I wanted to share this awesome virtual tour I'm using on this new listing in Thornton, CO. Check out the link and let me know what you think!
One of the more well-known methods of real estate investing involves buying a house at an under-market price (usually because the house needs significant repairs), completing a smart and cost-efficient renovation, and then selling the home at a premium. This is commonly known as "fix-and-flipping".
Where are the deals? Where do you start? How do fix-and-flip results compare from one neighborhood to another? What kind of gross margins should you expect in certain areas?
I'd start with this very helpful map. It provides a great overview of the area for current and future investors. I have a map for the entire Denver metro area, but you'll see that I've zoomed in to one area to briefly explain the important elements for you.
Let's look at the "Old Littleton" area. Over the last 3 years, here's what we know about this spot:
1. A total of 8 properties were fix and flip properties.
2. The average purchase price of these 8 properties was $187K.
3. The average sale price of these 8 properties was $337K.
4. As a result, the average gross margin was $150K. It's important to remember that this does not indicate the investors' profits earned - this doesn't take into account the cost of the rehab that was done on the home to sell it at that price.
Do you have a specific area you'd like to learn about? Feel free to message me, contact me at 303-929-7844, or email me at Drew@mynewera.com. I'd be happy to help.
All the best,
Ever wonder how the current market inventory compares to times past?
The following picture provides great historical context of Available Home Inventory vs. Number of Sold Homes across the Denver metro area over the last 8 years.
The yellow line represents the number of homes for sale at the end of that particular time period. The blue line represents the actual number of homes sold during that same period.
Some Key Observations:
1. The far left side of the chart highlights the tremendous amount of inventory on the market (almost 29,000 homes!), largely due to the high number of bank foreclosures. With such high inventory, prices were depressed (law of supply of demand).
2. The number of homes sold each year was surprisingly steady during the economic downturn. It was lower on average than in recent years, but not to the extent that one might have assumed. In fact, on average there are around 13 home closings per 1000 people. In recessions, it's around 11. In the boom times, it's around 15. That's not a big variation!
3. According to the chart, home sales have been generally trending upward since 2012. This can be largely attributed to an improving economy (one of the best in the country) and to the huge influx of people to the area.
4. We didn't arrive at this low inventory situation overnight. It took almost a decade to burn off all of the excess bank inventory.
5. What does this mean for a buyer or seller? As long as inventory is tight overall, buyers will have to be prepared to compete to win a home. Sellers will generally still have the upper hand.
Thanks again for reading! And as always, feel free to contact me with any of your questions or thoughts.
These are very special times in the metro Denver real estate market. Home prices are up, rents are up, inventories of homes both for sale and rent are low and our future outlook continues to look great. We talk about some aspect of real estate every month in this newsletter, but sometimes I think it can be hard to realize just how terrific our real estate market is without taking a step back and looking at the big picture. A great way to do this is to check out the recent press headlines and review the real estate news about our local market. In a word, it is amazing!
DENVER COUNTY HOME SELLERS MAKE OUT BIG IN Q3
Denver Post | 11/5/15
"Home sellers in Denver County made out big in the third quarter, where sellers sold for an average of a 41.5 percent gain over what they originally paid. That's according to research conducted by California housing data company RealtyTrac, which placed Denver County at No. 6 in the country for highest percentage sales gains. In September, RealtyTrac said Denver home sales were on pace to set a 10-year record, and median selling prices in Denver set an all-time high this summer."
CONDOS APPRECIATING MORE THAN SINGLE-FAMILY HOMES IN DENVER
Denver Business Journal | 10/27/15
"Condos in Denver have appreciated nearly 20 percent over the past year, which is nearly four times the national average and well above the single-family home appreciation rate in Denver. According to Seattle online real estate company Zillow, single-family homes in Denver have appreciated 15.9 percent over the past year, while condos have appreciated 19.7 percent. The yearly 15.9 percent increase in Denver single-family home appreciation was the biggest jump in the country while the 19.7 percent annual increase in condo appreciation was the second-biggest jump in the country, trailing only the Dallas-Fort Worth area, which recorded a 20.1 percent annual increase in condo appreciation."
HOW DOES DENVER RATE AMONG NATION'S BEST PLACES TO OWN A HOME?
Denver Business Journal | 11/9/15
"Where's the best place in the country to own a home? Right here in Denver, according to a new report. Porch and Redfin created the new list, based on a survey of about 10,000 U.S. homeowners in 67 markets, and using criteria including: healthy living, commute, climate, educational opportunity, economic opportunity, resident satisfaction, walkability, security and safety, real estate confidence, and tax fairness. Denver did the best, ranking No. 1 in the country, in the categories of health living and climate, and coming in No. 2 in resident satisfaction."
DENVER REAL ESTATE MARKET GROWTH IS FOURTH HIGHEST IN U.S, SAYS NEW REPORT
Denver Business Journal | 10/26/15
"The Denver area residential real estate market experienced the fourth-highest increase in a new housing report. The Freddie Mac Multi-Indicator Market Index (MiMI) uses four indicators to track an area's residential real estate growth, including home purchase applications, payment-to-income ratios (changes in home purchasing power based on house prices, mortgage rates and household income), proportion of on-time mortgage payments in each market, and the local employment picture."
There wasn't room in this post to include all the recent articles, and the good news just keeps coming! For additional articles highlighting Denver real estate news, please contact me.
If you're interested in learning about the real estate market and how you might take better advantage of it, whether you're looking to buy, sell, or invest, feel free to give me a call. I'd love to sit down with you, answer all your questions, and show you what's happening in our incredible real estate market!
And as always, thank you for reading each month! I truly appreciate you!