Should I Buy or Rent in this Market?

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“To buy or to rent?” That seems to be the question lots of people are wrestling with these days with interest rates still near historic lows and the housing market continuing to gain strength in most communities.

Recent graduates, thirty-somethings, relocating professionals and even current homeowners have probably considered both scenarios recently. While each option has its pluses and minuses, the decision to purchase a home as opposed to renting is a complex one and really depends a lot on your individual circumstances.

According to a recent survey conducted for the National Association of REALTORS®, nearly eight out of 10 respondents believe buying a home today is a good financial decision. But the question that remains is whether or not now is the right time for you to buy.

For most people, buying a home is the biggest financial decision they will make in their lifetime. Here are just a few things to consider when deciding between renting and buying:

  • Do you have a steady income? Buying may be a sound financial decision for those with documented income and a good credit history. A steady income can provide a strong basis for the initial down payment and future mortgage payments. Lenders will look at your ability to repay the mortgage and how positive your credit history is when deciding if you qualify for a loan.
  • Can you cover the other expenses? When you own a single family home, you – not your landlord –will be responsible for all of the maintenance and repairs, everything from a leaky faucet to replacing a roof. Will you have enough money left over in your budget each month (after paying the mortgage, property taxes and insurance) to cover any repair issues that may pop up?
  • How long do you plan to stay in your home? Although homes often appreciate over time in most areas and many owners build equity through monthly mortgage payments that go towards the principal of the loan, values can go up or down during any period of time. Generally, the longer you plan on staying in your home, the more likely that buying may be the right move for you.
  • How much will your rent increase in the future? Obviously no one knows for sure what the future will bring, but a recent study by Trulia found that rents on average are increasing faster than home prices. In fact, homeownership remains 38% cheaper than renting nationally, and it’s less expensive in all of the 100 largest metro areas studied by Trulia. But each neighborhood and each home are different, so it’s important to do your homework.
  • How do your other options compare? For renters, calculating month-to-month housing expenses is as easy as inquiring about the monthly rent and average utilities. The calculation gets a bit more complicated when considering the monthly cost and benefits of owning a home. Buy-versus-rent calculators, which are available on websites such as ColdwellBanker.com, offer a good start in comparing the two options.

There is a lot to consider when weighing the pros and cons of buying a home, and you’ll likely have a lot of questions. The best thing that you can do before making a decision is to do your homework and become better educated on your options. I’m here to help answer your questions and find the right course for you. Give me a call or send me an email and we can get started today.

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Tips for Getting Your Home Ready to Sell

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With the spring homebuying season just around the corner, you may be thinking about putting your home up for sale. Now may be the time to list your home with strong demand from buyers and a limited number of properties on the market in most areas.

If you’re kicking around the idea of selling, you may be worried that there’s too much to do to get your house ready to market. But a few simple, relatively inexpensive steps can make a big difference when it comes time to show off your home to prospective buyers.

Many sellers use a professional “stager” to help make their home really look its best and get the greatest possible interest from buyers. These are the folks that make those model homes look so neat and beautiful with their arrangements of furniture, accessories, and gardens.

Using a professional stager may be the right move for you. But regardless of whether you decide to hire a stager or not, it may be appropriate to think like one when it comes time to get your home ready to put on the market:

  • Maximize Curb Appeal: The old saying is true: you only get once chance to make a good first impression. Make sure that the outside of your home looks as appealing as possible. Water and mow the lawn, trim the trees, cut back overgrowth and plant colorful flowers in the front and back.
  • Clear the Clutter: When it comes to staging, less is more. Having fewer things filling the rooms makes your home look both neater and roomier. It allows buyers to more easily visualize their own furnishings there. Be sure to store bicycles, gardening equipment, and children’s and pet’s toys. Also move any cars from the driveway and along the curb in front of your home.
  • Focus on the Living Areas First: A living room is an area in which potential buyers should be able to envision themselves entertaining friends or gathering with their family. With that in mind, consider making the area appear as large and functional as possible by removing any unnecessary furniture and decorations.
  • Make Your Home Anonymous: Of course you’re proud of your family, but now is not the time to show their pictures and mementos. Stow away family photos, trophies, collectibles and any other personal items. You want buyers to imagine their families in the house, and that’s hard to do with constant reminders of your family. This process can also help you declutter.
  • Make Necessary Repairs: Look at your house with a critical eye. The last thing you want potential buyers to see are chipped tiles in the bathroom, a faucet that doesn’t work, or burned out bulbs in light fixtures. All systems and appliances should be in good working condition.
  • Consider Cosmetic Improvements: Simple, cosmetic touch-ups like painting, wallpapering, adding new light fixtures, and minor landscaping, can really help a home show better. If you paint, make sure it’s in a neutral color. You don’t need to spend a lot of money on these projects to help make your home look its best but remember that if there are any problems these must be disclosed to potential buyers whether or not the problems have been remediated.
  • Give Your Home a Good Cleaning: This can be the most cost-effective thing you do in prepping your home for sale. Potential buyers will want to inspect every part of your home, from the kitchen to the bathrooms to the garage. After removing any clutter, clean the inside of the house from top to bottom. Clean carpets, spotless kitchens and bathrooms, and tidy bedrooms can help make a positive impression.
  • Add a Few Final Touches: When stagers are through decluttering a home they finish by adding a few carefully selected items for beauty – a painting in the living room, fresh flowers in the kitchen, an accent pillow for the sofa, or maybe an area rug for the bedroom.

Preparing your home for sale doesn’t have to be an overwhelming, costly endeavor. By making a few simple changes you can help make a difference when it comes time to sell. A professional REALTOR® can help you through this process and have your home ready to list in no time! Give me a call and we’ll get started today.

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Why 2015 May Finally Be the Year You Sell Your Home

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The famed investor and industrialist J. Paul Getty once said, “I like to buy when everyone’s selling and sell when everyone’s buying.” In some ways, that same adage may be just as true for Main Street as it is for Wall Street – or at least the houses on Main Street.

Over the past couple of years, homebuyers have been out pounding the pavement looking for a home to purchase. But in many communities, they’ve been frustrated by a shortage of homes for sale. There are a number of reasons why potential sellers have been sitting on the sidelines, but things may be changing in the new year.

2015 may be the year that more homeowners join the “house party” and put their home up for sale. Here are just a few thoughts on why you may want to list your property this year:

  • It’s a seller’s market in many areas. Inventory shortages have given many sellers the upper hand. In some regions, the number of homes for sale is down as much as 50 percent from just a couple of years ago. The law of supply and demand has led to price increases in many markets and therefore homes are selling at higher prices than they might have a few years ago.
  • It may be getting a little easier for buyers to get financing. According to an article by Credit.com, mortgage credit is becoming more available as lenders scale back certain requirements. Credit.com noted that the average FICO score on a conventional loan in October was 754, a five-point drop from the average score in 2013. Fannie Mae and Freddie Mac also recently unveiled a 3% down payment option. These facts may indicate that more buyers may be able to purchase your home in the coming year.
  • Steady increases in home values have given some homeowners more equity. There was a time when a number of homeowners were “underwater” on their mortgage, meaning they owed more than the home was worth. While this is still the case for some homeowners, increases in home prices have resulted in many owners building more equity in their properties – money that they may be able to use to purchase their next home.
  • Interest rates could be ticking up before long. Mortgage rates are still near historic lows, but many economists are predicting that rates will start ticking up soon. The Federal Reserve has already signaled its intention to raise rates in the second half of this year. Any increase in mortgage rates could have an impact on buyers and how much home they can afford. Listing your home before rates increase may be a prudent move.
  • Industry forecasts call for a more balanced market in 2015. The National Association of REALTORS® expects that existing home sales will be higher this year due to more homes on the market, greater consumer confidence and continued pent-up demand. “The improving job market has consumers feeling more confident, and the rebound in home prices is building household wealth for homeowners and giving them the ability to sell after waiting the last few years,” said NAR® Chief Economist Lawrence Yun.
  • No one can predict what prices will do next. Trying to time your home sale to the peak of the market is like trying to time stock sales. You never really know what’s going to happen next, and you’ll never know if you have sold at the peak of the market until after the fact. Waiting for prices to rise even more also means that the price of the replacement home you might buy could rise just as much or possibly more depending upon the location.
  • You may want to sell while it’s still a seller’s market. Just like prices, no one can predict what the future will hold for this housing market. Although it is currently a seller’s market, changes in the economy, the number of homes on the market and several other factors could turn local real estate into a buyer’s market at any time. It may make sense to sell while the scales are still tipped in your direction.

If you’ve been thinking about listing your home for sale but have been holding off, now may be a good time to make your move. I’m ready to answer any of your questions and help you determine what your home might be worth on the market. Give me a call or email me today and we can get started.

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2015 Housing Outlook

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Home sales across Colorado and all around the country were slowed in 2014, in large part by a shortage of properties on the market. That same dynamic pushed home prices much higher in many areas, even leading to multiple offers and bids over asking price for some homes.

But as we begin 2015, many industry experts are forecasting a more balanced and normalized housing market, one that sees home sales rising once again and price increases moderating as more homes come on the market for sale.

If the forecasts hold true, this could be welcome news for potential homebuyers, many of whom may have missed out on purchasing last year due to limited inventory, rising prices and bidding wars in some communities.

Nationwide, the National Association of REALTORS® expects that existing home sales will be higher this year and prices will remain at a “healthier level of growth that should benefit both buyers and sellers.”

Lawrence Yun, chief economist for NAR®, forecasts that existing-home sales in 2014 are expected to be 4.9 million, and then increase to 5.3 million in 2015 and 5.4 million in 2016. He expects the national median existing-home price will rise four percent in 2015 and another four percent in 2016. His prediction is based upon more homes on the market, greater consumer confidence and continued pent-up demand.

“The improving job market has consumers feeling more confident, and the rebound in home prices is building household wealth for homeowners and giving them the ability to sell after waiting the last few years,” Yun said.

According to a recent article in REALTOR® magazine, 2015 should present first-time homebuyers with a good opportunity to jump into the housing market after largely staying away since the housing crisis but this prediction may not be true in all areas of the country.

“In 2015, increases in employment opportunities will empower younger buyers to return to the market and fuel the continued housing recovery,” says Jonathan Smoke, chief economist for REALTOR.com®. “If access to credit improves, we could see substantially larger numbers of young buyers in the market.”

The reemergence of first time buyers is one of several forecasts for 2015 made by REALTOR.com®, including:

  • Millennials driving household formation. Households headed by Millennials are expected to see significant growth in 2015, particularly if the economy continues to make gains.
  • Existing-home sales rising. Distressed properties will make up a smaller share of that growth as investor purchases continue to play a diminishing role in the market.
  • Mortgage rates to inch up to five percent. Rates are expected to increase as the Federal Reserve increases its target rate. This could lead to an average 30-year fixed-rate mortgage of five percent by the end of 2015. (It averaged just under four percent in mid-December, according to Freddie Mac.)

REALTOR® magazine said housing affordability may fall slightly in 2015 due to home-price appreciation and rising mortgage interest rates, but any decline in affordability will probably be offset by an increase in salaries next year for many households. “When considering historical norms, housing affordability will continue to remain strong next year,” the magazine notes.

So if you’ve been sitting on the sidelines, 2015 may finally be your chance to jump into the housing market. With rates still near historically low levels and more homes expected to come on the market in the coming year, this may be your opportunity to find the home you’ve been waiting for. I’m ready to help. Please give me a call or send me an email and we’ll get started today.

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Why Fall May be a Good Time to Sell Your Home

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Colorado’s housing market has been strong this year. There have been stories of crowded open houses, multiple offers on some listings, and even bidding wars on specific properties that push prices skyward. Now that fall has arrived, some homeowners may believe that they have missed their window of opportunity to sell and that they should wait until next spring. Don’t be fooled; this may actually be a very good time to sell your home.

A combination of continued demand from serious buyers, a lack of available inventory in many of our markets, ongoing relocations into the Colorado, and a warm, cozy feeling from homes over the holidays all add up as good reasons for why autumn may be a better time to list a home than most people realize. Consider all of the following:

Continued demand from buyers. As anyone who’s followed the news this year knows, there have been more buyers than sellers for homes in the Colorado. While the number of potential buyers at open houses may have dropped off in recent weeks—which is traditionally expected during the fall—there is still far more “traffic” than we usually see at this time of year.

“Serious buyers” in the market now. During the fall months, there tend to be fewer “lookers” than in the spring and summer, and more serious buyers. These are often people who must buy for specific reasons, such as employment relocation. As a result, they are more likely to act quickly when they find the right property.

A lack of available inventory. The number of listings has been relatively low all year compared to historical averages. The shortage of available inventory has helped to push prices higher in some areas. It is expected that this time of year there will be even fewer homes than the months preceding it, and that can mean less competition and more potential buyer attention for your listing.

Great natural “staging” this time of year. There’s a certain warm feeling that comes with being in a home during the holidays. Homes just feel friendlier and cozier with holiday decorations, the fireplace glowing in the living room, and special cookies baking in the oven. These holiday touches can help “stage” a home, giving it the very best possible look and feel to sell. Buyers who walk into a home during the holidays may have an easier time envisioning their family at happy gatherings there, too.

If you’re thinking about selling your home in the fall, there are a few things you should be doing. Start with improving your “curb appeal.” Clean up flowerbeds and rake any leaves on the lawn. Make sure weeds are pulled and shrubs are pruned. In the backyard, put away any summer items like pool toys. In general, keep things clean and neat.

Embrace the holiday season and use appropriate decor. Keep decorations in tune with the holiday that’s approaching. Doing so can help potential buyers see themselves and their families enjoying the same holidays in your home. But be careful not to overdo it.

It’s also important to price your home properly. Your REALTOR® can help you determine the appropriate price – based upon recent comparable home sales in your area and the anticipated inventory of available homes. Pricing your home correctly can increase the chances of getting a good offer faster.

Finally, it’s more important than ever to work with an experienced real estate professional. Look for an agent that has a solid track record in your community and can provide you with good advice on how best to prepare and market your home during the fall season.

While fall is not traditionally seen as the best time to sell a home, as explained above, there are a lot of advantages to listing your home now – especially at a time when others might shy away from selling. With a few simple steps, you just may find that selling your home this fall may be the best move you’ll ever make.

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How to Put Your Best Foot Forward When It Comes Time to Sell Your Home

Screen Shot 2014-03-18 at 12.48.03 PMThe traditionally busy spring home buying season is rapidly approaching. Over the past year, we’ve enjoyed a strong housing market – one that featured more buyers than sellers in some communities. In fact, there just aren’t enough good listings to go around and this could be an excellent time to consider selling your property.

But even in a “seller’s market” like this, some properties sell faster than others. Have you ever wondered why one home sells almost immediately and another one down the road sits on the market for months?

There are several key reasons why some homes languish on the market, including price, condition, and other variables. My hope is that this list will help you put your best foot forward when it comes time to sell your home:

  • The price is too high. Setting the appropriate price for a home is always more difficult for a homeowner, who has personal feelings for the property, than for an experienced, objective agent. REALTORS® do a thorough market comparison of comparable homes and a careful evaluation of the home they’re listing in setting a competitive price that will attract buyers. If a home has been sitting on the market too long, the market may be sending a message that the price is too high for the area or the condition of the property.
  • There’s too much clutter. Even if a seller chooses not to use a professional stager, they need to do what all stagers do – get rid of the clutter! We all accumulate knick-knacks and mementos over the years and have a house full of family photos. But when it comes to selling a home, less is more. Sellers should put much of their personal items in storage so that buyers will be able to see the home more clearly – and see themselves living there, not the current homeowner.
  • The home isn’t marketed extensively enough. The days of sticking a sign in the front lawn and taking out a newspaper ad to sell a house are over. Today nine out of 10 buyers turn to the Internet to start their home search, according to the National Association of REALTORS®. If one home shows up quickly in Internet searches the chances of selling are better than a home that doesn’t have that same online exposure. Also, more buyers are using mobile devices and social media in their search. So it’s important to work with a real estate professional and brokerage that has a strong digital marketing strategy, such as Coldwell Banker Residential Brokerage.
  • A picture (and video) is worth a thousand words. If a home isn’t selling, the marketing may lack enough visual elements to attract potential buyers. Buyers want to see lots of photos to get a sense of what the property actually looks like inside and out. More agents are using virtual tours and YouTube videos in their marketing as well to give consumers an even greater feel for the home. Listings that lack photos or videos may leave potential buyers wondering what the seller is trying to hide, and they may be more likely to move onto the next listing in their search.
  • A seller isn’t objectively weighing offers. In a seller’s market, some homeowners have a tendency to reject early offers, thinking that they may get a higher price down the road. However, this tactic can easily backfire and result in a home being on the market for several months. And experience has shown that the longer a home sits on the market, the more challenging it can be to sell without reducing the price. If sellers are receiving bids that are close to their asking price, this may actually be a sign that their asking price is accurate for their local market.

Selling your home is one of the biggest financial transactions you’ll ever make in your life. So it’s important to work with an experienced, full-service professional REALTOR® that can get the job done right. Please give me a call and I’ll be happy to talk about the ways to get the most for your home when the time is right.

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Housing Outlook for 2014: Steady Sales and Higher Prices

As we approach the end of 2013, it’s a good time to look back at the Colorado housing market and take a peek at what might be in store for the coming year.

In comparison with recent years, 2013 was a strong year for the real estate market, both here at home and across the country. Sales posted solid gains in most areas, foreclosures and distressed sales declined, and the median sale price continued to rebound sharply from their recessionary lows.

Almost half of the 276 metro areas nationwide saw double-digit increases in home prices last year, led by Las Vegas with a gain of 32%, according to Clear Capital, a national real estate data and analytic firm.

The Denver-Aurora Metro Area’s median sale price hit $263,000 this year, an 11.6% increase from a year ago, according to Clear Capital.

The housing market benefited from a slow but steady improvement in the economy and the job market, as well as mortgage interest rates that ticked up slightly in 2013 but still remained attractive.

The challenge for many communities wasn’t finding buyers for homes – it was finding enough homes to meet strong buyer demand. That led to multiple offers on homes in many instances and resulted in sale prices exceeding asking prices for a number of properties.

The National Association of REALTORS® said existing home sales should reach nearly 5.13 million units when this year is over, up 10% from last year. And the median sale price, according to NAR®, is expected to be up 11% from a year ago.

So what can we expect for 2014? While no one has a crystal ball, industry experts believe home sales will remain near or slightly above 2013’s level. Additionally, economists are looking for prices to continue climbing due to a stronger economy, lower unemployment, and a shortage of homes available for sale.

NAR®’s Chief Economist Lawrence Yun forecasts existing home sales to hold fairly even at about 5.12 million in 2014 and the median sale price to increase nearly 6% with inventory shortages being felt again next year.

Meanwhile, the Kiplinger Letter, in its annual economic forecast issue, calls for a 4% increase in existing home sales to 5.2 million units. The publication says new home sales are likely to jump about 16% next year after soaring 36% in 2013 and 20% in 2012.

Both Kiplinger and NAR® believe a shortage of inventory will continue to be a factor next year.

“Housing starts are the only way to alleviate inventory shortages,” Yun said. New home construction is expected to reach 1.13 million units next year, he forecasts, well short of the underlying demand of about 1.5 million.

While 2013 saw a strong seller’s market in many areas, the pendulum started swinging back to a better balance between buyers and sellers in recent months. That’s encouraging news for those buyers who have either sat on the sidelines or lost out in multiple offer situations.

Although housing experts like NAR’s® Yun expect continued strong sales and rise in home values, they see a less frenzied, less competitive market in the new year for buyers with fewer multiple offer situations and less bidding up of sale prices.

So if you’ve been thinking about buying a home, now may be the time to get into the market and take advantage of these more favorable market conditions. And if you’ve been thinking about selling, there will likely continue to be healthy demand for your home from buyers in the coming year.

Only time will tell how 2014 will turn out for our local real estate market, but for now the housing market forecasts should give both potential homebuyers and sellers reason to celebrate the new year in style!

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