For Whom The Bell Tolls

The Denver Post reports that Denver/Boulder/Greeely inflation (3.6%) outpaced the nation (3.2%) in 2006, pushed by rising shelter and apparel costs. Metro's core inflation raced ahead at a 5.5% clip vs. 2.7% for the nation. The WSJ cautions that the core rate went up 0.3% last month after three straight months of 0.1% increases. briefs that the Fed is "expected to hold its key rate target steady at 5.25% a sixth time next month, but further increases are still possible this year. Data out this week showed consumer prices rose faster than expected in January, signaling inflation pressure hasn't abated enough for the Fed to relax -- or cut rates."

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On Wall Street, Toll Bros. reported a 67% decline in 1Q07 net profit. On the bright side, Toll's cancellation dropped to 29.8% from 36.9% the previous fiscal quarter. Still, only 6,000 to 7,000 homes are expected to be delivered, off from a November estimate of 6,300 to 7,300.

Robert Toll: "There are too many soft markets at this stage of the selling season to call a general upturn in the new-home market," said Chairman and Chief Executive Robert Toll. "Demand varies greatly from week to week in individual markets."

Is it Time yet to talk about housing? The weekly newsmagazine by that very name runs a story under the banner "America's House Party". Nothing earth-shattering here but the article suggests that the latest boom will have lasting effects on how Americans view their homes:

The deeper changes of the real estate boom are likely to stick, particularly the notion that the house is no longer just a home. By tapping their built-up home profits through refinancings and home-equity loans, owners have ensured that the home-as-piggy-bank will be with us for some time, and that may have wide implications for tomorrow's economy.

We can at least take solace in the inherently different nature of housing as an investment vehicle, for houses are after all much more tangible and less prone to crashes than tulips or stocks. Okay, so Wikipedia says there is such a thing as a housing bubble; it's just that "a real-estate 'crash' is usually a slower process, because sellers just decide not to sell. Historically due to inflation, prices do not fall in nominal terms, rather they stay "flat" for a period of 3-5 years."

If you're not so worried about bubbles bursting, think about Colorado's water:

The Colorado River serves seven states - Colorado, Wyoming, New Mexico and Utah in the upper basin and Arizona, California and Nevada in the lower basin. When the 1922 Colorado River Compact divided the water among the states, the annual flow was estimated at 15 million acre-feet. Hoerling said that the recent annual flows are about 13 million acre-feet, but by 2050, climate change may drop that to about 10 million acre-feet - less than what is currently used by all of the states. That could mean there would be no extra water to store in Colorado.

A water bubble? Maybe someday. But back to real estate...

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Here's John Rebchook's article about Lincoln Station in its entirety:

Work starts on Lincoln Station

By John Rebchook, Rocky Mountain News
February 21, 2007

Westfield Development and Bradbury Woods have broken ground on the first-phase of Lincoln Station, a transit-oriented development on 35 acres next to the Lincoln Avenue Light Rail station, along Interstate 25 between Lincoln Avenue and C-470.

The mixed-use development will be anchored by a 151,000-square-foot, six-story, energy efficient office building called One Lincoln Station.

Phase one also will include the Clock Tower and Station Street South buildings, which will include 34,500 square feet of boutique office space on two floors above 18,800 square feet of retail.

The commercial space will cost $45 million — $30 million in equity and $15 million in a commercial loan.

The first phase also will include Station Street Lofts, a 73-unit "loft" building with 8,000 square feet of retail.

Eventually, the entire development will have more than two million square feet of additional office space, 2,000 residential units, and 50,000 square feet of retail space.

The first phase will be completed in the spring of 2008.

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Rebchook also scoops a new eight-townhome project, MetroView, in Jefferson Park.

Here are some renderings from website, denvercore.com, announcing the project:

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Another Front Range story to ponder: is Foothills Mall ripe for redevelopment? The article doesn't suggest anything of the sort, but consider recent Front Range success stories such as Boulder's Twenty Ninth Street (wikipedia). Just as Centerra is beginning to siphon off retail revenue from Ft. Collins, Flatiron Crossing had been doing the same number on Boulder until they responded. I wonder, by the way, if the new Wild Oats HQ at 29th Street will change now that the Boulder natural grocer has been, um, consumed by its now parent company, Whole Foods.

Twenty Ninth Street Site Plan: