By Peter Psotny - October 25, 2017
It is common knowledge that states where marijuana is legal have seen a drastic influx of people relocating to area. Colorado has been at the forefront of this migration for the last several years. How has this specifically affected residential real estate?
The Starbucks Effect
The “Starbucks Effect” is a real estate concept that has proven time and again to be accurate. Homes within a quarter mile of a Starbucks (this is also true for other coffee shops depending on the area) are worth notably more, with the increase attributed to the proximity of the coffee shop.
According to results from a recent study by the University of Wisconsin Madison, houses in Colorado that are located 0.1 miles or less from a marijuana dispensary experienced price increases that are eight times higher than homes that were similarly situated except that they were farther from dispensaries. The estimated difference on average was a $27,000 increase.
The Dispensary Study and Outside Factors
The study was conducted in 2013 and 2014, which were the initial years leading into marijuana legalization in Colorado. Experts contend that there are several other underlying factors that may have contributed to the increase. Several areas that are home to dispensaries are also near shopping, coffee shops and restaurants, which can increase a home’s value. The large influx in people and businesses is often attributed to the legalization of marijuana, also known as the “green rush.”
“Taken together, an increase in marijuana-related jobs, a tightened housing market, as well as the evidence we present that the housing stock near (within .1 mile) of a medical dispensary is relatively lower valued than other housing stock all combine to provide a story that there were many competitive buyers for the more affordable units in the city and the fact that they are located near retail dispensaries is not considered a disamenity,” wrote the researchers, “In fact, if many of these buyers have marijuana-related jobs, living near a retail dispensary could be considered an amenity.”
Community Specific Results
There are affluent areas in the state in which the presence of a dispensary would not increase the price of a home. Areas such as Bonnie Brae, Lower Highland and West Washington Park stereotypically prefer to keep marijuana consumption discreet due to the stigma that still surrounds the product in certain demographics.
Whether or not the presence of a dispensary nearby can still be equated with a notable effect on housing prices cannot be said for certain. Regardless of reason, many properties near dispensaries are still worth more (for better or worse) than their counterparts further away.
By Peter Psotny - August 10, 2017
Should I buy or rent?
It’s an ever present question in real estate because the answer is constantly changing based on the market as well as your personal situation. There are certain factors that play into making a decision that looks practical on paper. A calculator like this will help you account for all the potential costs in a rent vs buy comparison. But, not all important factors fit nicely into an equation.
The Housing Market
Faced with the choice between skyrocketing home prices and outlandish rental rates, Denver residents may be tempted to crawl down into their parents’ basements and avoid real estate all together. While the housing market does seem a little crazy and it’s hard to predict how long it will last, we can assess the current trends.
Home values continue to appreciate with no slowdown in sight, while mortgage rates remain reasonable. This means you can still consider home ownership an investment you’re likely to make a return on.
With rental rates at an all-time high, a mortgage payment may actually be the more affordable option. Why put your hard earned paycheck towards building your landlords equity when you could put it toward an investment of your own?
Preference and Lifestyle
Commitment - Generally, the longer you plan to stay in a home, the more likely you are to make a profit when you sell. In this market, though, it doesn’t take long. You may be able to make a profit on your home after owning it for as little as a year.
Maintenance – Home ownership isn’t for everyone. Are you ok with the cost and effort involved in routine upkeep, basic repairs, and surprise incidents or do you prefer to have those things taken care of by a property manager?
Location – In some cities, being able to afford a home in a location with particularly good resale value is a concern. But, with all of the new development going on and the convenience of the light rail, almost every corner of Denver is appealing to one demographic or another.
Still can’t decide which option is right for you? Call 720-220-2059 to talk to the experienced real estate agents at Colorado Home Sales, Inc. today.
By Peter Psotny - August 10, 2017
What is your retirement plan?
Most of us would list off a combination of savings and securities, including: stocks, bonds, 401k’s, IRA’s, etc. But, don’t forget about real estate. If you own a home in the Denver area, especially in the starter home price range, it should definitely factor in to your retirement portfolio.
Denver is currently experiencing a serious shortage of single-family starter homes. If you happen to own one, this market is for you. Now is the time to consider making a move. The profits from selling or renting out your home can be put towards your retirement.
If you are in the starter home price point, it’s likely that your home will sell at a profit. If you’ve owned the home for a considerable amount of time, you’ll probably have a large amount of equity. Utilize that equity to buy a move-up property or put it into a retirement savings plan such as an IRA or 401(k).
For a continuing source of income that could secure your financial future, consider renting out your home. The lack of single family homes on the market has pushed Denver rental rates to an all-time high, creating a new group of renters: young professionals and new families. In another market, this demographic would typically be in a position to purchase a first home. In the current market, they make ideal renters. Renting out your home is a great option, particularly if you own the home outright or if you’ve secured a low interest rate.
There are several ways to make becoming a landlord in retirement a viable option:
Continue living in your home and rent out only a portion of it. If your home is paid off, you are only making money in this scenario! Plus, if you’re looking to downsize, you get to do so without letting go of your family home.
Rent out your entire home for a premium rate or rent it out per bedroom. Either way, you’re likely to earn more than enough to cover your expenses.
Hire a property manager to help with property maintenance and day to day renter management.
Before you sell, talk to a professional who can assess your home, your individual situation, and all the details needed to make the most beneficial decision for you. Call 720-220-2059 to talk to the experienced real estate agents at Colorado Home Sales, Inc. today.
By Peter Psotny - July 7, 2017
You’re getting ready to buy the home of your dreams. It’s been inspected from foundation to roof. It’s been tested for lead and radon. As far as you can tell, it’s a clean and sturdy structure and you’re ready to sign the papers. But wait. Did you remember to test for…meth?
If meth testing didn’t cross your mind, you’re not alone. This is not a subject many people are talking about. Homeowners are simply unaware of the potential hazard. It’s hard to tell just how wide-spread the problem is, but the presence of meth being detected in homes is undoubtedly on the rise in Denver and throughout the entire Front Range. At Colorado Home Sales we’ve already seen 4 out of 25 homes test positive for meth so far this year.
It’s impossible to determine a property’s meth risk by the way it looks or by the neighborhood it’s located in. Sure, meth has been a problem in rentals and foreclosures, but it’s been detected in plenty of high-end homes as well. The stuff is everywhere.
Exposure to even a small amount of the toxic residue can make you and your family sick.
Smoking meth in a home just a few times can leave behind harmful amounts of residue.
You will not detect it during a walkthrough; it cannot be seen or smelled.
If it’s painted over, the residue will continue to seep through and the painted rooms must be gutted in order to remove it.
Professional testing is not particularly cheap, costing around $600 to prescreen for the presence of meth and upwards of $3,000 for a Colorado certified test, depending on the size of the home. But consider the cost of remediation. The cleanup process may require demolition work and can run anywhere from $7,000 - $40,000…maybe more. That’s enough to bankrupt a homeowner.
Although Colorado law states that a seller must disclose meth contamination that has not yet been remediated, liability hinges on the seller’s knowledge of meth use within the property. It is very difficult to win a suit after purchasing a contaminated home. You need to test before you buy!
We aren’t afraid to address all the nitty gritty details in order to protect our clients. Call 720-220-2059 to talk to the experienced real estate agents at Colorado Home Sales, Inc. today.
April 26, 2017