Benny Moo

307 N 22nd Street, Colorado Springs, CO 80904

Old Colorado City sits minutes between downtown Colorado Springs and the wide-open spaces of the west side, Pikes Peak and the Mountains beyond. Lifestyle is characterized by an open embrace of the outdoors, community, simplicity, and fun.   Wouldn't it be great to have a historic remodeled home within walking distance of the Farmer's Market, the neighborhood where you can actually walk to a restaurant for dinner, the location that is a 1.5 mile cruise down neighborhood streets to world-famous Garden of the Gods?   Look no further.  


307 N. 22nd St., C/S/C
307 N. 22nd Street is a 1944 stucco-sided rancher with abundant upgrades. The 1673 square feet enjoy 3 bedrooms, 2 baths, main level laundry and an attached one-car garage.   Entering the main level, you will find the living room and formal dining room. With abundant space for guests, this home makes for great entertaining. With a remodeled kitchen, highlighted by slab granite counters, gas-fueled GE Stainless stove and stainless fridge and dishwasher, you actually will have the power and space to entertain. A few steps to the south through the Main Level Mudroom and Laundry is access to a great grilling and patio area, with a privacy fence surrounding a great yard for play, dominated by year-round a westerly view of Pikes Peak.   Living quarters are on both levels with two bedrooms on the main, each with hardwood floors. One has period built-in furnishings in the closet and the other offers ample closet space. The full bath is easily accessible from either room. In the basement, a 2009 remodel has added a whole new dimension to livability with a professionally finished and permitted basement adding a master suite with 3/4 bath. This room could also be utilized as a family room. A generous storage room is off to the side where the updated mechanicals reside and the foundation is visible for inspection.   With major improvements including a replaced foundation (1989), new water heater (2007) new roof (2007), kitchen (2007) and basement (2009) this is a home a buyer can view and purchase with total peace of mind, and enjoy the fundamental value of location-location-location!

Free Friday: A Present from @COSBenny

Twitter is not the end-all, be-all of the social media universe. There are a few people I follow for reasons that I can't remember, and this week as a I de-cluttered my life by changing offices and ridding my desk of 7 years of files (files that had moved 7 times in those seven years without being touched again!), I unfollowed about three dozen people that were mindless chatter signifying nothing. If they're not stretching my perceptual map, challenging me to improve, making me grin, or participating in a conversation... it's pretty pointless.

So having bad-mouthed a lot of the mindless chatter of Twitter, there are some HUGE exceptions. Guy Kawasaki is one. This is a man with 27,530 some updates, 150,000+ followers and a master of the art of "the headline" that must accompany a blip url with sufficient ammo to get someone else to open it. Guy is a maximum minimalist, part of the meta-reality that is Twitter. Guy runs multiple online magazines and sites, advises the monsters of Silicon Valley and was at Apple in the early days. His posts could be on mating lab mice, a twitpic of him landing on an aircraft carrier, his pilates-followed-by-hockey workout regime, a podcast on the faith of a Big Island Japanese Boy, or most popular, technology.

About 30 minutes ago he posted a new U2 video. Now I'm a slobbering, ridiculous U2 moron who can't expand their musical perceptual map past Jack White in one direction and Jack Johnson in another. I am corporate rock. But I've never liked the new U2 single (a good album, but devoid of any "singles"). Well, this might be the best video they've ever done. I probably wouldn't appreciate it if I wasn't a dad, so here is a free Friday blip from the twitterverse, courtesy Guy Kawasaki and director, David O'Reilly.

U2 - I'll Go Crazy If I Don't Go Crazy Tonight from David OReilly on Vimeo.

Why Big Real Estate Has a Hard Time Converting to Social Media

Sherry Chris has written a superb post on the problems with Real Estate Brokerage.

In looking back one year after the publication of the book Groundswell (now in my Amazon Cart) she noted that agents have picked up social media by the boatload... brokerages and franchises have not.

I could not agree more.

My Nuclear Options Manifesto discussed the problems with the future of sustainable real estate brokerage architecture. One of those problems has to do with an aging real estate industry. Technologically-speaking, first-adoption or early adoption of the Twitter and Facebook bugs was bound to be slower. Not many real estate brands are run by social media users.

But the reality is that brokerage no longer leads. Brokerage often thinks it leads, but as Seth says "we need you to lead us". Most big business has the really important leadership coming from within as the tribe of heretics challenge authority and pre-conceived notions time and again. So the problem is there in real estate brokerage and franchising; but it has peers.

The bigger problem is the non-acknolwedgement that things have changed that seems to come from the leadership of Big Real Estate. Larry Kendall talks in Ninja III about the rise and fall of the brokerage-based business. His contention is that in the 1970's and 1980's the brokerage-based model was the staple. The split-model worked because the generation working real estate at that time respected the large company looking out for their interests and it made logical sense therefore, that all business was the business of the brokerage. I mean, if you think about it, the idea of working until you retired and collected your pension from GM and IBM had some romance to it. Generationally, I have plenty of friends that would like to think they will retire. But they will retire to do something else. I could live to 34 or 134. I have no idea how much I might have to save. That has a profound effect on how I go to work.

Correspondingly, as the generation changed and matured, real estate brokerage architecture matured. In the 1980's and 1990's, the 100% model ascended to supremacy, and Re/Max, Real Estate Executives, John L Scott and other 100% franchise models blossomed. So dawned the rise of the Agent. It was a business lead by the industry still, but brokerage mattered less than creating an environment where the individual agent was supported and thrived rather than supervised and treated as a contractor of the larger brokerage.

Mr. Kendall would say (and I would agree) that this too has matured and changed. Most franchises and large brokerages have not caught up to that. What changed was that the business became consumer-lead. Look at any major development in real estate post Realtor.com and the consumer brought that change to the industry... and the majority of agents either restricted or relented after much kicking and screaming.

I can not say I am 100% innocent of trying to control the outcome. I would not put an IDX widget on my site until 2007 because I was obsessed with controlling outcomes. But I've been evangelized. At the end of the day, freeing the consumer, my source of business, to be the consumer, makes sense.

It makes sense to have a Twitter Account, a Public Facebook Page, a Linked-In Profile that is open and not closed. It makes sense to publish market stats, analyze them at Mid-Year and then blog about it with the feeds hitting all sorts of different, easy to find places. How could a large, faceless corporation bent on selling membership "tools" even really use these if they had already failed to focus on that most important of social media hooks: TRUST?

Social Media is great, but really it is just another tool to disseminate something more powerful: TRUST. I like the fact that I follow 100 fewer people on Twitter than follow me. I like that I have fewer than 400 followers. The truth is, THEY FOUND ME. I didn't find them and they reciprocated. They saw me post something about someone, they caught a Re-Tweet, someone was talking about me and they found me. I call it Organic Twitterization. My far more successful and Seth Godin MBA Graduate Jon Dale uses the same strategy. I challenge you to find a person more dialed into how today's culture and marketing works than Mr. Dale. He has passed 1000 Twitter followers largely because people almost always RT what he has to say. Now THAT is a permission asset. I got the organic idea from him. His business is totally about the authority of trust. Without a permission asset: social media is SPAM.

If 95% of your business is word of mouth and personally-referred, SEO, does not matter. I have picked up two buyers in three days based on the failings of other agents. Both "asked" if I would work with them.  The Permission Asset Matters. The Quality of the Relationships, The Consistency of the Message... these matter. These are the conduits of conversation in social media.

I received a survey two months ago from ERA Corporate asking 1.) if I used Twitter and if 2.) I thought it would be a good idea for ERA to use Twitter. I guess to a degree I understand their point in asking. How does a big, face-less franchise make the jump from spending years on "tools" and reactive devices based on lead-capture to the sophisticated use of a tool best used for customized relationships or the ballyhoo of a Permission Asset? I sure as hell don't want tweets about the Direct Marketing Resource Center or that Lead Router will have a service outage from 12 to 2 am EST for maintenance. That's called "email". Static. Dead-Web-Point-0.

Here was my answer to their survey that I never heard a follow up on: FOLLOW ME. Can I help? Please? Can I show you what you missed the last four years? Please? Stuck in the place of "leadership", my request has fallen on deaf ears.

The sad reality is that ERA is among many brokerages that based themselves on "Education," "Top Production" (whatever that is) or "Oldest and Therefore Best (See CB's thud of a 2006 campaign), whereas the corniness of KW Family... actually has a hook to it. Even if you hate family reunions the all-inclusiveness of the brand that is based around a social concept... works. In this decade at least.

The problem is not so much that Brokerages and Franchises are failing in their own leadership to use Social Media; The Problem is that they failed to Build a Permission Asset. I can think of only Windermere among national real estate franchises that built their company on "really damn good agents you respect and might want to have a cocktail with". Outside of that brand based on Permission Assets, there is nothing for the consumer or the Realtor to relate to but a big, faceless corporation that takes 3 to 10% of each commission when only the creativity, deep smarts and years of built-up trust successfully deployed by the agent put together and closed the deal.

I can think of many other 1980's relics that would do poorly as a Facebook Fan Page or blasting tweets. If social media is about trust and consumers now lead the real estate industry rather than the real estate industry leading itself... well, I think the problem for Big Real Estate is pretty painfully obvious. Ms. Chris is a rare exception among franchise leaders because she uses the stuff herself as an avenue to build trust. If brokerages and franchises are more interested in income, than in making smarter, better, more efficient agents with fewer conflicts of interest... the social media wave could be their doom.

Mid-Year 2009 Sales Data

www.BenjaminDay.com/2009MidYear

As a Coda to this report, I've been previewing heavily in N/W and NGT the last two weeks and several properties of note over $550,000 have gone under contract. One of the likely stimulants has been the "returned availability of credit" to the Jumbo marketplace. It may not sound significant to somehow who has not followed it, but Jumbo rates can be obtained for qualified buyers with rates less than 6% again. It usually requires 25% downpayment (and you have $100,000 between the couch pillows, right?), but Bank of America, Chase and Wells Fargo are all offering products that buyers are starting to take advantage of and buy depressed value high-end properties. Until recently, most 30 year fixed Jumbos were over 7%, so the decreased cost of borrowing is a big deal.

Casa de Pollo

Organizing your tribe around stupid human tricks

My Director of Shameless Commerce was up to no good this weekend.

In addition to learning to tie a secure knot around his waste and scaling a Ponderosa...
In addition to wearing a black hat befitting a lad with the middle name "Gunnison" to the Rodeo...
He made his amateur debut in El Paso County Mutton Busting.

Mid-Year Sales Data for Colorado Springs Real Estate

There are no silver bullets.
There are no silver bullets.
There are no silver bullets.

There is merely a pile of data.
Correction: piles and piles and piles of data.

SOLD UNITS

• June 2009: 873 sales units
• June 2008: 867 sales units

ACTIVE UNITS

• June 2009:  5126 active units
• June 2008:  6596 active units

MONTHS OF INVENTORY

• June 2009:  5.87 months of inventory
• June 2008:  7.6 months of inventory
• June 2007:  6.1 months of inventory

AVG SALES PRICE

• June 2009: $225,400 avg. sales price
• June 2008: $256,800 avg. sales price
• June 2007: $276,100 avg. sales price

June 2009 marks the first time there has been a year over year improvement in single family units in 39 months (last month that was a gain was March, 2006).  Seasonally a two year low in months of inventory. Absorption rate remains at a 10 year low, June averaged 1083 closed sales from 1998 to 2007.

Role play:

• Does supply and demand rule all markets? Y/N
• What is going on with our demand based on this data, is it going up, down, or relatively stable?
• What is going on with our supply, is it going up, down, or relatively stable?
• If prices were forced down because demand went down and supply went up, what do you think might happen now that supply is down and demand is stabilized and trending up?

Now granted, this macro data does not apply to every home for sale, every neighborhood, or even every buyer. A buyer with a home-sale contingency or clause in their offer that clouds the seller's decision with doubt as to whether it will close or not has almost no negotiating ability. Local seller perceptions are that the market HAS BOTTOMED OUT and are less and less likely to discount their homes any further. Buying perceptions are that the market offers a good time to buy, so why not try and get a better price.

July 2008 saw 886 units close and August 2008 had 778. I'm hedging that neither July nor August 2009 will pass those numbers, but will be close. After those two months in 2008, the market began a severe erosion due to the credit crunch expanding into a full-fledged crisis. It now seems reasonable that despite the 9.4% decline in units sold year over year, that the 2009 market will sell very near the same number of properties as 2008 (8339). This is primarily due to the awful numbers posted last fall and the stimulus of the first-time buyer credit propelling transactions this fall through at least the November 30, 2009 deadline for action on the tax credit. Because of the crisis exploding onto the scene, prices tailed off dramatically last year, with the average sales price sinking from $256,829 in June, 2008 to $213,466 by November. The market now operates in a post-crisis environment. Correspondingly such a dramatic decline is unlikely this year because the market that was buying those homes on average at $213,466 is the same market that is buying homes today at $225,402. If anything, it will remain relatively stable, within +/- 4% through year's end. Seasonally, June average sales values should be higher than November average sales values, so it is foolish to point at November 2008 and then June 2009 and say that there is "appreciation". But it is logical to say that the similarities between the two shows that values have stabilized for the first 80% of the market in price (up to about $300,000).

Mid-Year Sales Data for Colorado Springs Real Estate

There are no silver bullets.
There are no silver bullets.
There are no silver bullets.

There is merely a pile of data.
Correction: piles and piles and piles of data.

SOLD UNITS

• June 2009: 873 sales units
• June 2008: 867 sales units

ACTIVE UNITS

• June 2009:  5126 active units
• June 2008:  6596 active units

MONTHS OF INVENTORY

• June 2009:  5.87 months of inventory
• June 2008:  7.6 months of inventory
• June 2007:  6.1 months of inventory

AVG SALES PRICE

• June 2009: $225,400 avg. sales price
• June 2008: $256,800 avg. sales price
• June 2007: $276,100 avg. sales price

June 2009 marks the first time there has been a year over year improvement in single family units in 39 months (last month that was a gain was March, 2006).  Seasonally a two year low in months of inventory. Absorption rate remains at a 10 year low, June averaged 1083 closed sales from 1998 to 2007.

Role play:

• Does supply and demand rule all markets? Y/N
• What is going on with our demand based on this data, is it going up, down, or relatively stable?
• What is going on with our supply, is it going up, down, or relatively stable?
• If prices were forced down because demand went down and supply went up, what do you think might happen now that supply is down and demand is stabilized and trending up?

Now granted, this macro data does not apply to every home for sale, every neighborhood, or even every buyer. A buyer with a home-sale contingency or clause in their offer that clouds the seller's decision with doubt as to whether it will close or not has almost no negotiating ability. Local seller perceptions are that the market HAS BOTTOMED OUT and are less and less likely to discount their homes any further. Buying perceptions are that the market offers a good time to buy, so why not try and get a better price.

July 2008 saw 886 units close and August 2008 had 778. I'm hedging that neither July nor August 2009 will pass those numbers, but will be close. After those two months in 2008, the market began a severe erosion due to the credit crunch expanding into a full-fledged crisis. It now seems reasonable that despite the 9.4% decline in units sold year over year, that the 2009 market will sell very near the same number of properties as 2008 (8339). This is primarily due to the awful numbers posted last fall and the stimulus of the first-time buyer credit propelling transactions this fall through at least the November 30, 2009 deadline for action on the tax credit. Because of the crisis exploding onto the scene, prices tailed off dramatically last year, with the average sales price sinking from $256,829 in June, 2008 to $213,466 by November. The market now operates in a post-crisis environment. Correspondingly such a dramatic decline is unlikely this year because the market that was buying those homes on average at $213,466 is the same market that is buying homes today at $225,402. If anything, it will remain relatively stable, within +/- 4% through year's end. Seasonally, June average sales values should be higher than November average sales values, so it is foolish to point at November 2008 and then June 2009 and say that there is "appreciation". But it is logical to say that the similarities between the two shows that values have stabilized for the first 80% of the market in price (up to about $300,000).

2009 Real Estate at Mid Year

These are the disparate data-points I try and draw patterns from to predict the real estate future:

1.) Colorado Springs' real estate market is off approximately 11% in value from the peak in 2007. Compare that to markets like LA and Las Vegas which just saw asking prices drop 10 to 20% in the last quarter (Thank you @Trulia).
2.) There are presently 1400 fewer single family and patio home listings for sale than the same time in 2008. That's a 21% decrease in inventory. And it looks like June 2009 sales volume will be identical to June 2008 volume (when I ran the numbers this morning, the net difference was 3 fewer sales in 2009). So demand is now officially stable and supply has shrunk dramatically.
3.) The first time buyer tax credit benefits marketplaces with a young demographic (Colorado Springs) and an abundance of neighborhoods with properties under $200,000 (Colorado Springs). Generation Y is also a larger generation than the Baby Boomers, meaning that growth in this age demographic is extremely sustainable.
4.) The nationalization of Fannie and Freddie has created a nightmare appraisal scenario when the low rate of demand is factored in. Yes, a consumer deserves a more accurate appraisal as that was the primary tipping point of the over-leveraged real estate bubble, but two of three comps within 90 days is almost impossible in half of our neighborhoods. If a real estate market was terribly homogeneous and Zillow worked perfectly due to lack of variables, this would not be the problem that it is. But a market like Colorado Springs has so many micro-markets within 1 and 2 miles that a comp really isn't a comp in this appraisal format. With the additional new requirement for a 90 day, 180 day, 270 day and 360 day market report supplementing the appraisal, markets like ours should be allowed to use 6 to 9 month history since the rate of value decline has been negligble since December, 2008 and supply-side stimulus has abated for two years.
5.) The volatility of interest rates meshes menacingly with the new Truth in Lending standards. Having seen buyers on three occassions go from qualified to unqualified to qualified within a 6 hour window to the fragility of inter-connected markets, I have no clue how on earth RESPA will enforce the three-day window that the new TLI requires. This will either be patently ignored, or another major restrictor plate on the marketplace.
6.) Throughout 2009 Denver has exhibited market behaviors that are the envy of the rest of the nation in the Case-Shiller index. In two of the last three months, Denver showed the smallest rate of market depreciation and year-to-date is one of the only markets in "the positive" in terms of appreciation. The rate of value decline is slowing nationwide, but Denver, our nearest major market and one we usually track within 3 to 12 months of, is already past the flat line and showing signs of honest-to-goodness gains. This value trend is the product of forces similarly exhibited in Colorado Springs: stable demand, 20% reduction in supply. Private Mortgage Insurance and OFHEO.gov made predictions that this would be the case in 4th quarter 2008, and that third quarter 2009 would see the glimmers of recovery along much of the Front Range. Moody's who nailed the expected price decrease in Colorado Springs, now ranks the state of Colorado 3rd out of 50 states to most quickly rebound from "The Great Recession".
7.) The majority of my buyers have sprouted shark fins and rightly so. The majority of my sellers are ticked that they're selling below market capitalized rates and want to consider all options including renting for a year or two to await some recovery. That means the disconnect is growing, not shrinking between buyer and seller expectations. Buyers see this as the biggest financial opportunity of their lives in many cases... a chance to get in on values as low as 2002 prices (I've sold one property for 70% of it's 1998 price tag this year, and three really nice homes within 1% of their 2002 and 2003 purchase prices) with never before seen interest rates. So they're looking for the deal of deals. Sellers see this as another squirt of lemon juice in their lacerated financial portfolio. The disconnect means that market-value ultimately falls between two really subjective parties, and not on anything objective. Buyers are always "the market" because a seller can't sell to themself, they must sell to a buyer. Buyers are no longer looking at the over-priced inventory of 2007, they are looking at a discounted inventory of 2009. And a lot of these sellers are ticked that they're selling 3% (Manitou, Old Colorado City) to 20% (High-End Luxury over $800K anywhere) below peak. It creates connundrums like I had last week, writing low offers while on vacation and the buyer and seller were 20% apart. The buyer can't be blamed for trying to get a steal of steal. The seller can't be blamed for thinking the worst is over. So a new level of disconnect has arrived: where sellers previously had unrealistic aspirations about what their house could command, buyers now have increasingly unrealistic expectations on what they can negotiate. Buyers are not willing to except this unless some other buyer comes in and buys out a house from underneath them. In the high-end, this doesn't happen very often. But under $250,000 it happens DAILY. 
8.) Seasonally we are in the peak of activity. What the fall brings is really anyone's guess. If the first-time buyer tax credit is not renewed, properties under $225,000 will continue to find ready, willing and able buyers and this price range will literally be a seller's market with bidding wars to beat the deadline of November 30th. There could even be an artifical spike in units sold this fall. If the tax credit is renewed, I actually think the market will pick up more gradually, but steadily through 2010. That is, if interest rates stay below 5.5%. Americans are actually saving money (the credit crisis began with a negative 0.5% savings rate!) and lenders have rethought who is a good candidate for their cash. If the tax credit is expanded to any residential buyer, there will be benefit to the higher reaches of the market (before inflation goes ape-you-know-what within 6 months). That could create a false recovery before a bigger tank job shows up. The big "but's" are:
    A. UNEMPLOYMENT: Can a market continue any recovery when 10% of Americans are jobless?
    B. JUMBO FINANCE: Colorado and most of the US that is non-coastal has a conventional cap at $417,000. Even with B of A, Wells Fargo and Chase now offering sub 6% Jumbo Loans, they still usually require 25% down. That's why there is almost a four-year backlog of inventory over $500,000 around here.
    C. APPRAISALS: How on earth will any property appraise in February when November, December and January will probably have only 400 to 500 sold units each month in the entire MLS? How many homes sold in Mountain Shadows over $400,000 last year in that time period? ZERO. Peregrine and Hunter's Point had 8, but Mountain Shadows in D11 had nada, none, zippo. An appraiser can't use a Blodgett Comp for a home on Brogan's Bluff. Sorry. But Happy Selling! The same problem is keeping qualified individuals trapped in their dumb loans of 2005, 2006 and 2007 because the three-month window won't produce sufficient value for their re-finance appraisal.

So what do I conclude?

Our market is getting marginally better, not marginally or significantly worse.

The market is going to take two to four years to recover, and for high-end sellers, three to six years.

Dirt Matters. Condition matters and price matters, but ulitmately, dirt carries the day. Where a home is physically located is 50% of the equation as to whether or not it is a good buy or a bad buy. The market in D20 right now is dead, dead, dead for properties over $550,000. There still is too much inventory in Flying Horse, Cordera and among the ranch plans in Pine Creek. Peregrine has one closed sale this year of any note and a good 15 properties competing with each other in a knife-fight. Six homes dropped $25,000 in price OR MORE in the last two weeks up there. But where a buyer can see with their own eyes "remarkble"... that's the area they need to pay attention to. Because even with inventory thinning and demand stabilizing, there are fewer and fewer remarkable homes. They're often at the top of a buyer's price spectrum, but there's a reason: That Remarkable Home started out WAY above where they were looking and has fallen precipitously ahead of it's peers to a point where it suddenly looks like a great value. Case in point: 7975 Ruststone. This was on the market way too high at $899,000 initially. It made a couple of adjustments and went to coporate buyout. That didn't come in so nice and the corporation priced it to get rid of it: at $700,000. Total time it took for a $200K price reduction? Four months. Verbally agreed to contract as of today. Time it took to get to contract since last price reduction: 4 days. Why? Great house at a remarkable price in a superb area. This one sale, while low, could be the catalyst that starts to spin the Peregrine market forward, proof that not everything will sit. Where's the lesson? THE REMARKABLE ONE'S SELL FIRST, NOT LAST. We are now past the inventory growth stage of the market. The only inventory that a buyer can rightly expect to see through the summer are drop-downs from one price range higher onto their radar screen.

Finally: YOU CAN BUY A HOME for $0.90 on the dollar. Sometimes $0.80 on the dollar. Maybe $0.70 on the dollar. The question is: today's dollar? Or 2005's dollar? With inventory levels now below where they were in 2006, it is easier and more likely that a buyer will make a smart buy rather than a dumb buy. But you have to really sort through all of the above to know if it is a GREAT BUY as opposed to a pedestrian "everyone's getting a deal."