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NOW is the Time to Move Up to Your Dream Home

by Cory Dudley
Don’t Wait to Move Up to Your Dream Home!

Don’t Wait to Move Up to Your Dream Home! | Keeping Current Matters

Now that the housing market has stabilized, more and more homeowners are considering moving up to their dream home. With interest rates still near 4% and home values on the rise, now may be a great time to make a move.

Sellers should realize that waiting while mortgage rates are increasing probably doesn’t make sense. As rates increase, the price of the house you can afford will decrease if you plan to stay within a certain budget for your monthly housing costs.

Here is a chart detailing this point:

Buyer's Purchasing Power | Keeping Current Matters

With each quarter percent increase in interest rate, the value of the home you can afford decreases by 2.5%, (in this example, $10,000). Experts predict that mortgage rates will be closer to 5% by this time next year.

Act now to get the most house for your hard earned money.


The Winning Team Real Estate Group at Old Town Real Estate Co.
522 Kimbark Street • Longmont, Colorado 80501 | o:303.776.4004 • c:303.641.8597 • f:303.776.4661
Email: cory@justlistedcolo.com  Connect:  Twitter | Facebook | LinkedIn

Pending Home Sales Remain Strong In June

by Cory Dudley
June Shows Pending Home Sales Remain Strong

 

Pending Home Sales Remain Strong In June | Keeping Current Matters

 

The National Association of REALTORSPending Home Sales Index is “a forward-looking indicator based on contract signings”. The higher the Pending Home Sales Index number, the more contracts have been signed by buyers that will soon translate to sales.

The latest index was released last week, with the headline:

Pending Home Sales Dip in June

As we reported last month, May’s Index levels were the highest recorded in the last 9 years. The small 1.8% decline from May remains 8.2% over last June and the third highest reading in two years. The NAR headline, while accurate, isn’t the best representation of what really happened.

NAR’s Chief Economist Lawrence Yun points towards “low inventory levels in many markets” leading to “reduced choices” at higher price points for the small decline in National Pending Home Sales.

In every major region of the country, pending sales are up year-over-year as shown by the graph below:

Pending Home Sales By Region | Keeping Current Matters

Yun goes on to say that there needs to be a significant influx of inventory into the market before anything will change.

"Unfortunately, because nearly all of these sellers are likely buying another home, there isn't a net increase in inventory. A combination of homebuilders ramping up construction and even more homeowners listing their properties on the market is needed to tame price growth and give all buyers more options." 

So What Does This Mean To Buyers?

There is a lot of competition out there right now for your dream home. Prices are going to continue to climb, act now before you are priced out of your future home.

What Does This Mean to Sellers?

If you are on the fence about listing your home for sale and debating whether now is the time to move on with your plans of relocating… don't wait!

There are more buyers that are ready, willing and able to buy their first, second, third, vacation, or investment property now than there has been in years! The supply of homes for sale is not keeping up with the demand of these buyers.

Listing your home for sale now will give you the most exposure to buyers and the best sales price.

Bottom Line

Whether you are planning on buying or selling a house this year, waiting to act no longer makes sense.


The Winning Team Real Estate Group at Old Town Real Estate Co.
522 Kimbark Street • Longmont, Colorado 80501 | o:303.776.4004 • c:303.641.8597 • f:303.776.4661
Email: cory@justlistedcolo.com  Connect:  Twitter | Facebook | LinkedIn

This Is NOT Your Parents’ 3% Down Payment Plan

by Cory Dudley
Today's 3% Down Payment Plan- NOT Your Parents' Plan!

This Is NOT Your Parents' 3% Down Payment Plan | Keeping Current Matters

In their latest Housing Market Insight & Outlook report, Freddie Mac revealed that recent low down payment initiatives have raised concerns that we may be returning to the same lax mortgage qualifications that caused the housing crisis from which we are just now recovering.

The report went on to explain that today’s underwriting guidelines are nothing like those that existed just prior to the housing meltdown.

“Pre-crisis underwriting allowed layered risk, that is, the combination of multiple features that amplified credit risk. Low down payments often were combined with variable-payment loan structures, property-based underwriting, and questionable appraisals. These risk factors, along with the ‘irrational exuberance’ of some borrowers, led to large losses during the crisis.”

What is layered risk?

In the pre-crisis environment, many mortgage loans incorporated several additional features besides low down payments that multiplied the total risk of the loans such as: variable payment options, underwriting based on the property not the borrower, questionable appraisal processes. Borrower expectations were also overly optimistic at that time.

Freddie Mac highlights the difference between then and now by using a table in the report:

3 Percent Down Then vs. Now | Keeping Current Matters

By removing the “layered risk”, we can be confident that low down payment programs will not impact the market the way mortgage underwriting impacted the market a decade ago. And the report explains:

“Previous research has found that reduced down payments can increase the relative probability of homeownership among some groups by over 25 percent.”

Bottom Line

We believe the report’s conclusion says it all:

“As long as the underwriting process bars the return of the layered risks prevalent in the pre-crisis era, lower down payments are not a cause for concern.”


The Winning Team Real Estate Group at Old Town Real Estate Co.
522 Kimbark Street • Longmont, Colorado 80501 | o:303.776.4004 • c:303.641.8597 • f:303.776.4661
Email: cory@justlistedcolo.com  Connect:  Twitter | Facebook | LinkedIn

What you Need to Know About the Mortgage Process

by Cory Dudley

 

What You Need To Know About the Mortgage Process | Keeping Current Matters

Some Highlights:

  • According to Freddie Mac, 40% of buyers are putting less than 10% down, with many putting down as little as 3%.
  • Have a budget and stick to it!
  • Know your credit score and history!
  • Reach out to a professional who can help you with the process!

The Winning Team Real Estate Group at Old Town Real Estate Co.
522 Kimbark Street • Longmont, Colorado 80501 | o:303.776.4004 • c:303.641.8597 • f:303.776.4661
Email: cory@justlistedcolo.com  Connect:  Twitter | Facebook | LinkedIn

Stop Paying Your Landlord’s Mortgage!

by Cory Dudley
Renting?
Now's the Time to
Stop Paying Your Landlord's Mortgage!

There are some people that have not purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage - either your mortgage or your landlord’s.

As The Joint Center for Housing Studies at Harvard University explains:

“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return.  

That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

Christina Boyle, a Senior Vice President, Head of Single-Family Sales & Relationship Management at Freddie Mac, explains another benefit of securing a mortgage vs. paying rent:

“With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”

As an owner, your mortgage payment is a form of ‘forced savings’ which allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee the landlord is the person with that equity.

The graph below shows the widening gap in net worth between a homeowner and a renter:


Bottom Line

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, owning might make more sense than renting since home values and interest rates are projected to climb.


The Winning Team Real Estate Group at Old Town Real Estate Co.
522 Kimbark Street • Longmont, Colorado 80501 | o:303.776.4004 • c:303.641.8597 • f:303.776.4661
Email: cory@justlistedcolo.com  Connect:  Twitter | Facebook | LinkedIn

5 Reasons You Should Sell Now!

by Cory Dudley
Thinking About Selling?
Here's 5 Reasons You Should Do It Now!

As the temperature continues to rise, buyers are coming out ready to purchase their dream home. Here are five reasons that you should list your house for sale now.

1. Strong Buyer Demand

Foot traffic refers to the number of people out actually physically looking at homes right now. The latest foot traffic numbers show that there are significantly more prospective purchasers currently looking at homes than at any point in the last two years!

These buyers are ready, willing and able to purchase… and are in the market right now! Take advantage of the buyer activity currently in the market.

2. There Is Less Competition Now

The National Association of Realtors reported last week that housing supply has slipped to a 5.0-month supply. This is still under the 6-month supply that is needed for a normal housing market.

This means, in most areas, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices.

There is a pent-up desire for many homeowners to move as they were unable to sell over the last few years because of a negative equity situation. Homeowners are now seeing a return to positive equity as real estate values have increased over the last two years. Many of these homes will be coming to the market in the near future.

The choices buyers have will continue to increase. Don’t wait until all this other inventory of homes comes to market before you sell.

3. Home Prices Are Skyrocketing

Daren Blomquist, President of RealtyTrac, recently shared insights into why “2015 is a Great Year to Sell” by saying:

"So far in 2015, [sellers] are realizing the biggest gains in home price appreciation since 2007. In June, sellers sold for above estimated market value on average for the first time in nearly two years."

One major factor driving prices up is the lack of inventory available for the amount of buyers in the market. Often buyers, who find a home that they would like to make an offer on, are met with the reality that they aren’t the only ones interested.

4. There Will Never Be a Better Time to Move-Up

If you are moving up to a larger, more expensive home, consider doing it now.

Prices are projected to appreciate by over 19.4% from now to 2019. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30-year housing expense with an interest rate near 4% right now.

Rates are projected to increase by a full percentage point over the next year according to Freddie Mac.

5. It’s Time to Move On with Your Life

Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?

Only you know the answers to the questions above. You have the power to take back control of the situation by putting your home on the market. Perhaps, the time has come for you and your family to move on and start living the life you desire.

That is what is truly important.

 
 
 
The Winning Team Real Estate Group at Old Town Real Estate Co.
522 Kimbark Street • Longmont, Colorado 80501 | o:303.776.4004 • c:303.641.8597 • f:303.776.4661
Email: cory@justlistedcolo.com  Connect:  Twitter | Facebook | LinkedIn

Are Home Values REALLY at Record Levels?

by Cory Dudley
Are Home Values REALLY at Record Levels?

Last week, the National Association of Realtors (NAR) released their Existing Home Sales Report. The report announced that the median existing-home price in June was $236,400. That value surpasses the peak median sales price set in July 2006 ($230,400). This revelation created many headlines exclaiming that home prices had hit a “new record”:

Wall Street Journal: Existing-Home Prices Hit Record

USA Today: Existing home sales surge, prices hit record

Though the headlines are accurate, we want to take a closer look at the story. We do not want people to believe that this information is evidence that a new “price bubble” is forming in housing.

NAR reports the median home price. That means that 50% of the homes sold above that number and 50% sold below that number. With fewer distressed properties (lower valued) now selling, the median price will rise. The median value does not reflect that each individual property is increasing in value.

Below are the comments from Bill McBride, the author of the esteemed economic blog Calculated Risk. McBride talks about the challenges with using the median price and also explains that in “real” prices (taking into consideration inflation) we are nowhere close to a record.

“In general I'd ignore the median sales price because it is impacted by the mix of homes sold (more useful are the repeat sales indexes like Case-Shiller or CoreLogic). NAR reported the median sales price was $236,400 in June, above the median peak of $230,400 in July 2006. That is 9 years ago, so in real terms, median prices are close to 20% below the previous peak. Not close.”

Earlier this week, the Wall Street Journal covered this issue in detail. In this story, Nick Timiraos explained that this rise in median prices is nothing to be concerned about:

“Does this mean we have another problem on our hands? Not really…There may be other reasons to worry about housing affordability by comparing prices with incomes or prices with rents for a given market. But crude comparisons of nominal home prices with their 2006 and 2007 levels shouldn’t be used to make cavalier claims about a new bubble.”

Bottom Line

Home values are appreciating. However, they are not increasing at a rate that we should have fears of a new housing bubble around the corner.

Buyer Demand Continues To Outpace Housing Supply

by Cory Dudley
Buyer's Demand for Housing Continues to Outpace the Supply

The price of any item is determined by the supply of that item, and the market demand. The National Association of Realtors (NAR) recently released their latest Existing Home Sales Report.

Inventory Levels & Demand

Sales of existing homes rose 3.2% from May, outpacing year-over-year figures for the ninth consecutive month. Total unsold housing inventory is at a 5.0-month supply.

This is down from May’s 5.1-month supply and remains below the 6 months that is needed for a historically normal market.

Consumer confidence is at the highest level in over a decade. Pair that with interest rates still around 4%, new programs available for down payments as low as 3%, and you have an attractive market for buyers.

Buyer demand for housing surged to it’s highest level since June 2013.

Prices Rising

June marked the 40th consecutive month of year-over-year price gains as the median price of existing homes sold rose to $236,400 (up 6.5% from 2014).

So What Does This Mean?

The chart below shows the impact that inventory levels have on home prices.

NAR’s Chief Economist, Lawrence Yun gave some insight into the correlation:

"Limited inventory amidst strong demand continues to push home prices higher, leading to declining affordability for prospective buyers."

NAR’s President, Chris Polychron added:

"The demand for buying has really heated up this summer, leading to multiple bidders and homes selling at or above asking price."

Bottom Line

If you are debating putting your home on the market in 2015, now may be the time. The number of buyers ready and willing to make a purchase is at the highest level in years. Contact a local professional in your area to get the process started.


The Winning Team Real Estate Group at Old Town Real Estate Co.
522 Kimbark Street • Longmont, Colorado 80501 | o:303.776.4004 • c:303.641.8597 • f:303.776.4661
Email: cory@justlistedcolo.com  Connect:  Twitter | Facebook | LinkedI

Selling Your Home? Price It Right From the Start!

by Cory Dudley
Price Your Home Right From the Start
A Huge Step in the Right Direction when it Comes to Selling Your Home!

In today’s market, where demand is outpacing supply in many regions of the country, pricing a house is one of the biggest challenges real estate professionals face. Sellers often want to price their home higher than recommended, and many agents go along with the idea to keep their clients happy. However, the best agents realize that telling the homeowner the truth is more important than getting the seller to like them.

There is no “later.”

Sellers sometimes think, “If the home doesn’t sell for this price, I can always lower it later.” However, research proves that homes that experience a listing price reduction sit on the market longer, ultimately selling for less than similar homes.

John Knight, recipient of the University Distinguished Faculty Award from the Eberhardt School of Business at the University of the Pacific, actually did research on the cost (in both time and money) to a seller who priced high at the beginning and then lowered the their price. In his article, Listing Price, Time on Market and Ultimate Selling Price published in Real Estate Economics revealed:

“Homes that underwent a price revision sold for less, and the greater the revision, the lower the selling price. Also, the longer the home remains on the market, the lower its ultimate selling price.”

Additionally, the “I’ll lower the price later” approach can paint a negative image in buyers’ minds. Each time a price reduction occurs, buyers can naturally think, “Something must be wrong with that house.” Then when a buyer does make an offer, they low-ball the price because they see the seller as “highly motivated.” Pricing it right from the start eliminates these challenges.

Don’t build “negotiation room” into the price.

Many sellers say that they want to price their home high in order to have “negotiation room.” But, what this actually does is lower the number of potential buyers that see the house. And we know that limiting demand like this will negatively impact the sales price of the house.

Not sure about this? Think of it this way: when a buyer is looking for a home online (as they are doing more and more often), they put in their desired price range. If your seller is looking to sell their house for $400,000, but lists it at $425,000 to build in “negotiation room,” any potential buyers that search in the $350k-$400k range won’t even know your listing is available, let alone come see it!

One great way to see this is with the chart below. The higher you price your home over its market value, the less potential buyers will actually see your home when searching.

A better strategy would be to price it properly from the beginning and bring in multiple offers. This forces these buyers to compete against each other for the “right” to purchase your house.

Look at it this way: if you only receive one offer, you are set up in an adversarial position against the prospective buyer. If, however, you have multiple offers, you have two or more buyers fighting to please you. Which will result in a better selling situation?

The Price is Right

Great pricing comes down to truly understanding the real estate dynamics in your neighborhood. Look for an agent that will take the time to simply and effectively explain what is happening in the housing market and how it applies to your home.

You need an agent that will tell you what you need to know rather than what you want to hear. This will put you in the best possible position.


The Winning Team Real Estate Group at Old Town Real Estate Co.
522 Kimbark Street • Longmont, Colorado 80501 | o:303.776.4004 • c:303.641.8597 • f:303.776.4661
Email: cory@justlistedcolo.com  Connect:  Twitter | Facebook | LinkedIn

Sales of Boulder County mountain homes soaring after years of fire, flood

Single-family home sales up 74 percent

 

 

 

Sales of single-family homes in the suburban mountains west of Boulder are up nearly 74 percent from last year, according to data compiled by D.B. Wilson at Re/Max of Boulder.

 

 

"Sales and list price are up, inventory is down, and the percentage under contract is as high as I've seen it or can remember," said Wilson. "All of this shows that this is a really strong market."

Jasper Kaminsky, 7, helps paint a shed on his parents property that is for sale in Nederland.
Jasper Kaminsky, 7, helps paint a shed on his parents property that is for sale in Nederland. (Mark Leffingwell / Staff Photographer)

"For the number of sales in the first six months to be 74 percent more than a year ago is a strong indicator that mountains have really bounced back after floods and wildfires from some years ago."

Heather Gray, a real estate agent with Re/Max Alliance in Nederland, said those numbers absolutely reflect the reality of the market she's working in.

"It's the best market I've ever had," Gray said. "(Properties) are selling closer to their value and really quickly, and we haven't seen that in who knows how long."

Fire, flood devalued homes

The market was depressed in part by the huge Fourmile Fire of 2010, which burned nearly 6,200 acres and destroyed 165 homes, according to Boulder County officials. A scant three years later, almost to the day, flooding surged through the foothills, sweeping away 349 homes in Boulder County.

Those combined natural disasters — the two "F words," as many in the business call them — slowed home sales beyond the typical recovery period, said Jimmy Keith, a Re/Max of Boulder agent who specializes in mountain properties.

"Fires (typically) slow down sales for one year," Keith said. "The flood has slowed things for two years."

The Fourmile Fire caused $100 million in property damages, according to Boulder County assessor Jerry Roberts, and property losses from the September 2013 floods were valued at $95 million.

About half of the properties lost in the Fourmile Fire were not rebuilt, said Garry Sanafacon, Boulder County flood recovery manager, as homeowners moved simply to get away or because they did not have enough money to rebuild.

Numbers weren't available for building permits and certificates of occupancy for homes destroyed in the 2013 flood, but more than 30 homeowners have expressed interest in a buyout program offered by the county and the Federal Emergency Management Agency (FEMA).

Of those, 12 have been approved by FEMA for purchase, the Times-Call reported Tuesday.

Homes selling near value

Though many fled the area, others stayed put, hoping that the market would revive enough for them to recover the value their homes lost in the wake of the calamities.

That day might have come.

Jamestown and Fourmile Canyon homes are selling "really well," Keith said, and much closer to their listing price than in previous years.

The sales price to list ratio is nearly 97 percent, up two percentage points from last year.

Though the average price of a single-family mountain home is down 3 percent — $519,686 in the first half of 2015, compared to $537,822 in 2014 — Wilson said that is mostly due to lower-end properties being snapped up.

The median price for the same area is up 5 percent, to $447,900.

Keith said that homes in the $400,000 price point are "pretty hot."

"In the mountains, you can get a nice home for $450,000 to $650,000," Keith said. "In Boulder, that's the base price."

Re/Max realtor Jimmy Keith in a home he is listing for sale in Nederland.
Re/Max realtor Jimmy Keith in a home he is listing for sale in Nederland. (Mark Leffingwell / Staff Photographer)

The average price of a single-family home in the city was $790,000 for the first six months of 2015, a 15 percent increase over last year.

Tom Kahn, a 40-year veteran of the Boulder real estate market, said the continued climb of prices in town has caused more prospective buyers to look elsewhere for more value.

"If you take $500,000-$700,000 to the mountains, you get a lot more bang for your buck," Kahn said. "As you get farther up, you get a lot more house."

More 'mature' buyers seek rural lifestyle

An influx of out-of-state buyers, seeking the "Colorado lifestyle" is also driving sales in the area.

"(They) are the kind of buyer that says, 'I'm coming to Colorado for a reason,'" Kahn said.

Karol and Loran Smith in October closed on a house halfway between Boulder and Nederland, off Magnolia Road. The Smiths moved from New Hampshire in August 2013, and lived in the city and in Boulder Heights before deciding to purchase a home farther into the mountains.

"We looked all over — Lafayette, Lousiville, Lyons," said Karol Smith. "We knew Boulder was sort of out of our reach (financially), and it was a little too crowded for us.

"We're from New Hampshire, so we're used to kind of mountains and being kind of remote, and that's sort of the way we prefer it."

Karol travels to Boulder for her job as a loan processor — "It's 20 minutes, door to door" — and her husband, Loran, who is self-employed as a carpenter and tradesman, drives to various jobs throughout the Denver metro area. Neither of them minds the commute.

"We rented the first winter off Lee Hill Road and saw what it was like commuting all winter," said Loran. "It was pretty much what we expected, so when we saw this property, it was just a beautiful spot."

The couple, in their 50s, typifies the new mountain buyer, said Keith — people who are pursuing a quieter life away from the "shopping and malls" in Boulder.

"Our buyers are slightly more mature," he said. "They are quite demanding and smart in wanting a rural lifestyle.

"These people are not even considering new, pre-built homes that are dominant in Lafayette and Louisville. They aren't interested in cookie cutter."

Keith said his buyers — many of whom are employed in the high-tech industry — take advantage of technology that allows them to work from home.

And those who do commute, he said, prefer a canyon drive to the snarled mess that has been U.S. 36 in recent years.

"The commute going east is difficult. It's quite free-flowing up the canyon, and people are realizing that 20 minutes up the canyon — that's three traffic lights in Boulder."

Supply dwindling

The rush of buyers to the mountains is likely to peter out soon.

Inventory is down — way down. Wilson's data revealed a 44 percent decrease from last year in single-family mountain homes.

That low supply, coupled with a demand that shows no signs of slowing, has resulted in an "aggressive market," Gray said.

"They're running out of homes down there (in Boulder)," she said, "so they're coming farther up."

Keith said that, although homes are reclaiming their pre-disaster value, he doesn't expect that too many more people will decide to sell.

"It's not that people wouldn't sell, it's that they can't get enough for their mountain house to move down to Boulder. That inhibits people."

Kahn offers a kinder view, one based on loyalty and the rugged spirit of mountain dwellers.

"The Daniel Boone spirit has been whipped out of the average person," Kahn said. "But with people on Magnolia, Flagstaff, Sunshine Canyon ... once they're up there, that's their mountain. They wouldn't trade it in for any other."

Shay Castle: 303-473-1626, castles@dailycamera.com

The Kaminsky home that is for sale in Nederland, Colorado.
The Kaminsky home that is for sale in Nederland, Colorado. (Mark Leffingwell)

The Winning Team Real Estate Group at Old Town Real Estate Co.
522 Kimbark Street • Longmont, Colorado 80501 | o:303.776.4004 • c:303.641.8597 • f:303.776.4661
Email: cory@justlistedcolo.com  Connect:  Twitter | Facebook | Link

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