Real Estate Information

With it being Chinese New Year this week, I couldn’t help but notice all the coverage about 2012, the year of the dragon, being the year of good luck. Fortunately housing economists seem to think so. CoreLogic’s chief economist Mark Fleming said, “The time is right in 2012 for prices to begin growing again and housing affordability will put a floor under any further significant declines.”

Recent data shows housing affordability rising dramatically due to a combination of home price deflation and rock-bottom mortgage rates; plus, both existing-home sales and single-family housing starts are up. And since consumer sentiment posted a six-month high in December, confidence is strengthening in the economy in general.

While it will be some time before home prices completely rebound from their peak, Boulder County included, a step in the right direction is all we need to keep confidence up and spur growth. Time will tell if 2012 becomes housing’s lucky year!

It’s not often that an immaculate, move-in ready home goes on the market with so much square footage for the money. With vaulted ceilings, main level laundry, 5 bedrooms (4 are upstairs), 4 bathrooms, and 2,776 finished square feet, 946 Shavano Peak Drive, Superior, CO is a great buy at $359,900. What’s so nice is that it’s nestled on a quiet street just blocks to both BVSD’s highly-rated Eldorado K-8 school and Superior’s South Pool. The master suite has a 5-piece bath and walk-in closet and the basement has been nicely finished with a 5^th bedroom, ¾ bath and study/rec room. What makes this opportunity even more unique is the assumable FHA loan (save mortgage insurance)!  Call me today at 303-442-5001 to view this home.

If you’re in the market for a home that has the benefits of being close to highly-rated Eldorado K-8 school and the pool, yet is located on a quiet street, 3547 Blanca Peak Drive, Superior, CO has so much to offer. For just $329,900, enjoy four bedrooms upstairs including the master suite with 5-piece bath and custom closet system. The unfinished basement offers extra storage, and the laundry is on the main level! What I especially like about this home for the area is the spacious, level backyard and deck. This home has a bright and sunny open floor plan, and with neutral décor throughout it is move-in ready.  

The holidays didn’t seem to have much of an effect on buyers looking for a home this season.  I stayed busy with showings but my buyer clients who don’t need to buy a home immediately are still looking simply because they haven’t found what they want yet.

While buyers are always looking for a great value, most of the homebuyers I’ve been working with lately want a move-in ready home, not necessarily fully remodeled but updated enough to not have a long list of “to dos” come closing.  

The Boulder Area Realtors Association is reporting the lowest inventory in Boulder County in several years. Many sellers are just postponing listing their home, often with the mindset that buyers don’t come out of the woodwork until the spring equinox. If this were true, I wouldn’t be seeing buyers get frustrated that there’s not much on the market meeting their criteria.

If you’ve been on the fence about listing your home, there’s no better time than the present. Call me today at 303-442-5001 if you’re looking for an effective, top-ranked realtor…I may already have a buyer for you!

What's a New Year without some sort of "top 10" (or in this case, seven) list? This week Inman News posted a list of real estate trends in 2011 that was very interesting. Here's a more condensed version:

1. Have we finally hit bottom? Prices are stabilizing across the country. Though the actual amount of sales is down from peak years this is a step in the right direction.

2. Boomers move to the forefront. With 2010's popular first-time homebuyer tax credit, the median age of buyers dropped. But in 2011, baby boomer purchases far surpassed that of the Gen Y buyers. 

3. FSBO successes continue to decline. A decade ago 24% of all home sales were for sale by owner. Now that number is 10%, and of those FSBO sellers 40% knew the homebuyer. 

4. More buyers are using agents. 89% of homebuyers in 2011 used a realtor (compared to 69% in 2001). Since realtors make the process easier by sifting through the inventory for time-pressed clients, help their buyers navigate through the sales process and legal documents, and help their buyers get a loan, it makes sense that people wouldn't want to undertake such an important life event unassisted. 

5. More cash buyers. Though most buyers had to undergo the process of getting a loan, 13% of 2011 homebuyers paid all cash.

6. More married couples. After a drop in married homebuyers last decade, 2011 saw 64% of homebuyers married (the largest share since 2001).

7. Life changes drive real estate sales. Repeat homebuyers cite the desire for a larger home, a job transfer, or relocating to be closer to family and friends as the primary reason to purchase a home. 

With spring still a few months away, sellers could benefit from making sure their home is in top showing shape this winter. Here are a few tips for the colder, darker days of the year:

1. Keep it comfortable. Aside from some nice warmer days, most buyers this time of year wear heavier clothing yet won't usually take off their coat when going from home to home. Keep the heat in mid-60s so they don't feel roasted out of your home. The goal is to get them to stay longer in your home and feel comfortable there.

2. Make it bright. With less hours of sunlight now and overall more cloudy days, make sure all the lights in your home are on. Don't overlook burned out bulbs and keep blinds open during the day. No one's first impression should be dark and dreary. 

3. Air it out. Since homes are closed up throughout the winter there's less fresh air circulating. Avoid any unpleasant odors from pets, cooking, trash, etc. by airing out your home periodically. Don't rely on fragrances as those won't get rid of the odors. 

4. Clear the area. Keep the sidewalk, driveway, and walkway snow and ice free as best you can. The easier your home is to access, the better. 

5. Avoid winter clutter. Boots, coats, hats, and gloves all take up a lot of space. Potential buyers will be opening closet doors so avoid stuffing closets to the brim by storing non-winter clothing in under-bed storage bins or somewhere else out of sight. A packed closet looks small no matter how big it really is. Also, keep holiday decorations at bay; they shouldn't hinder people easily moving about your home. 

6. Be flexible with showings. Often, the weekends are the easiest time for buyers to go on showings. You'll ideally want your home shown when it is still light out so be flexible as to when your potential buyer can view your home.

Now that December is officially upon us, I hear of more people taking their home off the market based on the sole misconception that home buyers stop looking during the holiday season. If this were true, then I'd have a lot more free time on my hands! Last year on Christmas Eve, I was showing properties in the morning before spending time with my family. Why? Most people don't have to work at this time, making their schedules available to view homes. For some families, it may be the only time where both spouses can really focus on their personal life and not work since many people use their vacation days in December and early January. I’m scheduled to close 5 deals this December which indicates that yes, people actually do buy and sell this time of the year.

Sure, the holidays are a busy time for people in general. But so is the summer…graduations, weddings, vacations, BBQs, sporting events, back-to-school activities, and more…yet people still carve out time to find a place to live! 

With less homes to view and motivated buyers, you may find you have more showings than you would if you listed your home after the first of the year. Unfortunately some sellers think they'll get "kicked out" of their home in the middle of their holiday celebrations, without factoring in that closing and possession dates are all negotiable. While some buyers would love to be in their new home for the holidays, others just want to finalize their future before year end and will move come January. I've done several deals where both parties agree to a closing date, then the now-previous owner rents the home back from the new owner for a short time. 

Plus, there is nothing like a home decorated for the holidays to help a buyer envision their own family celebrations there!

I know many of us have been saying this for some time now, but when the news media starts saying it – well, I guess that makes people stand up and take notice. A number of recent articles in the national press are now saying that it might be the right time for consumers, who have largely been on the sidelines, to jump back into the housing market.

I understand why potential buyers, whether first-timers or move-up buyers, remain cautious given all the economic headwinds and bad news out there. Economic growth has been slow, the jobless rate too high, and don’t even get me started about the politics in Washington, the euro-zone debt problems and the challenges facing Greece.

But I often urge buyers to examine what I like to call your “personal economy.” That is, if you have a steady job, reasonable credit, and enough savings for a solid down payment, you might want to take a deep breath and think about taking the leap into the housing market while prices and interest rates are so low.

Read what two of the nation’s top business publications, Fortune magazine and The Wall Street Journal, are telling their readers:

“Forget stocks. Don't bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing.”

- “Real estate: It’s time to buy again,” Fortune Magazine article by Shawn Tully.

“Two key measures now suggest it's an excellent time to buy a house, either to live in for the long term or for investment income.”

- “It’s Time to Buy that House,” The Wall Street Journal article by Jack Hough.

Tully in the Fortune piece interviewed Mike Castleman, founder and CEO of Metrostudy, who has spent more than 30 years tracking data on the inventory of new homes in the United States. Each quarter, inspectors go through 45,000 subdivisions from California to Maryland. According to Fortune, inspectors examine 5 million lots and record whether they contain a house under construction or completed.

What has Castleman observed? The glut of new homes that the U.S. had a few years ago at the peak of the market has rapidly disappeared. Instead, he told Tully that he has seen a rapidly declining inventory that could force prices higher. In the 41 cities Metrostudy looked at, there are just 78,000 houses vacant and for sale, or under construction – less than a quarter of the 343,000 units at the height of the market in 2006 and less than the total a decade ago.

"The talking heads who are down on real estate will hate to hear this, but America needs to build a lot more houses,” Fortune quoted Castleman as saying. “And in most markets the price of new homes is fixin' to rise, not fall."

Metrostudy collects figures on the number of homes that are vacant and for sale in each city, and the number of months it takes to sell all them to determine whether individual markets have a surplus or a shortage of homes. "If we had anything like normal levels of buying, those houses would sell in 2½ months," Castleman told Fortune. "We'd see an incredible shortage. And that's where we're heading."

Fortune says that consumers may be confused by conflicting news reports on the housing market, and that could be impacting their confidence in buying a home. On one hand, housing affordability has never been better. But on the other hand, they continue to see housing starts falling and home prices still heading down in some markets.

Tully said economists Robert Shiller and Karl Case, authors of the S&P/Case-Shiller Home Price indices, have different views about where we are in the cycle. While Shiller remains pessimistic, Case is more optimistic that things are starting to turn around, telling Fortune that "the lack of new home building is a huge help that a lot of people are ignoring.”

In its analysis of the housing market, Fortune noted that it’s important to look at the economic fundamentals of home ownership to see where the market is headed. As home prices rose sharply over the past decade, Tully said the magazine warned that a bubble was forming due to the level of new construction and the cost of owning a home compared to renting one.

“Eventually reality set in, and prices plummeted,” Tully said. “Our current view focuses on those same fundamentals — only now they're pointing in the opposite direction,” Fortune noted. “So let's state it simply and forcibly: Housing is back.”

The Fortune article said what will drive the recovery of the housing market is a sharp drop in new home construction, as noted in the Metrostudy research, as well as a big drop in home prices. Home prices have fallen about 30% nationwide since 2006, Fortune said, and more than 50 percent in hardest hit markets. With unusually high affordability levels, the article noted, Americans will start returning to the market.

While no one can predict with certainty the future of home prices and sales volume, it is safe to say that a turnaround will eventually happen. Timing the market is very difficult because you will never know the absolute bottom until prices have started going back up again. My advice is to look closely at your own “personal economy” and talk with a professional Realtor to see if now might be a good time for you to take advantage of low prices and rates, and join others in taking the plunge into buying a home.

Every so often, I read an article or blog that really gets me thinking. The chief economist at the National Association of Realtors, Lawrence Yun, recently posted about how a home buyer’s average mortgage payment today is not much different than it was 30 years ago. Though 1981 saw mortgage rates of 18 percent, home prices were much lower than they are now; and now that interest rates are so low, it is almost even.

Yun says, “Compare the chart below on the 30 year payment growth of the overall consumer price index, rent, food prices, gasoline prices, college tuition, and medical costs, versus the monthly mortgage payment. The rapid increases in college tuition bills may also imply too much demand, perhaps even a bubble in term of students not getting their money’s worth.  A recent spike in college student loans is due primarily to weak job market conditions, but may also be due to ‘over investment’ in education in relation to the cost.”

The slow growth in monthly mortgage rates and how cheap homes are on a per month basis makes a real value proposition for homebuying! Now is the time to buy an investment property, call me today at (303) 442-5001 to discuss your options.

I often speak with homeowners who tell me they’re going to wait until spring to list their home. Anyone who has learned the law of supply and demand knows that increased competition drives down prices on any product, homes included. Here are 11 important reasons why now is the time to sell!

1. People who look for a home during the holidays are more serious buyers!
2. Serious buyers have fewer houses to choose from during the holidays. Less competition means more money for you!
3. Since the supply of listings will dramatically increase in January, there will be less demand for your particular home. Less demand means less money for you!
4. Houses show better when decorated for the holidays!
5. Buyers are more emotional during the holidays, so they are more likely to pay your price!
6. Buyers have more time to look for a home during the holidays than they do during a working week!
7. Some people must buy before the end of the year for tax reasons!
8. January is traditionally the month for employees to begin new jobs. Since transferees cannot wait until spring to buy, your home must be for sale now to capture that market!
9. You can still be on the market, but you have the option to restrict showings during the six or seven days during the holidays!
10. You can sell now for more money and we will provide for a delayed closing or extended occupancy until early next year!
11. By selling now, you may have an opportunity to be a non-contingent buyer during the spring, when many more houses are on the market for less money! This will allow you to sell high and buy low!