Colorado's star powder
State's resorts remain a top destination of movie stars, musicians, politicians
Vail, Aspen and Telluride.
By Brian Metzler, Special to the News November 28, 2006
Celebrities are people, too - at least when they come to Colorado.
Take, for example, Kelsey Grammer. When the Hollywood actor and his family arrived in Colorado last week to spend the Thanksgiving weekend at their home in Beaver Creek, one of their first events was a trip to the new Costco store in Gypsum.
Apparently everybody needs groceries, big-screen TVs, holiday trimmings and bulk quantities of paper towels, toilet paper and Diet Coke, even if you happen to have arrived in the state by private jet.
"He loves to shop at Costco," said Brenda Smith, a membership coordinator at the Gypsum store. "He was just like any other normal person stocking up for the holiday weekend."
With the holiday season officially under way, it's high time for celebrity sightings in Colorado resort towns. Aspen, known as the Malibu of the mountains, has gotten the most notoriety as a holiday mecca for the rich and famous. But Vail, Beaver Creek, Telluride, Steamboat and Crested Butte also attract actors, athletes, politicians and high-profile businesspeople during the winter months.
Some celebs, for example Cameron Diaz, Justin Timberlake, Tom Cruise, Martina Navratilova, Ian Ziering and Robert Kennedy Jr., are avid skiers or snowboarders and share the same slopes as the rest of us. Diaz and Timberlake were on a ski vacation in January in Telluride when they helped a badly injured skier until the ski patrol arrived.
Of course, because celebrities have a lot of money and want privacy, they can do things we can't. Cruise, who owns a home in Telluride, has been skiing with Telluride HeliTrax on a couple of occasions. And two years ago, singer/songwriter Edwin McCain paid for a full day of snowcat skiing for himself and four friends.
But not all celebrities ski or snowboard. Some come to Colorado to spend time with their families and friends, dine at fancy restaurants, shop at lavish boutiques or simply enjoy the mountains.
"You don't really notice them after a while," said bartender and telemark skier Matt Hargraves, who has lived in Aspen for 12 years. "You'll see someone famous every now and then, but it's almost not that big of a deal, unless you happen to bump into them on the sidewalk."
Part-time residents Jack Nicholson, Don Johnson, Michael Douglas, Catherine Zeta-Jones, Kurt Russell, Goldie Hawn, Melanie Griffith, Antonio Banderas, Nick Nolte and Navratilova are the most commonly seen around Aspen every winter. Other recent vacationers have included Mariah Carey, Mischa Barton, Michael Jordan, Will Smith, and Luke and Owen Wilson.
The list of celebrity sightings at Vail and Beaver Creek includes Diaz, Timberlake, Ziering, Britney Spears, Tom Brokaw, Gloria Estefan, Snoop Dogg, Mary Hart, Ross Perot, Jack Kemp, Jack Nicklaus, Clint Eastwood and Arnold Schwarzenegger, as well as local residents Ryan and Trista Sutter, who earned national fame on The Bachelorette TV show.
President Gerald Ford and his wife, Betty, were part-time residents of Beaver Creek for more than 25 years and were avid skiers until health concerns limited their mobility. Other visitors have included Matt Lauer, Buzz Aldrin, Minnie Driver, Jane Fonda, Emilio Estevez, Mimi Rogers, Robert Redford and the Wilson brothers.
Actor Danny DeVito and his wife, Rhea Perlman, have visited Steamboat Springs several times in the past several years, as has former boxing champion Evander Holyfield. Actor/comedian Bill Murray also recently has taken a vacation to ski Steamboat's champagne powder.
Cruise is the most notable part-time resident of Telluride, but the opulence and remoteness of the resort town has attracted numerous other stars. Oprah Winfrey owns a home there, but Hollywood director Oliver Stone sold his a few years ago.
Actor Tom Skerritt often is seen around Crested Butte, where he has been a part-time resident and co-owner of the Idle Spur Grill and Brewery for several years. Ed Zwick, a Hollywood director and producer, also is a part-time resident of Crested Butte, while other visitors in recent years have included skateboard superstar Tony Hawk and Washington Redskins quarterback Mark Brunell.
Where can you expect to see celebrities? There's no exact formula. Waiting for private jets to arrive at Aspen/Pitkin County Airport or Eagle County Airport in Gypsum might seem obvious, but many stars are met by private cars on the tarmac and never enter the building. Hanging around posh restaurants, clubs or hotels, such as the Hotel Jerome in Aspen or the Sonnenalp Resort in Vail, can work, but you've got to be patient and lucky, too. Waiting near the line of Aspen's Silver Queen Gondola can work, but who wants to spend time doing that when you could be skiing?
The best way to spot celebs is to attend the Aspen Celebrity Downhill Weekend on March 9-10 in Aspen (ayexp.org) or the American Ski Classic on March 21-25 in Vail (vvf.org). Through the years, those events have brought together skiing legends and sports, entertainment and corporate celebrities for amateur ski races, parties and fundraisers. Among the big names that have attended those events include Eastwood, Carey, Kenny Loggins, Matt Dillon, former Celtics star John Havlicek and daytime actor John Castellanos.
While many celebrities try to remain as inconspicuous as possible, others just blend into the hordes of tourists that visit the state's resorts every winter.
"I was eating lunch at the base lodge and saw Mark Brunell," said Boulder resident Mike Slone, co-owner of a company that produces ski and snowboard books, Web sites and movies. "He had a ton of Crested Butte swag on and no ski equipment, so I knew he was someone famous. As he passed by the table, I asked him if he was Mark Brunell and he said, 'Yes.' Then he talked with me for about 15 minutes while his wife and kids went out to ski. He was a really nice guy."
Vail
• Britney Spears
The pop princess has been spotted in Vail. Soon-to-be single, the mother of two who has a well-documented taste for coffee might be found coming out of Starbucks, venti in hand.
• Arnold Schwarzenegger
The Governator is a frequent visitor to the Vail area. Perhaps it reminds him of his native Austria. You might run into Schwarzenegger at Hotel Gasthof Gramshammer, operated by another Austrian, Pepi Gramshammer.
• Ryan and Trista Sutter
The Bachelorette lovebirds call Vail home, and they say they aren't leaving. Though they have said they wouldn't immediately dismiss the idea of doing another reality show, Trista said, "If we would have to leave Colorado, we would pass."
Aspen
• Martina Navratilova
The tennis superstar makes her home in Aspen, at least for part of the year. There's a good chance you'll find Navratilova, an avid skier, on the slopes, now that she officially has retired from tennis (again) and has more free time.
• Jack Nicholson
Though he has said he doesn't ski as much as he once did, the film legend has a home in Aspen. He was seen skiing in the area in December.
Telluride
• Cameron Diaz
A trip to Telluride in January had this Charlie's Angel playing guardian angel. While on the slopes, Diaz and her flame, Justin Timberlake, stopped to help a badly injured skier.
• Tom Cruise
Cruise owns a home in Telluride, and he considers it the ultimate retreat. When he and his now-wife Katie Holmes needed some privacy after the birth of their daughter Suri, they headed to Telluride.
See more "star quality" homes at http://www.ColoradoDreamHomes.net
Tuesday, November 28, 2006
Sunday, November 19, 2006
Colorado Might Look More Like Florida by 2030
November 18, 2006State’s aging population a rising challenge
By PERRY SWANSON THE GAZETTE
WESTMINSTER - Colorado’s population will look a lot more like Florida’s a quarter-century from now as the number of people age 65 and older triples to 1.2 million, experts said at a conference Friday. Florida has long had the greatest proportion of residents age 65 and older. According to the U.S. Census Bureau, 16.6 percent of the state’s 17 million residents were in that age range last year. Colorado was ranked 47th among the states, with 9.7 percent of its residents age 65 and older last year.
But Colorado will catch up to Florida in the rankings as retirees move here and baby boomers who live in the state stay put, experts said. By 2030, people age 65 and older will account for 16.4 percent of the state’s residents. The state’s overall population, meanwhile, will increase from 4.5 million to 7.3 million, according to projections the Demography Office issued Friday. A surge in the population of older people creates challenges for governments, businesses and especially the young, according to demographers, economists and others. The problems could be severe for members of the baby boom generation who failed to save enough money for retirement, said Todd Swanson, a specialist in aging with the Colorado Department of Human Services. “Where will the boomers go when they run out of money? Well, be nice to your kids,” he said. Swanson was among the speakers at the annual meeting of the Colorado Demography Office, a state agency that examines population trends.
The baby boom generation includes people born from 1946 to 1964. The first boomers will turn 65 years old in 2010, hitting a traditional retirement age. But some boomers, particularly women, might delay retirement, said Bill Kendall of the Center for Business and Economic Forecasting. “These are women who, unlike their mothers and older sisters, have been in the labor force all their lives,” Kendall said.
Among other population trends the Colorado Demography Office identified Friday: - El Paso County’s population increase from 2004 to last year was the fourth-highest in the state, with an estimated 10,765 new residents. That’s about 29 new residents each day. Douglas County had the highest number of new residents during the same period: 12,252 people. Douglas and Weld counties were tied for the fastest percentage growth, with the population in each county increasing 5.1 percent. - Colorado’s home-building boom continued from 2004 to last year as 46,700 new houses and apartments were built. About 14 percent of the new housing units were in El Paso County. - The state’s population growth is expected to accelerate to about 100,000 new people each year through 2035. That’s up from about 75,000 new people annually from 2000 to last year. Thanks to a strong job market, migration from other states will overtake births as the largest contributor to population growth.
For more info on County housing trends go to www.ColoradoDreamHomes.net
By PERRY SWANSON THE GAZETTE
WESTMINSTER - Colorado’s population will look a lot more like Florida’s a quarter-century from now as the number of people age 65 and older triples to 1.2 million, experts said at a conference Friday. Florida has long had the greatest proportion of residents age 65 and older. According to the U.S. Census Bureau, 16.6 percent of the state’s 17 million residents were in that age range last year. Colorado was ranked 47th among the states, with 9.7 percent of its residents age 65 and older last year.
But Colorado will catch up to Florida in the rankings as retirees move here and baby boomers who live in the state stay put, experts said. By 2030, people age 65 and older will account for 16.4 percent of the state’s residents. The state’s overall population, meanwhile, will increase from 4.5 million to 7.3 million, according to projections the Demography Office issued Friday. A surge in the population of older people creates challenges for governments, businesses and especially the young, according to demographers, economists and others. The problems could be severe for members of the baby boom generation who failed to save enough money for retirement, said Todd Swanson, a specialist in aging with the Colorado Department of Human Services. “Where will the boomers go when they run out of money? Well, be nice to your kids,” he said. Swanson was among the speakers at the annual meeting of the Colorado Demography Office, a state agency that examines population trends.
The baby boom generation includes people born from 1946 to 1964. The first boomers will turn 65 years old in 2010, hitting a traditional retirement age. But some boomers, particularly women, might delay retirement, said Bill Kendall of the Center for Business and Economic Forecasting. “These are women who, unlike their mothers and older sisters, have been in the labor force all their lives,” Kendall said.
Among other population trends the Colorado Demography Office identified Friday: - El Paso County’s population increase from 2004 to last year was the fourth-highest in the state, with an estimated 10,765 new residents. That’s about 29 new residents each day. Douglas County had the highest number of new residents during the same period: 12,252 people. Douglas and Weld counties were tied for the fastest percentage growth, with the population in each county increasing 5.1 percent. - Colorado’s home-building boom continued from 2004 to last year as 46,700 new houses and apartments were built. About 14 percent of the new housing units were in El Paso County. - The state’s population growth is expected to accelerate to about 100,000 new people each year through 2035. That’s up from about 75,000 new people annually from 2000 to last year. Thanks to a strong job market, migration from other states will overtake births as the largest contributor to population growth.
For more info on County housing trends go to www.ColoradoDreamHomes.net
Saturday, November 04, 2006
Stocks Up and Real Estate Down?
A Tale of Two Headlines
by Peter G. Miller
It's been difficult to pick up a paper during the past few weeks and not notice two major stories: The Dow Jones Industrial Average reached a record 12,000 while real estate values are falling.
A recent visitor from Mars could look at such headlines and instantly conclude that the best place to invest one's money would be the stock market. However, a savvy Earthling might want to look with a little more care.
The old DJIA record was established on January 14, 2000 when the Dow topped out at 11,722.98. At the close last Wednesday the Dow stood at a new high: 12,134.68. That's an increase of 411.7 or just 3.5 percent over almost seven years.
Investors during the same period would have done better with a passbook savings account at 1 percent per year.
The Dow today is not the same as the Dow in 2000 because the same bundle of stocks is not being measured. In April 2004 three firms on the Dow were replaced. American International Group, Pfizer, and Verizon Communications were added while AT&T, Eastman Kodak and International Paper were dropped. In other words, comparing the Dow in 2006 with the Dow in 2000 is not the same as comparing apples with apples, it's comparing apples with yogurt.
Corrected for inflation it would take $13,813 today to buy the same package of goods that $11,723 would have bought in 2000.
The Dow does not reflect the entire marketplace. As examples, the NASDAQ stood at 2,356.59 on Wednesday, down more than 50 percent from the 5,048.62 reached on March 10, 2000. As to the S&P 500, it closed on Wednesday at 1,382.22 -- significantly below the 1,527 level reached on March 24, 2000.
One of the reasons per share prices and dividends have been rising is very simple: Shares are being bought back by issuing companies, which means there are fewer shares available for purchase. At the same time, the number of dollars pouring into retirement accounts increases by hundreds of billions of dollars each year.
For example, companies in the S&P 500 bought back shares worth $116 billion in the second quarter of 2006, a record and 175 percent higher than the second quarter of 2004.
"The record $116 billion in buybacks is the result of over 40 percent of the S&P 500 companies reducing their share count during the second quarter," says Howard Silverblatt, Senior Index Analyst at Standard & Poor's. "The unprecedented expenditure on buybacks and the resulting share count reduction is having a material affect on both earnings-per-share and cash flow. Left unabated, this will eventually impact the supply of open market shares, and therefore the share price itself."
Okay, what about those falling real estate values?
According to the National Association of Realtors existing home prices stood at $220,000 in September, down 2.2 percent from the $225,000 recorded in September 2005.
Even with the new math you have to say that $220,000 is less than $225,000. But how many people buy and sell a house within a year? Isn't real estate a long term investment, something people own for years on end and often for decades?
Let's go back. It turns out that in 2000 -- when the Dow hit the then-record of 11,722.98 -- the typical existing home sold for $139,000. In other words, while stocks have been treading water since 2000, the typical home increased in value by $83,000.
What does it all mean?
First, despite recent news, real estate has done remarkably well in most places and for most people during the past few years when compared with the stock market.
Second, broad indexes -- whether up or down -- are fun to follow but may not be especially useful. No one buys all stock or all real estate, we purchase a particular stock or a given property. For instance, it's surely possible that contrary to the movement of broad indexes in the past few years some stocks rose terrifically while some homes saw significant value reductions.
Third, financial decisions should be made in the context of the particular investment being considered. National trends and broad indexes are nice, but really they're just financial background noise. Most importantly, neither national indexes nor prior experience tells us with certainty what will happen in the future. As stock brokers explain, past performance does not guarantee future results.
For more articles by Peter G. Miller, please press here.
Published: October 31, 2006
For more info on local housing values, go to www.ColoradoDreamHomes.net
by Peter G. Miller
It's been difficult to pick up a paper during the past few weeks and not notice two major stories: The Dow Jones Industrial Average reached a record 12,000 while real estate values are falling.
A recent visitor from Mars could look at such headlines and instantly conclude that the best place to invest one's money would be the stock market. However, a savvy Earthling might want to look with a little more care.
The old DJIA record was established on January 14, 2000 when the Dow topped out at 11,722.98. At the close last Wednesday the Dow stood at a new high: 12,134.68. That's an increase of 411.7 or just 3.5 percent over almost seven years.
Investors during the same period would have done better with a passbook savings account at 1 percent per year.
The Dow today is not the same as the Dow in 2000 because the same bundle of stocks is not being measured. In April 2004 three firms on the Dow were replaced. American International Group, Pfizer, and Verizon Communications were added while AT&T, Eastman Kodak and International Paper were dropped. In other words, comparing the Dow in 2006 with the Dow in 2000 is not the same as comparing apples with apples, it's comparing apples with yogurt.
Corrected for inflation it would take $13,813 today to buy the same package of goods that $11,723 would have bought in 2000.
The Dow does not reflect the entire marketplace. As examples, the NASDAQ stood at 2,356.59 on Wednesday, down more than 50 percent from the 5,048.62 reached on March 10, 2000. As to the S&P 500, it closed on Wednesday at 1,382.22 -- significantly below the 1,527 level reached on March 24, 2000.
One of the reasons per share prices and dividends have been rising is very simple: Shares are being bought back by issuing companies, which means there are fewer shares available for purchase. At the same time, the number of dollars pouring into retirement accounts increases by hundreds of billions of dollars each year.
For example, companies in the S&P 500 bought back shares worth $116 billion in the second quarter of 2006, a record and 175 percent higher than the second quarter of 2004.
"The record $116 billion in buybacks is the result of over 40 percent of the S&P 500 companies reducing their share count during the second quarter," says Howard Silverblatt, Senior Index Analyst at Standard & Poor's. "The unprecedented expenditure on buybacks and the resulting share count reduction is having a material affect on both earnings-per-share and cash flow. Left unabated, this will eventually impact the supply of open market shares, and therefore the share price itself."
Okay, what about those falling real estate values?
According to the National Association of Realtors existing home prices stood at $220,000 in September, down 2.2 percent from the $225,000 recorded in September 2005.
Even with the new math you have to say that $220,000 is less than $225,000. But how many people buy and sell a house within a year? Isn't real estate a long term investment, something people own for years on end and often for decades?
Let's go back. It turns out that in 2000 -- when the Dow hit the then-record of 11,722.98 -- the typical existing home sold for $139,000. In other words, while stocks have been treading water since 2000, the typical home increased in value by $83,000.
What does it all mean?
First, despite recent news, real estate has done remarkably well in most places and for most people during the past few years when compared with the stock market.
Second, broad indexes -- whether up or down -- are fun to follow but may not be especially useful. No one buys all stock or all real estate, we purchase a particular stock or a given property. For instance, it's surely possible that contrary to the movement of broad indexes in the past few years some stocks rose terrifically while some homes saw significant value reductions.
Third, financial decisions should be made in the context of the particular investment being considered. National trends and broad indexes are nice, but really they're just financial background noise. Most importantly, neither national indexes nor prior experience tells us with certainty what will happen in the future. As stock brokers explain, past performance does not guarantee future results.
For more articles by Peter G. Miller, please press here.
Published: October 31, 2006
For more info on local housing values, go to www.ColoradoDreamHomes.net
Friday, November 03, 2006
Are Sellers Freaking Out?
Contributed by: Mark Zarichny on 11/1/2006
When it comes to pricing your house when you're ready to sell it, keep in mind you must sell in the market you're in today. All that matters is this: Whatever the last sale price in your neighborhood for your model, that's probably your sale price now.
When you're looking at what you'll gain on the sale of your house, let's keep it in perspective. If house prices increased year after year at 4 percent per year and then suddenly people were selling their houses for 1 percent less than last year's asking price, would that be reasonable? If so, then when property is moving up at 20 percent per year for several years and then suddenly you have to sell it for 5 percent less than the prices last year, would that be reasonable? The challenge is when we move from percentages to dollar amounts. If 5 percent represented $5,000, most people wouldn't blink. It's when 5 percent represents $25,000 that sellers start to freak.
There are stories from the field on how sellers are defending their prices as if their lives depended on it. While sellers are sitting on hundreds of thousands of dollars of equity, they can't stand the idea of dropping their price by $25,000 or $50,000 to sell it today. The house that was $260,000 in 1999 is now selling for $569,000 today. But some sellers now want that same type of appreciation and can't imagine selling it for less than $589,000. Bringing it down the $20,000 or $40,000 to sell the property seems, well, just not fair.
The market is like playing Russian roulette. Sometimes you don't know what you have until you pull the trigger. Somebody needs to blink. Sellers seem to be saying to buyers, "I'll drop my price, just make an offer." While buyers are blankly replying, "I'll make an offer, just lower your price."
For sellers staying in the same area, keep in mind, if you have to drop your price by 5 percent, then the seller of the house you're buying (usually a lot more expensive) is probably going to drop the sales price by about the same percentage point. It means that while you may "lose" money on the sale of your home, you'll more than likely "gain" it on the purchase up. The vast majority of sellers are not realizing this very important point.
Keep in mind, the market is the market. When it's time to buy, buy. When it's time to move, then sell. Work with the market you're in, not in the market you wish it would be. Now is the time to take advantage of the current Denver market and find a home greatly undervalued. In doing so, you would be well advised to take a second look at your asking price to ensure you are positioning yourself to take advantage of undervalued homes.
Mark Zarichny is the founder of Colorado Mortgage Network. He welcomes visitors to his Web sites at verysmartloans.com, realtyhowto.com and udebtfree.com.
To search the Denver MLS directly, go to www.ColoradoDreamHomes.net
When it comes to pricing your house when you're ready to sell it, keep in mind you must sell in the market you're in today. All that matters is this: Whatever the last sale price in your neighborhood for your model, that's probably your sale price now.
When you're looking at what you'll gain on the sale of your house, let's keep it in perspective. If house prices increased year after year at 4 percent per year and then suddenly people were selling their houses for 1 percent less than last year's asking price, would that be reasonable? If so, then when property is moving up at 20 percent per year for several years and then suddenly you have to sell it for 5 percent less than the prices last year, would that be reasonable? The challenge is when we move from percentages to dollar amounts. If 5 percent represented $5,000, most people wouldn't blink. It's when 5 percent represents $25,000 that sellers start to freak.
There are stories from the field on how sellers are defending their prices as if their lives depended on it. While sellers are sitting on hundreds of thousands of dollars of equity, they can't stand the idea of dropping their price by $25,000 or $50,000 to sell it today. The house that was $260,000 in 1999 is now selling for $569,000 today. But some sellers now want that same type of appreciation and can't imagine selling it for less than $589,000. Bringing it down the $20,000 or $40,000 to sell the property seems, well, just not fair.
The market is like playing Russian roulette. Sometimes you don't know what you have until you pull the trigger. Somebody needs to blink. Sellers seem to be saying to buyers, "I'll drop my price, just make an offer." While buyers are blankly replying, "I'll make an offer, just lower your price."
For sellers staying in the same area, keep in mind, if you have to drop your price by 5 percent, then the seller of the house you're buying (usually a lot more expensive) is probably going to drop the sales price by about the same percentage point. It means that while you may "lose" money on the sale of your home, you'll more than likely "gain" it on the purchase up. The vast majority of sellers are not realizing this very important point.
Keep in mind, the market is the market. When it's time to buy, buy. When it's time to move, then sell. Work with the market you're in, not in the market you wish it would be. Now is the time to take advantage of the current Denver market and find a home greatly undervalued. In doing so, you would be well advised to take a second look at your asking price to ensure you are positioning yourself to take advantage of undervalued homes.
Mark Zarichny is the founder of Colorado Mortgage Network. He welcomes visitors to his Web sites at verysmartloans.com, realtyhowto.com and udebtfree.com.
To search the Denver MLS directly, go to www.ColoradoDreamHomes.net
Basements add to the bottom line
Some blast new rule on square footage; others say it's fairer
By John Rebchook, Rocky Mountain News November 2, 2006
Residential real estate broker Sonja Leonard Leonard believes that a year-old rule that requires basements to be included in a home's square footage is contributing to the Denver area's record number of foreclosures and growing mortgage fraud.
She argues that, under the new rule, buyers think they are getting a much bigger house than they really are.
Other brokers, however, believe that the Metrolist change, which went into effect Jan. 1, reflects how other listing services calculate square footage and provides a better picture of suburban homes with sometimes luxurious walk-out basements.
But Leonard Leonard, who has been selling and investing in real estate for the past 27 years, counters that most houses in the central city neighborhoods her company serves don't have those big walk-out basements.
One home on Williams Street, for example, was recently listed as 3,200 square feet, but half the space was the basement.
"What is so frustrating about this is that it leads us right into the path of fraud and sleazy appraisers," she said. "People are thinking they are buying homes for $150 per square foot, when it is really selling for double that. I've seen homes magically blossom from 2,000-square-foot homes to 4,000-square-foot homes because the basement is included."
She argues the new rule allows brokers to list a "coal room" in the basement as if it were equivalent to a finished basement. A more precise definition of "finished" space is needed, she said.
Ed Hardey, a RE/MAX 2000 broker and a member of the Metrolist board, disagrees.
"Part of our challenge is that we have 18,000 brokers who use our service, and we can't please everyone," he said "A large number of brokers wanted us to change the rule to reflect what is happening in a lot of homes, especially outside of the older neighborhoods in the city. Some basement walk-out space is nicer than the rest of the living space in the house."
Hardey said there is no evidence that the rule is contributing to foreclosures or mortgage fraud, or is affecting the sale price of a home. He argues that no one buys a home without touring it first.
He said he's spoken to several hundred brokers about the change and that the vast majority have no problem with it.
Hardey said the rule only affects 4 percent of the homes in the central Denver area but a much higher percentage in the suburbs.
Chris Mygatt, president of Coldwell Banker in Colorado, said brokers want consistency.
"My opinion is that what is important is that all homes in the marketplace are compared equally," Mygatt said. "And I would say that 20 years ago, basements typically weren't important living areas, but that has changed a lot in recent years."
Basement rule at a glance
Square footage of the above-grade living space shall be specified on the property data form in the square feet field. Basement square footage is never allowed in the square feet field, but the finished portion of a basement may be included in the finished square feet field. The form has three mandatory square feet fields:
• Square feet: Includes the square feet of the main, upper and lower levels. When lower level is included, the type of lower level must be identified.
• Finished square feet total: Includes all finished main, upper, lower and basement square footage.
• Total square feet: Includes main, upper, lower and basement, regardless of whether the area is finished.
For more info on basements, go to www.ColoradoDreamHomes.net
By John Rebchook, Rocky Mountain News November 2, 2006
Residential real estate broker Sonja Leonard Leonard believes that a year-old rule that requires basements to be included in a home's square footage is contributing to the Denver area's record number of foreclosures and growing mortgage fraud.
She argues that, under the new rule, buyers think they are getting a much bigger house than they really are.
Other brokers, however, believe that the Metrolist change, which went into effect Jan. 1, reflects how other listing services calculate square footage and provides a better picture of suburban homes with sometimes luxurious walk-out basements.
But Leonard Leonard, who has been selling and investing in real estate for the past 27 years, counters that most houses in the central city neighborhoods her company serves don't have those big walk-out basements.
One home on Williams Street, for example, was recently listed as 3,200 square feet, but half the space was the basement.
"What is so frustrating about this is that it leads us right into the path of fraud and sleazy appraisers," she said. "People are thinking they are buying homes for $150 per square foot, when it is really selling for double that. I've seen homes magically blossom from 2,000-square-foot homes to 4,000-square-foot homes because the basement is included."
She argues the new rule allows brokers to list a "coal room" in the basement as if it were equivalent to a finished basement. A more precise definition of "finished" space is needed, she said.
Ed Hardey, a RE/MAX 2000 broker and a member of the Metrolist board, disagrees.
"Part of our challenge is that we have 18,000 brokers who use our service, and we can't please everyone," he said "A large number of brokers wanted us to change the rule to reflect what is happening in a lot of homes, especially outside of the older neighborhoods in the city. Some basement walk-out space is nicer than the rest of the living space in the house."
Hardey said there is no evidence that the rule is contributing to foreclosures or mortgage fraud, or is affecting the sale price of a home. He argues that no one buys a home without touring it first.
He said he's spoken to several hundred brokers about the change and that the vast majority have no problem with it.
Hardey said the rule only affects 4 percent of the homes in the central Denver area but a much higher percentage in the suburbs.
Chris Mygatt, president of Coldwell Banker in Colorado, said brokers want consistency.
"My opinion is that what is important is that all homes in the marketplace are compared equally," Mygatt said. "And I would say that 20 years ago, basements typically weren't important living areas, but that has changed a lot in recent years."
Basement rule at a glance
Square footage of the above-grade living space shall be specified on the property data form in the square feet field. Basement square footage is never allowed in the square feet field, but the finished portion of a basement may be included in the finished square feet field. The form has three mandatory square feet fields:
• Square feet: Includes the square feet of the main, upper and lower levels. When lower level is included, the type of lower level must be identified.
• Finished square feet total: Includes all finished main, upper, lower and basement square footage.
• Total square feet: Includes main, upper, lower and basement, regardless of whether the area is finished.
For more info on basements, go to www.ColoradoDreamHomes.net
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