Real Estate Breakfast is eye-opener
Panelists see market revival in south metro Denver area
Panelists at the South Metro Denver Chamber of Commerce’s 18th annual Real Estate Breakfast forecast a happy future for those in the industry, as well as home sellers and the overall south suburban economy.
“Clearly, the real estate market is recovering and strengthening, the residential market particularly,” Sterling Ranch principal Harold Smethills told an audience of about 500 gathered June 20 at Lone Tree’s Marriott Denver South.
South Metro Denver Realtor Association chairwoman Jo Pellegrino Ellis ticked off a list of positive metro-area housing statistics, which showed from May 2012 to May 2013 new listings increased by 21.8 percent, sales by 22.5 percent, median home prices by 8 percent, and the days of buyers pitching successful low-ball offers are ending.
“Total days on the market are down about 38 percent (to) about 47 days,” Ellis said, adding the average changes with location. “Some places in Highlands Ranch, they’re on the market for a number of hours.”
Everitt Real Estate Center director Eric Holsapple echoed some of Smethills’ and Ellis’ optimism, noting that 60,000 new jobs are expected in Colorado in the next year. The bad news?
“People are making less money,” Holsapple said. “I call it the Walmarting effect. Lower-price housing is really in demand. Housing starts are up, but only about 50 percent of where we were in 2006-07.”
Holsapple and Ellis both said the anticipated rise in interest rates isn’t cause for fear, particularly for real estate agents.
“When interest rates start to creep up a little bit, buyers really jump on the market,” Ellis said.
A lack of temporary housing is creating roadblocks for some potential sellers, she said.
“If my house sells in two days, will I have a place to go?” Ellis said. “Temporary housing, six-month leases, now even those are hard to find.”
Smethills said the demand for types of housing is changing, however. The Millennials, also known as Generation Y and the echo boomers, are in their prime real estate buying years, with many singles seeking smaller housing units, while aging baby boomers want homes with main-floor master bedrooms. Meanwhile, a rise in multi-generational housing requires yet another housing type, he said.
“All of this winds up making a large amount of our (existing) real estate obsolete,” Smethills said.
The availability of industrial space in the south metro area is tightening as more businesses move in, Industrial Property Group vice president Jeremy Ballenger said.
“These groups are looking for workforce and quality of life,” he said. “That’s why they’re coming here.”
Smethills advised companies looking for commercial property to carefully consider location.
“Having your commercial/industrial next to a robust, multi-level-price point housing market is very important,” he said. “Many people want to live close to work. They don’t want to commute.”
Ongoing and approved construction in the south metro area further supports the panelists’ good-news statements.
In Lone Tree alone, the city has so far in 2013 approved $200 million in building permits; that figure stood at $177.4 million in 2012. Both annual tallies represented a fourfold increase from the five preceding years.