Real Estate 2017: What to Expect

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One of the most common questions we get at this time of year is, “What’s going on in the market?” It’s not just potential buyers and sellers who are curious; homeowners always want reassurance their home’s value is going up. The good news is the American real estate market is strong and healthy: home values are up, prices and sales are strong, and millennial first-time buyers are eager to become homeowners.

We often use national real estate numbers to give us a clearer view of our local market. However, real estate is local, and while statistics and predictions help us understand the overall real estate market, our local market may be different. If you’re thinking of buying or selling, or just want to know how much your home is worth, give us a call!

What to Expect in the Real Estate Market in 2017

The American housing market is stronger than ever! Home values, prices and sales had their strongest numbers in 2016, a sure sign the market is healthy and strong. According to the Home Price Index from the Federal Housing Finance Agency (FHFA), property values have increased in 58 of the last 62 months and have increased more than 35 percent nationally. Homeowners continue to build equity in their largest investment—their homes.

First-time buyers are back.

Housing forecasts from the National Association of REALTORS (NAR), the Mortgage Bankers’ Association, Freddie Mac and Fannie Mae all predict existing-home sales will surpass 6 million in 2017, higher than anticipated sales for 2016. Who’s driving the surge? According to NAR, millennials who have put off buying a home are ready to buy. While they may have avoided buying a home due to student debt and limited employment, many are entering their 30s, a time when their attention turns to marriage, family and setting roots with homeownership. They’re predicted to be the driving force behind home and condominium sales from now until into 2020. (Source: MarketWatch)

What does this mean to you? If you’re a millennial who’s been on the fence about buying, now is the time to act. Give us a call to answer your questions about the market and the buying process.

Renters are embracing homeownership

Additionally, many renters who’ve resisted buying are starting home searches due to the economic weight of rising rents. This year’s home buyers seek to take advantage of comparatively low interest rates and, in most cases, static payments each month—an advantage of home ownership. Rental costs will only continue to rise; if you’re thinking of buying, now is an ideal time to do so.

What does this mean to you? Every month you pay rent, you lose the opportunity to build equity in a home of your own. Break free from the limits of renting and invest in your financial future. Come in the office and we’ll discuss your options.

Home prices are on the rise.

According to NAR, the median existing-home price not only increased 6.0 percent year-over-year in October, it’s also the 56th consecutive month of year-over-year increases. Prices are approaching the pre-recession peak.

What does this mean to you? Home prices, and subsequently home values, are increasing. If you’ve been waiting to list your home until you know you can sell it for what you think it’s worth, now is a great time to do so. We’ll be happy to give you a comparative market assessment of your home and help you get your home in list-ready shape.

If you’re in the market to buy, be prepared to act.

Homes were on the market for the shortest amount of time recorded since 2009: 52 days. The increase of qualified buyers in the market along with the increasing efficiency of the real estate process means homes are selling faster than ever, and in many cases buyers are engaging in bidding wars and paying over the list price to get the home of their dreams.

What does this mean to you? The home you have your eye on one day may be gone the next. In competitive markets, be prepared to come to the table with a competitive bid.

Looking for a new home?

New-home construction will increase to an average of 1.5 million per year to 2024, according to a report from NAR. However, experts anticipate housing starts will only increase to 1.22 million in 2017, which is less than the 1.5 million new homes required to keep up with growing demand. This inventory shortage of new entry-level homes—typically purchased by first-time buyers—may drive up prices in some areas. Home builders have been focusing on multi-family construction for the last few years, but this type of construction has begun to level off providing hope that builders will once again focus on single-family home construction. However, stricter proposed immigration policies may impact new home construction and tighten inventory.

What does this mean to you? First-time and repeat home buyers agree—there are plenty of advantages of buying a new home. Whether you want a home customized to your family’s needs or you don’t want to bother with age-related maintenance, a new home has much to offer. Give us a call to discuss your options.

Affordability pressures are increasing in many markets

Housing affordability in many of the nation’s largest cities has declined over the past few years, a trend that is expected to continue in 2017. However, there is hope. NAR created the Affordability Index to measure the affordability of homes across the United States. The Affordability Index assesses whether the typical family earning the median family income can qualify for a mortgage on a typical home based on the prevailing mortgage interest rate on loans closed on existing homes from the Federal Housing Finance Board.

The NAR Affordability Index is 170.2 (composite) and 169.8 (fixed), meaning a family earning the median family income has 170.2 percent of the income necessary to buy a median-priced, single-family home. Nationally, the qualifying income is $41,616, but it varies by region. In the Northeast, the qualifying income is $45,024. In the Midwest, it’s $32,640. In the South, it’s $36,960. In the West, it’s $61,824.

What does this mean to you? If you’ve had your eye on a new home, but weren’t sure if you could afford it, you may be pleasantly surprised. We may have homes in our area that meet your needs and budget. Give us a call today to discuss your home search.

3 Things to Do Now if You Plan to Buy This Year

  1. Get pre-approved for a mortgage. If you’re like most buyers who plan to finance part of the home purchase, getting pre-approved for a mortgage will allow you to put in an offer on a home and may give you an advantage over other buyers. The added bonus: you can see how much home you can afford and budget accordingly.
  2. Start looking. While most buyers start their searches online, be sure to look at homes in neighborhoods you’d like to live in as well. Keep a notebook to write down what you like and dislike about each home you view in person or online. This will help you narrow down where to look and what to look for in your next home.
  3. Come to our office. The buying process can be tricky. We’d love to guide you through it. We can help you find a home that fits your needs and budget. Give us a call to make an appointment today!

3 Things to Do Now if You Plan to Sell This Year

  1. Make repairs. Most buyers want a home they can move into right away, without having to make extensive repairs. While the repairs may or may not add value, making them will give your home a competitive advantage over other similar homes on the market.
  2. Get a Comparative Market Analysis (CMA). A CMA not only gives you the current market value of your home, it’ll also show how your home compares to others in the area. This will help us price your home to sell in our market. Call us for your free CMA!
  3. Start packing. Help your buyers see themselves in your home by packing up items you don’t use regularly and storing them in an attic or a storage space. This will make your home easier to stage as well as make it easier to move later on.

Are you thinking of buying or selling?

Whether you’d like to buy or sell a home this year, want to know how much your home is worth, or have general questions about our local market, give us a call! We’d love to discuss the market with you.

Start Checking Out Local Homes Now!

National Real Estate Market Primed for Expansion in 2016

January 2016 Housing reportStrengthening Economy 

Despite existing-home sales dropping last November, the National Real Estate Market is primed for expansion in 2016. Here’s why. Better weather in many parts of the country resulted in an increase in single-family and multifamily home construction. Also, the population of millennial homebuyers is expected to grow in 2016. This means increased demand to help the housing market see positive gains. With unemployment steadily decreasing, orders for new durable goods increasing 3 percent, inflation staying level, and income beginning to grow, the Fed decided to raise interest rates. The rate increase signals that our economy is getting stronger. So, don’t let the drop in existing-home sales in November fool you, with a stronger economy home sellers can expect eager home buyers in 2016.

Millennial Home Buyers

The low demand in November meant that first-time home buyers had only a 30 percent share in demand, which is slightly down from 31 percent in October and last year. However, in 2016 home sellers saw an increase of first-time home buyers enter the housing market  because of the growing segment of millennials between 25 and 34 years of age. The Census Bureau projects that the population of millennials aged 25 to 34 will increase by an average of nearly 500,000 per year in the second part of the decade. Also, NAR’s inaugural quarterly Housing Opportunities and Market Experience survey reported that a large majority of millennials between 25 and 34 years of age who rent want to own a home in the future.

Interest Rates

The Federal Reserve raised short-term interests this month. Freddie Mac reported that the average commitment rate for a 30-year, conventional, fixed rate mortgage stayed below 4 percent, but rose from 3.80 percent to 3.94 percent in November. Mortgage rates are expected to rise to 4.50 percent by the end of 2016, but this rate is still historically low; a full percentage point below the rate during the recession of 2008. The low fixed mortgage rate should help spurn demand and encourage first-time home buyers to enter the market.  But while the rate is at its current level, potential home buyers should keep an eye out for rate increases so that they’re not caught by surprise when the spring buying season comes around. Early 2016 would be a good time for home buyers to start looking to purchase a home.

Mortgage Lenders & Home Buyers

Fannie Mae’s fourth quarter 2015 Mortgage Lender Sentiment Survey™ shows that lenders expect to ease mortgage credit standards for GSE-eligible loans and government loans over the next three months. This should reduce the affordability problem for first-time home buyers. As a result, this will help young adult homeownership. Although home prices will be high, all of this is good news for home sellers because they should expect an increase in demand for their home.

In 2016, the first-time home buyer will have mortgage credit options available that were not available during the housing down-turn. First-time home buyers will have low-and no-down-payment mortgage loans available to them. Some loan options available include FHA loans and the conventional 97 percent program offered by Fannie Mae. Qualifying first-time home buyers need only to put 3 percent down on a home.

Homeowners

According to the Mortgage Bankers Association weekly survey, the Refinance Index increased 11 percent compared to the previous week. So it appears homeowners have anticipated the Federal Reserve’s increase in interest rates. If you’re a homeowner with an adjustable-rate mortgage or a variable home equity line of credit, you should expect your rates to rise in 2016. The first part of 2016 will be a good time to refinance. Home equity lines of credit (HELOC) are both fixed and variable. Variable HELOCs are tied to the Federal Reserve prime rate. Whereas fixed HELOCs are not. By refinancing early in 2016, you’ll afford any major life events that may occur such as daughter’s wedding, high college tuition, or home renovation.

Wrap-up

The National Real Estate Market is on its way to expanding. The Federal Reserve raising interest rates indicates optimism in the housing market and the economy as a whole. The 2016 housing market will remain a sellers market that should see an increase in first-time home buyers entering the market because of the strong desire of homeownership by millennials 25 to 34 years of age, and easing credit standards and increases in wages. Homeowners with variable mortgage rates should expect their rates to rise in 2016, but early 2016 will be a good time to refinance so that you’re that you won’t fill the brunt of further interest rate increases.

While every real estate market is local, national stats often give insight into predicting local trends. If you have any questions about our local market to help you make any real estate-related decisions, please don’t hesitate to let me know.

Call or Text: 720-849-6101

1514 Meyerwood | “The Ridge” at Weatherstone | Highlands Ranch, CO 80129

Incredible Opportunity in Weatherstone! This fabulous home sits on a huge, quiet lot with plenty of parking, room for outdoor fun and entertainment! Complete with pond and waterfall, finished basement with wet bar and full-size wine cellar, this is a must see! Priced to offer the BEST opportunity to own in this prestigious neighborhood…

Trader Joe’s Announces Colorado Store Openings

Trader Joe’s announced the opening date of 3 of it’s 5 Colorado locations! Trader Joe’s is a grocery chain, but seems to be a mystical experience for some people by the way they talk about the store.   I’ve never been to a Trader Joe’s, neither has a lot of people here in Denver that I’ve talked to, but I do look forward to the store openings. The store, the specialty products, the whole Trader Joe’s vibe is something we here in Denver will soon get to be part of.

Trader Joe'sTrader Joe’s announced that Valentine’s Day, February 14, 2014 will be the day they open their first 3 stores here in Colorado.  There seems to be plenty of anticipation, and I’m sure there will be long lines and lot’s of happy shoppers once the doors open.  I may or may not be there opening day, but I’ll soon get my taste of the Trader Joe’s shopping experience.

I live in the south Denver area so I will likely visit the Greenwood Village location at the Cherry Hills Marketplace. Most of my real estate clients will find that location or the one in Denver on Colorado Blvd. the most convenient for them.  Many of my relocation clients rave about Trader Joe’s and I know today with an opening date announced it is a happy day for them.

Trader Joe’s decision to expand into Colorado with multiple stores is another testament to the strength of the local business, real estate and lifestyle climate here that is attracting so many large, national companies.  It’s exciting to be part of this dynamic culture in the Denver area.

 

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The Snow Flakes Fly In Denver This October

Living in Denver: Well Hello Snow!

The weather this year has been nothing but full of extremes in Colorado. And while today’s snow in october highlands ranch cofirst snow may seem like an extreme it really isn’t. In fact I can remember many Septembers when the first flakes have flown.  Personally I could have waited another week or two to fully enjoy the changing leaves before they fall on their own. This snow will speed that along in the foothills and the mountains.

The beauty of living in Denver is that by later this weekend, the grey sky will be a memory, this light dusting will be gone and sunshine and blue skies will accompany the Colorado outdoor lifestyle. So the good news s, my hike in the foothills this weekend will be a go and I will still be able to enjoy the beautiful fall foliage our our changing aspens. But if you wait much longer, it will be too late.

Shhhhh, don’t tell anyone that sometimes we have 4 seasons in a week. Then they will want to live in Denver too.

 

Photo courtesy of my wife Laura from her office window this morning.

Highlands Ranch Luxury Homes

Luxury Homes Highlands Ranch COSo, what is a luxury home? Opinions can and do vary greatly on what might be considered luxury.  Is it granite counters, cherry cabinets and stainless steel appliances?  A gated community/neighborhood? Maybe, but many homes in nearly all price ranges in Highlands Ranch may have these luxuries.  Of course this can get too complicated and so I will define Highlands Ranch luxury homes with a simple dollar figure.  We will use $700,000 and above to define Highlands Ranch luxury homes.  The average priced home in Highlands Ranch currently is about $340,000, so this number seems about right.

Where are all the luxury homes in Highlands Ranch? BackCountry, Falcon Hills, Highwoods?  Yes on all three of these wonderful neighborhoods and then some others as well.  Places like Weatherstone, Highlands Ranch Golf Club and Mansion Hills.  The majority of active homes in this price range will be in BackCountry, Highwoods and Falcon Hills.   Here is the most current list of luxury homes in Highlands Ranch.

Interestingly, all 3 of the top spots for Highlands Ranch luxury homes are located within gated subdivisions.  But isn’t that part of what luxury living is about?  Luxury living is not new to Highlands Ranch.  The proximity to the DTC, many new corporate headquarters in the area and of course excellent schools, lifestyle and shopping all make Highlands Ranch a target for luxury home buyers.

If you are considering a move to a Highlands Ranch luxury home or maybe sell your current home, please get in touch.  I would like to help.  Lets have a friendly conversation and determine if we are a good match to work together.

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How Credit Scores Affect Mortgages

Credit Score RangeI think we all are aware that our credit score plays a big role in attaining a mortgage, or not.  Lenders check and re-check these scores in the process of determining a loan.  Poor credit scores can certainly influence the denial of a mortgage in many cases. Let’s look at how credit scores affect mortgages.

So what exactly are these scores and how are they calculated?  Can I get a copy of my scores?  These questions are important to ask yourself if you may be considering a mortgage or a refinance of your existing mortgage.

Your credit score, or FICO score is a number anywhere between 200 and 800 generally, which is used to rate you based on a number of criteria.  These credit scores are drawn from the main three reporting agencies, Equifax, TransUnion and Exprerian. These reporting agencies simply report what you have done in managing your credit in the past or the new credit you have or want.  They look at the type of credit (revolving, mortgage, auto..), length of credit and of course, payment history to issue a credit score based on these factors.

So what does a potential mortgage lender look at to determine a loan for you?  How do credit scores affect a mortgage? Clearly, they will want to see that your payment history is decent.  It may well factor into how you will pay them.  They will also want to see if you have a mixture of credit types that you have managed such as revolving credit, installment loans and even previous mortgage loans.  They will also put weight into the amount of credit you have. This can indicate how much in debt you can become should you use all the available credit.

Your credit score ends up being a big part of getting a mortgage.  There are other factors such as income, overall debt and others that accompany the credit score to help determine a mortgage for you and even at what interest rate.  It is important to know and understand your credit report and your credit score.  You can get a copy of your own report for free at Annual Credit Report and I would recommend doing so just to make sure it looks correct and help you make a plan to improve it if needed.

If you are in the market for real estate or considering it, please get in touch.  I can help guide you through the process and refer you to my mortgage partners that are experienced and excellent at finding the right financial fit for you and your lifestyle.  I can put it all together and help you find the right investment at the right price. Just get in touch and we can go from there.

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