Jan. 24, 2020

There aren't many homes listed for sale these days

Why aren't there enough homes for sale?

Almost anyone who has searched for a home recently knows that there are not enough homes for sale. Price appreciation is accelerating again because there is a shortage of homes on the market. 

"Overall buyer demand will remain very robust, particularly at the entry-level in 2020," states senior economist George Ratiu in a recent real estate forecast. 

Why is that millennial, first-time home buyers and Generation X move-up buyers have more homes to choose from? Who is responsible for the shortage of homes for sale and why?

"People of all generations are staying in their homes longer. The typical seller in 2019 owned their home for 10 years whereas owners used to list every 6-7 years," states Jessica Luatz, VP of demographics and behavioral insights for the National Association of Realtors.

Baby Boomer homeowners are more hesitant to sell the family home than previous generations. The most common reason for selling in 2019 was to move closer to friends and family. In previous years, the top reason to move related to job opportunities or accommodation of family size. 

Another factor in the shortfall is due to current homeowners have lower mortgage rates. Over the last three years, the interest rate on outstanding mortgages averaged 3.9%, according to the Dept of Commerce. This plays a major role in homeowners not wanting to give up their home. As mortgage rates rise, homeowners will be hesitant to sell and adds to the shortage of homes for sale. 

Major factor #2 - new home construction slowed over the last ten years and the U.S. population expanded by more than 20 million people during the 2010s.

New Home Construction Stats

Additionally, builders are ignoring entry-level buyers. According to the Census Bureau, of the nearly 585,000 new construction homes sold in 2019, 56% of those homes were priced at $300,000 and higher. Builders counter that land is higher and there is a shortfall of skilled construction works due to many dropping out of the trade during the Great Recession and younger people are not filling in the gaps or replacing them.

Homebuilders state that regulations such as infrastructure fees and environmental protections adds tens of thousands to the cost of the home. Michael Nest, VP of the National Association of Home Builders stated that regs account for 1/4 of the cost of each home build. Freddie Mac accounted a similar statement in 2017, "Land-use regulations have become more burdensome and making it costlier to build". Local zoning and regulations are enacted by officials and responding to constituents, limiting the supply. In addition to safety concerns, communities want to ensure that property value stays intact / rises. 

However, there is great news to report. Just last week, NAHB Greag Ugalde stated that "Low interest rates and a healthy labor market combined with a need for additional inventory are setting the stage for further home building gains in 2020." The increase has already begun, according to the January 2020 US Census Bureau Report - single-family housing starts were up 11.2% and attained the highest level in thirteen years.

What does all this mean for homebuyers? 

  • Be realistic about how long it will take to find and buy a home
  • Be ready to make a competitive offer when you find that home.
  • Save money for your down payment and build your credit score so that you can obtain the best mortgage deal.

When you are ready to take the first step in buying, building or selling your home, True Realty stands ready to assist you and help determine the best approach for your personal situation. Give us a call today to schedule your free and non-obligatory consult. If you decide that now isn't the time to make a move, no worries. We won't hassle you as it isn't our style. We want your experience with our True Realty team to be a level of professionalism that you'll be eager to tell your friends and family about. Ready to get started? Call (720) 305-0757.

 

 

Jan. 15, 2020

Luxury Homes - Forecast For 2020

Luxury Home Forecast _ True Realty Team Of Colorado

By the end of 2019, many homeowners found themselves with more equity than they realized and at the same time received a wage increase. When you combine the two factors, it can spark homeowners to think about making a move to a larger or more expensive home in the luxury space. That said, this is the perfect time to take a look at the forecast for luxury homes.

The U.S. Economy is strong today with buying opportunities throughout the luxury end of the market. Thomas Veraguth, Strategist @ UBS Global Wealth management says in Barrons.com,

“There’s a good link between luxury real estate prices and [economic] growth.”

Available inventory is a key element that can impact home prices. At the upper price range, the inventory is greater in comparison that to the entry-level market, making owning a luxury home a reality for many home buyers right now.

There has been an increase in activity for the market. 

“Affluent homebuyers will start to come out of the woodwork as they find rising luxury rents less appealing and sellers get even more negotiable on price.”

Buyers who are looking at luxury homes are taking the opportunity to negotiate on a price in a segment where there are more choices. According to Luxury Market Report, homes fold for an average of 96.94$ of the list price in December of 2019.

Buyers are also getting more for their money with greater purchasing power due to the current low interest rates. 

Buyers are often sellers too. Homeowners with an entry-level home can take advantage of the inventory shortage at the lower end of the market, driving higher sales prices for their current home. Combine this with the growing equity, it is a great time for those who are ready to make a luxury move. The extra equity and greater purchasing powerare bringing many buyers back to the market. 

“We’ve already seen buyers who’ve been on the sidelines for two years tread back into the market.”

If you are thinking about your options and considering entering the luxury market, 2020 is going to be a great year for those who are ready to make that move. Let's get together to set your personal real estate plan. Give us a call and a True Realty Team Member can schedule a time that works best for you - (720) 305-0757.

 

 

 

Posted in Buying, Selling
Jan. 12, 2020

"Seasoned" and "Sourced" funds --- what?

What are seasoned funds

If you have been saving for a down payment on a home, sometimes money falls in our lap --- tax returns, bonus checks, inheritance and so forth. But "sudden" money comes with a catch when it is considered as a portion of your down payment.

Lenders like things "seasoned" and become skeptical when money "suddenly appears". Your lender will want a paper trail of every penny you have and expect to have in the near future. AND the lender WILL ask about your down payment funds --- how much do you currently have and where it is currently being kept. 

Lenders become concerned of borrowers who have taken out a loan to get the down payment funds and it makes the borrower more of a risk. Even if your down payment comes for a legit source (a work bonus, tax refund, etc.) the lender will more than likely ask for "seasoned" funds in instead.

What are "seasoned funds"? This refers to funds that have been in your account for a specified amount of time. Many lenders insist on a 60-day seasoning time frame. Others ask for 90 or more days. Then, there are some who only require 30 days. Find out from your lender how seasoned your down payment funds must be and don't start the loan process until that specified period of time has elapsed.

You will also need to "source" the seasoned funds as well. Where did you get the money? Be prepared to no only answer the question but be able to prove the source of funds as well. Lenders want to make sure that you are not using a short-term loan or another source that places you at risk. If the money wasn't saved from your income, you will need to provide proof ... including inheritance money. 

Are you taking money from an investment account to use for your down payment or closing costs? "If you withdraw cash from an investment or retirement account that has certain restrictions or withdrawals, the underwriter will likely ask to see the terms of the withdrawal in writing. 

For money to be considered a "gift", the giver must have zero expectations of the funds being repaid. The lender will ask the source of the gift to determine who gave it to you and might need a letter from the person gifting you the funds.

If you want to learn more or have questions re: "seasoned" funds, we are here to assist and offer a free, non-obligatory consult. Just give us a call @ (720) 305-0757. 

 

Posted in Buying
Jan. 6, 2020

Why You Shouldn't FSBO

Should I sell my house on my own, FSBO

Rising home prices coupled with the current demand on today's housing market may have some homeowners considering to sell their home as a "For Sale By Owner". However, a "FSBO" might be hard to execute well for the vast majority of sellers.

Here are the top 5 reasons to reconsider when thinking about selling your home on your own:

1. Online Strategy To Buyers Who Are In The Market

Studies have shown that a staggering 93% of buyers browse the internet to search for their home. Most real estate agents have an internet strategy and subscribe to incredible data to place their sellers directly in front of buyers. Most FSBOs miss out on this tremendous opportunity to be in front of the buyer during an integral part of the search journey.

According to NAR, here is where buyers found the homes they actually purchased:

  • 55% on the internet
  • 28% from a Real Estate Agent
  • 10% Other
  • 6% from a yard sign
  • 1% from the newspaper

The days of selling your property by placing a sign in the yard or an ad in the paper are long gone. Have a strong internet strategy is crucial.

2. Perception

The perception of FSBO sellers is that they are not serious about selling their property and often just testing the market to see if they can get a far fetched price.  

3. There Are Too Many People To Negotiate With

Should you decide to FSBO, here's a list of some of the people with whom you must be prepared to negotiate with:

  • The buyer
  • The buyer's agent
  • The home inspection company
  • The appraiser

4. FSBOing Has Become Increasingly Difficult

The paperwork involved in buying / selling a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of homeowners FSBOing has dropped from 19% to 8% over the last 20 years. 

5. You Net More Money When Using An Agent

Many homeowners believe that they'll save money on the real estate commission when selling their own home, but the buyer and seller can't both save the commission. Many quickly find that they are actually not saving any money and eventually end up listing with an agent. Studies show that 36% of sellers who first attempted to sell their homes on their own, only 11% of sellers actually sold without an agent. 

Did you know that listing agents do not charge anything up front to sell your home? If they spend hundreds or thousands of dollars and cannot sell your home for the price you want, they are out the money, not you. This is perhaps one of the greatest reasons to use an agent --- you have an extremely low risk and cost to doing so.

Lastly, when you sell your home without an agent, mistakes can cost you greatly. Agents have E&O (Errors and Omissions) Insurance. This protects them if mistakes are made in contracts. When you sell your home on your own, others can make sure to exploit every little mistake that you make.

Before you decide to take on the challenges of selling your house on your own, let's get together to discuss your needs and your situation. There is no cost and there is no obligation, so you have nothing to lose. Give us a call today @ (720) 305-0757. 

 

 

Posted in Selling
Jan. 1, 2020

2020 Housing Market Predictions

Selling Or Buying A Home In 2020 _ True Realty Of Colorado

Happy New Year!

As we begin this new year and new decade, many wonder what is ahead for the housing market. While it is predicted to be an inventory shortage (not enough homes on the market for buyers, especially on the lower end of the market), interest rates are projected to remain low and appreciation is expected to continue as we move into 2020. It is also forecasted that the upcoming election will provoke many unique perspectives on the housing market. The challenge in this is to best understand what is actually happening and how to best position yourself if you are in the midst of buying or selling your home.

According to Realtor.com: 

realtor.com housing prediction for 2020

Additionally, George Ratiu, Senior Economist with Realtor.com states, "As millennials, the largest cohort of buyers in the U.S. History, embrace home ownership and take advantage of this year's unexpectedly low mortgage rates, demand is outstripping supply and causing inventory to vanish. This housing shortage is felt acutely at the entry-level of the market, where most millennials are looking to break into the market for their first home."

Mike Fratantoni, Chief Economist @ Mortgage Banker Association (MBA) states:

Mortgage Banking Association 2020 housing prediction

As you can see, the market is predicted to be a more moderate market than the last few years but still healthy and will remain to be competitive in much of the country. The most important thing you can do is understand what is happening right here in the Denver DMA. You may not be able to avoid some of the issues brought on by the housing shortage, but you can be educated and prepared.

If you are wondering if now is the time to sell, please try out our INSTANT home value tool. You'll get an estimate on the value of your property in today's market. 

Let's connect soon and discuss options that make the most sense for you and your current situation as we kick off the new year. Give us a call @ (720) 305-0757.

 

 

Posted in Buying, Selling
Dec. 28, 2019

A Happy Home

When does a house become a happy home

 

We often talk about why it makes financial sense to buy a home, but we most often drawn to the emotional reason to own a home.

The feeling and sense of home means different things to different people. Whether it is a certain scent or favorite chair, the feel-good connection to our homes are often more important to us than the financial ones. Why?

 

1. Owning a home offers you stability

From the best neighborhood to top school district, even those without children at the time of their purchase, may have this in the back of their mind as a major deciding factor when choosing the location of the home.

 

2. There's no place like home

Owning your very own home offers safety and security, a place to kick-back after a long rigorous day. Sometimes that is all we need to recharge and feel truly content.

 

3. More space for you and your family

Whether your family is growing or an older member is moving in, you have your own business and need office / quiet space to work, you need a backyard for your pets or land for your horses to roam, all of this goes into consideration when buying your dream home so that the space truly works for you.

 

4. You have control over renovations, updates and style

Tired of looking at outdated wallpaper / paint in the main living space? Tired of paying additional money towards a pet deposit? Or maybe you want to finally adopt that fur-baby that you've been hoping for. Looking to have a modern living space where the carpet was last updated within the last 10 years? When you have your own home, you have no restrictions on style, who lives in your house and updates that need to take place. You are in control when you're a homeowner.

 

Bottom line, whether you're a first time home-buyer or a move-up buyer who wants to start a new chapter in your life, now is a great time to reflect on the intangible factors that make a house a happy home. If you're ready to take that next step, give us a call at (720) 305-0757.

 

 

Posted in Buying
Dec. 19, 2019

The average homeowner gained $5,300 in equity over the last year

home equity

Over the last 12 months, your home - the biggest investment you own, has gained substantial value. CoreLogic has released their 2019 3 Quarter Homeowner Equity Insights Report, revealing that:

"U.S. Homeowner with mortgages (roughly 64% of all properties) have seen their equity increase by a total of nearly $457 billion since the 3rd quarter of 2018, an increase of 5.1% year over year."

home equity report

The equity in a property is determined by comparing the current value against the outstanding mortgage debt. As home prices rise, the equity in your home increases.

The report also identified that the average homeowner gain in equity over the last 12 months = $5,300.

"Ten years ago, during the depths of the Great Recession, more than 11 million homeowners had negative equity or 25% of mortgaged homes. After more than eight years of rising home prices and employment growth, underwater owners have been slashed to just 2 million, or less than 4% of mortgaged homes." - Frank Nothaft / Chief Economist

Since the 2008 housing crash, many homeowners have felt trapped in their current homes and didn't have enough equity to sell. The gains over the last few years have allowed many homeowners to use the equity in their home to move into a larger home / one that best fits their current situation. 

If you are curious about your home's equity, call True Realty for your free / non-obligatory consultation. We will conduct a free market analysis on the current value of your home and share the results. You may be pleasantly surprised. Call today, (720) 305-0757.

 

 

Posted in Buying, Selling
Dec. 16, 2019

What Is The Best Investment Opportunity In The U.S.?

Best Investment Opportunity Is Buying A Home

 

PORCH.com, a major network that helps homeowners with renovation project ideas, recently conducted a survey asking Americans:

"What do you believe is the safest investment over the next 10 years?"

"A Home" was the #1 answer, beating out other investments such as stocks, bonds, gold and savings.

Homes are the best investment opportunity

The findings of the survey also coincide with two previous surveys from earlier in the year:

1. The Federal Reserve Bank's 2019 Consumer Expectations Housing Survey reported that 65% of Americans believe home ownership is a solid financial investment.

2. The Gallup Survey identified that Americans have chosen real estate as the "best" investment for six consecutive years even though stocks have had a strong 2019, with the major US stocks indices establishing or nearing records highs in April and early May. 

All three surveys conducted this year clearly indicate that Americans still believe that home ownership as the best investment opportunity, and that sentiment continues to grow. 

If you are planning to purchase your first home, or if you're in the market to begin investing in property as a revenue stream, True Realty would be honored to navigate the process and help determine what is best for you and your situation. Please give us a call @ (720) 305-0757.

 

 

 

 

Dec. 12, 2019

Home Ownership

Mortgage rates have fallen

 

Mortgage rates have fallen over the past year, more than a full percentage point. This is an excellent driving factor to home ownership, as today's low rates provide significant benefits. 

Should You Refinance Your Home?

If you're a homeowner, you may want to consider refinancing. This is one way to lock in a lower monthly payment and save a substantial amount of money. However, this also means that you will also pay upfront closing costs too, ranging between 2%-4% of the loan. To decide if this is the best option for you, ask the 3 questions:

 

  1. Will you lower your interest rate and payment: If you have a 5% or higher interest rate, it may be worth taking advantage of the current lower interest rates to reduce your monthly and overall cost of your loan.
  2. Will you shorten the term of your loan: If you have a 30-year loan, it may be advantageous to change it to a 15 or 20-year loan so that you can pay off your mortgage much sooner and save for retirement / college, etc.
  3. Do you need a cash-out refinance: With home prices increasing, you may have equity to cash out and invest in your children's education, vacation home, new business, etc.

morgtage rates drop

 Is this a time to move-up or downsize?

Another option is to consider moving into a new home and placing the equity of your current house towards the down payment on the new one that better meets your needs and a perfect fit for you. Is a bigger house in your budget?

Become a first-time home buyer

There are many financial and non-financial benefits to owning a home - the most important thing to do first is to determine if this is the right time for you. 

renting vs buying

There are many opportunities for growth in the current real estate market. To find out what is best for you and your situation, let's get together to understand your options and guide you to the best decision. Simply call True Realty @ (720) 305-0757 for a free, non-obligatory consult.

 

 

 

Dec. 10, 2019

Holiday Shopping Can Take A Toll On Your Credit

Holiday shopping and your credit score

The holidays are always filled with fun, joy . . . AND a LOT of shopping. While ‘tis the season and you have a list of gifts planned for family and friends, make sure that you pay attention to your credit score so that it doesn’t drop. That last thing that you want to do is to come out of the holidays and into the new year with more debt or with your credit score lower than you’d like it to be.

The holidays don’t have to have an impact on your credit or lower it if you heed the following tips:

Avoid Too Many Credit Inquiries

Many retail outlets will entice you with offers to apply for store credit in exchange for a discount / email offers, etc. It will be tempting with the thought process of saving money. However, avoid too many credit inquiries at the same time as this will lower your credit score. If you decide to sign up for an offer, consider a few things. Do you shop at this store frequently? Will you pay off the balance at the end of the month? Store credit cards usually carry high balances so if you don’t plan to pay off the balance in full each month, it may not be worthwhile and the inquiry will only ding your credit score.

Don’t Overspend

This might be an obvious statement, but it is worth stating. It is so easy to get caught up in shopping over the holidays … so many deals and oftentimes we find see something that is on sale that wasn’t planned for or that “perfect gift” that wasn’t on the list but is just too perfect. Isn’t it also hard to pass up a good deal, even if it wasn’t planned? Before you know it, more money has been spent that originally planned and the holidays become stressful due to the credit card debt. Be sure to set a budget and stick to it. Those “deals” aren’t so good if it straps you into a plan that you cannot pay off. The interest rate on the credit card outweighs the “deal”.

Make Your Payments On Time

Making your payments on time is one of the most important things you can do during the holiday season. Don’t let all your hard work of your credit repair take a step backwards by not making your payment on time during the holidays. If you miss one payment, your credit score can drop. If you overspend this holiday season, you might have a hard time just making your minimum payment. Be mindful of your budget and while it might be difficult this holiday season to stick to it, keep in mind that your end goal is to be in that home of your dreams and next year, you could be in a completely different financial situation. As your paying your debt down, you want to try to always pay more than the minimum. With the gift season in mind, be sure that you make at least your minimum payment over the holidays on time.

Set A Budget

Hopefully you are currently working off a budget as you’re working towards your credit repair. To help in staying on track over the holiday season, create a budget especially for your gift spending. Make a list and plan how much the spend will be for each person. Research who will have the best deals and plan your shopping accordingly. Online shopping also helps in maintaining your budget and take advantage of extra deals. Retail shopping can be a lot of fun with all of the hustle and bustle. A list will help guide you to not overspend. If you find that you have left someone off the list and picked up a gift, be sure to update your list and your budget …. That money has to be accounted for. This update will also keep your budget top of mind when you’re out and about the next time and will limit the knee jerk purchase.

You can still have a lot of fun with family and friends this holiday season without stressing over money and back-stepping on your overall financial plan. Sticking to a budget and not overspending will also leave you feeling accomplished AFTER the holidays and sets a good habit going forward.