This has always been one of my favorite properties in LoHi (if you own 3310 Shoshone, I would love a tour), so I’m glad that it is getting some love on one of my favorite sites. It’s #16.
It would be an understatement to say that one had been living under a rock the last few years if they weren’t aware of the controversy going on in Highland Square. Yard signs (of which I have spotted fewer over the last year) dot almost every yard as you get closer to the intersection of 32nd Ave and Lowell Blvd. “NO HIGH RISES In West Highland” is prominently displayed in bold white letters on black. Quite intimidating. But is the development by RedPeak Properties worth the fight? Is it going to ruin the historical integrity of the West Highland neighborhood?
For starters, I think it is important to understand where the neighborhood group, No High Rises in West Highland, stands. Their mission states that they are not anti-development, but rather they just want to make sure development will stay in line with the character of the community. Given that the site, and neighborhood for that matter, have changed and adapted countless times over the history of the neighborhood, I don’t see this as a large enough concern to stifle development. What appears to be the real issue at hand, is that residents don’t want more congestion along the streets and their mountain views (which are non-existent from street level) to disappear.
A white paper put out in June 2009 by the National Association of Home Builders suggests that the impact, at least economically, of a multi-family building (or in this case, buildings) will be positive on the surrounding local community. They estimate that per 100 rental units (there will be 147 units for RedPeak’s West Highland development) there will be economic impact in three phases. The sum of the first two phases (Phase 1: Direct and Indirect Impact of Construction Activity; & Phase 2: Induced [Ripple] Effect of Spending the Income and Taxes from Phase I) will lead to $7.9M in local income, $827k in taxes and 122 local jobs. When applied to the West Highland development, those numbers go to $11.6M in local income, $1.2M in taxes and 179 local jobs (I am aware that the report is from 2009 and that these figures are estimates). Phase 3 of the process (Ongoing, Annual Effect that Occurs When New Homes are Occupied) suggests that the development will lead to $2.2M of local income, $395k in taxes and 32 local jobs (or, $3.2M in local income, $580k in taxes and 47 local jobs for the 147 unit West Highland project).
Economic impact aside, is either party “right” in this issue? Do the residents’ have valid arguments about congestion? I believe so (you can read a memo from the City of Denver on the parking/traffic situation in Highland Square as of January 2012, supported by volunteer gathered data, not from a licensed traffic engineer, here). Is the historical integrity and charm of the neighborhood in peril? In this case, no. It is no mistake that RedPeak chose the location that they did to develop. The demand to live in Highland Square is off the charts. What we really have here are resident’s that have been bitten by the NIMBY bug (they say so themselves).
RedPeak has taken a ton of community input into account. They are not building the maximum allowable structure, they have listened to residents’ concerns about retail on Meade Street and they have designed what will be a beautiful apartment building that will fit will into the mix of historical and contemporary buildings in the neighborhood. So, will there be more people around? Yes. Will it be worth it for the neighborhood? Absolutely.
I get asked this question a lot. Until recently, I would point to physical examples of redevelopment to help clients see why a particular property would be a safe bet (actual scrapes and new construction, or properties that have been rehabilitated). Of late, I have started using the zoning code to help clients see why they should consider purchasing a particular property. I have always looked to the zoning code on a particular property once a client has shown interest, but only for that property (ex. they want to split the lot, they want to turn the basement into another unit, etc.). The Denver zoning code, redone in 2010, is much more comprehensive now than it ever was, and it is very easy to understand a property’s potential with just a few minutes spent researching it’s code.
It can sometimes be hard to articulate why a certain block is a “hub” of the neighborhood. Sure, there may be restaurants on it, or there may be new construction, or the average sold price might be up 10% year over year, but some people still can’t see the potential future value of a piece of real estate. Here is an example of what my partners and clients look to when considering purchasing a property with the intent to hold it for a while (we focus on proximity to mixed use/main street/urban center zoning, if in an area of primarily single/double unit lots, and we look for lots zoned mixed use/main street/urban center that might currently have a single family unit on it):
The yellow on the map is zoned U-TU-B or U-TU-B2, meaning that if the lot size meets the minimum requirements set forth by the city, you can put a duplex on it (or carriage house, basement unit, etc.). The red and dashed red areas are what we focus on. Those are the the mixed use (solid red) and main street (dashed red) zoned lots. The number following the code (U-MX-3 for example, what my house is zoned) tells you how many stories you can build up to. So, when you look at the heart of LoHi around Hirshorn Park, it is easy to see why over the last couple years there has been so much development of tall multi-family units. This is exactly what the city wanted and intended.
To get back to the original question of where to buy in LoHi, I suggest looking to be in close proximity to the Tejon and Navajo corridors. Driving up Tejon today as opposed to a year ago, it is easy to see the development (there are currently five projects being constructed/redone between 33rd and 38th) in action. While the eastern part of LoHi has been a bit slower to transition, it will not stay that way forever. There is already the art district on Navajo (home of the lovely Bug Theatre), and a ton of potential thanks to the Denver zoning code. The red areas are going to be the hubs of redevelopment, so if you are considering LoHi for a purchase, consider proximity to those areas.
It doesn’t take long to realize that the Highland area (and specifically LoHi) has taken off in the last year. The lack of active listings is being felt across the Denver metro area with offers coming in within the first two weeks in all price ranges and multiple offers a regular occurrence. The days where buyers were able to take their time and have their pick of properties have passed. The market has shifted from a “buyer’s market” to a “seller’s market” (hate those phrases) very quickly, particularly in LoHi.
One can drive around and notice the lack of “for sale” signs in yards (never noticed how many there were until I started in this business, now I see them everywhere, even when they’re not there), but it’s easier to check the numbers. One year ago, the average days on market for a listing in LoHi was 101 days (it was much higher in other parts of the city and price points, some as high as 250) and the average price per square foot in LoHi was $243. Now? Try 74 days on market with an average per square foot of $259 (note: these statistics are based on both single family/condo properties ranging in price from $0 – $600K). That means that in one year we have seen the average appreciation of 6.58% and a decrease in the time it takes to close of 26.7%.
What has caused this? The amount of homes for sale has dropped by over 50%, rates have remained relatively stable (some decrease) and there are more buyers in the market. Combine all of that with the fact that LoHi is walking distance to downtown, restaurants, shops and every sporting event in the city (sorry Rapids) and it has quickly become the best place to sell a house in the city.
4. Separate Needs from Wants. Do you need the condo complex with all of the amenities and the HOA fees to prove it, or is space the main issue? Viking appliances are nice, but will the electric stove suffice for the time being? Once you start looking at properties, you will notice that comparable properties (in terms of location and square footage) differ more in price than it would cost to have the high-end finishes installed (granite counters, stainless steel appliances, wood floors, etc.). This is because of convenience. Sellers (and more importantly, sellers’ brokers) know that buyers will pay more to have a property ready to move in right after closing than they will a “fixer-upper”. If you are willing to focus on your core needs now, you may find that you will get all the wants for less, later.
5. Know Your Desired Location. Where’s the closest LightRail station? What does the parking situation look like for guests? How far away is the nearest grocery store? These questions may seem like trivial no-brainers, but I have seen them get overlooked more than you would think. I always recommend to clients that they visit the neighborhood they are thinking about buying in at different times of day to get a true feel for the neighborhood. Talk with the neighbors and get their take on the neighborhood and it’s surroundings. Find out how far away schools are. Know what the other homes in the neighborhood have recently sold for, and find out why they sold for what they did. Lastly, talk with a real estate broker (you knew that was coming, didn’t you? Pat on the back). Just as it is with every other industry, it is easier to navigate unfamiliar waters with someone that knows them and with someone you trust. Make sure you can speak candidly with your broker, and if at any time you feel uncomfortable, let them know. If they can’t get it done, don’t give up hope. Find someone that you feel comfortable with.
If you would like more in-depth answers and stories of first-time homebuyers, drop me an email and I will send you a copy of Your First Home written by Gary Keller, Founder and CEO of Keller Williams Realty International.
At some point in all of our lives, we will assume the role of first-time homebuyer. What on earth does this entail? Uncertainty, choices, time, stress, this giant amount of money called a mortgage and a place that is truly yours. I often get asked about what first-time homebuyers need to focus on, so here is my top 5:
1. Take Your Time. Take your time looking at properties. When physically visiting the property, notice the direction the front of the house faces (north in Colorado = icy driveways), pay attention to the foundation and look for stress fractures in the ceiling and around windows. Any major issues will come to light during the inspection, but you may be able to cross a property off of your list by doing your own analysis. Also, make sure that you exhaust all of the properties that fall in your price range. I always advise clients to look at as many properties as they can handle so that they can make the best choice possible. Properties are always coming on and off of the market, so it is inevitable that you won’t be able to see them all. Make sure that you see enough to feel comfortable with your final choice. See what’s available in Denver.
2. Talk With a Lender… Yesterday. Just as important as exhausting your choices for properties, is speaking with lenders. They will all be able to offer different rates and different programs specific to their companies. Some are mortgage officers lending their own institutions money and others are mortgage brokers that will shop the loan on a secondary market. There is no right answer here, just a level of comfort. Ask about what types of government programs (FHA, VA, etc.) are available to you. And if it doesn’t make sense, ASK! I promise, you won’t sound dumb for doing so. You have to find a lender and program that make you feel comfortable.
3. Think About Your Exit Strategy. I know, you haven’t even purchased a property yet, and here I am telling you to think about how you are going to get out of it. If you don’t though, you will pay the price later. How long are you planning on living in property? Will you be transferred in the next two years? Do you have pets? Getting married? Children? You’ll have to answer these questions sooner or later, and the more time you give yourself, the easier it will be to come to solution you are content with. Maybe you want to hold onto the property after you purchase another, and use the first as an income property (you can thank me later for this advice)? Regardless of the decision, come up with a plan now, and then tweak it later.