year ago and up 0.22% from last quarter.
• National Association of REALTORs for June 2007:  Denver's median home price of $255,200 unchanged from a year ago.

So it appears that home prices in the Denver area are within plus or minus 1% from a year ago as of the end of June.

Unfortunately, this is the most recent data available, and the effects of the Liquidity Crisis, aka Credit Crunch, which reached a crescendo in the news in the middle of August, are not reflected in the data.

No question, the Liquidity Crisis was not a positive for the Denver real estate market, and Q3 data will probably show the impact in the form of lower transactional volume. However, I believe that home prices will continue to remain flat, with no more than a 1 or 2% reduction in Q3 and Q4 2007.  Why?  Because the fundamentals that drive demand - jobs, incomes, and interest rates - remain very positive in Denver.

• Unemployment remains very low at 3.9%
• Interest rate on a 30 year fixed loan around 6.25%

Stay posted....we'll see if my predictions are accurate.

You've seen the headlines about the so-called "Bubble Markets" bursting. Home price appreciation rates and sales volume are down in markets such as Phoenix, Las Vegas, and Tampa, according to the recent home sales report released by the National Association of REALTORs (NAR) for Q2 2007.

However, the Denver market is fairing much better than the bubble markets. In fact, since Denver never experienced a "bubble" of rapidly increasing home prices fueled by speculative buyers, there just simply isn't a bubble to burst.

Denver's market is a classic "flat" market. In fact, according to the NAR report, Denver's median home price at the end of Q2 2006 was $255,200, and a year later at the end of Q2 2007, the median price remains exactly the same, $255,200. A market cannot get much flatter than that!

The number of homes that have sold in the Denver area has remained relatively flat from last year as well, increasing by a modest 2.68% through the end of July according to Metrolist, the Multiple Listing Service for the Denver Metro Area.

It is interesting to note that Denver could now be considered a bargain for housing when compared to other cities in the West that experienced a large run-up in home prices in the last 5 years.

For example, in January of 2002, the S&P/Case-Schiller Home Price Index for Phoenix was 111.6 and 121.3 for Denver. Five years later in January of 2007,the S&P index for Phoenix had skyrocketed to 220.2, whereas Denver had only moderately increased to 135.9, making Phoenix a much more expensive city to call home.

This leads me to believe that Denver, and Colorado in general, offer a relative bargain for today's home buyers, especially when you factor in the high quality of life the state has to offer.

Exposition, Mississippi, South Steele and University are the streets that have hemmed in Bonnie Brae, the name of the neighborhood that means "Pleasant Hill" in Gaelic, since the 1920s. Among its curvy streets, reminiscent of the Scottish villages that inspired them, is a circular central park, and an atmosphere as charming as its real estate.

Born in the roaring '20s, Bonnie Brae enjoyed an initial growth spurt, followed by some stunted growth until the mid-'30s, when the development of Ellipse Park gave home builders and buyers their second wind. The neighborhood is a living, 3-D hieroglyphic of Denver's own coming of age story, with some of the most interesting architecture in the city, including some well-known examples of International and Art Moderne styles, as well as Cape Cod, English Tudor, and ranch-style homes.

Today, Bonnie Brae is an old neighborhood with new blood. The Bonnie Brae Tavern on South University, open since 1934, is just a brisk walk from a sushi bar. The strip is a popular stop for tourists, University of Denver students, and locals; the median age in Bonnie Brae is 37, making for a comfortable social scene for just about everyone.

But if Bonnie Brae is one of the most sought-after neighborhoods in Denver for what's in it, what's around it seals the deal. What's around it? Just about everything. The Cherry Creek Mall and Washington Park are just a quick drive or bike ride away, as is the Denver Country Club and the amenities that scale the distance between parks and recreation and fine dining. The median home price in Bonnie Brae is in the mid- to upper-700s, a steal compared to sister neighborhoods Country Club and Polo Club. Its proximity to Colorado Boulevard makes reaching I-25 a breeze--without the fishbowl effect that too often accompanies neighborhoods with lickety-split access to major highways. And get a load of the views.

Take a spin by COhomefinder and then one through Bonnie Brae, making sure to take your time, enjoy the strip with an ice cream sundae, a bistro lunch, or a picnic in the park, and soak up the pleasantries of Denver's queen of the hill.

When Money Magazine ranked Colorado among their top ten places to live in 2006--with Ft. Collins, CO taking first place on their cities list--it's obvious that things are looking up in Colorado. That's good news for those of us who've enjoyed the luxury of long-time home ownership in Denver and its surrounding areas. But the even better news is that, although Colorado's economy, job market, and general well-being are looking way up, there are plenty of neighborhoods where real estate prices aren't.

Take for example Money's number one city, Fort Collins, which CNN Money also tapped as one of its "Best Places to (Still) Invest." It's Ft. Collins where you'll likely find a new 4 bedroom, 4 bathroom single family home in the low 300s, although with Ft. Collins's median home price at $212,000 in 2006--vs. the "best cities" median of $259,600--there are plenty of homes for sale below the 300 mark. To compare nationally, top city Fairfield, Connecticut lists a median home price of $565,000 and Colorado neighbor Scottsdale, AZ lists its median at $370,000.

A median home price in Metro Denver of about $252,000 means that the region's housing stock is now more affordable than other competitive markets. There's Westminster for example, also ranked at 24th in the Money "best places" poll, where it's easy to find 3,000 square foot homes built in 2006 and 2007 priced in the mid 300s. COhomefinder can help you find your own Colorado gem, a home in close proximity to the premiums Colorado neighborhood have to offer without all the sticker shock. A median home price in Metro Denver of about $252,000 means that the region's housing stock is now more affordable than other competitive markets. There's Westminster for example, also ranked at 24th in the Money "best places" poll, where it's easy to find 3,000 square foot homes built in 2006 and 2007 priced in the mid 300s. COhomefinder can help you find your own Colorado gem, a home in close proximity to the premiums Colorado neighborhood have to offer without all the sticker shock.