Realism returns to real estate: hot fix-up market means work for skilled tradesmen.

• Author: Titus, Stephen
• Position: WHO OWNS Colorado

IF YOU'RE SICK OF HEARING ABOUT THE POOR ECONOMY and downturn in the real estate market, you're not alone. Most of the economic antagonists (many of them journalists) love to talk about the sky falling when in fact all that financial rain is producing some substantial growth and not just from artificial means like government stimulus, which is really the financial equivalent of pigs eating sausage definitely not sustainable.

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Investment in new businesses, construction and capital investment in existing business is very much on the rise. While the current economic figures don't yet show it, they most certainly will by the end of the summer.

A brief glance around your neighborhood -- or most any other neighborhood along the Front Range -- and you'll notice plenty of new construction. The question is where did the money for these projects come from and why is it showing up now?

"I think the money has always been there; it has just been on the sidelines," said Greg Smith, managing broker at ReMax Alliance Boulder. "Banks are lending a little more easily, but also consumers know what to expect from banks and have realistic expectations. They know they need a decent credit score and a down payment."

It turns out there are plenty of people out there who fit this model. While the realistic expectation is a much more modest home, few want to live in a ramshackle shanty abandoned to foreclosure by the previous owner. This has recreated the business of buying distressed homes, either from the courthouse steps or the bank and rehabbing them into something first-time homebuyers can be proud to own.

There's a pent up demand, Smith said. "Now homebuilders are coming back in the market to fill the new demand."

Sales statistics for the Boulder area show sales of 3,009 single family homes in 2010 and 3,005 homes in 2011 -- almost identical But the important statistic is the number of new listings coming on the market. In 2010 there were 1,353 listings, and in 2011 there were 1,121 -- a 17 percent decrease, and this drop in the available homes for sale will eventually drive up prices.

"Price is a lagging indicator to sales," Smith said. It is about two years behind the trend, so looking in a crystal ball we'll see two more years of lower prices, but by this summer we'll start to see the first signs of rising prices.

Already demand for distressed "fix-up" property is extremely hot. Bank-owned properties are getting multiple offers in a...