Foreign Investment in Colorado Real Estate Should we be Concerned

A few weeks ago local Channel 7 news ran a story about foreign investment in Colorado Real Estate titled: Foreign investors continue their real estate spending spree in Colorado. I am glad the producers included the word “continue” in their story as this is not a new phenomenon. Back in the late 1980’s my thesis for undergrad in Political Science was titled Direct Foreign Investment in Downtown Denver an era when Canadians were slowly divesting from commercial real estate downtown and surprisingly Europeans, specifically Germans were purchasing. Of note this was a time when our local economy was on the skids post oil boom in the mid 1980’s.

Also foreign investment in real estate within our mountain resorts is goes back to the development of our modern ski resorts with Vail and Aspen starting the trend and foreign investment can be seen throughout our mountain resorts.

Of note the article seems to focus on Denver and how foreigners are purchasing real estate at above market rates and thus placing additional stress concerning demand and by simple economics pushing prices higher. However the story did not look at the pitfalls of such investments concerning our local economy.

While many will suggest to look at Vancouver as a cautionary tale concerning foreign investment I could not agree more. With a large influx of Mainland Chinese buyers using Vancouver real estate as both an investment and monetary shelter it is not uncommon to see homes and flats vacant for most of the year. Yet due to this purchasing activity Vancouver has become unaffordable to many of the locals. The local government is pursued a speculation tax to address the issue. Other popular attractive destinations around the world including New Zealand seem to be following Vancouver’s lead to try to dissuade foreign buyers.

Yet on the flip side foreign buyers can also have disrupt segments of the market with nothing to do with affordability. In New York City condo towers presently under construction on Billionare’s Row* AKA West 57th Street believed the demand from foreign buyers specifically Russian and Chinese was sustainable; it’s not and losses happen. Related in New York City there is support for a pied-a-terre tax to provide capital for the city’s aged mass-transit system.

Even Mansion Global an influential read for those in the luxury housing market advises in a recent article how to attract foreign buyers in a slowing demand marketplace: Strategies for Sellers as Chinese Buyers Scale Back on Foreign Real Estate Investment.

Granted there are other macro economic forces at play as well including the value of the US Dollar against other currencies i.e. when the US Dollar is weak our real estate looks even more enticing to foreign buyers just as US based buyers flock to Mexican real estate when the Mexican Peso is weak.

Back to Denver; I would be concerned. At present we may have pockets of foreign money purchasing residential rental properties and thus may be adding stress to our already over-heated housing market (based on the divergence between local housing costs and local income levels). My concern is more macro i.e. if the US Dollar continues to strengthen or if there is a world-wide recession; foreign money can take flight as easily as it comes in.

While I do not believe foreign investment in Denver’s residential real estate market is a concern due to the limited capital investments against the full local real estate economy there are places in China now known as Ghost Cities where speculation’s negative extranalities are on full display.

* Full disclosure, I used to reside part-time in a co-op located adjacent to Billionaire’s Row. Our building actually sold our air-rights to the developer of adjacent 220 Central Park South. In the 13 years of ownership, when sold generated a profit of just shy of 500% partially due to timing and mostly due to luck.

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Yes There Are Still Bargains in Real Estate. How about $75 PSF

While traveling on the East Coast last week probably one of the most intriguing bargains in the real estate market sold and closed at $75 per square foot! Yes $75 PSF Finished. While many may assume the house is a wreck or was sold for land value or is inhabitable; all such assumptions are incorrect.

Actually the home located at 50 Poplar Drive, Farmington, CT is a bit gaudy for my personal tastes however the home does offer 21 bedrooms and 35 bathrooms, as well as a movie theater, gym, indoor pool and basketball court. The strip club room complete with stage and stripper poles may have alienated some prospective buyers yet one can always renovate. The location; while located in Connecticut, away from the popular  commuter rail lines and inland thus no water views.

Now for the history. The home was once owned by boxer Mike Tyson (who tried to sell the home for $22M in 1997). In 2003 as the national economy was heating up, rapper and entertainer 50 Cent paid $4.1M to Mike Tyson to take the mansion off his hands. Then 50 Cent invested millions into the house concerning renovations.

The real estate market has not been kind to 50 Cent. He first listed the home in 2007 at the height of the real estate boom, one year prior to the Lehman Brothers implosion and the start of the world-wide recession. The downward price adjustments continued soon after:

  • Initial Ask – 2007:  $18,700,000
  • 7/2009: $10,900,000
  • 1/2011: $9,999,999
  • 10/2015: $8,500,000
  • 7/2016:  $5,995,000
  • 12/2017:  $4,995,000
  • 3/2019:  SOLD for $3,900,000 or $75 PSF

In general the larger the home and cost the fewer prospective buyers. Within Denver the largest most luxurious homes usually sell for less on a per square foot basis than smaller homes on the same block or neighborhood. While the average home in the United States has steadily increased in size, there is a limit.

Of note in 1950 the average American home was 983 SF, in 2014 it was 2,657 SF .

While anomolies include the blockbuster sale at 220 Central Park South in New York or the Hongtian Chen residence purchased for $270,000,000 USD in Hong Kong; most real estate experts agree bigger is not always better and the larger the home and pricing and more finite the market. BTW: the Central Park South and Gough Hill Road (where a nice rental is available) homes are priced beyond traditional jumbo mortgage options. 

 

 

Do Not Be Lured Into a False Sense of Business Acumen By Low Interest Rates

The dominant story in the real estate industry last week was the drop in interest rates on mortgages. The timing for many is welcome i.e. the beginning of the traditional spring selling season. While I can advise yes lower interest rates may make a transaction more palatable with a lower monthly payment I would be remiss not to mention lower interest rates usually signal an economy that may be challenged in the foreseeable future. In economic principles lower interest rates are considered a tool to increase economic activity. In addition while housing prices have stabilized and in many markets adjusting downward many believe housing prices are still inflated overall.

The above brings me to the topic of not only interest rates but also the timing of the market. In a conversation with my CPA last week we discussed how so many seem to have forgotten about the Great Recession. It was not that long ago when distressed properties dominated the MLS, short-sales were common, credit scores were dropping and homeowners were literally walking away from their homes knowing what they owned on their mortgages far exceeded the present value of the home.

Which brings me to today’s blog. A lovely home in tony Cherry Hills Village just came on the market. Located in Old Cherry Hills, the 8,100-square-foot residence and guest house (above the 5-car garage) is located at 1120 E. Tufts Avenue. The home is listed at $4.5 million ($778.28 PSF above grade), by Cherry Hills standards while not the most expensive, not a bargain either. At present there are 37 active listings within Cherry Hills Village ranging from $900,000 to $22,000,000, the Medain PSF above grade asking is $492.98):

The 7-bed, 9-bath residence is just over 8,100 square feet and sits on 1.28 acres. The 1,600-square-foot basement features a home theater, bedroom and bathroom. All seven bedrooms have bathrooms en suite, and the master suite boasts a balcony overlooking the property.The two-story home is surrounded by a professionally landscaped backyard complete with an orchard, vegetable gardens and a pool pavilion.

As mentioned there is a one-bed, one-bath guest house with a kitchenette and its own fireplace atop the five-car garage.

I am a bit of a statistician and when looking at real estate I try to take the emotion out of the equation. My feeling is a residence’s value should at minimum keep up with inflation; any gain beyond is icing on the cake. Yes there are limited various tax advantages yet also costs concerning maintenance and upkeep of a residence. Of course pride of ownership may trump all the perceived challenges of home ownership (and of note a wise person once said “If you have a mortgage you do not own the home, the bank does”).

Back to the residence on the market. Trust me if I hit Powerball I am a potential buyer. Yet how did the sellers financially on the house during their tenure of ownership?

  • The owners of record paid $3.96M for the home in 2006.
  • The asking in 2019 is $4.5M. On its face a potential profit of $540,000.
  • Impressive over 13 years or $41,000/year gain during ownership.

Yet let’s consider the following. Even if the seller sells for $4,500,000 when one factors in commission of 6% and Closing Costs of approximately $10,000 the net to seller is $4,220,000, still an impressive gain.

However, the $3,960,000 paid in 2006 when adjusted for inflation is $4,965,000 in 2019 Dollars or $465,000 below thr asking which equals an average home in Metro Denver. Thus the home did NOT keep up with inflation.

Now let’s assume the seller had a mortgage and placed 20% down on the purchase price. Of note in 2006 mortgage interest rates were at a 4-year high with the average 30-yr rate at 6.75%, or 3.75% higher than rates quoted last week. The Principal/Interest/Taxes and Insurance (PITI) on the $3,168,000 would exceed $22,000/month! High mortgage interest rates usually signal a strong economy and in 2006 the national economy was booming as few would have believed two years later the economy will go into the worst downturn since the Great Depression of the 1930’s.

For the prospective buyer concerning potential write-offs; real estate taxes as of 2019 can only be deducted up to $10,000. The real estate taxes on the residence for 2017 were $24,472.

The message here is: I assume the sellers when purchasing their dream home in 2006 assumed their home would only increase in monetary value, their mortgage rate (assuming they obtained a mortgage) was within expectations and even at 6.75% was half of the rate of the early 1990’s. Overall a positive investment of both capital and lifestyle. At asking of $4.5M the seller will profit slightly yet when reviewing the 13 years of ownership, the residence was a financial loss in terms of inflation adjusted dollars. 

A home should first and foremost be considered shelter not an investment. I am worried with the sudden downturn concerning mortgage interest rates of last week; are buyers purchasing based on a monthly payment in a still inflated housing market versus sound financial judgement and future wealth aspirations.

 

 

First Time Home Buyer In Denver…..May Wish to Reconsider

I know I am a realist; I guess that comes with the three decades in the business and having been through three regional boom and bust cycles. Personally I was fortunate concerning the housing market; I bought my first house in 1989 for the grand sum of $140,000 ($285,000 in 2019 Dollars) the seller had purchased 5 years prior during an up-cycle i.e. the oil and gas boom of the 80’s before the S&L crisis had paid $200,000 ($238,000 in 1989 Dollars, $486,000 in 2019 Dollars) for the house. When I purchased the home, the seller still owed $160,000 on the mortgage and a 6% ($9,600) brokerage commission at the time of the sale. Yes I was fortunate concerning timing and insights i.e. in 1989 it was more advantageous for me to purchase based on the mortgage payment coupled with tax benefits (15 yr mortgage with 20% down) than the monthly rental of a comparable residence.

Thus it was disheartening to review the following article in this past weekend’s New York Times titled The Best Places to Be a Buyer – and the Worst. Spoiler alert, Denver was at the top of the list; for worst places to be a buyer followed by Los Angeles.

Denver was once a city and region which attracted the brightest and motivated with its mix of affordable housing, varied styles/neighborhoods, great climate and many more attributes, to many to list. Yet in the span of one generation housing has become not necessarily shelter but more of an investment. We also have collectively short memories i.e. the mid 1990’s when the Wednesday HUD foreclosure listings in The Rocky Mountain News were as thick as the newspaper itself and more recently The Great Recession of 2008-2010.

My gut is Denver will always be an attractive place to live and attract the brightest, most talented and entrepreneurial. However if we do not witness prices return to levels in-line with regional incomes and move beyond housing speculation we will be at risk of “Killing the goose that laid the Golden Eggs“.

The reality is there are a lot of cities in the Midwest, South and Southwest that would welcome the young, best and brightest coupled with a much lower cost of living. If our housing prices and challenges to ownership continue unabated the outcome may not be what we collectively desire.

When Future Housing Value Forecasts Disagree    

A while back I posted a blog concerning Zillow and how their valuation of a specific home was off by 20% as their valuations are based on data from public sources yet does not necessarily account for tangibles including specific location, neighboring uses, traffic impact and so forth. Here is the link: https://denverrealestateinsights.wordpress.com/2017/11/13/the-internet-says-my-house-is-worth/

Thus I was intrigued when Zillow predicted a 4% gain for the Metro Denver Housing Market for 2019 yet the Colorado Association of Realtors (CAR) predicts a loss for the same market.

Let me be clear I do not know the methodology of Zillow or CAR. However I am inclined to go with the CAR forecast.

  • Anecdotally we as brokers witnessed a slowdown in the market concerning both sellers and buyers.
  • CAR using local MLS data including market activity i.e. price increase, decrease, withdrawals and so forth probably has a more accurate prediction of the market.
  • Houses entering the market at present may have languished prior, taken off the market and placed back on; a micro indicator of market conditions i.e. did not sell, try, try again
  • All of the above coupled with slowing in-migration.

Even a 1% loss is not worrisome as the housing market continues to outpace inflation. Also the run-up we have witnessed since the end of the Great Recession while impressive if you are a homeowner or seller has various negative externalities.

Back to the forecast; while data mining and algorithms are important and valued the reality is local and regional knowledge based on eyes and ears on the local scene is generally more accurate.

When did the tide turn? I believe we need to go back to the Savings and Loan crisis of the late 1980’s to 1990’s. Before the era of mega-banks that crossed state lines mortgage origination and appraisals were handled locally. The local bank would actually offer and service the mortgage. In the purchase process the local bank would hire the local appraiser and so on. The end result realistic valuations and risk assessment based on local conditions.

Yet the Savings and Loan crises in part began with banks lending beyond their markets thus beyond their local/regional market intelligence, using appraisers that were not familiar with the local/regional market and the desire to secure highest and best returns without assessing risk.

Does not sound much different than the Great Recession of 2008/2009 when real estate markets such as Las Vegas, Phoenix and others boomed based on speculation versus true market demand from employment and in migration and other factors that influence a local housing market.

Personally I can share two examples when appraisers not familiar with the local market showed how lack of knowledge of the local market can truly under-value and at times over-value a subject property.

  • Lexington Avenue versus Fifth Avenue, NYC: The two apartments were identical i.e. building design, floor plan, interior condition, date of construction and so forth. Yet the 5thAvenue apartment was on the market for 50% more than the Lexington Avenue sale within the prior 6 months.
  • The appraiser used the Lexington Avenue apartment as a comparable and based his appraisal of the 5thAvenue apartment on the prior sale. HOWEVER the Fifth Avenue apartment not only has a direct view of Central Park, 5thAvenue is considered one of the most highly valued and sought after residential streets in the world on par with Eton Square in London, Avenue Foch in Paris and Peak Road in Hong Kong.  Needless to advise the appraisal was challenged.

Locally here in Denver when selling a row house in Cherry Creek North I had to supply the appraiser with comparable and subsequently challenge his valuation. While the property was located in Cherry Creek North he was using comparable sales from Congress Park and The Hale neighborhood i.e. within one mile of the subject property. Also he was using condos and townhomes yet the row house had an individual land plot and thus was unique in that respect and more valuable. Finally he used a comparable in the complex yet the subject property went through a gut renovation one-year prior interior and exterior including windows, mechanicals and related. The comparable adjacent in the original condition and state of disrepair from 1984.

Granted appraisers only have access to so much information usually provided via the MLS and pictures. However as brokers we literally deep dive and understand market nuances that may not be evident in pure market statistics or within an algorithm. Thus while I am a fan of technology, AI and all the opportunities coming down the pipeline, considering real estate, I am old school and realize humans while flawed can actually make subjective judgments that are more accurate versus objective data driven information.

The Brady Bunch may wish to consult with middle sister Jan as she has been quite successful concerning real estate investing

A few months back all over the popular news was the story of the North Hollywood home at 11222 Dilling Street used as the model for The Brady Bunch being placed on the market. The home subsequently sold to Discovery Inc.‘s HGTV network and is now bring renovated by the Brady siblings with additional guidance from The Property Brothers.

While the Brady kids have varied careers including Christopher Knight AKA Peter Brady who now produces a furniture line the siblings may wish to look to Eve Plumb AKA Jan Brady the misunderstood middle child; as real estate investor she as been quite savvy on the East and West coasts and definitely not misunderstood.

At present Ms. Plumb and her husband’s Ken Pace just listing a property on the  Upper West Side of Manhattan at 2025 Broadway for $735,000. The unit 22-J is on the 22nd-floor, 716-square-foot co-op is in a full-service building by Lincoln Center and Central Park. For those who may not know Manhattan, a desirable area. Of note Ms. Plumb purchased the unit for $589,000 in January of 2013, not a bad profit at all.

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Back in 2016 Ms. Plumb purchased a penthouse at 330 East 49thStreet just east of the heart of Midtown Manhattan for $1,557,000. The unit, a 2 bedroom is approximately 1,100 SF yet has three (3) setback terraces which are most desirable in an open-space starved city. In addition, the penthouse features a windowed galley kitchen, two marble bathrooms, hardwood floors and lots of closet space, according to the listing.

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The two buildings in Manhattan are known as post-war construction which usually trails the market versus pre-war apartments and of course the new in-demand curtain wall designs yet savvy investors know such apartments in these buildings usually have locations that cannot be replicated and can be purchased for 20-35% below comparable new and pre-WWII constructed apartments. For more about NYC apartment styles the following is an excellent primer: Postwar, Prewar and Everything Before

Yet most impressive is probably Ms. Plumb’s first foray into real estate. In 1969 at the age of 11 she purchased with the assistance of her parents a beach cabin (850 SF – pictured above) in Malibu for $55,300 or $377,225 in today’s inflation adjusted dollars. The bungalow style home, which is located on Escondido Beach Road and thus on one of Malibu’s most picturesque beaches, includes three bedrooms and 1.75 bathrooms and NO heat or air-conditioning. Of note the quite modest home sold in 2016 for $3,900,000 off an asking of $4,150,000. “Way to go Jan“.  Below the smaller home on the foreground.

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Tuesday’s Real Estate News Should Signal Caution Now and in the Immediate Future

OK, I am the first to admit I have an alert concerning local real estate. I usually receive updates from The Denver Post, The Denver Business Journal, BusinessDen and other local sources of business news. However Denver and Colorado are not an island in a vast sea and at times we seem to forget we are part of a larger country and may be missing signals concerning the overall national housing market.

Last week a grouping of news came out on the same day that cause me to suggest proceed with caution. Granted many of my peers suggest I am a pessimist, however with almost three decades in the real estate business I have witnessed everything from exponential growth in prices to foreclosure listings offered by The Department of Housing and Urban Development (HUD) when published in the newspaper secured their own pullout multipage section.  Thus when the following news hit the wires last week I said to myself “The Dow is at 26,000 however the tea leaves concerning housing seem to be advising caution”. The following is a longer than average blog post for me, thus highlights are in BOLD and there are various links as well.

Home DepotThis retailer is actually one of my favorite indicators concerning the housing market. In flush times Home Depot’s stock is in-demand due to being a favorite supplier for independent contractors, homeowners and related entities. This is a stock so sensitive to housing that when a Hurricane hits a populated area not surprisingly Home Depot stock price rises and the company has its own Hurricane Command Center.

On Tuesday 2/26 Home Depot reported fourth-quarter earnings and sales that missed analysts’ expectations and offered a weaker-than-anticipated outlook for fiscal 2019. With U.S. home sales and prices under pressure, fewer shoppers are heading out to buy materials for home projects and renovations. For much of last year, confidence in the U.S. housing market soared, benefiting Home Depot and Lowe’s. But with mortgage rates climbing, attitudes have since started to turn sour. This may lead to home prices rising at a slower rate and the market cooling down, which has sparked some fears for the sector.

Housing Starts: The number of homes being built in December 2018 plunged to the lowest level in more than two years, a possible sign that developers are anticipating fewer new houses to be sold this year. The Commerce Department said Tuesday (2/26/19) that housing starts fell 11.2 percent in December from the previous month to a seasonally adjusted annual rate 1.08 million. This is the slowest pace of construction since September 2016.

Over the past 12 months, housing starts have tumbled 10.2 percent. December’s decline occurred for single-family houses and apartment buildings. Builders have pulled back as higher prices have caused home sales to slump, suggesting that affordability challenges have caused the pool of would-be buyers and renters to dwindle.

The S&P/Case-Schiller Index: I have profiled the Case-Shiller Index in past blogs and is one of the statistics that I am most interested in and intrigued by as it offers an immediate snap-shot of the market’s health as well as historical reference and thus while somewhat complex concerning its data; the empirical information provided is invaluable.

Home prices increased 4.7 percent annually in December 2018, down from 5.1 percent in November, according to the S&P CoreLogic Case-Shiller U.S. National Home Price Index.That is the slowest pace since August 2015. The 10-city composite annual increase came in at 3.8 percent, down from 4.2 percent the previous month. The 20-city composite rose 4.2 percent year over year, down from 4.6 in the previous month.

Las Vegas, Phoenix and Atlanta reported the highest year-over-year gains among the 20 cities. In December, Las Vegas prices jumped 11.4 percent year over year, followed by Phoenix with an 8 percent increase and Atlanta with a 5.9 percent rise.Three of the 20 cities reported greater price increases in the year ending December 2018 versus the year ending November 2018. Of note impressive gains for Las Vegas and Phoenix; two cities that represented the irrational exuberance of real estate speculation during the 2000’s only to be the symbols of foreclosures and negative equity during the Great Recession.

In addition affordability is at the lowest in about a decade, and home sales were sharply lower at the end of 2018. Prices usually lag sales, so it is likely price gains will continue to shrink until sales make a move decidedly higher.

According to the National Association of Realtors sales of existing homes were 8.5% lower in January 2019 compared with January 2018, Homes are now sitting on the market longer and sellers are cutting prices more frequently.

 I am the first to admit anyone can manipulate statistics yet it seems there is a convergence of cautionary news out there. I do not see myself as a pessimist, more of a realist. Yes real estate is emotional, it is not liquid like equities and for most of us it represents the largest purchase and subsequent debt servicing of our lives. Thus why I suggest proceed with caution and be rational.

 

 

 

 

Seasonal Adjustment or Starting of a Trend

January is a peculiar month for real estate. As residential brokers we generally experience a slow down concerning transactions during the 4th Quarter of the year due to the holidays i.e. Thanksgiving and the December holidays. With few exceptions usually due to tax strategies closings during the last week of December are rare.

When January comes along we assume New Year’s Resolutions may include a new home. Historically January is a slow month as the days are short, the weather is cold and not the most conducive month of the year to go touring houses. Yet I have advised buyer clients January is a great time to look. Even though inventory is generally limited the slower pace and lack of competition can be an advantage.

Yet even I was surprised with the January 2019 market report. According to the latest marketing statistics from REcolorado, the Denver Metro market continued to experience increased inventory levels in January, due in part to 4,817 new listings coming on the market, more than double what we saw last month (December 2018).

This means buyers have even more options than they’ve had in quite some time, which may help relieve some of the stress home buyers have been feeling over the past few years. There is currently 8 weeks of inventory, 1 week more than last month and 2 weeks more than last year.

In January, home sales decreased 8% from last year and are down 24% from last month. The number of homes that moved to Under Contract in December was 8% higher than last year, indicating it was an active month. The rate at which home prices are increasing has continued to moderate in January, with the average price of a single-family home rising to $460,525, up 3% year over year.

From experience while a two month supply of housing may be positive for buyers based on historical averages the market for buyers and sellers is closer to equilibrium when inventory is in the 4-7 months range depending on the specific regional market.

The 3% year over year increase in average price mirrors inflation thus while may be disappointing to many homeowners who purchased within the last 12-24 months in reality a 3% growth is healthy and sustainable.

I believe February and March 2019 will be interesting to watch i.e. how much inventory increases and to see if buyers are active. Interest rates are 1% point higher year over year yet are still historically low. The factors that we should watch for beyond inventory and closing activity are:

  • Migration Into and Out of Metro Denver.
  • Activity in the luxury market; usually an early indicator of market trends.
  • Price Adjustments from Original List Price.
  • Days on Market, higher number weaker market.

Anecdotally I am seeing softness in the market. At present I am listing a residence in Congress Park. Due to its existing cosmetic condition the home is priced 20% below 6 month sales market comps for the neighborhood. While viewing activity has been strong; an offer has not been presented. If the home was on the market 18-24 months ago at the same asking price there would have been multiple offers; many above asking sans contingencies. Will keep you all posted.

Of note concerning last week’s blog about the unit in Writer Square there has been a price adjustment from $725,000 to $710,000.

A Gem in Downtown Denver’s Writer Square is In Search of a Buyer

Over the weekend I was with clients who had a most specific request: a condo unit with its own separate and private entry. The clients did not want an attended lobby or similar.  Yet the vast majority of condos in Downtown Denver have a communal lobby, shared hallways to the unit and many of those lobby’s are attended.

Yet there are a handful of legal condos which are designed in the vernacular of a townhome. While you may not know the name of the complex, if you have been in downtown Denver you probably have experienced/walked-through Writer Square.

Dating back to the days of Urban Renewal, Writer Square was in vogue during a time of mixed-use developments inclusive of residential, retail and office. The Writer Square development which is bounded by Larimer St, Lawrence St, 15th Street and 16th Street Mall is literally the poster child of such developments.

At present one of the townhomes is for sale. 1512 Larimer St #27 aka Writer Square is a gem. Located towards the southwest of the square block complex the unit is set-back from 15th Street and Larimer Street thus not impacted by the vehicular traffic on those streets. Yet due to its location within Writer Square offers a view of the historically preserved 1400 block of Larimer Street.

Unit #27 is a two level unit that has undergone a gut renovation. While the exterior is late 1970’s contemporary the interior of this unit offers a warmth in design with a nod to French provincial. The main level includes a formal entry, an office (easily a 3rd bedroom), dining area, living room w/ gas fireplace, access to a private outdoor deck, double-height peaked ceilings, full bathroom and a beautifully designed and functional kitchen including a built-in espresso maker (trust me, my Mr. Coffee was quite disappointing this morning).

The upper level has two additional bedrooms including a master with an expansive en-suite and a secondary bedroom with another full bathroom. Extensive use of built-ins add voluminous storage space truly bespoke to the design of the unit.

The icing on the cake, two deeded parking spaces and storage.

If one is looking for a high-floor, city or mountain views with on-site amenities i.e. door staff, health club and so forth best to bypass. However if one desires a truly central location, a townhome design inclusive of privacy and security, private outdoor space and truly a turn-key opportunity i.e. no renovations.updates needed, this is a unit not to be missed.

 

A 1894 Congress Park Victorian in the Rough Comes to Market in Denver

Every once in a while a home enter the market that is truly unique concerning design and opportunities. I have run across a few of these in my career including an intact Burnham Hoyt in the Country Club neighborhood and a Lang Mansion in the 1400 block of Race Street.  I am soon to bring such a gem to the market.

1353 Clayton St. is an intact Victorian home located in the desirable Congress Park neighborhood. When constructed in 1894, the home matches others on the block and must have benefitted from the Gold Coast moving south and east from Colfax Avenue and Capitol Hill.

Recently painted the exterior color palette embraces its Victorian heritage sans being gaudy or trendy. A more subdued color palette verses the Painted Ladies found in San Francisco; still a bold palette more oriented to the Denver market.

The front porch has been enclosed yet can easily be opened up if desired. Once inside the home; a Victorian that has been preserved in-situ. The original wood staircase is a visitor’s first introduction to this jewel. The formal living room with its wood-burning fireplace and wood floors represent the formality of Victorian homes of the era.

Adjacent is the Parlor Room, which provides the living room with a true double room orientation. Through a set of pocket doors the formal dining room and ½ guest bath reminds us of an era when formal dining was the norm not the exception.

Beyond the dining room is the kitchen, which has been though multiple updates, the most recent being during the 1990’s including granite, dual wall ovens, a breakfast bar and other design features that beyond the materials used are timeless.

On the upper level are three bedrooms. The master is a two-room suite with a wood burning fireplace and access to a deck built above the enclosed porch. The perfect perch for morning coffee coupled with the warmth of the eastern orientation no matter the season.

There are two additional bedrooms, a full bathroom and a conventional staircase providing easy access to the attic with a peaked ceiling providing potential for the addition of dormers and thus additional functional rooms.

Being trained in design I envision an additional en suite bathroom for the master as plumbing is adjacent. Dormers in the attic could provide as mentioned above additional living space. There is also a rear service staircase from the rear bedroom to the 1stlevel most likely used by service staff well into the 20thcentury.

The basement is unfinished; at present just a washer/dryer (included with the home) and mechanicals. One can excavate to add additional square footage if desired.  The furnace is newer as is the on-demand hot water connected to updated plumbing. There are remnants of a solar power system and CAC can easily be added. Of note the basement as both in-residence and an exterior entry.

The rear yard is private and provides access to a one-car garage and additional off-street parking adjacent. Personally as a trained design professional and as the zoning allows for an accessory dwelling unit I would suggest rebuilding the garage into a 3-bay unit with a studio or one bedroom, ¾ bathroom and kitchenette above the garage. Of course any prospective buyer should review options and opportunities with a licensed design professional and insure entitlements per zoning including an ACU, tandem and duplex is allowed by checking with the Denver Zoning office.

This is truly a diamond in the rough. While the diamond’s value is intact, some additional cutting and polishing will only enhance an already strong value. The residence is priced at $694,900, which is 15-20% below comparable sales taking into account the present condition.  For the purchaser with a vision of what could be coupled with the preservation of the Victorian details inside and out a truly rare opportunity.

Please note the residence is listed by Joseph Sobin, Engel & Volkers Vail.

MLS Link: 1353 Clayton St. Denver, CO. 80206

There will be an Open House on Saturday February 23, 2019 from 12P-3P