How to decide on a builder to buy property in Bangalore

Choosing a builder is a big decision for any property buyer. This becomes even more crucial in Bangalore as property purchase could be a minefield of regulatory and legal issues. Don’t go just by the 3D models, glossy brochures, advertisements, sample apartments and promotional offers made by sales representatives.

First identify your position and needs

Don’t jump the gun and finalise on the builder before equating your financial position and your needs. Before zeroing in on a builder, you should get your maths right and decide on how much financial liability you are willing to take. Also, give due consideration to the location – travel time to office, your child’s school, closeness to commercial areas, resale value, rental income that you can earn, etc. It is advisable to prioritise your needs and financial position before finalising on a property and the builders in Bangalore.aaaaWhat to research about builders

Spend enough time researching about the property and the builder. Spend time to collect all possible information about the builder. Study the track record andthe ability to deliver on time. Collect information on completed projects andconstruction quality and check if the builder is involved in any legal issues.The financial strength of the builder is anotherinformation you should collect. If they are a small-time builder, go an extra mile and research about the prices in nearby locations. Check with other buyers on the payment terms made, mode of payment, buyer seller agreements,etc.

Where to look

The internet is a wonderful medium to research about a builder. Check property portals, the builder’s website, discussion forums, reviews about the builder, social networking sites, consumer complaints and other forums. This can give a detailed background about the builder.

Size and feedback ratio matters

Most buyers prefer renowned builders. Usually, large construction companies in Bangalore take care of all the legal and regulatory issues and construct by providing all the required amenities. A good brand name can alsofetch you more value if want to sell the property at a later stage. Big builders also tie-up with various banks and come with preapproved loans.

Small isn’t bad

If your needs don’t require all amenities that a big builder is offering, or if you have budget constraints, crosscheck all the details thoroughly and go with a small builder. Sometimes, small builders can offer you flats and houses for real value of money and in much better localities.

Understand management background

Collect your details regarding the builder’s management, their values and ethics. It is definitely better to go with a builder with good ethics than the one without.

Main builders in Bangalore

Some of the major construction companies in Bangalore who have numerous Apartments in Bangalore are Shobha Developers, The Brigade Group, House of Hiranandani, Mantri Developers, Sterling Developers, SNN Builders, Ozone Group and Purvankara.

 

Check out RoofandFloor and find the best builders in Bangalore. RoofandFloor can also help you find the best construction companies and architects in Bangalore, while also providing you with verified and updated listings, thus helping you to quickly connect with the builders in Bangalore.

 

A Few tips to help you in searching apartments in Koramangala

Koramangala is a southeastern part of the Bangalore city in India. It has one of the biggest neighborhoods, and is an exceedingly looked for residential properties with wide tree-lined streets and a blend of extravagance apartments, business structures, and posh bungalows. It has slowly developed into a business center point.

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Koramangala is to a great extent cosmopolitan in nature. It is the point of convergence of numerous occupied main streets, eminently the Intermediate Ring Road, which links the Airport Road with Hosur Road and Electronics City, Sarjapur Road and 80 Feet Road.  It orders one of the most elevated property costs in the city and is considered by Bangaloreans to be one of the best places to live, in spite of the fact that commercialization as strip malls, instructive foundations, a few product companies, shopping centers and eateries, expanding activity and populace have postured issues for its occupants.

Finding apartments in Koramangala can be quite overpowering. Not just you can pick a place from the apparently unlimited choices accessible; you regularly need to sign a long-term lease that holds you to your choice for a whole year.

To make the procedure more reasonable, you ought to pick up a comprehension of precisely what it is that you are searching for preceding starting the inquiry. Here are the 5 most critical things to consider when searching for flats in Koramangala:

  • Location: As a matter fact, the most important thing to consider while searching for an apartment is its location. In case, you don’t have a specific zone at the top of the priority list, analyze the encompassing regions, making a point to gain a decent feeling of the general character of each before settling on your choice. At the point when conceivable, visit every area to get to know nature and ingest the general feel of the area.

 

  • Rent: The second thought is the amount you are ready to pay every month in rental expenses. You must focus your value compass and set a great sum of the rent.

 

  • Length of Lease: Focus on the period of time you are hoping to have the lease, which is generally for 6 months to a year. On the off chance that you need a month-to-month rental, your alternatives may be lessened and you ought to expect somewhat higher expenses. You can easily get flats for sale in Koramangala within your budgeted amount.

 

  • Building Size: Next, find out what kind of building and unit you are searching for. There are different sizes of rental structures with contrasting quantities of units, from single family homes to substantial condo structures. You must consider whether you are willing to live in a little spot in a superior area or in the event that you need a certain size living region.

 

  • Amenities: Since the particular elements fluctuate incredibly, it is important to indicate the pleasantries critical to you, recognizing your needs. When you have distinguished your prerequisites, you can completely decide out all properties that neglect to accommodate your needs. Next, make a rundown of amenities that you might want to have, however could live without if vital.

Using these tips you can find apartments for sale in Koramangala

 

What Make SobhaElan Stand Out in Coimbatore?

The city of Coimbatore is considered to be one of the most promising new property related investment options in the country. The city is considered to be one of the most popular new hubs of housing investment in the southern parts of the country. Coimbatore has been an important economic hub for a long time. However the growth in demand for residential properties in the city has been relatively new. There indeed was a demand for housing here, but most of it had earlier not been capitalized on. Then the property markets were deeply impacted by the recession which led to the drop in the demand for houses across all territories. This was a time when the property builders realized that they could not always focus on the prime territories. They also had to consider the overall returns and it was a wise option to search for alternatives. This search for new property hubs caused the rise of Coimbatore in the property business. Now that the market conditions have improved in the year 2015, the city has emerged as a new prominent hub of residential properties. As a result, SobhaElanhas emerged as a prominent new opportunity for property investment in the city. This is a project that has been offered by the Sobha Limited, a developer company that was established way back in the nineties. Now they are offering some of the most prominent urban property demands in the country.

What does SobhaElan have to offer?

The SobhaElan project offers urban lifestyle that comes with vivacity and elegance that the residents of Coimbatore have come to seek over time. The project offers strategic location advantage to start off with. It lies in the Ganapathy locality which is an important region of Coimbatore. Important avenues like the Ring Road, FCI Road, Sathy Road, Avinashi Road and Mettupalayam Road are easily accessible from the project. Anyone planning to invest in housing for a long term in Coimbatore can consider SobhaElan Coimbatore to be one of the most promising new property related option in the country. The overall growth in demand for housing across the country has increased over the years and the property business in Coimbatore is also doing well. A good offering therefore is always in demand and the Elan project is one such offering.

Property seekers can opt for the 3 BHK apartments that the project offers. The builders have ensured that all these apartments are amongst the most spacious apartments available in the city. Each of the 3 BHK houses have an area of over one thousand six hundred square feet. These apartments come with three bathrooms as well.

The builder profile

SobhaElanGanapathyis one of the most prominent new property related options in the city of Coimbatore. This project has been developed by Sobha Limited; a company that was established in 1994 and has been responsible for the development of almost one hundred and fifty projects till date. The builders are a known brand in the southern parts of the country and they have ensured that the property seekers find the best available property options in Coimbatore.

In Conclusion

Elan Coimbatore is considered to be one of the most prominent new housing options in the cityof Coimbatore.

Mumbai Properties is recognized as a fast paced property market in India

India is the greatest country of south Asian territory. Its economy has shown a reliable upward example in the latest decade or something like that. A substantial part of this expansion in economy is started after India ascended as one of the I.T beast of the world. The useful results of this change in economy of the country are recognizable in every business zone including the property market. Mumbai, which is perceived as the business capital of the India, has grabbed the thought of the money related pros of the world together with the people who need to place assets into property market. Mumbai, the budgetary capital of India and a dream city for a colossal number of Indians, continues seeing striking advancement in its property section. Called the most secure city of India, Mumbai welcomes an overwhelming economy which is creating at a brisk rate. The city’s thick and creating masses have pulled in property money related experts from India and abroad comparative, putting Mumbai within period of area activity in India.

Mumbai Properties- Quick but Steady

Most of the engineers nowadays are providing a huge amount of quality on their real estate project. The principle negative variable today is that there is compelled arranged stock with extraordinary property producers in Mumbai. General the organizations in Mumbai look truly enduring, the designers who have a work in progress stretches out in awesome zones with incredible hobby are so far growing there expenses by Rs.50/ – to Rs.500/ – every 2 or 3 months. Property costs in diverse urban groups in India are basically less extravagant than in Mumbai.

At present, there are mixes of goliath private and business stretches out in the time of change and various more in the channel. This exhibits towards the measure of advantage which is there in the Real Estate Mumbai. Diverse multinational associations and fiscal foundations are arranged in Mumbai and more need to come here to contribute. So the enthusiasm for property in Mumbai is not going to decrease. Additionally, people here have enough trade to buy properties in for cold hard currency Mumbai as it is insinuated as the ‘New York of India’.

Mumbai has a chance for people from every class of the overall population to place assets into property market. As a regular workers man you can purchase a few lofts in Mumbai and after that you can benefit by renting them. If you are planning to place assets into property business part of Mumbai then you are better urged to buy property in Navi Mumbai or in whatever other suburb of Mumbai as property here are by and large less costly. Examiners are concentrating on Navi Mumbai in light of the fact that the expenses here are on the addition. It is an as of late made range specifically over the harbor. Navi and distinctive country regions are flawless spots for you in case you need to buy private property in Mumbai.

Why people want to invest in Mumbai real estate:

The theorists, both neighborhood and outside, have various inspirations to place assets into Mumbai. One noteworthy reason is the city’s being the most populated city of India, and its country territories concealing the world’s second most prominent urban agglomeration after Tokyo. Seeing the high rate which Mumbai’s people is developing with, an enormously extended enthusiasm for both private and business properties in Mumbai is definitely not hard to envision in the looming years. Enthusiasm for Mumbai property passes on surefire returns to the monetary pro, who can profit by trading the property at a higher expense, or more preferably, rent the property and acknowledge relentless income. If you want to buy or offer properties in Mumbai, then best thing you can do is to get the organizations of any property office. If you are short on time then there are various property workplaces like Better Homes India that give online organizations. Enrolling the organizations of a property association can help you in understanding the best course of action for you in confined time.

Housing by the numbers: Something is weird

Homes are selling at a faster clip this spring, but something still isn’t quite right in housing.

Thanks to the epic real estate crash of the last decade, market watchers and reporters now have a whole cottage industry of data providers to track every move in home sales and mortgage financing. But looking at all those numbers now, something doesn’t add up to a “normal” housing market.

Mortgage rates are rising, up pretty significantly in just the past two weeks from an average 3.6 percent on the 30-year fixed to just over 4 percent. In the first three months of the year, rates were lower, prompting a refinance “boomlet.”

'For Sale' sign is displayed outside of a house in Oradell, New Jersey.

Lower rates, however, did not translate into more mortgages to purchase a home. In fact, purchase loan originations were down 25 percent in the first quarter from the previous quarter and up only 1 percent from a year ago, according to new numbers from RealtyTrac.

“The purchase loan market remained largely missing in action despite tepid growth from a year ago. The prime buying season still remains ahead, providing some hope that first time homebuyers and other traditional buyers relying on traditional financing will come out of the woodwork in greater numbers in the coming months,” said RealtyTrac Vice President Daren Blomquist.

But in analyzing the numbers, Blomquist admitted that FHA insured loans, a favorite among first-time buyers due to their low minimum down payments, saw weak volume. Granted the first quarter was still winter, but the comparison to a year ago points to weakness, especially given that the economy has supposedly improved in the past year.

RealtyTrac also recorded the highest volume of nonowner occupant buyers (largely investors) in the first quarter since 2011. Investors are still in the game, and some are now starting to use mortgages again for their purchases, though that share is still small.

“Investor activity continues to represent a disproportionately high share of all home sales activity in this housing recovery, but unlike the past three years the large institutional investors are backing out while the smaller, midtier and mom-and-pop investors are remaining active,” said Blomquist.

That dovetails with a report from CoreLogic showing that all cash sales are still inordinately high. At nearly 38 percent of all sales, cash is still king. That’s down from 46.5 percent at the worst of the housing crash in 2011, but it’s still significantly higher than the normal 25 percent share. Some states, like New York, Alabama, Florida and Indiana are seeing around half of all sales in cash.

Cash may in fact play a bigger role in the coming months, as weak inventory leads to more bidding wars. All-cash buyers have a significant advantage in the competition, as sellers would rather not have to rely on borrower buyers, especially as home prices rise more dramatically, and homes don’t get appraised at deal values.

Home prices have been gaining steam this spring, rising at a far faster pace than income and employment growth. April was the third-straight month that prices grew above 6 percent, according to Redfin, a real estate brokerage. Even with three-straight months of increased listings—about 10 percent more each month, according to Redfin—supply is not keeping up with demand, not even close.

The numbers also don’t speak well of credit availability. Forty-seven percent of real estate industry experts polled by Zillow said lending is still too restrictive. Tight credit, combined with higher home prices, continue to sideline first-time buyers, at least in larger metropolitan markets. Good news for the rental market, but not for home ownership.

“Renters face several challenges,” said Zillow Chief Economist Stan Humphries. “They need enough money on hand to start to buy homes. Even as mortgage credit becomes easier to obtain and home prices level off, renters are confronted with slow income growth and high rental rates. In addition, they face sometimes fierce competition for very few available homes in the market.”

Still another survey, of demand, finds that since the end of the recession in 2009, the housing market’s capacity to support sales activity has nearly doubled. That is, people’s ability to purchase a home. This points again to the supply problem at the heart of housing today.

“The fact that actual existing home sales volumes were lower than market capacity, yet house prices are increasing, indicates that the market is experiencing supply constraints more than demand constraints,” said Mark Fleming, chief economist at First American.

Put simply, the housing market is underperforming because both homebuilders and home sellers are underperforming. Housing starts are still well below even historical norms, despite pent-up demand, and sellers, despite gains in home equity, are still not willing to list at current prices.

“Existing-homes sales are currently below expectations because it’s hard to be a buyer if at first you can’t be a seller,” said Fleming. “Without the constraint of insufficient equity, many more homeowners would be willing to sell their homes, especially given the continued low interest rate environment and increased certainty in labor markets.”

The home ownership rate now stands at the lowest level in 25 years, and it continues to drop each quarter it is measured. Next week the National Association of Realtors will report April sales of existing homes. The headline numbers will likely be better than they were a year ago and as compared to the previous month; one number, however, does not tell the whole housing story.

Home builder sentiment drops 2 points in May

In the heart of the spring housing market, home builders are less optimistic.

Builder confidence slipped two points in May on a monthly survey from the National Association of Home Builders (NAHB). It now stands at 54. Fifty is the line between positive and negative sentiment.

A contractor works on a townhouse under construction at the Pulte Homes Inc. Pepper Lane development in San Jose, California.

A contractor works on a townhouse under construction at the Pulte Homes Inc. Pepper Lane development in San Jose, California.
“Consumers are exhibiting caution, and want to be on more stable financial footing before purchasing a home,” said NAHB Chief Economist David Crowe. “On the bright side, the HMI component measuring future sales expectations has been tracking upward all year, mortgage rates remain low, and house prices are affordable. These factors should spur the release of pent-up demand moving forward.”

Perhaps they should, but they haven’t so far, as potential home buyers are still facing tight credit conditions and home prices are rising faster than income and employment growth. Sales of newly built homes in March, which represent signed contracts not closings, fell just over 11 percent month-to-month, according to the U.S. Census. Mortgage applications to purchase a home were flat in April, according to the Mortgage Bankers Association, suggesting April new home sales might be lower. The average loan size for a newly built home soared to a record $315,670, as builders continue to focus on higher end buyers, not entry level consumers.

Builders are less confident overall, but their sentiment was strangely mixed, again indicative of the still floundering recovery. Of the NAHB index’s three components, sales expectations in the next six months rose one point to 64, buyer traffic dropped one point to 39, and current sales conditions fell two points to 59.

Regionally, on a three-month moving average, builder confidence in the South and Midwest each rose one point to 57 and 55, respectively. In the Northeast, it fell by one point to 41, and in the West it dropped three points to 55.

US housing starts, permits surge in April

U.S. housing starts jumped to their highest level in nearly 7-1/2 years in April and permits soared, hopeful signs for an economy that is struggling to regain strong momentum after a dismal first quarter.

The strength in housing is in stark contrast with weakness in consumption, business spending and manufacturing, which have prompted economists to lower their second-quarter growth estimates and raised doubts that the Federal Reserve will raise interest rates before the end of the year.

Groundbreaking surged 20.2 percent to a seasonally adjusted annual pace of 1.14 million units, the highest since November 2007, the Commerce Department said on Tuesday. The percent increase was the biggest since February 1991.

March’s starts were revised up to a 944,000 unit rate instead of the previously reported 926,000 unit pace.

Starts for single-family homes, which accounts for the largest share of the market, hit their highest level since January 2008. Groundbreaking for the volatile multifamily segment also recorded hefty gains last month.

Permits for future home construction jumped 10.1 percent to a 1.14 million-unit rate, the highest since June 2008. Permits have been above a 1 million-unit pace since July.

Economists polled by Reuters had forecast groundbreaking increasing to a 1.02 million-unit pace and permits rising to a 1.06 million-unit rate last month.

The dollar rose to a session high against the euro on the data, while prices for U.S. Treasurys turned negative.

U.S. stocks index futures were trading higher, also after the European Central Bank suggested it would speed up its bond buying program.

Housing firming

The firming housing market also buoyed profits at Home Depot. The world’s largest home improvement chain by sales reported better-than-expected quarterly profit and sales, and raised its full-year sales and profit forecast on Tuesday.

While the robust data probably overstates the health of the housing market, the signs of strength fit in with views that a housing rebound is under way.

There is cautious optimism that housing, which has seen an acceleration in home sales and prices, will combine with a tightening labor market to lift the economy out of the soft patch hit at the start of the year.

The government reported last month that gross domestic product grew at a 0.2 percent annual pace in the first quarter. But weak March trade and inventories data suggested the economy actually contracted.

The government will publish its revised GDP data next week. Output at the start of the year was held down by a harsh winter, a strong dollar, a ports labor dispute and deep energy spending cuts in the first quarter.

Although growth is picking up, retail sales and industrial production data for April suggest the rebound is modest.

In April, groundbreaking rose in three of the four regions, but fell 1.8 percent in the South, where most of the home building takes place.

Single-family homes groundbreaking gained 16.7 percent. Groundbreaking for the multi-family homes segment increased 27.2 percent.

Single-family permits increased 3.7 percent last month. Multi-family permits surged 20.5 percent.

A house that thumbs its nose at the drought

Imagine a home that could recycle two-thirds of the water it uses. No need to imagine. New technology to do just that was recently approved for use in drought-parched California, and the company behind it claims it could be looking at a $15 billion business ahead.

“In five years time, every new home will have a water recycler in it,” said Ralph Petroff, chairman of Nexus eWater, the Australia-based company behind the technology.

The system, which lives under two manhole-like covers on the side of the home, pulls in soapy water from the house—that is shower, dishwasher, laundry and sink water, not toilet water—and then sends it into a cleaning system. What comes out, so-called “gray water,” is water that can be used for irrigation and for flushing toilets. The water cannot be used for washing or drinking.

California-based KB Home bought into the technology and just announced that it will be standard in over 50 homes in a new San Diego development. It is also demonstrating the system in model homes in Sacramento and Lancaster.

The cost is just under $10,000 per home to install, but Petroff said that price should go down as more builders buy in and the technology becomes more common. He sees it as having even more potential than solar panels.

“There is no alternative to water. That’s what Californians are discovering every day,” said Petroff.

In Irvine, California, developer Emile Haddad, CEO of Five Point Communities, an offshoot of Lennar, is behind the construction of thousands of new homes by various public builders. Water is not a huge problem because the Irvine water district already recycles its water through purple pipes that run through all new communities.

Read MoreHouses are about to get really, really smart

“Irvine has been way ahead in its thinking,” said Haddad, who sees the severity of this drought as an opportunity, a tipping point, for new technology in homebuilding.

“I think what we’re going to see is a much more surgical approach and we are going to put together a plan that deals with water hopefully once and forever and we’re going to see in 20 years that we talk about drought as something we all can live through,” he said.

KB Home is teaming up with the U.S. arm of an Australian company, Nexus eWater, which can recycle 2/3 of the water you use in your home on site.

KB Home is teaming up with the U.S. arm of an Australian company, Nexus eWater, which can recycle 2/3 of the water you use in your home on site.
At the Irvine water district, there is some skepticism about in-home gray water technology, since the area already recycles its water. That water, however, does not go out of the home and directly back into it. Recycled water is sold off for commercial real estate use, agriculture and some residential housing.

“Individual homes need to look at it community by community,” said Paul Cook, general manager of the Irvine Ranch Water District, who is concerned that home water recycling in some places is as redundant as it is costly.

Read MoreUS housing starts, permits surge in April

Builders, faced with a drought with no clear end in sight, are doing all they can to make their homes as water and energy efficient as possible. Not only do they have to, but it makes them more competitive.

KB Home is teaming up with the U.S. arm of an Australian company, Nexus eWater, which can recycle 2/3 of the water you use in your home on site.

KB Home is teaming up with the U.S. arm of an Australian company, Nexus eWater, which can recycle 2/3 of the water you use in your home on site.
“The biggest advantage is that new homes are way more water efficient; that they are on smaller lots with very little landscaping, they can put in very drought resistant plants, and somebody concerned about their water bill would have a huge advantage buying a new home over a resale home,” said John Burns, founder of John Burns Real Estate Consulting.

Burns, a resident of Irvine himself, saw his water bill go up 30 percent in the last few months and has been warned that it could go up more if he doesn’t curtail usage. While new construction is more expensive, he says California buyers are more willing to pay more up front in order to save in the long run. Builders know that, and that is why prices are not coming down.

“They don’t look to California for volumes, they look to California for good margins and good price appreciation,” said Burns.

So far there has been no moratorium on new construction, just delays for permits, which is costly for the builders. Burns and Haddad agree that the state would take a big risk stopping new home construction, as supply is already severely limited, demand is rising and prices are soaring again.

Housing stocks set to double—here’s why

The news that housing starts rose 20 percent in April serves as just the latest evidence that housing is set to roar back in a big way, according to Fundstrat Global Advisors’ Tom Lee. But the real key to the rally will be young people buying homes.

Lee notes that household formation numbers compiled by the U.S. Census have recently started to break out. But the usually bullish strategist says they still have a long way to go.

Based on unusually low household formation numbers, “there’s a ton of people living in basements,” Lee said Tuesday in an interview with CNBC’s “Trading Nation.” “Two quarters of pretty decent household formation isn’t getting everybody out of the basement. I think this means we have multiple years where household formations are well over 1.3 million, 1.4 million.”

Of course, if many more young people start buying homes, that’s a natural boon to the companies building them.

“I think housing and housing-related stocks are all buys,” Lee said. “If housing starts go to 2 million, which is where we think they’re going to go, the builders are going to rise almost 150 percent from here.”

And this all has very positive ramifications for the broader economy and market.

“I think it’s a very bullish sign because when you look at housing cycles… there’s so much revenue and activity generated by housing that if starts go to 2 million, it’s several hundred billion dollars of incremental revenues for that sector.”

Lee isn’t the only bull crowing about the housing market these days.

Canaccord Genuity equity strategist Tony Dwyer made a similar point Tuesday in a note to clients, writing that the “acceleration in the number of millennials turning 30 over the next six years … could ramp household formations,” particularly given the “positive employment outlook” and “low household debt service ratio.”

If young people develop a taste for houses, then, the outlook forhomebuilders could begin to look very bright indeed.

Denver housing: Rocky Mountain high and HOT

When Christopher Simmons began shopping for a home in Denver six months ago, he had no idea the risk and the frustration it would take to get one. The 27-year-old had good credit and cash to put down, but that was not enough in this red-hot market.

“One of the hardest parts is that I travel for work often and am typically out of town on the weekends, and houses are being listed Thursday afternoon, offers due by Sunday afternoon and responses back on Monday,” said Simmons.

He lost eight houses he liked, simply because he was out of town. He lost two others in bidding wars, one of which had 18 bidders. Finally, Simmons went under contract on a small home in a transitional neighborhood, but only after beating out five other bidders. He wrote a letter to the owners, describing how he had grown up in the neighborhood, and then he added a risky tactic.

“I waived the inspection and the appraisal contingencies on all of the offers I made and on this one as well,” said Simmons.

The supply of homes for sale in Denver is down 15 percent from a year ago, the number of days on the market for homes has fallen 31 percent and the median home price is up 11 percent, according to the real estate company Live Urban Real Estate. Homes are flying off the shelves, and bidding wars are the new normal.

Skyline of Denver, Colorado

“Prices are going crazy. Multiple offers, love letters, videos, all kinds of things to appeal to a seller in order to make yours stand above all the others,” said Denver real estate agent Jill Schafer.

Supply here is low for a number of reasons. Employment is growing at more than 4 percent versus a year ago, home builders really didn’t ramp up production after the recession and land prices in the Denver area are at an all-time high, according to John Burns Real Estate Consulting. Most of the available land is out by the airport, where sales are not particularly strong.

Another issue plaguing the market is a lack of condominiums. Demand for condos was weak after the housing crash and foreclosure crisis, and then a Colorado law passed in 2010 making it easier for homeowners’ associations (HOAs) to file class-action lawsuits against developers for even the smallest construction defects.

“If you can’t put a project-specific insurance policy in place to protect yourself against inevitable lawsuits, you won’t build condos,” said Christopher Waggett, CEO of D4 Urban, a Denver real estate developer, who has been fighting to have the law changed.

Standing in front of a huge construction site of rental apartments, Waggett said there is a multifamily construction boom in Denver, but just 2 percent of it is condos, and those are only on the very high end. That’s because in order to afford the insurance policies against litigation, developers would need to build million-dollar units.

“We’ve had a situation in Denver for the last five years, where vacancy rates on multifamily have stayed below 5 percent and rental growth has been above 7 percent. That is not a normal market,” said Waggett.

Rent growth is great for apartment developers, not so great for Denver renters, many of whom are young millennials coming to town for new jobs with Google and Apple.

“I don’t think incomes have been rising at that pace, and I think we all know what happened in 2008-09 where we got an imbalance between incomes and value of property, in this case rent. There is a serious issue,” added Waggett.

Over in the tony Cherry Creek neighborhood of Denver, a condo building is going up, and it is more than 80 percent sold, even though it doesn’t open until August.

“If we were 50 percent sold, we’d be just outrageously happy, but at 80-85 percent where we are right now, this market is so incredibly tight for all real estate including condos. It’s just been amazing,” said Roy Kline, managing director of Western Development Group.

Most of the condos at Kline’s 250 Columbine list at more than a million dollars, with the penthouse going for $5 million. That, he said, is what it takes to insure his company against litigation, and to test the project vigilantly for any potential defects..

Christopher Simmons has a home under contract in Denver after losing out on others in bidding wars.

Christopher Simmons has a home under contract in Denver after losing out on others in bidding wars.
“We have peer reviews, have people looking over each other’s shoulder continuously to make sure everything gets done right,” said Kline, who described going over the top by beefing up the building for sound attenuation and water resistance.

Kline, however, expects there still may be lawsuits, even though not one owner has moved in a suitcase. Lawyers, he says, target new condos, hoping to find anything wrong.

“The HOA will be approached by a litigation firm, and they’ll ask them, maybe we can help you if you have some issues with your building, and they’ll go in and literally end up taking a unit apart and looking for all the little defects in it,” said Kline.

Some say the lack of condos is less about the law and more about lack of demand, but that argument is losing steam, as home prices soar amid stiff competition.

With rents continuing to rise, it is already cheaper to buy in this market than to rent, according to Schafer, and that will only put more pressure on single-family home builders and condo developers to ramp up production. Until then, buyers will continue to bid.