Prices Still Up

It seems that COVID-19 did not cause prices to decrease and certainly didn’t cause them to crash.

Average prices are up compared to last year:
2.8% in Larimer County
5.4% in Weld County
3.3% in Metro Denver

Low supply, sustained demand, and incredibly low interest rates are all fueling the price growth.
At Windermere Real Estate we are taking Safer at Home and Social Distancing very seriously. Our people are following our Safe Showings protocol, staying connected to their clients, and providing help wherever needed.


Posted on June 5, 2020 at 2:34 pm
Paul Hunter | Posted in Buyer Tips, Friday Fun Facts, Homes for Sale, Investment, Seller Tips | Tagged , , , , ,

Another Meltdown?

This week our Chief Economist took a deep dive into the numbers to examine the current health crisis versus the housing crisis of 2008.

The reason why? People wonder if we are going to have another housing meltdown nationally and going to see foreclosures and short sales dramatically increase.

It turns out that the numbers show that today’s housing environment is quite different than 2007, right before the housing bubble burst.

Specifically, homeowners are in a vastly different situation with their mortgage compared to the pre-Great Recession’s housing meltdown.

In addition to much higher credit scores and much higher amounts of equity compared to 2007, the most significant difference today is in the amount of ARM mortgages.

Back in years leading up to the housing bubble, Adjustable Rate Mortgages were very prevalent. In 2007 there were just under 13 million active adjustable rate loans, today there are just over 3 million.

The number of those ARMs that would reset within three years was 5 million in 2007 compared to only 320,000 today.

It’s those Adjustable Rate loans resetting to a higher monthly payment that caused such a big part of the housing crisis back in 2008 to 2010.

Back then not only was people’s employment impacted, but many were facing increased monthly mortgage payments.

That’s why there were so many foreclosures and short sales in 2008 to 2010.

That is not the case today and one of many reasons why we don’t foresee a housing meltdown.


Posted on May 1, 2020 at 1:36 pm
Paul Hunter | Posted in Buyer Tips, Friday Fun Facts, Homes for Sale, Investment, Real Estate, Seller Tips | Tagged , , , ,

Why No Crash

This week we hosted our clients and friends for a special online event with our Chief Economist Matthew Gardner.

Matthew talked about a variety of topics that are on people’s mind right now including home values.

Matthew sees no evidence that home values will crash and actually sees signs that they may rise this year nationally.

Here’s why he says this:
• Mortgage rates will remain under 3.5% for the rest of the year so there won’t be any interest-rate pressure on prices
• Inventory, which was already at record-lows, will drop even further keeping the supply levels far below normal
• New home construction will continue to be under-supplied and will be nothing like the over-supplied glut of inventory that we saw in 2008
• The vast majority of employees being laid off and furloughed are renters
• Home owners have a tremendous amount of equity in their homes right now compared to 2008 which will prevent an influx of short sales and foreclosures

If you would like to receive a recording of the webinar we would be happy to send it to you. Feel free to reach out and ask for the link.


Posted on April 24, 2020 at 1:23 pm
Paul Hunter | Posted in Friday Fun Facts, Homes for Sale, Investment, Real Estate, Seller Tips | Tagged , , , , , ,

Special Event

On Wednesday April 22nd you are invited to a special online event with Windermere’s Chief Economist Matthew Gardner.

He will be giving his insights into the U.S. economy and what that means for real estate along the Front Range of Colorado.

You will hear the answers to the biggest questions we are hearing from clients now like “do you think housing prices will crash?”

This event is exclusively for clients and friends of Windermere Real Estate. To receive the registration link simply reply to this email or reach out to your Windermere real estate broker.

Many of you have heard Matthew speak at our Market Forecast events we hold each year in January. He is famous for making complex economic dynamics very simple to understand.

You will get useful and valuable information which will give you clarity about where the market is headed and when we can expect the economy to improve.

For example Matthew predicts unemployment to hit 15% by the end of June, but then to improve to 8% by year-end and 6% by this time next year.

Again, if you would like the link just reply to this email or reach out to your Windermere broker.

At Windermere Real Estate we are taking Shelter in Place and Social Distancing very seriously. Our people are working at home, staying connected to their clients, and providing help wherever needed.


Posted on April 17, 2020 at 1:03 pm
Paul Hunter | Posted in About the area, Buyer Tips, Friday Fun Facts, Homes for Sale, Investment, Real Estate, Seller Tips | Tagged , , ,

Headwind Vs. Tailwind

Headwind vs. Tailwind

So far the tailwind of historically-low mortgage rates are prevailing over Wall Street and COVID-19 concerns.

Buyers are still active. Properties are still closing. Moving trucks are still showing up at people’s homes.

Open house traffic has declined, but we notice plenty of buyers looking for property. (one of our open houses last weekend had over 40 visitors)

For many, the interest rates are just too good to pass up.

We even see instances of multiple-offer situations for properties priced right in high-demand locations.

Rates today, compared to 4%, equate to not only a monthly savings for those refinancing but also equates to tens of thousands in additional purchase power.

For the average price of a home on the Front Range, the savings is $171 per month and the increased purchase power is $35,811.

Here’s what we expect to happen over the coming months. Listing inventory and transaction volume will both decline. We will no doubt see lower activity compared to a year ago.

But thoughts of the market “coming to a screeching halt” can’t be validated because of the historical performance of our market and because of the inherent fundamentals in place.

We will continue to track the numbers and communicate the facts so that you remain well-informed.


Posted on March 13, 2020 at 1:09 pm
Paul Hunter | Posted in Buyer Tips, Friday Fun Facts, Homes for Sale, Investment, Real Estate, Seller Tips | Tagged , , , ,

A History Lesson

With the stock market on a wild ride and the Dow Jones dropping nearly 1,000 points yesterday, it makes some people wonder if the local real estate market might also crash or at least “correct.”

A little history lesson is in order.

Over the last 40 years, the real estate market along the Front Range has averaged 5.5% appreciation per year.

The highest appreciation in one year was 15.9% in 1994.

The lowest ever was -4.0% in 1982.

The last time Wall Street was in turmoil and the stock market was plummeting was 2008.  This was, for many reasons, the worst economy of our lifetime.

That year real estate along the Front Range dropped 2.2%.

Meanwhile that year the Dow Jones fell 33.8%.

Bottom line, our market has no history of crashing or even experiencing a major correction.

Why is that?

The answer is fundamentals.

Our local economy has inherent fundamentals that insulate it from big downturns.

We have an incredibly diverse economy which is not reliant upon a single industry.  We have all the way from health care, to technology, agriculture, oil and gas, major universities, and financial services (just to name a few).

We are a global destination with a major international airport.

Oh, and the quality of life here isn’t too shabby.

Prices of real estate, just like prices of anything, come down to basic economic principles of supply and demand.

Because of our diverse economy and desirable quality of life, there has been strong, consistent demand for housing along the Front Range.

While there may be little bumps along the way, over the long term our market has proven that it performs.

 


Posted on March 6, 2020 at 1:49 pm
Paul Hunter | Posted in Buyer Tips, Friday Fun Facts, Homes for Sale, Investment, Real Estate, Seller Tips | Tagged , , ,

1 Million

We have our pulse on the high-end luxury market.

The activity in price ranges over $1,000,000 is an effective indicator of the health of the overall market.

If buyers for luxury properties are active, it tells us that “smart money” is confident about real estate in Metro Denver.

So far this year, 1671 luxury properties have sold.  This is 75 more than had sold at this same time last year and 440 more than 2017.

It seems “smart money” is confident.


Posted on September 20, 2019 at 12:34 pm
Paul Hunter | Posted in Buyer Tips, Friday Fun Facts, Investment |

On Sale

With interest rates so low, one could argue that money is essentially on sale.

It’s actually half off.

30-year mortgage rates hit 3.75% which is exactly half of their long term average.

Rates have averaged 7.5% over the last 40 years so today buyers are getting half of that rate.

The “sale” on mortgage rates creates a significant savings in monthly payment because of the 1%/10% rule.

For every 1% change in interest rate, the monthly payment will change roughly 10%.

So when rates go up to 4.75%, a buyer’s payment will be 10% higher.

For example, the principal and interest payment on a $400,000 home with a 20% down payment at today’s rates is $1,482.

If rates were 1% higher, the payments jump up to $1,669.


Posted on August 9, 2019 at 7:34 pm
Paul Hunter | Posted in Buyer Tips, Investment, Real Estate |

New Gardner Report!

 

The following analysis of the Metro Denver & Northern Colorado real estate market (which now includes Clear Creek, Gilpin, and Park counties) is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere agent.

 

ECONOMIC OVERVIEW

Colorado’s economy continues to grow with the addition of 44,800 new non-agricultural jobs over the past 12 months. This represents a reasonable growth rate of 1.7%. As stated in last quarter’s Gardner Report, we continue to see a modest slowdown in employment gains, but that’s to be expected at this stage of the business cycle. I predict that employment growth in Colorado will pick back up as we move through the year, adding a total of 70,000 new jobs in 2019, which represents a growth rate of 2.6%.

In February, the state unemployment rate was 3.7%, up from 2.9% a year ago. The increase is essentially due to labor force growth, which rose by more than 84,000 people over the past year. On a seasonally adjusted basis, unemployment rates in all the markets contained in this report haven’t moved much in the past year, but Boulder saw a modest drop (2.7%), and the balance of the state either remained at the same level as a year ago or rose very modestly.

 

HOME SALES

  • In the first quarter of 2019, 11,164 homes sold — a drop of 3% compared to the first quarter of 2018 and down 13.5% from the fourth quarter of last year. Pending sales in the quarter were a mixed bag. Five counties saw an increase, but five showed signs of slowing.
  • The only market that had sales growth was Adams, which rose 4.9%. The rest of the counties contained in this report saw sales decline, with a significant drop in the small Park County area.
  • I believe the drop in the number of home sales is partially due to the significant increase in listings (+45.6%), which has given would-be home buyers more choice and less need to act quickly.
  • As mentioned above, inventory growth in the quarter was significant, but I continue to believe that the market will see sales rise. I expect the second half of the year to perform better than the first.

 

 

HOME PRICES

  • Home prices continue to trend higher, but the rate of growth is tapering. The average home price in the region rose just 2.1% year-over-year to $456,243. Home prices were .3% higher than in the fourth quarter of 2018.
  • I anticipate that the drop in interest rates early in the year will likely get more buyers off the fence and this will allow prices to rise.
  • Appreciation was again strongest in Park County, where prices rose 21.9%. We still attribute this rapid increase to it being a small market. Only Clear Creek County experienced a drop in average home price. Similar to Park County, this is due to it being a very small market, making it more prone to significant swings.
  • Affordability remains an issue in many Colorado markets but that may be offset by the drop in interest rates.

 

 

DAYS ON MARKET

  • The average number of days it took to sell a home in Colorado rose five days compared to the first quarter of 2018.
  • The amount of time it took to sell a home dropped in two counties — Gilpin and Park — compared to the first quarter of 2018. The rest of the counties in this report saw days-on-market rise modestly with the exception of the small Clear Creek market, which rose by 26 days.
  • In the first quarter of 2019, it took an average of 42 days to sell a home in the region, an increase of four days compared to the final quarter of 2018.
  • Job growth drives housing demand, but buyers are faced with more choice and are far less frantic than they were over the past few years. That said, I anticipate the late spring will bring more activity and sales.

 

 

CONCLUSIONS

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

For the first quarter of 2019, I have moved the needle a little more in favor of buyers. I am watching listing activity closely to see if we get any major bumps above the traditional increase because that may further slow home price growth; however, the trend for 2019 will continue towards a more balanced market.

 

 

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.


Posted on May 2, 2019 at 3:13 pm
Paul Hunter | Posted in About the area, Buyer Tips, Evans Real Estate, Fort Collins Real Estate, Homes for Sale, Investment, Johnstown Real Estae, Longmont Real Estate, Loveland Real Estate, Real Estate, Seller Tips, Wellington Real Estate, Windsor Real Estate | Tagged , , , , ,

Tax Time!

It’s Tax Time

You probably don’t need a reminder that this is tax season.

Not only because tax returns are due in two weeks but also because you will soon receive your property tax notification in the mail.

Every two years your County re-assesses the value of your property and then sends that new value to you.

When this happens, many of my clients:

  • Don’t agree with the new assessed value
  • Aren’t sure what to do
  • Are confused by the process
  • Want to save money on property taxes

Good news!  I have a webinar that will help you.  On the webinar we will show you:

  • How to read the information from the County
  • What it means for you
  • How to protest the valuation if you want
  • How to get an accurate estimate of your property’s value

You can listen to the webinar live or get the recording.  In any case, you can sign up at www.WindermereWorkshop.com  

The webinar is April 17th at 10:00.  If you can’t join live, go ahead and register so you can automatically receive the recording.

This is a complimentary online workshop for all of my clients.  I hope you can join!


Posted on April 2, 2019 at 1:08 pm
Paul Hunter | Posted in About the area, Buyer Tips, Evans Real Estate, Fort Collins Real Estate, Homes for Sale, Investment, Johnstown Real Estae, Loveland Real Estate, Real Estate, Seller Tips, Wellington Real Estate, Windsor Real Estate | Tagged , , , , ,