New vacant building tax immediately implemented Lakewood, CO just implemented the first vacant building tax…
3 Colorado trends to watch this fall
Happy fall, hopefully everyone got a chance to enjoy the beautiful Colorado weather we’ve been having the last couple of weeks. With the change in the seasons, there are three trends to keep an eye on in Colorado for the final quarter of the year. Has Denver reached an inflection point? Will oil and Gas impact Colorado Real estate? What does the ski safety act and a current court case have to do with the resort communities?
First, has the Denver Real estate Market shifted? Is a bust on the way? Denver metro real estate is an indicator for most markets throughout the state. In the past week for the first time in five years there was a major change, more houses have…. Read more
Second, will oil and gas continue to tank? How will this affect the Colorado economy? Oil and Gas is a large driver of Colorado’s economy paying over 400 million a year in property taxes and consuming 17% of all Denver office space. Although the slide in oil/gas prices has been bad, the new regulatory environment and CO Supreme Court case could make things considerably worse…. Read More
Finally, the ski safety act is facing its biggest challenge in years. How will this impact the ski industry? There is a major challenge to the ski safety act that could open the ski industry in Colorado to serious liability. What is the current CO Supreme Court case about and how could this change the ski safety act which resorts rely on to protect them from liability? There is a major challenge to the ski safety act that could open the ski industry in Colorado to serious liability. Read More
First, has the Denver Real estate Market shifted? Denver metro real estate is an indicator for most markets throughout the state. There are some interesting trends starting to emerge that point to a shift in the market. In my opinion Denver is somewhere near its peak. For the first time in 5 years, we are seeing many homes lowering their List Price from their original List Price. Over the last week alone 1,000 houses in Denver metro have lowered their list price (see full article from 9 news). This means prices are slowing (more than the usual seasonal decline) and houses are staying on the market longer. Basically this is a shift to a more balanced market and/or an indicator of a possible correction.
One of the primary allures of Denver has been its affordability compared to the coastal markets. This affordability is getting crimped (see Denver Channel article: Denver housing is unaffordable to both buyers and renters according to Zillow). Denver is one of only five metro areas that Zillow.com found to be unaffordable to both buyers and renters. In Denver rents have gone up nearly 7 percent in the past year, which is three times the national average increase of 2.3 percent and two bedroom rent is 41 percent higher than the national average (see article in Denver Business Journal: Denver rents rising three times faster than national average). In essence people are using more of their income for both rent and mortgages. For example rent now takes up over 35 percent of an occupants pay which is well above the national average. The high cost of living will ultimately lead to more people choosing lower cost markets to relocate to and as a result more business relocating to lower cost markets (they can pay their employees less in lower cost markets).
Second, Oil and Gas: Prices for these commodities have been in a freefall dropping substantially in the last 3 months. Oil and gas consume roughly 20% of all office space in metro Denver (See Denver Post article: Where are oil and gas jobs concentrated). Along with falling prices, proposed regulation, and a pending Colorado Supreme Court case could rock the industry.
In regards to regulation, Governor Hickenlooper’s oil and gas task force proposed allowing more local input to cities on pad site locations (setbacks, etc…). If this rule were passed this will dramatically alter the landscape of where and how drilling is done throughout Colorado (see Denver Post article: local input for oil and gas locations) This rule was intended to head of municipalities trying to outright ban oil and gas within their cities like Longmont did (see NY times article: Heavyweight response to fracking bans). This ban has ultimately led to a Colorado supreme court case that will decide the fate of fracking bans (see Denver Post Article: Colorado supreme court will decide fracking bans). The decision in the Longmont case will have far reaching ramifications throughout the state. If the local control issue were not enough “fun” for the industry, there are many ballot initiatives in play to propose outright fracking bans, setback requirements, etc… Look for a rocky year ahead for oil and gas in Colorado due to prices, regulatory uncertainty, and various ballot initiatives
Finally, The ski safety act: First, what is the ski safety act. In Colorado the legislature passed a bill that basically granted the ski resorts immunity from lawsuits due to skiing (basically says that skiing is inherently risky and you cannot sue a ski resort as a result of death or injury). Next time you get on a ski lift, there typically is a sign posted that recites the ski safety act. There is a major challenge to the ski safety act that could open the ski industry in Colorado to serious liability. The heart of the most recent challenge to the act basically questions whether an inbounds avalanche is an inherent risk of skiing, the Colorado supreme court is working this case now (here are two articles on the subject: Aspen Times & Denver Post). The outcome will have huge ramifications if the ski resorts are found liable. Definitely something to keep an eye on over the next 6 months or so.
Written by Glen Weinberg, COO/ VP Fairview Commercial Lending. Fairview is a hard money lender specializing in private money loans / non-bank real estate loans in Georgia, Colorado, Illinois, and Florida. They are recognized in the industry as the leader in hard money lending with no upfront fees or any other games. Learn more about Hard Money Lending through our free Hard Money Guide.
Has the Denver real estate market shifted?
Oil and Gas regulations & their impacts:
Ski safety act: CO Supreme Court challenge to ski safety act and resort liability