Mary Beth Loves Denver: February 2009

I grew up in a Hutchinson.

Many of you who grew up in Denver are nodding. For the rest of you, I’ll explain.

Hutchinson Homes built houses here in the Metro Denver area from the 1950’s until the early ‘80’s. They built a lot of houses. If you’ve spent any time in Denver at all, you’ve seen a Hutchinson. They all look alike. Two bedroom windows, front door, picture window, garage. Mostly brick. Garage may be one or two car. Kind of like this:

Or this:

Or this:

Wherever you see blocks and blocks of essentially identical houses like this, you’re in a Hutchinson neighborhood. Some of the houses will have two car garages, some will only have single car. Some have the garage on the left, some on the right. Occasionally you’ll see one with no garage at all, or with only one bedroom window in the front. But mostly they look a lot like 85 Cody Street, where I grew up.

In the 1970’s they branched out and built some trendy bi-levels and tri-levels. But throughout the ‘50’s and ‘60’s they built these little brick forts. A lot of them.

And they were forts. They were small. They were simple. But they were built incredibly well — built to last. And they have.

One of my buyers recently bought a Hutchinson. I was having a lot of fun when we were shopping, because walking into a Hutchinson reminds me of my childhood. The one he bought reminded me of my friend Lisa who lived down the street. We played Barbies in her basement a lot.

The inspector I generally work with is wonderful. Most thorough inspector I’ve ever seen. If there’s a problem in a house, he finds it. Takes three to four hours on the average inspection. He grew up in a Hutchinson, too. Inspecting this Hutchinson for my buyer, he kept walking around saying “This is a joy.” Not just because it reminded him of his childhood, but because the house – which was built in 1961 – was in such amazingly good shape.

We wound up asking the sellers for no repairs. Zip. Zilch. Nada.

Of course, not every Hutchinson is in such pristine condition. This one has had the same owners since 1975, and they’ve taken very good care of it. But even a Hutchinson in rough condition is, at its core, a well-built house.

My parents owned their Hutchinson for 40 years. It was small. (1100 square feet and six people – you do the math.) It didn’t have a lot of closet space. But it was sturdy. It sat on a big lot. And by the time my parents sold it, it had been very personalized. They finished the full basement in 1968, doubling their finished square footage. In the ‘70’s they added a beautiful family room to the back of the house. Later they tore up the carpet and refinished the beautiful hardwood floors underneath. Every pre-1970’s Hutchinson has gorgeous #1 red oak hardwood floors, often buried beneath dated shag carpeting. It cleans up nicely!

That house was lovely – and sold very quickly – when my parents finally moved out in 2004.

Starter home? Investment property? Check out a Hutchinson!

I have super, super good news. I have inherited 2.5 million dollars!

I know what you’re thinking. she probably just got one of those random email from somebody in Ghana telling her she’s inherited money from the late somebody or other. But no, I’m not that gullible. I didn’t just get a random email from somebody in Ghana. I got a phone call from somebody in Ghana. Several phone calls, actually. And then a few emails, but they referenced our phone conversations.

So that’s way more legitimate, right?

Here’s what happened. This guy died. I didn’t know the deceased, I’ve never heard of the deceased, but apparently he died in a car accident along with his wife and daughter, who were his beneficiaries. He had no relatives, as he was an orphan who made his way to Ghana in 1975. Therefore, they have concluded that I am his next of kin, since we share the same nationality and the same last name. His name was Steven Beth’s Corner.

Huh?

I have to admit, this last part confused me a little bit. My last name isn’t “Corner” or “Beth’s Corner.” If it were, my name would be “Mary Beth’s Corner.”

Then I remembered. On my speaking web site (www.reallove.net), there is a section on the home page called “Mary Beth’s Corner,” where I post random tidbits that I think might be interesting to readers. Either by some massive coincidence an orphan named Steven Beth’s Corner has died with his family and my unfortunately worded home page has hampered their search for the legitimate heir (perhaps the elderly Mrs. Edna Beth’s Corner in central Ohio), or somebody with a particularly low IQ is attempting to scam me.

Do you think this means I don’t get the money?

Everywhere I turn, I hear that the Denver market has turned and is poised for a rebound. Great news. But I wanted to see exactly where all of this optimism was coming from. So I started digging into the numbers.

The numbers look very, very good.

From September 2007 to September 2008, inventory (the number of homes on the market), dropped nearly 20%. The number of houses sold increased 15%. The average days a home is on the market before it sells dropped 5%. And – get this – the “months’ supply” of homes on the market dropped a whopping 30%.

Why does this signal a rebound? Because the problem in our market (and in any difficult real estate market) has been that we’ve had a lot more sellers than buyers. And — thanks to the law of supply and demand – when you have less demand for a product, the price tends to drop. How do we know we have more sellers than buyers? Inventory. When a lot of houses build up on the market, we know we have more people trying to sell their houses than we have people willing to buy those houses. So, with all of the competition for fewer buyers, houses sit on the market longer, reflected in the average days on market statistic. All of this leads to the “months of inventory”, which is what you get when you take the number of houses on the market divided by how many are selling every month. That tells us how long it would take to sell all of those houses if no new houses were to come onto the market.

When more houses are selling and less houses are sitting in inventory, that tells us that the market is becoming more balanced. It tells us we have more buyers in the market, buying houses and reducing inventory.

Why has this happened? Well, the average sales price might give us a hint. It has dropped 14.8% in the past year. Median sales price dropped 11.8%. Apparently prices have dropped to a level where homes are attractive to buyers. It’s the law of supply and demand again. When the price drops, demand increases. As demand continues to increase, prices rise to meet the demand.

At any rate, it’s very good news for Denver real estate.

In a word, “yes.” Now is most definitely a good time to buy real estate in Denver.

I remember Denver’s real estate bust in the 1980’s. I wasn’t living here at the time, but I’d come home to visit and see that I could buy a condo in Denver for less than I paid for my car. (Well, less than the average person paid for the average car. I don’t think my ride at the time was worth a whole lot.) I, of course, had no interest in buying any of these bargain-basement condos because a) I didn’t live here, b) I had no money, and c) I naively assumed that their value would always remain low.

If I’d only known then what I know now. If I had scraped together every dime I had, bought one of those condos and rented it out, I’d be thanking my young self for it today.

Unfortunately, my crystal ball is in the shop, so I don’t know at the moment when housing values in Denver will start to climb. The market indicators show that we’ve reached the bottom. So it should happen sooner rather than later. I don’t know if the wider economic crisis will delay it. I do know that Denver’s economy frequently runs counter to the national economy. Given that interest rates are likely to remain low, and that Denver’s employment situation looks "relatively" good, I have every reason to be optimistic about the Denver market.

So yes, I believe that this is an incredible time to buy. Market conditions have driven prices down in many areas. Housing is “on sale.”

Get in on the sale while you can.