The Sale Sign is Gone and No Change in Ownership

Below is a blog in italics I posted back on September 24th 2018. It is close to four (4) months later. I walked by the residence again, the “For Sale” sign has been removed and based on public records I reviewed from the Denver Assessors Office there was not a change in ownership.

As you can see from the  prior blog post noted below the property was being listed by Rex Real Estate. The company has a unique business model; the use of social media to sell homes as noted excerpted from an article about the company: “A full-service brokerage that eschews the MLS, uses technology to displace traditional agents, and charges home sellers a set 2 percent listing fee.” As mentioned I was mystified as the listing did not show up in our local MLS service (and yes I know what eschews means) which is accessible by the general public at www.REColorado.com.

Long story short the house does not seem to be listed for sale anymore; the last asking was $650,000. I did a quick check in the immediate vicinity of what sold in the last 6 months for between $600,000 and $700,000 within the Congress Park neighborhood i.e. comp. properties:

Concerning 800 Jackson Street the Denver Assessors Office has the residence which is a charming tudor design measured at 1,229 SF above grade (281 SF larger then the comps) plus 1,184 SF basement which is considered fully finished. Based on the above comp. sales and being conservative let us use the $347 PSF total. The value of 800 Jackson Street should be approximately $837,000 (if based on the above grade PSF amount the home would be $852,926) and is over 500 SF larger than the median figures above.

I am the first to suggest some buyers may balk at being adjacent to 8th Avenue as well as across an alley from neighborhood serving retail (full disclosure my dry-cleaner is in the across the alley strip, The Cleaners which saved one of my favorite ties from a nasty and I assumed terminal grease stain) thus let us discount the value by 20% bringing the value down to $670,000. Yet the house was listed at $650,000 and did not sell or was taken off the market for other reasons.

With a 20% discount to comparable listings/sales there is a value play. Asking was $650,000; even if someone closed at the asking there seems to be value. Anything below $650,000 is even more attractive. I have no idea why the home did not sell yet my gut advises the following; I as a broker had challenges securing information about the listing; I would assume others did as well assuming they were even exposed to the listing beyond the sign and that was only visible if driving/walking west on 8th Avenue west of Colorado Boulevard.

Please note I am not disparaging any brokerage and I am intrguted with companies wishing to be disruptive including marketing, reduced commissions and so forth as I do believe comptition is healthy and produces innovation. However based on comparable properties this listing seems to be value priced and did not transact; why? I do not know and yes I am curious.

Below the original blog post including the response I received when I inquired about the listing with the agency marketing the home for sale: 

September 24th 2018: Last week I was walking to Trader Joes on Colorado Boulevard and detoured slightly seeing a For Sale sign on a home at the northeast corner of 8th Avenue and Jackson Street in Denver’s Congress Park neighborhood. So what do I immediately do; I pop the address into my Engel and Volkers App and nothing comes up!

Now I am mystified so I put the address within www.REColorado.com our MLS service, again nothing shows up!

Finally I took a picture of the sign, looked up the contact information for the firm and sent an inquiry concerning the listing as per traditional services not to be found.

I did receive the following via email the next morning.

Screen Shot 2018-09-17 at 6.42.12 PM

I am not going to opine on REX Real Estate which proudly boasts they purposely do not upload listings to the MLS as per the following from a trade periodical: a full-service brokerage that eschews the MLS, uses technology to displace traditional agents, and charges home sellers a set 2 percent listing fee. Now I understand why the listing did not show up in any of my go-to searches.

Again I am not disparaging any new firm or start-up. I actually encourage and am intrigued by such businesses; while the real estate trade is somewhat old-school and may need some disruption, how is an issue I prefer not to discuss at present..

Now concerning 800 Jackson Street, the asking is $650,000. Based on the condition and my comparable knowledge, I would put the correct valuation closer to $525-$535,000.

On their site if you scroll down there is an option for comparable’s and it lists three(3) as follows:

747 Cook St:              Sold for $815,000 or $245PSF

823 Monroe St:         Sold for $811,000 or $402 PSF

811 Cook St:              Sold for $781,000 or $311PSF

Thus based on their generated comparable’s this makes 800 Jackson Street look like an absolute bargain at $650,000 or $269 PSF. Yet…..

  • The three comps provided by Rex Real Estate are on better blocks with stronger housing stock and urban fabric
  • Their homes are south of the actual Congress Park.
  • All three homes are in better condition inside and out.
  • All three homes are mid-block where as 800 Jackson Street is on a corner abutting a one-way west-bound arterial and literally ½ block west of commercial development and Colorado Boulevard including a gas station less than 500 feet to the east.

So being a broker you may ask what would I use as a comparable?

I would use 601 Cook Street for the following reasons:

  • Similar neighborhood.
  • Adjacent to 6th Avenue, a one-way arterial east-bound.
  • Similar lot size and design.
  • In better overall condition.

The sales price on 601 Cook: $540,000 or $213 PSF within the last year.

My gut is if or when 800 Jackson Street does in fact sell I believe the sale price will be closer to the low to mid $500’s, this is just my prediction. Now someone may absolutely fall in love with the house, the location the layout and so forth and pay the asking however assuming they may be working with a full-service knowledgeable real estate broker, I assume that broker will provide comparable’s that are more alike and will of course assuming financing order an appraisal.

I will be keeping an eye on this one, just not via the MLS will use Assessors Records.

Of note, next Monday October 1, 2018 I will not be publishing as I will be in Asia. Will post the following week.

 

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A Congress Park Bungalow Why I Always Look At Sales History

I am the first to admit sales history and chain of title may not tell the full story. Granted its records transaction prices as reported to the Clerk and Recorder office as we are a Deed of Trust state. Thus the following has always caught my curiosity as I drive by it daily.

The home, a small bungalow in Congress Park has as mentioned always attracted my attention. The main level per city records has 877 SF and the basement 432 SF of which 380 SF is finished. In addition the lot is small i.e. 2,970 SF. In addition no garage, a postage stamp sized yard and abuts a major thoroughfare thus no on-street parking and faces the major one-way thoroughfare.

I watched as the residence sold in 12/13 or 5 years ago for $210,000.

The buyers were fix and flippers and after a cosmetic renovation and some mechanical updates placed on the market for $409,000 3 months later. After a price decrease to $399,000 the home sold for $393,500 in April 2014, 5 months after the initial purchase. Again a fix and flip (and I am the first to admit a well-done cosmetic flip and the addition of egress from the basement). I was always curious as location abutting a major thoroughfare, no true yard or buffer from traffic, a curious home indeed.

The home was re-listed for sale in January 2017 for $549,000.

After a slight price reduction the home sold for $535,000 in March 2017. This seller probably hit the market just at the right time as in the 3 years of ownership enjoyed a gross gain of 30% before closing costs including commissions.

9 months later the house reappears on the market asking $575,000. Granted I would love to profit $40,000 however when one considers commissions and closing costs (let’s assume 6%, the net profit would be $40,000-$34,500 or $5,500. While not a great profit basically was able to live for free for the prior 9 months.

However this seller was not so fortunate! 4 months later a price reduction to $549,900 and subsequently the home sold for $540,000 in May 2018.

Of note the house sold to that seller for $535,000 14 months prior. Thus again assuming commissions and closing costs of 6% of $540,000 or $32,400 actually a loss of close to $30,000 during the 14 months or approximately $2,100/month not factoring in taxes, insurance and other homeowner associated costs.

The house again has come in the market 7 months after the last resale asking $585,000 or desiring to profit $45,000. Again assuming 6% closing costs at asking ($35,000) will net seller $550,000 or $10,000 profit in 7 months assuming it sells at asking price.

The reality is doubtful the home will sell at full asking and thus most likely this seller will also take a loss on the home when it sells.

As a broker on behalf of my clients I always do a look back concerning the sales history. On this particular home I would actually steer my client away due to size, inferior location i.e. on a busy street, no garage and so forth. Granted I believe it would make a great rental property however at asking even if cash the return would be minimal AND the potential equity upside I believe is limited as we are on the downside of the market.

Here is the history in an east to review table:

  • 12/13: Sold for $210,000
  • 4/14: Sold for $393,500
  • 3/17: Sold for $535,000
  • 5/18: Sold for $540,000 – Also known as the year of NO PROFIT
  • 12/18: Asking $585,000

I wish these sellers the best of success. Yet any home that has gone through 5 owners in 5 years would make me question “what is going on with this home?”

Congress Park Real Estate Recap for 2015

2015 was a banner year for real estate in Central Denver. From the depths of the Great Recession we witnessed a true market reversal. The neighborhood we specialize in i.e. Congress Park enjoyed continued strong growth. Below is a recap of 2015 real estate activity from our Multilist Service:

Congress Park: 6th Avenue to 13th Avenue, York Street to Colorado Blvd:

Average Home Sold: 3 Bedrooms/2 Bathrooms

Average Size: 1,520 SF Above Grade / 2,269 SF Total

Average Days on Market: 20

Average Price: $561,306

Vehicular Traffic and The Congress Park Neighborhood of Denver

As a broker on behalf of clients I have been looking at opportunities in the Congress Park neighborhood of Denver, CO. An area I define as 6th Avenue on the south, Colfax Avenue on the north, York Street on the west and Colorado Boulevard on the east. Within the boundaries are unique enclaves including the areas between 6th and 8th Avenues (both one ways) and north of 12th Avenue where higher density multi-family structures are more common.

My clients are most attracted to the streets radiating off of 7th Avenue Parkway, a majestic street dominated by a center median with mature landscaping and pre-WWII homes of some would argue estate proportions facing the avenue.

Yet one concern is the future impacts concerning the redevelopment of the former CU Health Sciences Center. The redevelopment calls for a mixed-use urban oriented project including commercial and residential development. While the former hospital and medical school did generate vehicular activity for the most part the traffic was confined to work hours. The new development will undoubtedly generate additional car-trips due to the mix of uses proposed for the site.

The concern I shared with my clients, 6th Avenue is a one-way east-bound from downtown and 8th Avenue is a one-way from Colorado Boulevard west into downtown. While traffic calming measures have been put in place within the last decade including on-street parking and other measures the reality is both Avenues will be the preferred conduit between former CU Health Sciences Center and downtown.

7th Avenue historically has traffic calming measures in place including stop signs and other impediments to dissuade cut-through traffic. Yet 6th and 8th Avenues and their one-way orientation date back to the McNichols administration which believed an efficient city was one which transported its workers in and out as efficient as possible.

Yet times and traffic patterns have changed. During the last 20+ years we have witnessed a resurgence concerning “inner-city” and “close-in” neighborhood demand. It is not uncommon in Congress Park to witness bungalows being expanded both vertically and horizontally.

Maybe it is time we collectively consider additional traffic calming on 6th and 8th Avenues (and possibly expand to 13th and 14th Avenues). The reality is we will see an increase in vehicular traffic on those avenues just by redevelopment east of Colorado Boulevard. As increased vehicular use will naturally slow traffic down, we need to consider measures to dissuade cut-through traffic AND preservation of the existing urban fabric.

Now is the time to investigate and install such measures now before the impacts are upon us and “the genie is out of the bottle”. If we collectively can be proactive versus reactive to the coming onslaught of traffic and congestion we have a better change of insuring our quality of life and preservation of the urban fabric which makes Congress Park so desirable.