Real estate and economic development experts – as well as two prominent elected officials – covered a lot of ground at this week’s Colorado Real Estate & Economic Summit.

More than 1,000 people, from all over the Colorado, attended the two-hour presentation at the PPA Convention and Event Center next to Invesco Field on Thursday evening. The event was sponsored by Coldwell Banker Residential Brokerage and the keynote speakers were Gov. John Hickenlooper and Denver Mayor Bill Vidal. In addition, a panel of experts addressed just about every aspect of real estate and economic development, from mortgage rates to new home building.

“From the feedback I received after the event, most people seemed to appreciate that we brought together a wide-variety of very authoritative people, including the governor, the mayor and others, in what was not a political event,” said Chris Mygatt, president of Coldwell Banker in Colorado. “It was great, for example, to hear what Brian (Phetteplace) had to say about downtown.  And Mark Snead can take very complex data points that otherwise might be very dry and boring, and make them understandable and interesting.” Snead is the chief economist for the Kansas City Federal Reserve Bank.

While not everything was positive – two speakers, Hickenlooper and David Mandarich, president and chief operating officer of Denver-based MDC Holdings Inc., parent of Richmond American Homes – compared the recent economic turmoil to the Great Depression and Snead said the national housing bottom still has not been reached – Mygatt said the overall tone was bullish, at least for Denver and Colorado.

“I think they were clearly all able to demonstrate that we are very lucky to live in the great state of Colorado,” Mygatt said. (Snead, for example, joked at one point that things are so grim in Las Vegas that he is convinced that Nevada is just going to be swallowed into the “earth and disappear.”) “Very positive things are going to happen here,” Mygatt said.” Sure, they are not happening fast enough. We are not going to return to selling 50,000 homes along the Front Range anytime soon. That’s just not going to happen. We’re going to return to a new normal. And that’s OK. A great many people who were buying homes a few years ago were not buying for the right reasons. That was not a sustainable model.”

Some of the highlights from the panel members include:

• Phetteplace, the Economic Development Division’s Manager of Residential and Retail Development for the Downtown Denver Partership said the redevelopment of the Denver Union Station is a “huge game changer for downtown Denver.” Phetteplace noted that a $300 million federal grant kick-started development around the station, which will be a major transportation hub for FasTracks, especially after a commuter rail line extends from downtown to DIA. That will be a huge attraction for companies wishing to move to Denver, for example. He also noted that the Spire condo tower may be the best-selling condo tower in the nation.  Its success will set the stage for future developments. It is fortunate that downtown did not over-build its condo market, like so many other cities in the country, he said.
• LaCharles, Keese, executive director for the Denver Office of Economic Development, said that a rule-of-thumb for his office is that every $35,000 in economic development loans it gives, it expects that the recipient will create one job. The average size of a loan is $175,000, or five jobs. His department typically gets $9 million in federal block grants a year, he said. He said one area that his department will pay more attention to going forward is DIA, because it is such a huge economic engine, not only for Denver, but the entire region.
• Mandarich, president and COO of Denver-based MDC, one of the nation’s largest home builders, said in 2005 the average size of a home it was building was 3,000 square feet and now it is 2,000 square feet and more efficient. He said his business is “capital-starved” and MDC is one of the few national homebuilders that still has the financial strength to access capital, allowing it to take advantage of market conditions, when others cannot. He said much is made about value with foreclosures, “but there is nothing more exciting than buying a new home.” Asked what is different in this downturn, he pointed to the “moral hazard” of people who can afford their mortgages, but are still walking away because their their homes have lost value.
• Allen Hurst, an executive sales manager for PHH Mortgage, said the “mortgage landscape is as unsettled as I have ever seen it.” Hurst added that he believes the “pendulum has swung too far,” as far as regulating banks and lenders. “We have become too risk adverse.” Barring a “geo-political event,” such more violent unrest in the Middle East, he expect that interest rate to rise from just under 5 percent to 6 percent or higher in 2012. He said if rates are still under 5 percent a year from now, it probably means that something bad has happening in the economy.
• Economist Snead, said for the economy to recover, not only do household incomes need to rise, but contradictory things need to occur, such as an increase in consumer spending, reduced household debt and an increase in the savings rate. And, indeed, all of these things are beginning to happen, he said. While nationally “there is no firm bottom to the housing market,” especially with a shadow market of homes still lurking in the background, he said that commercial real estate clearly is on the mend, with rental rates rising, values rising, and vacancies falling because of increased demand. And while the housing market is not yet as strong, he said that for three consecutive quarters, mortgage delinquencies have fallen. “That is a monumental piece of data,” Snead said.

Similar Posts:

• Visit pleases former Milwaukee planner
• Central Texas CoreNet Chapter thinking green for inaugural event
• Quality Hill Square: Own for less than renting in prestigious downtown neighborhood
• Quality Hill Square: Own a new condo for less than paying rent
• Core Campus Communities buys prime real estate near ASU