Colorado Real Estate News

Renovations to Consider Before Selling Your Home

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.

Bottom Line

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.

Colorado Real Estate News

Best Reasons to Jump Into a Real Estate Market Shift

CEO Reflections
Written by President and CEO of Kentwood Real Estate, Gretchen Rosenberg

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:

  1. What will home prices be like in 2022?
  2. 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:

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.”

Kentwood Real Estate Brokers are experts at their local markets, and Kentwood Commercial Brokers represent all commercial sectors. Prosperity Home Mortgage Colorado lenders will assist with your next home purchase financing. Reach out to our team as you consider the next steps in your life journey!

Colorado Real Estate News

Top Real Estate Predictions for 2021’s Second Half

Real Estate Trends 2021

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 Mac states: 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.

Colorado Real Estate News

Top Reasons Why National Homeownership Month is Vital

Colorado Luxury Real Estate

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 

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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.

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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.

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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.

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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.

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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.

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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!

Colorado Real Estate News

Is Real Estate a Better Investment than Stocks or Gold?

Kentwood - Colorado's Luxury Real Estate

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.


Survey Says

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:

Long Term Investments for America
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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.”


Key Takeaways

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.

Colorado Sunflowers
Yellow sunflowers over Colorado’s mountains.

Colorado Real Estate News

Top Reasons to Look for Your Next House Over Holiday Weekends

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.

Final Thoughts

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.

Colorado Real Estate News

5 Tips to Maximize Your Home Sale

Kentwood - Luxury Real Estate Colorado

Written by Gretchen Rosenberg, President and CEO of Kentwood Real Estate

If you’re ready to make a move to a new home, you’re in a great position to sell this Spring. Housing inventory remains low which has been driving up buyer competition. This gives homeowners better leverage to sell for the best possible terms, and it’s been fueling a steady rise in home prices throughout Colorado.

In a hot market like the Front Range real estate market for homes, properties are selling quickly. According to the National Association of Realtors (NAR), homes are typically on the market for just 18 days nationally. The Denver metro average Days on Market (DOM) in April was just 13 days and in Fort Collins average DOM for single-family homes in April was 47.

Despite the speed and opportunity for sellers, there are still steps you can take to prep your house to shine so you get the greatest possible return. Not every home is selling in hours for the above list, so it’s a great idea to calibrate your expectations. Resolve to be content if you have an offer within the range of average DOM for at, or close to, list price. Call it a happy by-product of a crazy market if you’re one of the lucky ones with a property that is bid up.

1. Give your house that homey feel

Use your time to declutter. Pack the bulk of your personal items like photographs, awards, and sentimental belongings. The more neutral and tidy the space, the easier it is for buyers to picture themselves living in the home. According to the 2021 Profile of Home Staging by NAR:

“82% of buyers’ agents said staging a home made it easier for a buyer to visualize the property as a future home.”

Not only will your house potentially attract the attention of more buyers and likely sell quickly, but the same report also notes:

“Eighteen percent of sellers’ agents said home staging increased the dollar value of a residence between 6% and 10%.”

As Jessica Lautz, Vice President of Demographics and Behavior Insights for NAR, says:

“Staging a home helps consumers see the full potential of a given space or property…It features the home in its best light and helps would-be buyers envision its various possibilities.”

2. Keep It Clean

Another important habit while showing your home is to keep it neat and clean every day that it’s on the market. Before a buyer stops by, pick up toys, make the beds, and wash the dishes. This will reduce the number of distractions that can lessen the appeal of your home.

Ensure your home smells fresh and clean, but don’t use grocery store plug-ins to do it. Buyers will remember the smell of your house, and according to the same report from NAR, the kitchen is one of the most important rooms of the house to focus on if you want to attract more buyers. Open windows for fresh air, bake cookies, or light a vanilla candle for an hour before the showing.

3. Give Buyers Access

Buyers are less likely to make an offer on your house if they aren’t able to easily schedule a time to check it out. If your home is available anytime, that opens up more opportunities for multiple buyers to go from curious to eager. It also allows buyers on tight schedules to still get in to see your house.

While health continues to be a concern, it’s important to work with your agent to find the best safety measures and digital practices for your listing. This will drive visibility and create access options that also keep everyone in the process healthy. Real estate agents in Colorado have become very adept at following guidelines and protocol and as the regulations loosen, your broker will be able to keep you apprised of methods to satisfy everyone wherever they are on the spectrum of safety.

4. Price It Right

Even in a sellers’ market, it’s crucial to set your house at the right price to maximize selling potential. Pricing your house too high is actually a detriment to the sale. The goal is to drive high attention from competing buyers and possibly even let bidding wars push the final sales price up. If you receive full price or close to it, that’s a good thing!

5. Set Reasonable Expectations

Average prices are up year-over-year, but more inventory is slowly coming. If you price your home right the first time, it will sell faster and for more money. Half the listings are now going under contract within the first 4 days, but many sellers are finding themselves still on the market one or two weeks out.

Heading into June, buyer fatigue is setting in. We’re finding that by the third weekend on the market, homes are selling for 98.8% of the original list price. You only have about 7 days to make a great impression for both condition and price. Then buyers will begin to suspect there’s something wrong. Calibrate your expectations and be content if you receive list price.

Key Takeaways

If you want to sell your home on your terms, in the least amount of time, and for the highest price, today’s market sets the stage to make that happen. Give yourself the best chance by hiring a Kentwood Real Estate broker to help you sell or buy and get the job done with the best possible outcome. Find Colorado Front Range homes on www.kentwood.com

Colorado Real Estate News

Why You Shouldn’t Give Up on the Colorado Housing Market

Written by President and CEO of Kentwood Real Estate, Gretchen Rosenberg

In a recent Kentwood Real Estate team meeting, we discussed the Colorado housing market and heard tales of some buyers starting back off, deciding they’ll wait until the timing “improves” for buying their next home.

In the Metro Denver housing market, the mid-price range is generally thought to be $500,000 – $900,000. In Northern Colorado the mid-range is $300,000 – $600,000. The brokers at our meeting indicated there were listings in this range that saw fewer than expected showings this week and fewer than expected offers. Some of the buyers in this range (in specific locations and markets, not all) appear to be stepping onto the sidelines.

Questions our brokers are asking buyers who have become fatigued by the velocity of the market are:

  1. Do you think home values will be higher a year from now?
  2. Do you think mortgage rates will be higher a year from now?

If the answer to one or both of these questions is yes (which is likely) then here are a few things to consider if you’re one of those fatigued buyers.

Where will home prices be a year from now?

Averaging recent projections from major industry forecasters, the expectation is U.S. home prices will increase by 7.7% in 2021. The Denver Metro Association of Realtors reported April 2021 year-over-year price appreciation was 6.19%. The Fort Collins Board of Realtors reported at the end of April the YOY median price increase was 14.6%.

Let’s look at a house that’s valued today at $500,000 as an example of what happens by purchasing now versus waiting a year, when prices and rates have increased:

If a buyer makes a 10% down payment today on that $500,000 home ($50,000,) they’ll end up borrowing $450,000 for their mortgage. Applying the U.S. average projected rate of home price appreciation in 2021 (7.7%,) the same house will cost $538,500 next year. Next year, with a 10% down payment of $53,850, the buyer would be borrowing $484,650.

You can see that as a result of rising home prices, a prospective buyer will have to put down an additional $3,850 and borrow an additional $34,650 just for waiting a year to make their move.

Where will mortgage rates be a year from now?

Today, mortgage rates are hovering around 3%. However, most experts believe they’ll rise as the economy continues to recover. Any increase in the mortgage rate will also increase a purchaser’s cost. Here are the forecasts for the first quarter of 2022 from four major entities:

What happens if both home values and mortgage rates increase?

A buyer will pay more in their monthly mortgage payment if both variables increase. Assume a buyer purchases a $500,000 home this year with a 30-year fixed-rate loan at 3% after making a 10% down payment, their monthly principal and interest payment would be $1,897.

That same home one year from now could be $538,500 and the mortgage rate could be 3.5% or greater. The monthly principal and interest payment on $484,650 (purchase price less the 10% down payment) would be $2,176.

The difference in the monthly mortgage payment would be $279. That’s $3,348 more per year and $100,440 over the life of the loan.

Bottom Line

When asked if they should buy a home, buyers like to think about the nonfinancial benefits of owning a home. When asked when to buy, the financial benefits make it clear that doing so now is more advantageous than waiting until next year. Jumping into multiple offers can be deflating and exhausting, but with strong representation and a fighting attitude, there will be a win. As inventory comes on the market this spring there will be better opportunity to find a great home.

Navigating the Colorado Real Estate Waters

For more information on Colorado, Denver and Fort Collins housing, connect with a Kentwood Real Estate broker to talk about the best ways to navigate such an energetic market. Our residential and commercial brokers sell and lease properties across the Northern Front Range of Colorado from south of Castle Rock to Denver and up to the Fort Collins area. Search for your 

Colorado Real Estate News

Are we in a Housing Bubble?

Written by President and CEO of Kentwood Real Estate, Gretchen Rosenberg

Lawrence Yun, Chief Economist for the National Association of Realtors (NAR) recently said, the period we’re in “is not a bubble. It is simply a lack of supply.”

  • In a recent article about the intense demand we’ve seen play out since late 2020, Lawrence Yun discussed the state of today’s housing market.
  • Yun addressed whether today’s high buyer competition and rising home prices are evidence of a housing bubble and said that this “is not a bubble. It is simply lack of supply.”
  • Today’s housing market remains competitive, with rising prices driven by buyer demand.

Kentwood Real Estate Agents Have Their Say

I queried several of our Metro Denver and Northern Colorado agents and they weighed in on the bubble theory.

“I’ve been in real estate sales in Colorado for several decades. There have only been three years out of the past 30 when we saw housing actually depreciate. Two of the Great Recession years and one year in the 1970’s.”

“I’ve been explaining today’s housing dynamics to my clients. They understand that there aren’t enough homes for the number of buyers in the market and absent a huge influx of inventory (unlikely) or a large rise in interest rates (not anticipated in the near-term) we will remain in a seller’s market for quite a while.”

“When supply and demand begin to get more in-balance, price appreciation will slow to single digits from double digits. I don’t anticipate it slowing to the point where we see loss of home values unless there’s a crazy unplanned incident. A “Black Swan.” Covid was that Black Swan in 2020 and even that only caused a two to three month pause in the housing market.”

Navigating the Colorado Real Estate Waters

For more information on Colorado housing, connect with a Kentwood Real Estate broker to talk about the best ways to navigate such an energetic market. Our residential and commercial brokers sell and lease properties across the Northern Front Range of Colorado from south of Castle Rock to Denver and up to the Fort Collins area.

Colorado Real Estate News

The Top 3 Indicators for Commercial Real Estate Recovery

Written by President and CEO of Kentwood Real Estate, Gretchen Rosenberg

Our Kentwood Commercial team of brokers is often asked what they see on the horizon for commercial real estate (CRE) and whether the sector across-the-board suffered pandemic woes.

In actuality, CRE is many sectors, not one. Commercial office sales and leasing are quite different from industrial and warehouse, retail and mixed-use are nothing like multifamily. If we unpack the variety of sectors in Colorado’s real estate markets, we can use the past 14-months to plan for the future.

Leading Indicators

Leading indicators are what drive behavior change and business results. The leading indicators of the Work from Home adaptations we’ve made over the past year are impacting both the housing and commercial office markets. Many businesses are planning to retain a hybrid model but are committed to being back in their offices by third quarter 2021 in some form. This will benefit office, but the sector still lags in other areas of CRE. Companies are looking for ways to consolidate and shrink their office footprint, and in metro Denver we have hundreds of thousands of square feet on the sublease market. Dr. Michael Sklarz wrote about the intersection of rising housing prices with office lease rates due to the WFH trend in a recent blog post.

Company Culture

CRE appears to outsiders to be a clinical, analytics driven area of real estate. In many ways, that’s true. However, human behavior and consumer behavior have a large influence over many CRE sectors. Retail and hospitality has been impacted in an outsized way by the pandemic and the business owners are re-imagining how their businesses will look going forward, and how their real estate needs will be changing as a result. Corporations are reconsidering the open floor plan “hoteling” model that came into fashion over the last decade. Some managers like that model even more as they move to a hybrid work from home format, others like it less as they wrestle with how to keep their employees safe in an office environment.

Warehouses Dominate

The industrial and warehouse sectors are thriving. Internet shopping is driving a need for fulfillment and storage which is driving demand for warehouses. This is a trend that picked up steam over the past year and should remain strong as we move into 2022 and beyond.

Commercial real estate is thriving in Colorado for many owners and landlords. Others are still struggling – multifamily owners are impacted by eviction moratoriums, strip malls with family-owned restaurants and shops hope tenants reinvigorate as society opens back up, large office buildings aren’t clearing vacancy rates at the planned for velocity. The best way to stay informed about CRE is to speak with brokers who know all aspects of the business. Kentwood Commercial brokers are seasoned professionals who stand ready to help.