Tag Archives: Downtown

Epi Central: Co-Work arrives in Downtown Colorado Springs, and of course, it took Hannah to do it

A quick, but big, kudo to business partner Hannah Parsons.

Hannah Parsons

Hannah was just featured this week in the Colorado Springs Business Journal for her entrepreneurship, and practical action of opening the downtown’s first co-working space. They do offer advanced degrees in entrepreneurship, and that was Hannah’s MBA focus. A participating member of our unique and charming downtown, Hannah is consistently looking for opportunities to take “quaint” and make that “thrive”. Next week, the “downtown offices of Pikes Peak Urban Living” become official, as we join other entrepreneurs at Hannah’s Co-Work Venture, Epi Central in the 400 block of Tejon. To the jealousy of the real estate community, Epi Central is across the street from PPAR.

Part of the real estate future shock is that money is rarely in the brokerage. The money isn’t even in the dirt. The money is in the ideas. The money is in the process. The money is in the relationship. The money is in the tribal leadership. Yep, real estate needs to start acting like something buzz-worthy. I have many times referred back to Seth Godin, from Purple Cow to his address to the National Association of REALTORS in 2007. Seth saw the end of business as REALTORS knew it in a single cursory glance and seeing all the frailties, and all of the unimaginative reinventions it was avoiding. Among Seth’s best pieces of advice was to start a blog. That probably made the majority of the old guard real estate practitioners in attendance roll the eyes, but that’s because they missed the sentence that came after “start a blog”. That sentence was “in order to organize your tribe.” You can’t glaze over that sentence. You can run like hell away from it, but you can’t glaze over it.

In other words, you can blog about real estate. You can regurgitate facts. You can do “market reports”. You can showcase the trim on a house. You can talk about the walkability of a neighborhood. You can check in with Foursquare. You can become the mayor of a coffee shop. It’s all nice. It might be helpful. But what about being a thought-leader? What about building a permission asset?

At the core of it, that’s what Co-Working is all about. That’s why Hannah is so cool. Hannah is about building permission assets. She is about sharing. She’s about strange bedfellows. She’s about attorneys sharing space and white board with social media marketers, putting designers and architects and gardeners in the same room, and giving them lots of fun seats and flex space to spur on their creativity. She’s about being lean, but not mean, practical while still encouraging depth.

Entrepreneurs don’t take instructions very well. They’re too damn inquisitive. They learn by doing and sometimes, that means ignoring the instruction manual. It doesn’t mean throwing out the rules or bypassing ethics, in fact, on the contrary. It just means that business as usual should always be questioned. Co-work is kind of like a thoughtfully inexpensive Montessori for professionals. Coming from me, who has given five years to Giving Tree Montessori (yes, the Indy’s best childcare/preschool two-years running), that’s a compliment.

Hannah: way to go. Thanks for questioning business as usual. Again.

The Relevance of “New” to Seller’s in Today’s Market

Through May 2010, Single Family Building Permit activity was 45.8% ahead of the same pace in 2009. June 2009 was the month that single family permitting actually returned to life, so the first five months of this year presents a very valid point of reference for one of the major ramifications effecting the marketplace: the value of new.
Actively marketed sellers need to examine for themselves what the same dollars might buy somewhere else in El Paso County. This might seem ridiculous and foolish: why compare downtown Colorado Springs to Lorson Ranch in Fountain? Why compare Peregrine to Pine Creek? How can Falcon in the $300,000’s compare to Gleneagle? Would an appraiser ever compare these two areas? Never. But is a buyer? Maybe. Okay, probably. Okay… most likely. Hey, if you wanted to sell a ’99 Benz for $10,000, and a buyer could get a 2006 Honda Accord for the same price and mileage… that’s how consumers tend to think.
There are 515 homes for sale from $225,000 to $250,000. The average sales price market-wide in June improved to $237,000 and change. So why is there an 8 month backlog of sell-time in this price-range? Consider: Classic Homes is no longer the city’s largest builder. The same company that produced more than 1200 homes in 2005 now has less market share than two companies that did not even exist in the market in 2004 (Journey Homes and St. Aubyn Homes). These two builders, along with Challenger Homes, account for 1/3rd of the marketshare among new home builders. Classic is now fourth. These Top Three builders are all producing homes in the $200,000’s (and no, that’s not the advertised “from the $200K’s… those are closed values). No, they’re not in Oak Valley Ranch, Divine Redeemer or even Springs Ranch areas where homes in this price range should be flying off the shelf (but aren’t)… but it begins to explain why resale homes are struggling to sell from $200,000 to $300,000.
Classic Homes builds entry level homes, but their average sales price is $375,000. The new-build focus from 2002 to 2006 shifted to a higher and higher price bracket due to the ready availability of cheap credit, especially jumbo credit. After the market freefall and credit crunch, the game had to change dramatically. While Saddletree/Symphony is still making a profit, and Keller, Vantage, Acuff and Classic all seem to have “survived” the downtown, the growth is not in their price range: it’s in the average-priced-home available with a two car garage, new HVAC efficiencies and shiny new appliances.
Of severe significance: average now equates to a custom experience for the home buyer. At average price… they can pick their colors; their trim; their flooring; their appliances; their landscaping. Double that average price point, and how special does a resale home have to be when there are granite slabs to be chosen, wet bars to be designed, 16″ tile to be selected for the two-person shower? In the higher price brackets, a new built $500,000 home is not the same as a new built home from four or five years ago. First, it is probably energy-star rated. The added insulation and HVAC inspections cost more money. The counters are probably slab granite. The appliances are probably standard stainless. The lot has probably been discounted. It might have a standard basement finish. The builder has trimmed work forces and had to trim their profit margin on the building. This all adds up to a property that probably offers 10% more value than the same product purchase three or four years ago.
Add to that money leverage. Every one percent drop in interest rate increases a buyer’s buying power by 11%. Consider this crazy reality: the market has fallen in value 5% to 20% depending on neighborhood. It is fair to say in general terms that prices are about 8 to 10% less than they were two summers ago. Rates at that time were 6%. Rates today are as low as 4.5%. That means buyers have 25% MORE BUYING POWER than they did just two years ago.
Add to that the fact that buyers still control the market. A balanced market has 6 months of inventory: neither buyers nor sellers control the market at 6 months. Below six months, sellers control the market and appreciation is likely. Above six months, buyers control the market. Appreciation is less likely due to increased supply. Buyers correspondingly hold out for… MORE.
That “MORE” that buyers hold out for is critical. They are operating in a whole other realm of reality and possibility right now with 25% more buying power this summer than two summers ago. With that come heightened expectations. The first place that is made manifest is in the house itself. Yes, that lot might have value. Yes, that location might have value. But buyers simply will not tolerate: outdated carpet and paint; 80’s/90’s fixtures; lack of cleanliness; lack of snappy curb appeal; prices that are even slightly out of line.

Sure, it’s the Great Recession. But take one look at the Promenade Shops at Briargate parking lot any day of the week and you’d never know. New and New-On-Sale are today’s consumers two favorite categories.

After the Tax Credit. What now?

The first listing I sold was 1620 N. Nevada in March, 2000. After pricing the house at $325,000, I looked up the public record to see what the seller paid for it back in 1989: $88,000. 370% appreciation in 11 years!

A present downtown listing

Was that lovely 1898 Victorian Grand House shiny and new in 2000? Or was the value of that property something established by something fundamental? Examples: there are photos of it in the Pioneer’s Museum; Old North End dirt has been considered valuable for 125 years. Why is that house now today probably worth $500,000? Hint: it has nothing to do with the kitchen counters!

I predicted that the market would hit 9200 sales this year. That is exactly the pace the market is on. But I no longer think the market will hit that number. Statistically, fewer homes sold the first four months of 2010 then in 2008. Anyone care to remember the real estate bliss of 2008? I had a moderately bullish forecast in January due to supply and demand trends that no longer exist. The market is better now than it was in 2008 or 2009: but those were lousy years. Comparative analysis requires thoughtful honesty. If the market was actually “improved”, the market would have less than 6 months inventory right now which would catalyze summertime appreciation. It is at 6.5 months despite a massive 1500+ under contract properties. With the 31% increase in listings year to date, it might not get below 6 months this year . More at The Stat Pack.

I financially benefited from the tax credit. This has personally been one of my most successful years in the business. Yet it has also been the most puzzling. 1.) A great number of the listings that soared onto the market this spring were trying to capitalize (too late) on the move-up tax credit. Will these people stay on the market without a $6500 government incentive? 2.) Shiny and new is always popular, but it is also always depreciating. Why oh why is there a 15 month supply of housing of pre-1950 housing $200,000 and up downtown, while there is only a 5.5 month supply of housing of 1998 or newer over $200,000 in Powers? Yes, there are more buyers for properties in PWR than CEN, but we’re comparing 77 active listings downtown to 275 in PWR, and still there is 1/3rd the months of inventory out east? Consumers are habituated to buying disposable things, like a flat screen TV, a Starbucks, or a car with a loan. This behavior seems to be alive in real estate purchasing. I am guessing that the “sale” aspect of the tax credit encouraged it.

The real value of buying in 2010 is to leverage REMARKABLE. Prices went down for 3 years. Buying power is  25% better than it was in 2007 when you account for pricing drops and money leverage. This opens up a lot of 1620 N. Nevada scenarios for a lot of people.

Location is the first and greatest real estate fundamental. Prime location areas have not sold well year to date. It’s not just Broadmoor and upper Peregrine, but downtown, Manitou, Old Colorado City and places where the value is in the dirt.

If you are choosing to sell or buy, qualify your “WHY.” Why are you doing this?  If you are selling and can seize other opportunities, then get it over with. If you are buying, what’s the most remarkable area you can afford?

Real estate isn’t fair; never is, never was. Removing the carrot from before the horse helps consumers more honestly assess their wants and needs.

Where to Buy 2010, Part III: Green Light Data Edition

Wolf Ranch 2004 2005 2006 2007 2008 2009 Avg
Sold 28 111 84 80 57 52 69
Avg Price 305970 348121 394526 396895 367503 368180 363533
Expired/Failed 16 10 20 55 65 41 35
Total Units 44 121 104 135 122 93 103
Probability Sale 64% 92% 81% 59% 47% 56% 64%
Listed 30
Avg. List 371416
Skyway 2004 2005 2006 2007 2008 2009 Avg
Sold 40 43 34 25 8 26 29
Avg Price 249746 273427 333679 305375 333987 243388 289934
Expired/Failed 28 21 15 21 18 22 21
Total Units 44 64 49 46 26 48 46
Probability Sale 64% 67% 69% 54% 31% 54% 57%
Listed 11
Avg. List 331054
Pinecliff 2004 2005 2006 2007 2008 2009 Avg
Sold 23 24 13 27 15 13 19
Avg Price 345293 358016 367884 406895 384080 325053 364537
Expired/Failed 12 7 6 16 15 13 12
Total Units 35 31 19 43 30 26 31
Probability Sale 66% 77% 68% 63% 50% 50% 63%
Listed 7
Avg. List 389314
Cordera 2004 2005 2006 2007 2008 2009 Avg
Sold - - 21 13 18 30 21
Avg Price - - 402201 427005 417182 388590 408745
Expired/Failed - - 0 6 15 16 9
Total Units - - 21 19 33 46 30
Probability Sale - - 100% 68% 55% 65% 69%
Listed - 19
Avg. List - 438845
Downtown 2004 2005 2006 2007 2008 2009 Avg
Sold 137 131 156 92 108 86 118
Avg Price 186939 198821 198488 210545 196956 187402 196525
Expired/Failed 109 76 80 85 78 41 78
Total Units 44 207 236 177 186 127 197
Probability Sale 64% 63% 66% 52% 58% 68% 60%
Listed 54
Avg. List 237723
Fairfax 2004 2005 2006 2007 2008 2009 Avg
Sold 143 150 140 120 99 67 120
Avg Price 215679 251518 252542 250635 237804 247789 242661
Expired/Failed 50 42 65 72 65 63 60
Total Units 193 192 205 192 164 130 179
Probability Sale 74% 78% 68% 63% 60% 52% 67%
Listed 29
Avg. List 247096
Gatehouse 2004 2005 2006 2007 2008 2009 Avg
Sold 111 128 91 79 61 58 88
Avg Price 249826 269487 281448 287350 276485 271733 272722
Expired/Failed 59 35 30 42 53 44 44
Total Units 170 163 121 121 114 102 132
Probability Sale 65% 79% 75% 65% 54% 57% 67%
Listed 11
Avg. List 274372
Vista Grande 2004 2005 2006 2007 2008 2009 Avg
Sold 101 116 113 94 78 59 94
Avg Price 168762 187375 186714 181848 168075 162927 175950
Expired/Failed 53 30 54 59 65 41 50
Total Units 44 146 167 153 143 100 144
Probability Sale 64% 79% 68% 61% 55% 59% 65%
Listed 16
Avg. List 237325
Summerfield 2004 2005 2006 2007 2008 2009 Avg
Sold 51 53 44 55 24 18 41
Avg Price 306615 331506 392408 365449 341415 317113 342418
Expired/Failed 13 13 15 28 19 19 18
Total Units 64 66 59 83 43 37 59
Probability Sale 80% 80% 75% 66% 56% 49% 70%
Listed 3
Avg. List 354996
Wedgewood 2004 2005 2006 2007 2008 2009 Avg
Sold 29 38 48 21 17 7 27
Avg Price 247500 277220 292065 264229 252552 281877 269241
Expired/Failed 19 10 11 8 10 7 11
Total Units 44 48 59 29 27 14 37
Probability Sale 64% 79% 81% 72% 63% 50% 72%
Listed 3
Avg. List 233250
Sable Chase, Misty Meadows, BRI 2004 2005 2006 2007 2008 2009 Avg
Sold 95 119 90 87 55 56 84
Avg Price 184598 200240 206681 210392 197909 192956 198796
Expired/Failed 41 32 38 43 35 30 37
Total Units 136 151 128 130 90 86 120
Probability Sale 70% 79% 70% 67% 61% 65% 70%
Listed 12
Avg. List 211250
Wagon Trails 2004 2005 2006 2007 2008 2009 Avg
Sold 194 197 133 109 97 82 135
Avg Price 235039 244862 252418 251508 239808 233896 242922
Expired/Failed 133 67 91 91 116 47 91
Total Units 327 264 224 200 213 129 226
Probability Sale 64% 75% 59% 55% 46% 64% 60%
Listed 30
Avg. List 296418
Pinon Valley 2004 2005 2006 2007 2008 2009 Avg
Sold 53 52 54 45 35 37 46
Avg Price 229440 229645 240097 237371 250062 227110 235621
Expired/Failed 25 15 14 23 14 8 17
Total Units 78 67 68 68 49 45 63
Probability Sale 68% 78% 79% 66% 71% 82% 74%
Listed 5
Avg. List 237840
Stetson HIlls 2004 2005 2006 2007 2008 2009 Avg
Sold 203 313 355 297 297 268 289
Avg Price 194051 209000 227478 240000 235572 222201 221384
Expired/Failed 124 125 172 272 232 174 183
Total Units 327 438 527 569 529 442 472
Probability Sale 62% 71% 67% 52% 56% 61% 61%
Listed 75
Avg. List 259399
Springs Ranch 2004 2005 2006 2007 2008 2009 Avg
Sold 234 299 244 155 118 123 196
Avg Price 222269 235000 246000 237478 218691 217583 229504
Expired/Failed 116 110 120 163 133 71 119
Total Units 350 409 364 318 251 194 314
Probability Sale 67% 73% 67% 49% 47% 63% 64%
Listed 54
Avg. List 245237
Norwood 2004 2005 2006 2007 2008 2009 Avg
Sold 141 118 104 81 62 54 93
Avg Price 195322 201336 213976 215038 208335 201727 205956
Expired/Failed 94 52 57 44 50 30 55
Total Units 44 170 161 125 112 84 148
Probability Sale 64% 69% 65% 65% 55% 64% 63%
Listed 13
Avg. List 220623
Rockrimmon 2004 2005 2006 2007 2008 2009 Avg
Sold 152 133 110 103 69 54 104
Avg Price 308490 320571 352425 366151 344536 311085 333876
Expired/Failed 101 46 54 84 77 60 70
Total Units 253 179 164 187 146 114 174
Probability Sale 60% 74% 67% 55% 47% 47% 60%
Listed 26
Avg. List 388530
Contrails 2004 2005 2006 2007 2008 2009 Avg
Sold 109 99 89 67 46 41 75
Avg Price 200913 216404 222565 230572 217874 215608 217323
Expired/Failed 48 16 23 46 25 21 30
Total Units 44 115 112 113 71 62 105
Probability Sale 64% 86% 79% 59% 65% 66% 72%
Listed 11
Avg. List 220427
Mesa Heights/PV 2004 2005 2006 2007 2008 2009 Avg
Sold 44 58 44 24 33 22 38
Avg Price 198826 214456 226259 252070 201974 224381 219661
Expired/Failed 15 25 23 14 18 11 18
Total Units 44 83 67 38 51 33 55
Probability Sale 64% 70% 66% 63% 65% 67% 68%
Listed 15
Avg. List 247040
Mesa Heights/PV 2004 2005 2006 2007 2008 2009 Avg
Sold 44 58 44 24 33 22 38
Avg Price 198826 214456 226259 252070 201974 224381 219661
Expired/Failed 15 25 23 14 18 11 18
Total Units 44 83 67 38 51 33 55
Probability Sale 64% 70% 66% 63% 65% 67% 68%
Listed 15
Avg. List 247040