Priced Out: Investors buy expensive homes just to tear them down

Home sales are driving up real estate prices and changing the dynamics of Denver’s neighborhoods, including those who can afford to live in them.

DENVER – Live in one place long enough and change becomes the only constant.

“I’ve seen changes. Lots since I’ve been here,” Mela Ornelas said as she sat on the porch of her Sunnyside neighborhood home. “I was young when I moved here. They were all young. Now I’m still here and they’re all gone or passed away. There’s a lot of new people coming in.”

The Ornelas have lived in their north Denver home for more than 50 years. Your neighborhood is rapidly changing now, as older homes sell for nearly a million dollars only to be torn down by developers rebuilding for big profits.

“It’s changed dramatically in the last 10 years,” said Dennis Ornelas, Mela’s son. “Seeing people you grew up with and seeing your neighbors have their houses torn down. It just takes a lot of memories and stuff like that. That’s the downside for me.”

Two houses down the road from the Ornelas’ house, the latest example of change is evident. Another house was sold to an investor.

“The asking price for this home was $850,000 and we’ve had competing offers of up to $890,000,” said Chris Crumrine, the real estate agent representing the seller. “Eventually all these other small houses on these streets will probably be bought by an investor as well.”

The investor who bought it told Crumrine they plan to demolish his client’s house and replace it with a semi-detached house, just like they did next door. Also raised in North Denver, Crumrine understands what high real estate costs are doing to the neighborhood.

“It drives out the low-income families,” Crumrine said. “It’s just so expensive to live in the Highlands, Sunnyside, now. The whole north Denver area has gotten so expensive.”

Crumrine added that the area’s redevelopment has dramatically reduced crime.

RELATED: Priced Out: How the Denver Metro Housing Market Got Where It Is Today

The properties being sold to developers and investors are worth far more money than the Ornelas paid for their home in the 1960s.

“I can’t believe the price in this area,” said Mela Ornelas. “My husband bought this house for $13,900.”

Investors are willing to pay exorbitant prices for homes just to demolish them. Like the property listed by another Crumrine client in the Lower Highlands neighborhood.

“Right now the asking price is $1.6 million,” Crumrine said of the 10,000-square-foot property. He lists the property with the intention that whoever buys it will level the property and build a new building full of apartments or townhouses.

“They only want the land. They don’t take care of the house at all,” Crumrine said. “The investors who come in won’t even look inside the house. They do not care. You will tear it down. A lot of investors come in and take distressed real estate and tear it down Dirt, it’s the place that gives it value.”

In Edgewater, get this $450,000 500 square foot home on the market right now. In Washington Park, a lucky $725,000 investor just bought the right to knock down a house and build something new.

9NEWS property expert Lane Lyon said these weren’t necessarily ridiculous deals. It’s what people are willing to pay for right now.

“These developers saw an opportunity,” Lyon said. “You have to believe that the developers won’t roll the dice and pay a pretty penny for these tickets if they don’t think anyone will buy them.”

Lyon said real estate in Denver’s most desirable areas is hard to come by. While many people want newly built homes, the only way to get them is by paying premium prices.

“We’ve had neighborhoods that have become real key areas for development and redevelopment,” Lyon said. “The complexion of appearance changes, but often these houses are replaced with something much more expensive.”

Back in Sunnyside, Mela Ornelas said crime had gone down in recent years and the neighborhood is much cleaner now. What is lost are the people who were displaced because they can no longer afford to live here.

“There are many strange people that I have never seen,” said Mela Ornelas. “As long as I’ve been here, I’ve kind of known the people. who was who A lot of strange people come by now. Go for a walk with their dogs. Many young people.”

Her son also noticed the change.

“For me, I have my culture and background,” said Dennis Ornelas. “I think if I had the money that’s fine, but it doesn’t replace the memories of where I grew up. I see the money and that’s a really nice thing. But at the same time, I like the memories I have more than the money.”

After more than five decades on the Veranda, change is still the only constant.

“They offered me a lot of money,” said Mela Ornelas. “They want to buy my house. But I don’t want to sell it yet. It has many memories. I don’t want to let it go They’re probably going to tear it down and build one of those square houses. That is my life.”

RELATED: Priced out: Workers are turning to van living amid soaring rents and home prices

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