Northern Colorado Real Estate and Community News

Jan. 30, 2023

Where Will You Go If You Sell? You Have Options.

 

Where Will You Go If You Sell? You Have Options. | MyKCM

There are plenty of good reasons you might be ready to move. No matter your motivations, before you list your current house, you need to consider where you’ll go next.

In today’s market, it makes sense to explore all your options. That includes both homes that have been lived in before as well as newly built ones. To help you decide which is right for you, let’s compare the benefits of each. Regardless of which option you choose to explore, working with a trusted real estate professional throughout the process is essential.

The Benefits of Newly Built Homes

First, let’s look at the benefits of purchasing a newly constructed home. With a brand-new house, you’ll be able to:

1. Build your dream home

If you build a home from the ground up, you’ll have the option to select the custom features you want, including appliances, finishes, landscaping, layout, and more. Bankrate puts it like this:

“Building means customizing. . . . instead of wishing your home had a certain kind of flooring, a sunroom or some other special amenity, you’ll be able to tailor the property to your exact needs. You also won’t be limited to a specific location or neighborhood.”

2. Take advantage of builder concessions

In today’s market, a lot of home builders are working hard to sell their current inventory before they add more to their mix. That means many of them are offering concessions and are more willing to negotiate with buyers. That could work to your advantage in the process.

3. Minimize home repairs

Many builders offer a warranty, so you’ll have peace of mind on unlikely repairs. Plus, you won’t have as many little improvement projects to tackle. As realtor.com says:

“. . . if something goes wrong with your new home, not only are there likely some manufacturer warranties in place, but many builders also include additional home warranties . . .”

4. Take advantage of energy efficiency

When building a home, you can choose brand-new, energy-efficient options to help lower your utility costs, protect the environment, and reduce your carbon footprint.

The Benefits of Existing Homes

Now, let’s compare those to the perks that come with buying an existing home. With a pre-existing home, you can:

1. Explore a wider variety of home styles and floorplans

With decades of homes to choose from, you’ll have a broader range of floorplans and designs available.

2. Appreciate that lived-in charm

The character of older homes is hard to reproduce. If you value timeless craftsmanship or design elements, you may prefer an existing home.

3. Join an established neighborhood

Existing homes give you the option to get to know the neighborhood, community, or traffic patterns before you commit. Plus, they have more developed landscaping and trees, which can give you additional privacy and curb appeal.

4. Move in faster

If you have a short timeframe to move or you just don’t want the process to take several months while your home is under construction, buying an existing home might make sense for you. U.S. News explains:

“When you’re choosing a home, existing or new, you should also consider how long it might take to move into that home. Just because you have a contract doesn’t mean that your new home will be completed (or even started) at the time you agree to the purchase. It can be a struggle waiting for the walls to go up as you wonder what your home will become.”

When thinking about where you’ll go after you sell your house, remember your options. As you start your search, think about what’s most important to you. By working with a trusted real estate agent, you can be confident you’re making the most educated, informed decision.

Bottom Line

If you have questions about the options in our area, let’s discuss what's available and what's right for you, so you’re ready to make your next move with confidence.

Posted in Selling Your Home
Jan. 27, 2023

Homeownership Builds Your Wealth over Time

 

Homeownership Builds Your Wealth over Time [INFOGRAPHIC] | MyKCM

Some Highlights

  • If you’re thinking of buying a home this year, be sure to factor in the long-term benefits of homeownership.
  • On average, nationwide, home prices appreciated by 288.7% over the last 32 years. That means homeowners grow their net worth significantly in the long term.
  • Homeownership wins over time. Let’s connect so you can start your homebuying journey today.
Posted in Buying a Home
Jan. 26, 2023

Why It Makes Sense To Move Before Spring

 

Why It Makes Sense To Move Before Spring | MyKCM

Spring is usually the busiest season in the housing market. Many buyers wait until then to make their move, believing it’s the best time to find a home. However, that isn’t always the case when you factor in the competition you could face with other buyers at that time of year. If you’re ready to buy a home, here’s why it makes sense to move before the spring market picks up.

Spring Should Bring a Wave of Buyers to the Market

In most years, the housing market goes through predictable seasonal trends in activity. Winter is typically a quiet point in the year, while spring sees a surge of buyers begin their search. And experts project that this year will be no exception.

Right now, buyer demand is low due to a combination of normal seasonal trends and a reaction to last year’s rise in mortgage rates. But rates have started to come down since last November, which has more and more potential buyers planning to jump into the market. That means right now is a sweet spot if you’re in a good position to buy, before more buyers reappear. Affordability is beginning to improve, but demand is still low — for now. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), shares:

“. . . expect sales to pick up again soon since mortgage rates have markedly declined after peaking late last year.”

If you’re ready to buy a home, right now is the best time to do so before your competition grows and more buyers enter the market.

Today’s Sellers Are Motivated

Low demand from buyers often means sellers are more motivated to work with you, and that can set you up to buy a home on your terms. In fact, sellers have been more willing to negotiate this winter because there are fewer buyers in the market. According to a recent article from Forbes:

“. . . sellers gave concessions to buyers in 41.9% of home sales in the fourth quarter of last year.”

But keep in mind, the advantages buyers have this winter won’t last forever. The competition you face could be greater if you wait until spring to make a move, and increased buyer demand means sellers will have less motivation to negotiate with you. Be sure to work with a trusted real estate professional to learn what you can expect in your local market right now.

Bottom Line

If you’re in a good position to make a move, it may make sense to move before spring. Working with your team of expert real estate advisors is the best way to learn about the current market and what it means for you. Let’s connect today to determine the best plan to achieve your homebuying goals.

Jan. 25, 2023

Why You Shouldn’t Fear Today’s Foreclosure Headlines

 

Why You Shouldn’t Fear Today’s Foreclosure Headlines | MyKCM

If you’ve seen recent headlines about foreclosures surging in the housing market, you’re certainly not alone. There’s no doubt, the stories in the media can be pretty confusing right now. They may even make you think twice about buying a home for fear that prices could crash. The reality is, the data shows a foreclosure crisis is not where the market is headed, and understanding what that really means is mission critical if you want to know the truth about what’s happening today. Here’s a deeper look.

According to the Year-End 2022 U.S. Foreclosure Market Report from ATTOMforeclosure filings are up 115% from 2021, but down 34% from 2019. As media headlines grab onto this 115% increase, it’s more important than ever to put that percentage into context.

While the number of foreclosure filings did more than double last year, we need to remember why that happened and how it compares to more normal, pre-pandemic years in the market. Thanks to the forbearance program and other relief options for homeowners, foreclosure filings were down to record-low levels in 2020 and 2021, so any increase last year is — no surprise — a jump up. Rick Sharga, Executive VP of Market Intelligence at ATTOM, notes:

“Eighteen months after the end of the government’s foreclosure moratorium, and with less than five percent of the 8.4 million borrowers who entered the CARES Act forbearance program remaining, foreclosure activity remains significantly lower than it was prior to the COVID-19 pandemic. It seems clear that government and mortgage industry efforts during the pandemic, coupled with a strong economy, have helped prevent millions of unnecessary foreclosures.”

Clearly, these options meant millions of homeowners could stay in their homes, allowing them to get back on their feet during a very challenging period. With home values rising at the same time, many homeowners who may have found themselves facing foreclosure under other circumstances were able to leverage their equity and sell their houses rather than face foreclosure, and that trend continues today.

And remember, as the graph below shows, foreclosures today are far below the record-high 2.9 million that were reported in 2010 when the housing market crashed.

Why You Shouldn’t Fear Today’s Foreclosure Headlines | MyKCM

So, while foreclosures are rising, keeping perspective in mind is key. As Bill McBride, Founder and Author of Calculated Risknoted just last week:

“The bottom line is there will be an increase in foreclosures over the next year (from record low levels), but there will not be a huge wave of distressed sales as happened following the housing bubble. The distressed sales during the housing bust led to cascading price declines, and that will not happen this time.”

Bottom Line

Right now, putting the data into context is more important than ever. While the housing market is experiencing an expected rise in foreclosures, it’s nowhere near the crisis levels seen when the housing bubble burst, and that won’t lead to a crash in home prices.

Jan. 24, 2023

The 3 Factors That Affect Home Affordability

 

The 3 Factors That Affect Home Affordability | MyKCM

If you’ve been following the housing market over the last couple of years, you’ve likely heard about growing affordability challenges. But according to experts, the key factors that determine housing affordability are projected to improve this year. Selma Hepp, Executive, Deputy Chief Economist at CoreLogicshares:

“. . . with slowly improving affordability and a more optimistic economic outlook than previously believed, the housing market could show resilience in 2023.”

The three measures used to establish home affordability are home prices, mortgage rates, and wages. Here’s a closer look at each one.

1. Mortgage Rates

Mortgage rates shot up to over 7% last year, causing many buyers to put their plans on hold. But things are looking different today as rates are starting to come down. George Ratiu, Senior Economist at realtor.comexplains:

“Let’s celebrate some good news. . . . mortgage rates are down. With inflation showing a tangible slowdown, I do expect mortgage rates to follow suit in the months ahead.”

Even a small change in rates can impact your purchasing power. Nadia Evangelou, Director of Forecasting for the National Association of Realtors (NAR), gives this context:

“With a 6% rate instead of 7%, buyers pay about $2,700 less every year on their mortgage. As a result, owning a home becomes affordable to about 1.4 million more renters and 4.3 million more homeowners.”

If 7% rates paused your homebuying plans last year, this could be the opportunity you need to get back in the game. Be sure to work with a team of experts who know the latest on mortgage rates and can give you the best advice for the current market.

2. Home Prices

The second factor at play is home prices. Home prices have made headlines over the past few years because they skyrocketed during the pandemic. When discussing home prices in 2023, Lawrence Yun, Chief Economist at NAR, says:

“After a big boom over the past two years, there will essentially be no change nationally . . . Half of the country may experience small price gains, while the other half may see slight price declines.”

So, while prices will likely be flat this year in some markets, others could see small gains or slight declines. It all depends on your local area. For insight into what’s happening in your market and how prices are impacting affordability, reach out to a trusted real estate professional.

3. Wages

The final component in the affordability equation is wages. The graph below uses data from the Bureau of Labor Statistics (BLS) to show how wages have increased over time:

The 3 Factors That Affect Home Affordability | MyKCM

When you think about affordability, remember the full picture includes more than just mortgage rates and prices. Wages need to be factored in as well. Because wages have been rising, many buyers have renewed opportunity in the market.

While affordability hurdles are not completely going away this year, based on current trends and projections, 2023 should bring some sense of relief to homebuyers who have faced growing challenges. As Mike Fratantoni, Chief Economist at the Mortgage Bankers Association (MBA), says:

“Rates are expected to move lower for the year, and home price growth is expected to cool, both of which will help affordability challenges.”

Bottom Line

If you have questions, let’s connect. You’ll also want to make sure you have a trusted lender so you can explore your financing options. You may be closer to owning a home than you think.

Posted in Buying a Home
Jan. 23, 2023

Want To Sell Your House? Price It Right.

 

Want To Sell Your House? Price It Right. | MyKCM

Last year, the housing market slowed down in response to higher mortgage rates, and that had an impact on home prices. If you’re thinking of selling your house soon, that means you’ll want to adjust your expectations accordingly. As realtor.com explains:

“. . . some of the more prominent pandemic trends have changed, so sellers might wish to adjust accordingly to get the best deal possible.”

In a more moderate market, how you price your house will make a big difference to not only your bottom line, but to how quickly your house could sell. And the reality is, homes priced right are still selling in today’s market.

Why Pricing Your House Appropriately Matters

Especially today, your asking price sends a message to potential buyers.

If it’s priced too low, you may leave money on the table or discourage buyers who may see a lower-than-expected price tag and wonder if that means something is wrong with the home.

If it’s priced too high, you run the risk of deterring buyers. When that happens, you may have to lower the price to try to reignite interest in your house when it sits on the market for a while. But be aware that a price drop can be seen as a red flag by some buyers who will wonder what that means about the home.

To avoid either headache, price it right from the start. A real estate professional knows how to determine that ideal asking price. They balance the value of homes in your neighborhood, current market trends, buyer demand, the condition of your house, and more to find the right price. This helps lead to stronger offers and a greater likelihood your house will sell quickly.

The visual below helps summarize the impact your asking price can have:

Want To Sell Your House? Price It Right. | MyKCM

Bottom Line

Homes that are priced at current market value are still selling. To make sure you price your house appropriately, maximize your sales potential, and minimize your hassle, let’s connect.

Posted in Selling Your Home
Jan. 20, 2023

What’s Really Happening with Home Prices?

 

What’s Really Happening with Home Prices? [INFOGRAPHIC] | MyKCM

Some Highlights

  • If you’re thinking about selling your house, recent headlines about home prices falling month-over-month may have you second guessing your decision—but perspective matters.
  • While home prices are down slightly month-over-month in some markets, home values are still up almost 10% nationally on a year-over-year basis. A nearly 10% gain is still dramatic compared to the more normal level of appreciation, which is 3-4%.
  • Let’s connect to find out how much equity you have in your current home and how you can use it to fuel your next purchase.
Jan. 19, 2023

Pre-Approval in 2023: What You Need To Know

 

Pre-Approval in 2023: What You Need To Know | MyKCM

One of the first steps in your homebuying journey is getting pre-approved. To understand why it’s such an important step, you need to understand what pre-approval is and what it does for you. Business Insider explains:

“In a preapproval [sic], the lender tells you which types of loans you may be eligible to take out, how much you may be approved to borrow, and what your rate could be.”

Basically, pre-approval gives you critical information about the homebuying process that’ll help you understand your options and what you may be able to borrow.

How does it work? As part of the pre-approval process, a lender will look at your finances to determine what they’d be willing to loan you. From there, your lender will give you a pre-approval letter to help you understand how much money you can borrow. That can make it easier when you set out to search for homes because you’ll know your overall numbers. And with higher mortgage rates impacting affordability for many buyers today, a solid understanding of your numbers is even more important.

Pre-Approval Helps Show You’re a Serious Buyer

Another added benefit is pre-approval can help a seller feel more confident in your offer because it shows you’re serious about buying their house. A recent article from Forbes notes:

“From the seller’s perspective, a preapproval [sic] letter from a reputable local lender often can make the difference between accepting and rejecting an offer.”

This goes to show, even though you may not face the intense bidding wars you saw if you tried to buy during the pandemic, pre-approval is still an important part of making a strong offer. In fact, Christy Bieber, Personal Finance Writer at The Motley Fool explains it may be the most important part of making an offer:

“Pre-approval maximizes the chances you’ll be able to actually close the deal – and sellers want to see that.

The fact that a pre-approval gives you a better chance of getting your offer accepted is undoubtedly the most important reason to complete this step . . .”

Bottom Line

Getting pre-approved is an important first step towards buying a home. It lets you know what you can borrow and shows sellers you’re serious about purchasing their home. Connect with a local real estate professional and a trusted lender so you have the tools you need to purchase a home in today’s market.

Posted in Buying a Home
Jan. 18, 2023

Have Home Values Hit Bottom?

Have Home Values Hit Bottom? | MyKCM

 

Whether you’re already a homeowner or you’re looking to become one, the recent headlines about home prices may leave you with more questions than answers. News stories are talking about home prices falling, and that’s raising concerns about a repeat of what happened to prices in the crash in 2008.

One of the questions that’s on many minds, based on those headlines, is: how much will home prices decline? But what you may not realize is expert forecasters aren’t calling for a free fall in prices. In fact, if you look at the latest data, there’s a case to be made that the biggest portion of month-over-month price depreciation nationally may already behind us – and even those numbers weren’t significant declines on the national level. Instead of how far will they drop, the question becomes: have home values hit bottom?

Let’s take a look at the latest data from several reputable industry sources (see chart below):

Have Home Values Hit Bottom? | MyKCM

The chart above provides a look at the most recent reports from Case-Shiller, the Federal Housing Finance Agency (FHFA), Black Knight, and CoreLogic. It shows how, on a national scale, home values have changed month-over-month since January 2022. November and December numbers have yet to come out.

Let’s focus in on what the red numbers tell us. The red numbers are the change in home values over the last four months that have been published. And if we isolate the last four months, what the data shows is, in each case, home price depreciation peaked in August.

While that doesn’t guarantee home price depreciation has hit bottom, it confirms prices aren’t in a free fall, and it may be an early signal that the worst is already behind us. As the numbers for November and December are released, data will be able to further validate this national trend.

Bottom Line

Home prices month-over-month have depreciated for the past four months on record, but there’s a strong case to be made that the worst may be behind us. If you have questions about what’s happening with home prices in our local market, let’s connect.

Jan. 17, 2023

Think Twice Before Waiting for 3% Mortgage Rates

 

Think Twice Before Waiting for 3% Mortgage Rates | MyKCM

Last year, the Federal Reserve took action to try to bring down inflation. In response to those efforts, mortgage rates jumped up rapidly from the record lows we saw in 2021, peaking at just over 7% last October. Hopeful buyers experienced a hit to their purchasing power as a result, and some decided to press pause on their plans.

Today, the rate of inflation is starting to drop. And as a result, mortgage rates have dipped below last year’s peak. Sam Khater, Chief Economist at Freddie Macshares:

“While mortgage market activity has significantly shrunk over the last year, inflationary pressures are easing and should lead to lower mortgage rates in 2023.”

That’s potentially great news if you’re a buyer aiming to jump back into the housing market. Any drop in mortgage rates helps boost your purchasing power by bringing down your expected monthly mortgage payment. This means the lower mortgage rates experts forecast this year could be just what you need to reignite your homebuying goals.

While this opens up a window of opportunity for you, remember: you shouldn’t expect rates to drop back down to record lows like we saw in 2021. Experts agree that’s not the range buyers should bank on. Greg McBride, Chief Financial Analyst at Bankrateexplains:

“I think we could be surprised at how much mortgage rates pull back this year. But we’re not going back to 3 percent anytime soon, because inflation is not going back to 2 percent anytime soon.

It’s important to have a realistic vision for what you can expect this year, and that’s where the advice of expert real estate advisors is critical. You may be surprised by the impact even a mild drop in mortgage rates has on your budget. If you’re ready to buy a home now, today’s market presents the opportunity to get a more affordable mortgage rate, find your dream home, and face less competition from other buyers.

Bottom Line

The recent pullback in mortgage rates is great news – but if you’re ready to buy now, holding out for 3% is a mistake. Work with a local lender to learn how today’s rates impact your goals, and let’s connect to explore your options in our area.

Posted in Buying a Home