Recently a couple who I represented many years ago told me they might be selling their local home and moving to a Colorado resort community. Their question was, “when is the best time of year to put our house on the market?”
If you’re ready to move, you have an incredible opportunity in front of you today. Our expert brokers at Kentwood Real Estate will help you determine when to list your home, but generally our top sales prices are seen between February and May every year.
Looking at the big picture, the opportunity you have as a seller today is unprecedented. Last year was a hot sellers’ market. This year, inventory is even lower, which means the opportunity to sell remains high. Finding your next home in a market with low inventory can be challenging, but is that a large enough concern to pass up some of the best conditions sellers have ever seen?
According to the National Association of Realtors, in February, the average home sold received 4.8 offers. When buyers are competing like this, they’ll do what they can to make their offer stand out. This could play to your favor and mean you’ll see fewer contingencies; more cash offers and offers over asking price. Selling when demand is high, and supply is low sets you up for a win.
If you’re also looking to buy a house, you may wonder if you’ll have trouble finding your next home. Remember that perspective is key. As Danielle Hale, Chief Economist at realtor.com, says:
“The limited number of homes for sale is a lesson in perspective. This same stat that frustrates would-be homebuyers also means that today’s home sellers enjoy more limited competition than last year’s home sellers.”
You have an incredible advantage when you sell your house under these conditions. Since buyer demand is so high at a time when seller listings are so low, there’s a good chance buyers will be competing for your house. An experienced broker can next help you navigate the purchase process.
Today, there are far more buyers looking for homes than sellers listing their houses. Connect with a Kentwood Real Estate Broker so you have expertise on your side to help you win when you sell and when you buy.
This isn’t about the Olympics, although it could be. It’s about gold mining in Colorado.
During the Colorado gold rush in the 1800’s there was a miner who came west to stake a claim and make his fortune.
The miner found a vein of ore and as he dug into the earth he planned what he would do with his pile of gold. He dug and dug for months but it became apparent that the vein he’d discovered ended soon after it started. Despondent and exhausted, he sold off his equipment and moved home to become an insurance salesman.
Reaching the Tipping Point
Malcom Gladwell writes about the concept of perseverance and not giving up just before you “tip” into the success you’ve worked toward. The junk man who bought the miner’s equipment instinctively knew this and took up the project with the help of an expert who calculated where the vein of gold likely ran. The junk man struck it rich just three feet away from where the original miner had given up.
Your Expert, Your Gold
Being a home buyer in 2022 is much like being that miner. Keep at it and don’t quit three feet from gold. Perseverance is key, patience is paramount and the help of an expert who knows the landscape is invaluable.
How are our Colorado real estate experts at Kentwood Real Estate are helping their clients?
· They’re making sure buyers are in the best financial position to be competitive. Pre-approval from a reputable lender like Prosperity Home Mortgage is key.
· They’re staying informed up to the minute of neighborhood closings that could affect value and helping buyers determine whether they can (and should) provide appraisal assurance to the seller.
· They’re helping buyers understand the pros and cons of a contingent home inspection and where hidden expenses might lurk in the future.
· And they’re never giving up, creating a partnership with their clients that will see them through one or twenty one offers and months of digging for that perfect house.
Great real estate professionals are adaptable and resilient. Small scale or large, luxury or starter, we’re here to help you find your gold in Colorado. In 2022 that may take longer than it used to, but perseverance and professionalism are hallmarks of Kentwood Real Estate brokers.
Written by President and CEO of Kentwood Real Estate, Gretchen Rosenberg
The wildfires in Boulder County late last week devastated the bedroom communities of Superior and Louisville, Colorado. These lovely towns between Denver and Boulder are known as friendly, vibrant and boast great views of the Front Range.
Colorado’s Front Range, from Colorado Springs to Fort Collins, has been struggling with a housing shortage for several years. The pandemic-created housing boom exacerbated our need for more homes for both sale and rent. Suddenly, one of our growing areas has lost close to 1,000 properties. Some of which were on the market and under contract at the time of the fires.
The people of Superior and Louisville will spend several years rebuilding. As a former resident of Laguna Beach, CA whose neighborhood burned down in the early 1990’s, I remember it taking half a decade or more for all to be new again. The trauma never goes away, but it does get better once folks find a new home or rebuild.
The immediate challenge is finding interim housing, making insurance claims and replacing household goods. The next challenge will be either entering a housing market with limited inventory or finding builders who have capacity to rebuild the homes that were lost.
The Kentwood Cares Foundation is focusing on aiding those with immediate need due to the fires. Several of our brokers are also representing fire victims looking for a new home or rental. Please consider a contribution to Kentwood Cares and keep the Boulder County fire victims in your heart.
Distinction: Excellence that sets someone or something apart from others.
As we head into the final month of our 40th year at Kentwood Real Estate, it’s a fine time to honor the people of distinction who founded, fostered and created one of the top real estate brands in Colorado and the U.S.
In January 1981, five brokers at Van Schaack and Company: Jack Bradbury, John Burns, Roger Campbell, Jim Nussbaum, and DeWayne Willardsen, formed the beginnings of the distinguished brand that would become Kentwood Real Estate.
Over the years, the core of Burns, Campbell, and Nussbaum remained. Campbell and Nussbaum are still associated with the firm today. A few other recognizable names in Denver real estate who over time owned shares in the company or offices were Peter Niederman, Bill Moore, John Fitzpatrick, Dee Chirafisi, Jim Theye, Hank Edler, Julie Hummel, and Chris Vuletich.
A History of Excellence
Kentwood’s strong leadership team saw the company through the worst recession in U.S. history and grew the company to a record year in 2015 as a local boutique brand. Niederman sold the three metro Denver residential offices, a new commercial division and Denver Rental to Berkshire Hathaway’s HomeServices of America in June 2016.
In 2017 Prosperity Home Mortgage was added to the Kentwood family of companies and in 2018 we expanded our footprint to Northern Colorado with the addition of Kentwood Northern Properties. This year we’ve added HomeServices Insurance.
Nothing but the Best
Kentwood real estate agents are successful because they’re serious about providing the utmost in customer service, knowing their profession, and being experts in the market. All of our agents – commercial and residential, leasing agents and property managers – view their chosen profession with passion. They execute for clients nationally and internationally, utilizing the networks our company has created to go beyond Colorado real estate. The Kentwood staff bring their all every day and they know that creating and supporting the best brokers in the business requires the best staff in the business.
Thank you to our Kentwood clients and customers past and present, to our current and past brokers and agents, to our current and past owners, and to our staff and leadership team. It’s been a tremendous 40 years. 2021 will set a new record. We’re ready for the next 40 years at Kentwood!
Have you been thinking about selling your home and wondering what you’ll need to do to get ready? This can be an overwhelming process without guidance for which renovations are best to maximize the return on your investment of time and money.
The first things to consider are how much clutter you have and whether your house’s finishes compare favorably with neighboring homes. Next, think about the last time you had your house painted and assess whether it could be freshened up. Light neutral colors are still in fashion and make a home appear bright and clean. White walls or light grey are popular with homebuyers, even if they decide later to add more personality.
Decluttering and painting can be a game-changer and you might be able to stop there. With some professional staging, you could be ready to maximize your home’s price after these simple steps.
The National Association of Realtors’ latest data suggests that on average homes are receiving 3.7 offers and 86% are on the market less than a month. With that level of buyer demand, your updates should be calculated to make sure you stand out above the crowd and you’re the next one to get an offer.
If you’re in an older home, more serious renovations might be in order. See the graphic below for ideas on where to best leverage your money. Lighting isn’t listed but replacing dated fixtures will add another subtle layer to a home’s value in buyers’ minds. Ask your broker whether you need to look at a mini-renovation including lighting or a more major update like kitchen or baths, new garage door or even roof.
Not every broker will recommend a home inspection prior to listing, but it’s not a bad idea. Sellers can learn about repairs they may not have realized were needed (surprise! we do have termites in Colorado.) Inspectors will also point out other deferred maintenance that could spook buyers, as well as where a seller should plan to spend money during the inspection phase. A home warranty isn’t a bad idea either. Yes, sellers will need to fully disclose the information turned up in a pre-inspection, but forewarned is forearmed and not only can you address the serious issues ahead of time, but you can also factor the information into your pricing.
Talk with your broker before diving into repairs for a home sale. Each neighborhood is different and home sale statistics can help inform you about what’s selling most quickly for the highest price per foot.
At Kentwood Real Estate we have seasoned brokers who have deep knowledge about the markets they serve. We also have the Kentwood Amplify program to assist homeowners in contracting and paying for renovations prior to listing. Contact a Kentwood broker today if you’re interested in learning what steps to take to get ready for a home sale.
You may have considered buying or selling real estate this year but so far you’ve decided to stay on the sidelines. You want to see what happens and whether the strong sellers’ market begins to downshift.
Those are reasonable questions to be asking. Here is the perspective from a real estate professional with over two decades in the business. I’ve witnessed several swings of the market pendulum over the years, and based on the signs we’re seeing today, it is a very good time to think about jumping in.
Ask yourself these two questions as you consider your options for 4th Quarter 2021 and into 2022:
What will home prices be like in 2022?
Where will mortgage rates be by the end of 2022?
Real estate markets periodically move from a buyer’s market to a seller’s market and back. There are usually some months in between these swings where markets are “in balance.” A balanced market is when we see around 5-6 months of available inventory, giving buyers plenty to choose from and sellers a good chance of selling at a reasonable price.
Let’s shed some light on the questions above to determine where we are in the cycle. Keep in mind that market dynamics vary for commercial real estate, depending on whether you’re looking at office, retail, warehouse, or industrial. One commercial sector might be on fire (currently warehouse and industrial) while another is languishing (currently office and retail.) Each sector experiences its own swing from buyer/tenant market to seller/landlord market. This discussion is for residential real estate.
What will home prices be like in 2022?
Three major housing industry entities project continued U.S. home price appreciation for 2022. Here are their forecasts:
Zillow is forecasting a +17% increase in Metro Denver home prices next year
Using the average of the three national projections (6.27%), a home that sells for $500,000 today would be valued at $531,350 by the end of next year. If you delay, the same home will cost more. As a prospective buyer, you may end up paying an additional $31,350 if you wait.
Where will mortgage rates be by the end of 2022?
Today, the 30-year fixed mortgage rate is hovering near historic lows, although in recent days rates have ticked up. Most experts believe rates will slowly rise as the economy continues to recover and the Fed begins to taper their economic stimulus. Here are the forecasts for where rates may be in the fourth quarter of 2022 by those three major entities:
Still incredibly low, but the average projection for late next year is 3.7%. Close to a percentage point higher than today’s rates. An increase in mortgage rates will increase your cost.
Homeowners, Your Own Special Considerations! You see that prices are projected to increase into 2022, so you might be tempted to wait another year to sell. If selling later meets your life cycle needs, then wait for the best time. As rates and prices increase, there is the potential that your pool of qualified buyers may be reduced. Also, factor in the increased cost of your replacement home, along with the higher rate you’ll pay when you purchase.
What if both home values and mortgage rates rise?
Your payments will go up unless you’re paying cash. Assume you purchase a $500,000 home this year with a 30-year fixed-rate loan at 2.91% after making a 10% down payment. According to the mortgage calculator from Smart Asset, your monthly mortgage payment (including principal and interest, estimated home insurance, property taxes, and other fees) would be approximately $2,478.
That same home could cost $531,350 by the end of 2022, and the mortgage rate could be 3.7%. Your monthly mortgage payment, after putting down 10%, would increase to $2,835.
Another factor to consider is that if you buy this year, you’ll be building equity all of next year in addition to paying less each month. Your $500,000 home could be worth over 6% more at the end of 2022. And quite a bit more than 6% depending on which pundits get it right.
When Versus Whether
Many calculations come into play when considering a home purchase. Lifestyle, job security, and plans for the future come to mind. Whether you purchase has a lot more to do with these intangibles than when to purchase. It’s hard to time the market, so considering lifestyle and future plans is vital in buying a home. When to purchase is a secondary decision. If you’re ready and have savings, a steady income, or cash and you know it’s time, then don’t wait to see what happens with the market.
Remember the oft-quoted Chinese Proverb: “The best time to plant a tree was 20 years ago. The second best time is now.”
Buyers and Sellers ask us what we see ahead for the second half of 2021 in Colorado’s real estate markets. It’s apparent that real estate has been in a hot seller’s market for close to a year, ever since pandemic lockdowns began to lift in mid-2020.
Record-setting low mortgage rates have driven home price appreciation while pent-up home buying demand supported a robust housing market in the first half of 2021. What does the forecast tell us could be in store?
Mortgage Rates Will Likely Increase, a Little
Most experts project a rise in interest rates later this year or early in 2022. The latest Quarterly Forecast from Freddie Macstates: “We forecast thatmortgage rates will continue to rise through the end of next year. We estimate the 30-year fixed mortgage rate will average 3.4% in the fourth quarter of 2021, rising to 3.8% in the fourth quarter of 2022.”
The anticipated increase is expected to be modest and well below averages for past mortgage rates. With a historical perspective on rates, it will still be a good time for homebuyers who hope to purchase in the next six months. Freddie Mac’s report goes on to say: “While higher mortgage rates will help slow the pace of home sales and moderate house price growth, we expect overall housing market activity will remain robust. Our forecast has total home sales, the sum of new and existing home sales, at 7.1 million in 2021….”
Home Price Appreciation Will Continue, at a Slower Pace
Joe Seydl, Senior Markets Economist at J.P. Morgan, projects home prices to continue to rise. His prediction encourages buyers who are interested in purchasing a home would benefit from jumping in soon. Waiting for rates or home prices to go down may not be wise: “Homebuyers—interest rates are still historically low, though they are inching up. Housing prices have spiked during the last six to nine months, but we don’t expect them to fall soon, and we believe they are more likely to keep rising. If you are looking to purchase a new home, conditions now may be better than 12 months hence.”
Inventory a Challenge, but Optimism Abounds
Home prices are rising, which should moderate as more housing inventory comes to market. George Ratiu, Senior Economist at realtor.com, notes there are signs in the U.S. housing market that we may see the current inventory challenges lessen, creating more choices for buyers. This will contribute to better affordability as buyers avoid bidding wars that often pushed values well above list prices. “We have seen more new listings this year compared with 2020 in 11 of the last 13 weeks. The influx of new sellers over the last couple of months has been especially helpful in slowing price gains.”
Mark Fleming, Chief Economist at First American, commented on the improving economy as a positive for the housing market: “A growing economy in the summer months has multiple implications for the housing market. Growing consumer confidence, a stronger labor market, and higher wages bode well for housing demand. While a growing economy and improving public health conditions may also spur hesitant existing owners to list their homes for sale, it’s unlikely to significantly ease the super sellers’ market conditions.”
Real Estate Takeaways
Looking at the forecasts for prices, interest rates, and inventory, experts remain optimistic about the second half of 2021. Contact a Kentwood Real Estate broker with your real estate questions or a Prosperity Home Mortgage consultant with loan or rate questions. Our team professionally serves the northern Front Range of Colorado from Colorado Springs to Fort Collins, Metro Denver, and Boulder.
June is National Homeownership Month in the U.S. which provides us a potent reminder that many people and families have built their wealth through homeownership.
Home is more than simply the house, more than the “sticks and bricks.” For many people, it’s now become their workplace, their children’s school, and a safe harbor against the pandemic. 65.6% of Americans own their homes, the highest rate in the past eight years. A recent Gallup survey ranked real estate as the best investment a person can make. In addition to the financial upside, there are also non-financial benefits. The financial benefits should not be overlooked though, as long as the homeowners can keep on top of their mortgage payments and upkeep.
Benefits of Owning
1. Civic Participation: Owning a home is owning a part of your neighborhood. Homeowners have a stronger connection to their neighborhoods and are more committed to volunteer work and other ways to be involved.
2. Pride of Ownership: Owning a home means having a space that is uniquely yours. You can customize it to your liking and make it reflect your personality and values.
3. A Safe Space: Owning a home gives you a sense of security and privacy – two things that have become even more valuable as we’ve tackled the challenges of the recent health crisis.
4. Forced Savings: Owning a home builds equity. Your equity grows with each payment you make toward your mortgage. This form of forced savings can be used down the road to help you accomplish your most significant financial goals.
5. Appreciation: Owning a home is making an investment that steadily gains value, and experts project home values will continue to rise in the years to come.
6. Stability: Owning a home means having better control over your future housing payments. Over the years, a mortgage stays relatively steady, but rent costs continue to rise.
Kentwood Real Estate Can Help
Whether you’re moving up, down, from a rental into your first home, or looking to purchase an investment property, our team of professional real estate brokers from Denver to Fort Collins can help you. Search for your home at www.kentwood.com and look for your Prosperity Home Mortgage broker. We believe so strongly in homeownership that we’re in the business!
Real estate brokers are often asked whether a particular home they’re contemplating “will be a good investment.” There are buyers concerned with finding the perfect nesting spot, and others worry whether they’ll come out financially ahead.
Some investors look strictly to commercial real estate, but for this analysis we’re talking about residential homes a buyer intends to reside in.
Much of the calculation depends on various factors, including how long the homeowners will keep the property, whether it’s compromised by a busy road, whether the homeowners plan to keep it in tip-top shape or upgrade, and whether it’s a single-family home or a condominium.
Recently in a post on the Liberty Street Economics blog, the Federal Reserve Bank of New York noted that Americans believe buying a home is definitely or probably a better investment than buying stocks. A subsequent Gallup Poll reaffirmed those findings.
In an article on the current real estate market, Gallup reports:
“Gallup usually finds that Americans regard real estate as the best long-term investment among several options — seeing it as superior to stocks, gold, savings accounts and bonds. This year, 41% choose real estate as the best investment, up from 35% a year ago, with stocks a distant second.”
Here’s the breakdown:
Is Real Estate Really a Sound Investment?
Americans have great confidence in real estate as a good long-term investment and view their home as a way to build future wealth. Although there is some underlying anxiety that the build-up in home values may be mirroring what happened just prior to the 2008-11 housing crash. According to Merrill Lynch, J.P. Morgan, Morgan Stanley, and Goldman Sachs, the current real estate market is strong and sustainable.
As Morgan Stanley explained to their clients in a recent podcast:
“Unlike 15 years ago, the euphoria in today’s home prices comes down to the simple logic of supply and demand. And we at Morgan Stanley conclude that this time the sector is on a sustainably, sturdy foundation. This robust demand and highly challenged supply, along with tight mortgage lending standards, may continue to bode well for home prices. Higher interest rates and post-pandemic moves could likely slow the pace of appreciation, but the upward trajectory remains very much on course.”
America’s belief in the long-term investment value of homeownership has been, is, and will always be, very strong. Home prices have been stable or rising the propensity of time over decades, even through other sector downturns. It’s good to diversify your investments, but don’t discount the long-term value of owning real estate.
Find a Kentwood Real Estate Broker, or your next Colorado home, on our website, www.kentwood.com. We service the Front Range of Colorado from south metro Denver, throughout Denver metro, Evergreen, Boulder, and northern Colorado, including Loveland and Fort Collins.
Written by Gretchen Rosenberg, President and CEO of Kentwood Real Estate
At Kentwood Real Estate, our team of professional brokers, residential and commercial, are expertly managing the current Colorado real estate market dynamics and stand by for all of our clients who are ready to transact real estate.
As Memorial Day approaches, we remember and honor those servicemen and women who gallantly and selflessly served our country and paid the ultimate price. Many people will be spending the weekend in reflection, visiting cemeteries and memorials to honor friends, relatives and strangers.
While remembrance is the most vital part of the Memorial Day weekend, it also signifies the unofficial start of summer for so many people. Whether you’re planning to spend the weekend celebrating or reflecting, if you’re in the real estate market this may be a good weekend to check with your agent to see if there are homes or properties that meet your criteria.
Buyers Will Be Off the Field
We’re hearing of buyers who have taken themselves out of the game, at least temporarily. Which could mean relative ease for those buyers who want to stay active over the upcoming summer holidays. If home sellers experience fewer showings, buyers could be in a better position. Perhaps reducing the number of competing offers to just a few, or none.
Sellers Will Be Motivated
Sellers who have their homes on the market for more than a week are getting antsy. They hear about multiple offers within hours and become concerned if that’s not their experience. Even with the expert guidance of a broker who can explain that the process varies across prices and locations, we’ve heard of Sellers who are finding themselves disappointed when they don’t get above list in hours. A slower holiday weekend might be a great time for buyers to take advantage of slowing the process down. Having plenty of time in a home to really take it in and a negotiation that is more give and take, win/win.
School’s Out for the Summer
Finally, with school ended or ending soon and summer vacations not quite starting, Sellers who have their homes on the market will be anxious to get a deal done before the dog days of summer set in.
If you’re a buyer who has a desire to spend a part of your Memorial Day weekend house hunting, this could be a great time to catch a deal, or at least find a home that suits you without as much competition as we’ve been experiencing as of late. Contact a Kentwood Real Estate broker to get the home buying or home selling process going and start your search on kentwood.com. We represent clients all up and down the Front Range from Fort Collins to Colorado Springs.