Putting and Offer on Townhome in Booming Area
 

Hello,

I have been looking around to buy a place in the Highlands area
(Denver, CO) for the past few months. I plan to put an offer down on a
place in the next day or two but had a question for the experts. There
is so much new residential construction going on in the area. I'm not
sure what to make of it. I've been looking in the townhome market and
there are quite a few planned townhomes going in and hundreds of condo
units going up. On one hand, I see the surrounding property value
increasing but on the other, I'm concerned about resale 2-5 years from
now with all of the new places going in. Just wondering what the take
was on the Highlands (specifically E. Highlands) and if it is a good
investment to buy new construction where so much new has already gone
up and much more is planned.

Thanks for your insight.

Putting and Offer on Townhome in Booming Area
 

writes:

Hello,

I have been looking around to buy a place in the Highlands area
(Denver, CO) for the past few months. I plan to put an offer down on a
place in the next day or two but had a question for the experts. There
is so much new residential construction going on in the area. I'm not
sure what to make of it. I've been looking in the townhome market and
there are quite a few planned townhomes going in and hundreds of condo
units going up. On one hand, I see the surrounding property value
increasing but on the other, I'm concerned about resale 2-5 years from
now with all of the new places going in.

As well you should be.

Just wondering what the take was on the Highlands (specifically
E. Highlands) and if it is a good investment to buy new construction
where so much new has already gone up and much more is planned.

Thanks for your insight.

There are a couple schools of thought on this. If the market is
robust, new construction is thought to be a good investment,
particularly if you get in on pre construction pricing. The builder
enforced price increases make your home automatically appreciate.

On the other hand, when you go to sell if they're still building in
the area, you're competing with other builders and all their upgrade
and financing incentives, etc.

If you have an old property in an area suddenly flooded by new, if
they have features you don't have and you look dated by comparison,
you're gonna take longer to sell, and/or sell for less.

Right now the overall market is pretty tepid so I would be careful...
Any chance you can drum up some local advice?

Best Regards,
--
Todd H.
http://www.toddh.net/

Putting and Offer on Townhome in Booming Area
 

Thanks for the input. I have posted to a local forum that can probably
give some good advice as well. These new places are pretty darn modern
and contemporary. They started listing at $460k. There are five
units. One sold for $455k and after a price drop, another sold for
$430k. They dropped again to $399K and one sold this past weekend.
There are now two left and I think we are going to put an offer in for
one (after a second review today) for $370K. They are identical units,
so I feel good that someone out there would pay $60k more than what is
being asked right now but still worried about all of the new
construction going in around us.

Thanks again for any additional thoughts.

Todd H. wrote:
writes:

Hello,

I have been looking around to buy a place in the Highlands area
(Denver, CO) for the past few months. I plan to put an offer down on a
place in the next day or two but had a question for the experts. There
is so much new residential construction going on in the area. I'm not
sure what to make of it. I've been looking in the townhome market and
there are quite a few planned townhomes going in and hundreds of condo
units going up. On one hand, I see the surrounding property value
increasing but on the other, I'm concerned about resale 2-5 years from
now with all of the new places going in.

As well you should be.

Just wondering what the take was on the Highlands (specifically
E. Highlands) and if it is a good investment to buy new construction
where so much new has already gone up and much more is planned.

Thanks for your insight.

There are a couple schools of thought on this. If the market is
robust, new construction is thought to be a good investment,
particularly if you get in on pre construction pricing. The builder
enforced price increases make your home automatically appreciate.

On the other hand, when you go to sell if they're still building in
the area, you're competing with other builders and all their upgrade
and financing incentives, etc.

If you have an old property in an area suddenly flooded by new, if
they have features you don't have and you look dated by comparison,
you're gonna take longer to sell, and/or sell for less.

Right now the overall market is pretty tepid so I would be careful...
Any chance you can drum up some local advice?

Best Regards,
--
Todd H.
http://www.toddh.net/

Putting and Offer on Townhome in Booming Area
 

wrote:
I have been looking around to buy a place in the Highlands area
(Denver, CO) for the past few months.

I drove through Denver last month, the first time in years. The
construction boom south and west of the city is just incredible.
Mile after mile of wall to wall townhouse and condo developments,
all very new. Some not yet completed. Hung with huge banners
yelling LEASING NOW etc. Are you *really* confident it is not a
bubble on the verge of collapsing?

Even if the market were rock solid, I wouldn't want to live out
there. There's nothing out there but housing. No local work
(unless you work from home) and no place you can go except in a
car.

Una

Putting and Offer on Townhome in Booming Area
 

Putting and Offer on Townhome in Booming Area
 

On 5 Jan 2007 11:42:45 -0800, wrote:

Hello,

I have been looking around to buy a place in the Highlands area
(Denver, CO) for the past few months. I plan to put an offer down on a
place in the next day or two but had a question for the experts. There
is so much new residential construction going on in the area. I'm not
sure what to make of it. I've been looking in the townhome market and
there are quite a few planned townhomes going in and hundreds of condo
units going up. On one hand, I see the surrounding property value
increasing but on the other, I'm concerned about resale 2-5 years from

Ding ding ding!! If two years is even a concern, you need to rent,
not buy. The rapid increases in property value appear to be over for
a while, and if you aren't planning to be there at least five years,
you're likely to get your lunch eaten.

Putting and Offer on Townhome in Booming Area
 

Thanks to everyone for the feedback. The area is a great location. It
not the suburbs by any means and there is plenty to walk to. That was
one of the requirements when looking for a place to buy. Denver is
going the way of suburban sprawl, but this location is walking distance
to downtown and also an area called the Highlands with plenty of local
non-chain retail.

The same place next door (5 units) sold for 55K more than the counter
bid a month ago. Isn't that a good sign? We did put an offer down for
30K less than asking price and the counter was 10K less than asking
price.

We very well could stay there more than 2 years. I was just taking a
random guess. This is more of a starter home since we have never owned
before.

So the options are to buy a new place or buy an older (1905) remodeled
place.

Thanks again.

Putting and Offer on Townhome in Booming Area
 

writes:

Thanks to everyone for the feedback. The area is a great location. It
not the suburbs by any means and there is plenty to walk to. That was
one of the requirements when looking for a place to buy. Denver is
going the way of suburban sprawl, but this location is walking distance
to downtown and also an area called the Highlands with plenty of local
non-chain retail.

The same place next door (5 units) sold for 55K more than the counter
bid a month ago. Isn't that a good sign? We did put an offer down for
30K less than asking price and the counter was 10K less than asking
price.

We very well could stay there more than 2 years. I was just taking a
random guess. This is more of a starter home since we have never owned
before.


You're in a very emotional time, and are probably quite caught up in
the excitement of buying your first place, and don't really want to
hear bad news keeping you from the finish line.

I've been there. But I totally got my ass handed to me on the first
house I bought in an area I wasn't terribly familiar with. In the
cyclical Texas real estate market 2 years later, I found myself with a
10 year old house that when I went to sell, was surrounded by new
subdivisions. Where I was from, a 10 year old house was considered
very very new, but in this booming yuppie outer suburb area, it was
extremely difficult to compete on the market with the builder's
offerings and their financing incentives, and the gleam of new houses
comparably priced. Market time was a year and it was hell.

I bid you caution and hope you don't make a similar mistake.





So the options are to buy a new place or buy an older (1905) remodeled
place.

Thanks again.


--
--
Todd H.
http://www.toddh.net/

Putting and Offer on Townhome in Booming Area
 

Okay, that neighborhood. Well, I would go for an older house, but
that's my personal preference.

Re price, if you like the house and the neighborhood, and you can
afford it, and you plan to stay there, go for it. Current prices,
and whether you get a good deal, will be insignificant issues in
the long run.

Anyway, what you describe doesn't sound at all like "booming"...

Una

Putting and Offer on Townhome in Booming Area
 

Thanks again. I don't want to get my ass handed to me by any means but
not sure what other options I have. Before posting, I was pretty
confident with my decisions. I'm glad I'm getting a different
perspective from some members of this topic. I'm just looking to make
the best decision, and from what it sounds like, there is no option
that is favorable.

Here is brief look at what's going on in the area:
http://www.denverinfill.com/big_picture.htm

Thanks

Putting and Offer on Townhome in Booming Area
 

Putting and Offer on Townhome in Booming Area
 

Thanks. I do have a local real estate agent that just focuses on the
two zip codes I'm looking at.

Appreciate all the advice.

Putting and Offer on Townhome in Booming Area
 

Don't use asking price as a benchmark for anything! If you want
to compare, use selling price. If selling price is not public
data in Colorado, you will have to resort to an appraiser. You
already made an offer, yes? Is it contingent on an appraisal?
Your mortgage will be. The appraisal will give you a benchmark,
but again the difference between a good deal and a bad deal is
in how you feel about it, after the deal is done.

I got 3 appraisals on my first house. #1 the appraisal that the
seller ordered before putting the house on the market. I simply
asked for it and the seller simply gave it to me. #2 was my own
order, as the market was in flux. #3 was ordered by the mortgage
holder; I asked the loan officer for a copy and received it for
free. I was *not* entitled to #1 and I got a copy of #3 in
part because "I" paid for it rather than the seller paying for
it. That's a technicality, sort of. The selling price on my
house was significantly below market value, per all 3 appraisals,
so I (the buyer) got a great deal. Right? It's not that simple.
I required the seller to do absolutely nothing to the property
and I paid all closing costs and put up with all the associated
PITA factors. I suspect the seller would gladly have sold the
house to me for even less. On that point I could feel I got a
bad deal, if I wanted to, but I don't.

Probably the only people who aren't happy are other sellers who
got my house as a comp on appraisals of their houses, and buyers
who got it on an appraisal only *after* entering into a contract.

Una