Dan Polimino discusses automated valuation tools and the risks that come with Annie Mae and Freddie Mac moving towards an automated system. He also gives a neighborhood spotlight on Kentley Hills in Highlands Ranch and expands on some solutions to affordable housing in Colorado.
Might not be a good idea.
- It doesn’t take into account finishes
- It doesn’t take into account all of your home upgrades
- It doesn’t take into account the specific location of your home, whether or not it has a view, if it’s on a cult-de-sac, etc.
Hi, everybody. Welcome to today’s episode of Ask The Colorado Dream House Team. I’m Dan Polimino, your host, coming to you live from Denver, Colorado. Happy Thursday everybody. The weekend is almost here. Can you believe it? This time next week, we’re going to be taking off for the Labor Day holiday weekend. Of course, Labor Day traditionally means the end of summer. Where did the summer go? It flew by! I hope you had a great time. We’ve had a great time here in Colorado. We still have a lot of homes. It’s been a rollercoaster ride, but it’s been a lot of fun.
Again, if you’re new to the show, welcome. This is all about real estate. This is news you can use. It doesn’t matter if you’re in Denver, Maine, Seattle, Florida, Dallas, everything we talk about is good database-driven information and comes from years of experience and thousands of transactions. Use our knowledge base for your benefit. Okay? If you’d like to participate anytime in the show, you can. All you have to do is leave a comment here on Facebook or you can email us or call us, 720-446-6325. If we can help you buy, sell, or invest in real estate, we’d love to do it, or if you just have a question, we’re happy to answer it. We’re here to help.
Again, two things we like to accomplish in every show. We like to do a little market news and then we like to answer your questions. This week, we started a new feature called the Area Spotlight, or Spotlighting Different Neighborhoods. Today, we’re going to spotlight Kentley Hills. It’s my neighborhood. I live in Kentley Hills in Highlands Ranch and have been there 17 years and absolutely love it. Funny story, when my wife and I first got together, I wanted to live in the city because I had already lived in Washington Park and I enjoyed it and I liked it, but I knew I wasn’t going to be able to afford the prices back then. She wanted to live in the suburbs. She dragged me, kicking and screaming, out to the suburbs. I said I’d never lived in the suburbs, and sure enough, 17 years later in Kentley Hills, I couldn’t be happier. It’s turned out just great.
Let me tell you a little bit about the small little sub area. It’s almost at the corner of Highlands Ranch Parkway and University. If you know where that is, there’s a village shopping center right there with a King Soopers and across the street is the Whole Foods. Right behind that is the big church, Cherry Hills Community Church. Across the street from Cherry Hills Community Church is Spaces. It’s a new development by Shea Homes. Next to Spaces is Kentley Hills. You kind of got an eastern border of Fairview, you’ve got a western border of Wildcat Reserve because Wildcat Reserve swings around, and then Summit View is your northern border. It’s just this tiny little group of homes.
The price range in there is between $400,000 and $800,000. I know that’s a pretty wide gap, but that’s really how it is. The builders in there, there was about four or five builders that really developed Kentley Hills. They were Ryland Homes, which is now CalAtlantic, Sanford, which isn’t around anymore. Oakwood was another builder. They developed Green Valley Ranch. Shea and Richmond Homes were the other two builders. All really good homes. Some bigger, some smaller. Some have just amazing views. Being in Kentley Hills, if you’re in the right place, you got some beautiful mountain views.
A couple of things about activity. Right now, there are only two homes for sales in the MLS in Kentley Hills. It is a very sought after neighborhood. People like it a lot, and homes don’t stay on the market there. There are four under contract at present time. In the last six months, there have been 11 sales. You say, “Well, 11 doesn’t sound like a lot.” That’s because they don’t come up for sale very often.
Take my house for an example. I’m on a cul-de-sac and it backs to open space. Two really big pluses when you talk about location, location, location, so I don’t want to leave. A lot of people don’t want to leave. A lot of the homes back to open space because there’s a great trail system through Kentley Hills. There are lots of places to walk and bike.
There’s plenty of places, plenty of parks. Dad Clark Park is right across the street from me. They got the potato patch where you can have a little garden. They’ve got a football field and a basketball field. You’ll find these things all over Kentley Hills. The two main elementary schools in Kentley Hills are Heritage and Summit View Elementary. They both feed into Mountain Vista High School later, but Rock Canyon High School isn’t too far away. If you know anything about the Douglas County school district and system, you know that Mountain Vista and Rock Canyon are very, very highly rated.
It’s a great community. If you’re thinking about moving there or would like to move there, contact us. We know of some properties that are both on the market and off the market. Hope that gives you a little insight into Kentley Hills, my neighborhood, in Highlands Ranch. Let’s get to today’s questions.
“Dear Colorado Dream House Team,
Can a contractor put a lien against a house even after the house was sold?”
Yeah, they can. Let’s say you had a contractor do some work, you didn’t pay them, you sold the house, contractor finds out that the house was sold, the contractor can go back and put a lien, a mechanic’s lien, against the property. You may be thinking, “It’s the new homeowners’ fault.” It’s not because at the closing table, you signed a document with the title company indemnifying them of any future problems just like this. That document states that to your best knowledge, and you are aware, there were no outstanding bills, debts, or money owed to contractors. You sign that document at closing. Now run through this. Contractor finds out you sold the house, they place the lien on the house, that goes to the title company. The title company comes back to you to pay off the lien. Trust me, they have infinitely more resources and attorneys to get that money out of you. Yes, they can put it. Make sure you don’t have any liens or unpaid bills on that house before you sell it.
“Dear Colorado Dream House Team,
Do you see any solution to the Affordable Housing problem in Colorado?”
Wow. That’s a big one and not enough time to cover here, but a couple of quick thoughts. The city is employing two different things right now. One of them is they are requiring builders of condominiums to set aside x amount of units within the building that are deemed Affordable Housing, meaning they’re going to be a set price point for these and that only certain people are going to be eligible and can qualify to purchase one of those. That’s just an okay solution.
Other thing they’re doing is they’re taxing or putting some type of an additional fee on builders who are building condominiums in Denver, collecting that money, putting it in a kitty in a fund to help Affordable Housing somewhere down the line. What they’re doing with that fund they haven’t really spelled out or said. I’m never really a big fan of more taxes and more fees by the government.
The question is, “What would be the solution?” I think the primary answer to that is simply redevelopment. People think that there’s not a lot of space left in Denver or around the city and county, but that’s not true. If you go through some of the more impoverished areas, drive up and down East Colfax for instance, there are plenty of vacant buildings. There are plenty of empty lots. They may not be huge, like the size of the old Gates Rubber Factory, but there is a lot of infill land and property that can be redeveloped for Affordable Housing.
You say, “How would that work?” The city can partner with a developer, the city can take that property back maybe, or the property that the city owns could actually give the land to the developer. You say, “You can’t have a government giving land to a developer for private enterprise.” Sure you can. Partnerships happen like that all the time. If the city gave land to a private developer, he spent the money to build Affordable Housing, the people who are going to buy that housing are all of a sudden going to be paying property taxes, which is probably more than the city’s getting now. There’s a lot of solutions here. You just got to work at it. We can talk more about this at another time.
“Dear Colorado Dream House Team,
I’ve heard you talk most recently about appraisals. Then the other day, I was reading an article in the news about Fannie Mae and Freddie Mac no longer requiring an appraisal and instead using an automated valuation tool. What do you think?”
I think automated valuation tools are a big mistake. One of the biggest is Zillow. If you’ve ever gone online and you tried to price out your house with Zillow, you know it’s not very accurate. Anytime you get into an automated valuation tool, you’re not going to get an accurate number. I hear the arguments, “Oh, they’re getting better and they’re getting better every day.” I don’t care how good the algorithm gets. The algorithm is never going to be able to tell the finishes in the house and whether you updated the kitchens and bathrooms. The automated algorithm isn’t going to be able to tell that you back to open space or you’re on a cul-de-sac. There’s only so much algorithms can do.
I think if we’re talking about home values and being off 15% or 20%, that can mean a lot of money. I see Fannie and Freddie moving to an automated evaluation tool and they say, “Only in certain circumstances.” Even in only certain circumstances, I think it’s going to be a disaster. Moreover, I’m sure appraisers aren’t going to be happy about being out of a job and they might have something to say about it. I just think it’s ripe for mistakes. That’s my two cents on it. You might think differently.
That’s this week’s show. Everybody have a great weekend. We’re back here on Tuesday.