Thursday, December 31, 2009


As we wind down the final hours of 2009, I want to stop and say THANK YOU to everyone who helped my business reach new heights this year. We overcame significant obstacles in our market in 2009 and I am indebted to all of you who referred business to me or trusted me with your own transactions.

I have treated each deal as if it was my own, and I remain committed to being both your trusted advisor and fiercest advocate.

As you know, my business is referral driven. That means not only do I work hard on keeping my existing relationshipships strong, but I must take incredible care to make sure each client referred to me has an awesome experience. Frankly, I wouldn't have it any other way.

As I work on my business plans for 2010, know that you are at the heart of it. To those friends, colleagues, past clients and future prospects who regularly read this blog, thank you.

Next year, I pledge to continue to engage in the disciplines of success. I will hold client appreciation parties, networking events, first-time buyer seminars and open houses. I will work on improving my eduction through CRS classes, RE/MAX International programs, state and national conferences and by surrounding myself with the best support team in the business. I will set goals and track their progress, realizing that "success is something you attract by the person you become."

And I will continue to give every client my full time and attention so that the process of buying or selling a home is fully understood.

Have a safe and enjoyable New Year's Eve... and cheers to a great 2010!

Wednesday, December 30, 2009


As I have posted many times before, I don’t buy the Case-Shiller housing data “hook, line and sinker” because it throws the entire housing market into one big pot, like a mutual fund. Obviously, it’s better to have a good Case-Shiller reading than a bad one, but as I have said for two years, this market is incredibly segmented.

Overall, Case-Shiller reports that homes in the Denver market lost 0.1% of their value in the year ending October 30, the top reading from the 20 major metro areas the study tracks.

However, as is always the case the statistics, some interpretation is in order.

Almost all of the strength in the Denver market lies in one place, and that is the sub-$300,000 market. We have seen appreciation as high as 15% in some areas of town over the past year, mostly in areas of entry-level homes that were on the front end of the foreclosure cycle. Above about $400,000 the market is dead, regardless of what your neighborhood brokerage is putting out there or what propaganda you read in the newspapers.

Our economy has fundamentally shifted in the past 18 months, and “thinking small” is the trendy new reality of today. One client recently asked me, “How much house can we afford if my wife loses her job and we have to get by on one income?” That’s a great question, and it’s one you never heard asked three years ago.

New construction is dead, high end is dead, but the population continues to grow. Colorado is on track to be the fourth fastest growing state in the country in 2009, and our excess housing inventory is being depleted at a pace that is much quicker than the rest of the country. The number of homes for sale is off by nearly 40% from its peak in 2007, and bank-owned inventory is getting harder and harder to find.

Bottom line: the Case-Shiller news is good for Denver. But it’s especially good for people who have purchased entry level homes over the past 36 months, with fixed rates in the 5's and waves of future demand sure to come as our population continues to grow.

Wednesday, December 23, 2009


Looking for a jolt to start the new year?

Pick up a copy of Robert Kiyosaki's Conspiracy of the Rich, a fascinating and fast-paced read that discusses the conditions that led to the stock market collapse of 16 months ago and talks about what you can do to better prepare yourself for the choppy economic waters ahead.

Financial education in this country is woefully inept, according to Kiyosaki, and if you don’t know the difference between investing for capital gains and investing for cash flow, you need to slow down and really come to understand these important distinctions.

Most capital gains from the past decade have been the result of easy credit, which created an asset bubble which caused real estate and stocks to become overvalued. Now that the credit bubble has popped, those who invest in real estate or the markets need to rethink their strategies to focus on cash flow and sustainability in an economy that will not be going back to what we knew (and grew too comfortable with) just a few years ago.

Kiyosaki also talks about the corruption of our political systems, of how President Nixon’s decision to take America off the gold standard in 1971 essentially unleashed a new, debt based (as opposed to “production based”) economy that enriched banks and catapulted average Americans into a debt spiral that finally came unraveled over the past 24 months.

The book warns of hyperinflation in the years to come, showing how the amount of currency in circulation has essentially doubled in the past eighteen months. This around-the-clock printing strategy will ultimately drive the prices of commodities higher (think $5 per gallon gasoline and $3 per head lettuce), eroding savings and pushing much of the middle class into a lower standard of living. Demands for government services will rise, taxes will increase, and high unemployment will become the new norm.

It’s a scary assessment, but to protect and prepare for your financial future, you need to consider the possibilities. There will be opportunities and shelters in every economy, but they will be fewer and it will take a better understanding of economics to identify them.

Now is the time for raising your financial IQ. If you know that interest rates are going up, taxes are going up, unemployment is likely to stay high and the stock market is likely to stagnate, is it a good time to buy a house? Is it a good time to buy two??

With better education, your thinking will be clearer.

Since the onset of the stock market crash 16 months ago, I have subscribed to the notion that the only way out is to forget about the government and for YOU to get better. For YOU to improve your skills. For YOU to become more financially literate, better educated and adaptable to a changed economy.

Whether or not you agree with the author's assessment of our economic condition, this book will challenge you to look critically at what's going on. And that alone makes it worth the read.

Saturday, December 12, 2009


I was saddened to learn last Saturday of the passing of Jim Rohn, a man whose influence in my life runs deep. Even though I never met Mr. Rohn personally, I came to know him quite well through his books, interviews and recorded seminars, which have been influencing people around the globe for nearly 30 years.

And it was the application of those principles taught by Mr. Rohn that prodded me to leave a comfortable existence in California five years ago to launch and then build a successful and growing real estate practice here in Colorado.

I have read Rohn’s "Seasons of Life" aloud to both of my daughters, who are 8 and 10. The book is written in simple English, but it explains with clarity and beauty the natural flow of seasons in our lives. “Sow in the spring or beg in the fall” is one of my favorite Jim Rohn quotations.

Recognizing opportunities, and knowing when a season of opportunity (springtime) is at hand, is fundamental to planting a crop that will yield a fruitful harvest in the fall.

At the same time, Rohn taught that winters are an inevitable season of life. We all experience setbacks, we all deal with loss from time to time… but spring will come again, and another opportunity with it. Knowing that the next opportunity is just around the corner places winter in its proper context – as a season, not as a final result.

Rohn also influenced me to become an avid goal setter. Five years ago, I began making lists of one year, 5-year and 10-year goals. I review them often, and the truth is, I have learned that our minds are equipped to take us anywhere we choose to go. Focus on scarcity, and it finds you. Focus on abundance (and engage in the disciplines to create it), and it will find you as well.

Rohn taught that many of us are held back by our own self-imposed limitations. Rohn said we are all faced with a choice – we can choose to earn a living, or we can choose to design and live out an extraordinary life.

We are also faced with a choice about how we use our time and resources. We can engage in disciplines that will create abundance and opportunity... or we can choose to glide along, missing opportunities, not tending to relationships, ignoring the clock... until we find ourselves all alone and out of time.

Rohn often said "the pain of discipline weighs ounces, while the pain of regret weighs tons."

I’m pursuing that more disciplined, extraordinary life now, and the journey is exciting. Jim Rohn taught me how to start the process. Simple disciplines, consistently repeated - an apple a day, sending out handwritten notes, making one extra call - add up to huge results.

Mr. Rohn is gone, but his philosophies live on. There is a better future for all of us, if only we commit to pursuing it.

Thursday, December 10, 2009


For most of 2009, first-time buyers have been in a frantic sprint to find inventory, write offers, and cash in on the $8,000 tax credit from the federal government. From the time the stimulus bill was signed in February, the inventory of homes below $250,000 dropped down to less than 3 months (and then stayed there). That's an exceptionally tight market by anyone's standards.

This tight market created urgency, bidding wars and a lot of angst for both buyers and their agents. But now that we have hit the holiday season (and even though the tax credit has been extended), it's seems the market has hit a wall of exhaustion.

The inventory of homes priced below $250,000 has jumped from 2.89 months to 4.79 months in the past 60 days. That's a 60% increase in market time, caused not by a surge of new inventory, but by a dramatic reduction in the number of buyers looking for homes.

The market from $250,000 to $400,000 has also cooled off, with inventory rising from 6.99 months to 9.86 months over the past 60 days. Above $400,000 the demand has remained relatively unchanged, but since homes below $400,000 have accounted for over 85% of the sales in the Denver metro area this year (peaking at 88% in October), the bottom off the market is what we should be watching as we try to project where buyer confidence is headed.

Come January, I would expect to see a lot of new inventory on the market and a lot of buyers coming back in off the sidelines, but for now, there's not a lot to choose from.

Until then, the market figures to continue to move in slow motion.

Friday, December 4, 2009


Talk about timing.

Yesterday in this space I wrote about the fact Denver had shed almost four percent of its jobs in the past year, and that interest rates were holding in the 5% range because you cannot have true economic growth without job creation.

This morning, the government reported that the nation's economy lost only 11,000 jobs in November, a 100k improvement from October and the lowest figure since June of 2007.

Recession over?

In response, interest rates have spiked significantly, wiping out three weeks of downward drift in three hours of frenzied trading and pulling us well off the record lows we were experiencing. If you are under contract and have your rate locked in, congratulations. If not, you might want to check in with your mortgage lender and have a conversation about strategy going forward.

For the past year, I have been looking over my proverbial shoulder, waiting for the impact of a trillion dollars in government stimulus to wash over the market and drive interest rates higher. I hope this is not the arrival of that tsunami.

Thursday, December 3, 2009


The headlines are what the headlines are, and the fact is that jobs continue to disappear. The Denver Business Journal reported today that the Denver metro region has lost 48,000 jobs in the past year, as unemployment has risen from 5.3% to 6.8%.

This remains a serious problem, and I believe that it's the primary reason interest rates are still in the 5% range, despite trillions of dollars of spending and spending commitments by the federal government.

The story is far more bleak in other markets - several metropolitan areas reported job losses of 7 to 8% over the past 12 months, while Detroit checked in with a staggering unemployment rate of 16.7%. The entire state of Michigan is broken.

A total of 124 cities across the country reported unemployment rates of 10% or higher, led by El Centro, California, with 30% of its workforce sitting at home.

No jobs, no economic growth, no matter how much the government spends. That's the deal. And with 361 of the 369 cities surveyed reporting job losses over the past year, a legitimate recovery remains a long way off.

Tuesday, December 1, 2009


Vacancies for Denver area rental homes fell to 4.6% during the third quarter of 2009, down from 5.2% during the second quarter, according to a new report from the Colorado Division of Housing. Average rents increased from $998 per month to $1,059, a jump of almost seven percent.

Rental housing, as defined in the survey, includes single family homes, townhomes, condos, duplexes, triplexes and fourplexes.

The strongest rental market in the region remains Jefferson County, where the vacancy rate is just 3.4%. Adams County (6.2%) and Douglas County (5.7%) have the highest vacancy rates in the seven county metro area.

While the $8,000 first-time buyer tax credit continues to pull qualified renters into the ranks of new home owners, population growth and tougher loan qualifying guidelines are helping to fill entry level rental properties, which remain in high demand.

A lack of new construction figures to increase the pressure for entry level housing in the years ahead, both for renters and first-time buyers.

It is my opinion that, prior to the introduction of the first-time buyer tax credit, investors basically had the entry-level purchase market to themselves. With so many first-time buyers jumping into the mix over the past 18 months, I have seen investors pull back, as values have risen in many areas by 10% or more in the past year.

That means less new rental inventory coming onto the market, which is one reason things continue to get tighter. There are still opportunities for investors, but it is more difficult and time consumptive to find the kinds of deals that were readily available at the start of 2008.