Welcome to Ask the Colorado Dream House with your host Dan Polimino!
We’re starting off today’s show with gratitude. Gratitude for all our clients, friends, families, and partners. We hope you have a wonderful Thanksgiving spending time with those you love.
Dan has a special update today on the Luxury Real Estate Market and predictions for 2018.
✅ The 2018 selling season will be starting earlier
✅ We’re anticipating modest gains in 2018
✅ Inventory will remain an issue
✅ What’s all the talk about the new tax plan❓
00:02 Hello everyone and welcome to the Thanksgiving edition of Ask the Colorado Dream House Team. I
00:07 hope you're doing well and I just want to say how grateful we are this Thanksgiving season as we approach the big holiday coming up on Thursday we were so grateful to our family our friends and yes our clients. You guys are wonderful. We did a coat drive. I don't know if you saw the video here on Facebook but we did a coat drive for the last 30 days. Our clients our friends our vendors showed up big and donated over 200 coats for people who are less fortunate and don't have a coat this winter season. And we donated those last Saturday so I scrolled through the Facebook feed I'm sure you can find the video but absolutely amazing. And just a heart of thankfulness as we get ready to celebrate this week with family I hope you have a wonderful Thanksgiving and I hope you get some downtime and do whatever you want to do. My brother in law and I are going to be watching football and eating like so many people so you have a great time.
01:07 Today we're actually not going to answer any questions today we're going to talk about our 2017 luxury marketing report. We're taking a look back at the past year and asking the question how did luxury sales do. In Denver and the surrounding suburbs for 2017. And it's a very detailed report. It's about seven to eight pages. It's very easy to read what we do is we break down the luxury market from 1 million to 4 million and we break it down into 500000 dollar segments or we called bandwidths. So we look at. How many homes sold between a million and a million five. Where we're the most sales. Was it Denver was a Cherry Hills village was a Greenwich Village and so forth. And we do that for every price range in$500000 increments up to four million so not only can you see how many homes sold you can see how many are active but you can see really and this is the part I love about our report where the most sales are occurring.
02:17 So you can find out exactly in a calendar year how many really qualified buyers are in your city or in your neighborhood that can buy your luxury home if you want a copy of that. It's absolutely free. Just e-mail us here at Team at Colorado Dreamhouse dot com and we'll provide you a report or maybe Mike our Director of Marketing will post one here on Facebook for you and you can just grab it that way. All right. Couple of I want to go over the conclusions. I'm not going to go price range of bandwidth by bandwidth but I want to go a couple of A can give you some of the conclusions there's about seven of them.
02:57 The first is this it was an absolute banner year in luxury sales in 2017. Here in Denver. Now when I authored this same report last year at the end of 2016 one of the things I said was there could be a big boomerang effect in 2017 and we could see a huge increase in luxury sales luxury sales were kind of slow in 2016 and it was due primarily to the contentious election. There were a lot of people luxury buyers that were sitting on the sidelines and they were very worried about the election. And so they didn't pull the trigger and buy a home. And what I what I predicted was that right after the election that the luxury market would take off and that 20 17 would be a terrific year in luxury sales.
03:48 And that's exactly what happened. As I said banner year across almost all price ranges across city this city. What you see are some wins and some losses depending on the price range. Some cities did better in certain price ranges than others. And you'll take a look at that in the report. But really just a tremendous tremendous year some of the big winners this year were clearly the city of Denver. The city of Denver increased luxury sales in almost every price range. Another big winner was boulder Boulder didn't show up in some price ranges last year and this year they showed up in just about every price range and they had some really impressive sales. And the numbers look good for Boulder Castle Rock and Parker conversely had an incredible year in 2016. I mean a real banner year for sales.
04:43 And we thought wow that's kind of a different trend line. We weren't expecting a big year out of Council Rock and Parker in 2016 it kind of caught us by surprise. We were going to be interested to see if it continued in 2017. And I'm sorry to say it did not 20:17 was more of a usual or more of a normal year for both Castle Rock and Parker We didn't see that huge spike in sales like we did last year. Cherry Hills village in Greenwood Village kind of a mixed bag. Again depending on what the price range is the cities were up and some price ranges and down in the others for the second year in a row I want to let you know that the selling season is starting earlier and earlier. Used to be you had to have your property on the market some time in April.
05:30 Now you got to have your property on the market really in early to mid March. Last year during February and March it was some of the hottest real estate market I've seen in quite some time. So if you're thinking that spring is your time you're going to sell in the spring. Then what you need to have is conversations with us in January and February. Right. We need to meet with you talk about the sales process talk about what we have to do to get the house prepped and ready to go on the market that second or third week of March. We're telling all of our clients we want to be on no later than the second or third week of March. Conclusion number three modest gains are predicted for 2018. Long gone are the days of 8 9 10 11 percent appreciation.
06:24 You can't do that year over year. A city is not going to be able to sustain double digit gains for a long period of time. So here's what we're thinking. If you're in the luxury market maybe 1 to 3 percent and if you're a non luxury home maybe two to five percent appreciation for 2018. Excuse me conclusion number four. Inventory. The inventory problem is not going to go away soon. This is here to stay. Inventory shortages are probably here for the next three years as a nation. We are in a deficit of about 900000 homes per year. And it's not going to change here in Denver. So the inventory problem is not going to go away. The question is What do you do about it. And the answer that we've come up with our clients for 2018 is.
07:18 We want you to buy first and sell second. Now that sounds easy and you're saying. But Dan I'm going to need the proceeds out of my home in order to buy. That's why we're partnering with a lot of lenders and getting a V or variety of bridge loan products in place. And so what we're going to do is we're going to get into a bridge loan pull the equity out of your current home let you go find a home at your leisure however long it takes. Buy that home. On it move in move into it and then sell your existing home and pay off that bridge loan. That's our strategy for 2018. Conclusion number five. There's a new sheriff in town. What I mean by that is there's a new Fed chair.
08:03 So what this guy is going to do with the interest rates. Who knows. We are now out of the game of predicting where interest rates go because every time we make a prediction that they're going to go up. They don't. And then when we do say that they're going to stay stable they go up. So I don't know what the new guy's going to do. And it's a total crap shoot and 2018 number six the biggest question for 2018 is really going to be the tax plan. How will the tax plan affect homeowners. Will there still be a mortgage interest deduction. Will it be up to a million where it is currently now. And that's what the Senate proposes or will it be reduced down to 500000 which is what the House passed and proposes will there be a deduction for property taxes.
08:52 These are all big questions that could affect homeowners in 2018. Not to mention the individual tax rate in the corporate tax rate. What happens with that. Does it get done before the end of the year. Is it retroactive back to the start of 2017. All big big questions that will probably affect our spending habits in real estate. Last. Number seven These are the positives for Denver. The first real big positive is the net gain of people moving into the city about 50000 a year net gain. So all the people coming out and all the people coming in about 50 a year it's still a place where people want to live in work. And that bodes well for Denver real estate. Second big positive is we're all going to be waiting anxiously. The announcement from Amazon will Amazon select Denver as their second North American headquarters.
09:51 There's a number of cities throughout Denver and the suburbs that have all been submitted as a proposed site. There's a number of cities around the country that are all vying for Amazon.com simply because Amazon said we're going to bring 50000 people and we're going to invest$5 million in a brand new building on campus. And everybody wants that business. We'll be waiting to see who they choose. Right. In 2018 I'm hearing that in the spring they will whittle down and get down to a short list and then sometime in fall they will make their selection. Those are some of the positives for 2018. Well those are seven conclusions from the luxury market report. Make sure you get a copy with us here at the Colorado Dreamhouse team. Again Happy Thanksgiving everybody. Have a great four days off. If you have four days off and we'll talk with you next week.