Opportunity Knocks at Club Monaco Denver

Back in the early 1990’s my then girlfriend (now wife) owned a unit at Club Monaco (approximately Monaco St. Parkway and Mississippi Avenue, Denver). It was her first foray into real estate and as a first-time homeowner she was thrilled with the purchase and eventually sold the unit using a 1031 Exchange into an investment property in Cherry Creek North.

Recently a client asked me to look into Club Monaco and I was tickled as i had not been back in easily 20 years. I just previewed two active for-sale units and must admit on a value proposition I am intrigued. One unit is a first level with an expansive lower level, literally duplicating the at grade level, a similar floor plan as my now wife’s unit. This design has inherent flexibility. Another active unit is one floor above grade (exterior stairs) and has an interior 2nd floor with tree-top views.

The unit with the expansive below grade space is 6660 E. Mississippi Ave #1 with a total finished at 1,670 SF is asking $175,900 and of note offers two private at grade patios.

The two-level upper level unit is 6550 E. Mississippi Ave #10 with a total finished at 1,045 SF is asking $145,000 and of note offers an expansive deck.

Over the past 6 months there have been 7 resales recorded on MLS. The average sale price was $169,000 .

So you may inquire why am I intrigued and interested?

Let me list the attributes:

  • SE Central Denver location, i.e. easy access to downtown and the Denver Tech Center.
  • Close to multiple transit lines including the 79 Ltd into downtown.
  • Both units are interior thus no Monaco St Parkway impact.
  • Very close to two large parks, Cook (including a recreation center) and Garland and the Cherry Creek Bike and Recreation Path.
  • Both units have one-car garage parking (there is guest and on-street parking as well).
  • Wood burning fireplaces.
  • Club Monaco has ample open space and a seasonal outdoor pool and club house.
  • HOA fees are quite reasonable and the complex is well managed.
  • Price: A lot of SF for the price.

I will admit the complex which was built in the 1970’s may be dated for some however the floor plans and individual systems (forced air gas heating and electric air-conditioning) provide a sense of single-family design. In addition as mentioned the HOA has kept the ground and physical structures in good condition. For the premier location, flexible designs and price per square foot a good option for those in the under $200K market.

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September 2015 Statistics in the Books

As I have noted in previous blog posts I have noticed a slowdown in the marketplace. While far from empirical, from my own activity level and in discussion with peers, we came to similar conclusions. Now The Denver Metro Association of Realtors (a trade organization), one of the best resources concerning statistical information and analysis concerning the Metro Denver residential real estate market has provided empirical evidence.

Of note, while I have quoted the Case/Shiller index and other sources of information, the DMAR which compiles information concerning the 11 county metro area is consistently the most accurate source of market statistics and overall information and trends concerning Metro Denver.

Some interesting statistics for review:

  • Nationally the average home is on the market for 47 days and an additional 42 days to close. In the Denver Metropolitan Area the average home is on the market for 28 days with an additional 38 days to close. Of note with the new loan processing procedures, days until closing may have a moderate increase during the 4th quarter. Locally showing activity is beginning to slow: translation, seasonal adjustment and more opportunities for buyers.
  • The Average and Median Single-Family Sold Price for September 2015 decreased by 2.51% to $398,591 and by 1.65% to $340,000 respectively.
  • The Average and Median Condo Sold Price for September 2015 decreased by 0.78% to $253,109 and by 1.86% to $211,000 respectively.
  • Concerning the overall marketplace from the month prior:
  • Under Contract decreased by 10%
  • Sold decreased by 7.8%
  • Total Sales Volume by 9.91% to $1.76B which is still respectable volume as 12.05% higher than the same period the year prior.
  • The highest price paid for a Single Family Home in September 2015 was $5.395M for a 3-bedroom, 8 bathroom, 7,990 SF home in Cherry Hills Village.
  • The highest price paid for an Attached (Condo) Single Family in September 2015 was $1.8M for a 2-bedroom, 3 bathroom, 2,621 residence in the Cherry Creek North neighborhood of Denver (where yours truly resides).

Am I concerned? Not at all. First, a seasonal adjustment is to be expected. Second, many believe the market was a bit over-heated during the Spring and Summer of 2015 and third, we are moving into a more equitable market for sellers and buyers which is a good thing.

For sellers, a more balanced market may NOT translate into top dollar, however appraisal issues are not as prevalent and the gains over the past few years are still impressive and Denver continues to be one of the top performing markets in the nation only behind San Francisco over the past year.

For buyers an increase in inventory and moderation of pricing is welcoming.

My prediction as the market continues to move towards equilibrium including the potential for a modest fed fund increase during the 4h quarter of 2015 or the 1st quarter of 2016 we will return to a market where buyers and sellers transact based on value versus a monthly payment, overall a positive.

New Mortgage Disclosure Rules Take Effect Today

If you have purchased real estate with a mortgage in the United States you most likely were inundated with various disclosure forms prior to and at the closing. The documents included the Good Faith Estimate, Truth In Lending and a personal favorite, the HUD-1 (a dual-column page for which a magnifier glass and a dictionary should have been included).

In a nod to simplicity and less complex disclosures, the documents are being replaced. Starting today buyers will be introduced to a a simpler loan estimate and closing disclosure under the ” Know Before You Owe” program developed by the Consumer Federal Protection Bureau.

Bid farewell to the good faith estimate, two truth-in-lending forms and the complicated HUD-1. Replacing them are a simpler loan estimate and closing disclosure under the ” Know Before You Owe” program developed by the federal Consumer Financial Protection Bureau.

The immediate beneficiaries of the program are borrowers. In addition to the new forms offering a sense of simplicity, the standardization of the forms will allow borrowers to compare loan offers on an apples to apples basis. For many borrowers, interest rates and loan terms fairly competitive, the variations and added fees and closing costs are now more apparent and easy identifiable.

Yet from personal and client experience one of the new rules, i.e. the final disclosure must be in the borrow’s possession three days before closing is a benefit. The old rules required the disclosure to be provided 24 hours prior to the borrower. The new rule allows more time for scrutiny and additional time to rectify any issues.

I believe the new forms will be beneficial for all parties involved HOWEVER a few caveats:

Learning Curve: While the mortgage industry has been aware of the revisions and the original implementation was scheduled to be over the summer, the reality is there will be some confusion during the 4th quarter of the year. Thus most brokers I know are pushing contract signing to closings to 45 days for transactions inclusive of financing just to add a bit of cushion to the process.

Being Aware of the 3-Day Disclosure: This could be more of an issue for lenders and mortgage brokers as the past disclosures were due 24 hours prior to closing. Thus I am advising my clients to consider closings on Thursday or Friday to allow proper disclosure delivery during the work week.

Last-Minute Credit Reports: Historically lenders would pull a borrower’s credit report the day before or day of the closing to make are there have not been any substantial revisions. While usually not an issue as most brokers advise buyers to avoid large purchases prior to closing, a revision to one’s credit rating can in turn change the interest rate offered and any change within the 3-day disclosure restarts the disclosure clock thus adding a minimum of 3 days to the closing. In addition to the mortgage documents, the transaction contracts would have to be amended by both buyer and seller and if the transactions are contingent or stacked, there could be a domino effect.

Once all parties work with and become familiar with the new disclosure documents will be a definitive benefit to consumers. Yes the learning curve will be steep and I would assume over the next few weeks there will be delayed closing (and full disclosure I am attending a closing on Friday 10/9 representing a family member as their Attorney-In-Fact and I hope not to be delayed).

Most brokers I know have become familiar with the new disclosures and subsequent documents as many of us have taken classes concerning the revisions during the Spring assuming a summer implementation. As a broker I am pleased as explaining a Hud-1 was always a challenge (even with reading glasses) and having the 3-days prior to review, allows me to take clients to lunch and review documents versus a quick coffee and a highlighter.

Additional Links for your review:

Loan Estimate Explainer

Sample Closing Disclosure Explainer