This Isn’t a Bubble. It’s Simply Lack of Supply. [INFOGRAPHIC]

by Suzanne Ekeler

Some Highlights

In a recent article, Lawrence Yun, Chief Economist for the National Association of Realtors (NAR), discussed the state of today’s housing market.
When addressing whether or not today’s high buyer competition and rising home prices are evidence of a housing bubble, Yun said that this “is not a bubble. It is simply lack of supply.”
Today’s housing market is healthy, and rising prices are driven by real buyer demand. Let’s connect to talk about the best ways to navigate such an energetic market.

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Blog • Buyers • Buyers & Sellers • Friday Fun Facts • Sellers • Windsor Real Estate • April 23, 2021

Future of Work

by Suzanne Ekeler

This week we had the opportunity to hear a presentation by Ed McMahon who is the Senior Fellow for Sustainable Development at the Urban Land Institute.

He is a leading expert on the future of housing and development in the United States.

He sees that Colorado is positioned to massively benefit from the work from home shift taking place across the Country.

Ed cited that only 1 in 10 companies expect employees to come back to the office to work full time. The believes the future of work is a hybrid model where most employees are mixing their work hours between the company office and their home office.

What does this mean for housing demand?

Smaller cities (like Denver), suburbs and high-amenity small towns will benefit.

He sees that those places with a high quality of life will benefit the most.

Bottom line, if people are untethered from their corporate office and can live anywhere, they will choose to live in places that are nice to live.

Colorado is certainly high on the list of high-amenity and high-quality places.

So, the new work from home dynamic is another reason to be bullish on the future of Colorado real estate.

Blog • Buyers • Buyers & Sellers • April 20, 2021

Buying with Remodeling in Mind

by Suzanne Ekeler

A man and woman sit looking at blueprints as they prepare to remodel their newly purchased home.

Everyone has their own definition of a dream home. For some, they know right when they see a home that it’s perfect as is. For others, it takes remodeling to achieve their vision. Whether you’re looking for something in need of a few upgrades or a total fixer-upper, buying with the intention of remodeling comes with added considerations.

Finding the Right Home to Remodel

When it comes to choosing the right home to remodel, you’ll want to look for a property that not only aligns with your renovation plans but has significant ROI potential. How much value a home stands to gain depends on a variety of factors, like the cost of the project and your local market conditions. Knowing this information will help paint a picture of a home’s potential ROI. By conducting detailed Comparable Market Analyses (CMAs), your Windermere agent can provide helpful info on how similar homes in the neighborhood have performed on the market. Though these factors don’t provide a concrete valuation, they will help you understand how much your home could be worth.

Choose the Right Remodeling Projects

The right remodeling projects are the ones that align with your plans for living in the home. If you’re looking for an investment property, you’ll be targeting renovation projects that appeal to buyers, like a kitchen remodel, attic conversions, garage door replacement, and exterior projects that boost the home’s curb appeal. However, if you’re planning on putting down roots and staying for an extended period of time, you’ll want to focus on projects that maximize your enjoyment of the space. In either case, any structural issues require immediate attention and should be at the top of your list.

Know Your Remodeling Budget

Your remodeling budget will help you determine the scope of renovations you’re able to afford, and ultimately, which home is right for you. Knowing this information will help your agent identify which homes fall within your range. It will also guide your conversations with your lender when structuring your loan. For more information on home renovation loans, talk to your Windermere agent.

Break Down Your Remodeling Costs

Although remodel cost estimates aren’t always final, they give you an idea of what you can expect to spend. No renovation comes without hurdles and complications, so leave some wiggle room in your budget for unforeseen costs. This will allow you to expect the unexpected and stay within your budget. A cost breakdown will also help to identify areas where you can save money by doing-it-yourself. Painting projects, landscaping, and small-scale demolition are common DIY projects that can add up to significant savings.

Find the Right Contractor

For the remodeling projects that require professional expertise, finding the right contractor is another pivotal step in making your dream home a reality. Start by reaching out to your circle of friends and family for referrals. If someone you know and trust had a positive experience with a contractor, that’s a great starting point. Continue your search by gathering information for multiple contractors in your area and request project bids and timelines from each one. This will allow you to compare pricing and make a more informed decision.

Conduct Thorough Inspections Before Remodeling

Buying a home with the intention of remodeling means that a home inspection is likely to produce a longer list of items than a newly constructed home. Conducting a thorough home inspection is critical to formulating your plans for remodeling. Additionally, it will help identify which issues need immediate attention, enabling you to negotiate repairs and concessions, so long as the inspection is performed during your inspection contingency period.

Blog • Buyers & Sellers • Economics 101 • Sellers • April 19, 2021

Why Forbearance Households WON’T become Foreclosures?

by Suzanne Ekeler

There has been a lot of discussion as to what will happen once the 2.3 million households currently in forbearance no longer have the protection of the program. Some assume there could potentially be millions of foreclosures ready to hit the market. However, there are four reasons that won’t happen.

1. Almost 50% Leave Forbearance Already Caught Up on Payments

According to the Mortgage Bankers Association (MBA), data through March 28 show that 48.9% of homeowners who have already left the program were current on their mortgage payments when they exited.

26.6% made their monthly payments during their forbearance period
14.7% brought past due payments current
7.6% paid off their loan in full

This doesn’t mean that the over two million still in the plan will exit exactly the same way. It does, however, give us some insight into the possibilities.

2. The Banks Don’t Want the Houses Back

Banks have learned lessons from the crash of 2008. Lending institutions don’t want the headaches of managing foreclosed properties. This time, they’re working with homeowners to help them stay in their homes.

As an example, about 50% of all mortgages are backed by the Federal Housing Finance Agency (FHFA). In 2008, the FHFA offered 208,000 homeowners some form of Home Retention Action, which are options offered to a borrower who has the financial ability to enter a workout option and wants to stay in their home. Home retention options include temporary forbearances, repayment plans, loan modifications, or partial loan deferrals. These helped delinquent borrowers stay in their homes. Over the past year, the FHFA has offered that same protection to over one million homeowners.

Today, almost all lending institutions are working with their borrowers. The report from the MBA reveals that of those homeowners who have left forbearance,

35.5% have worked out a repayment plan with their lender
26.5% were granted a loan deferral where a borrower does not have to pay the lender interest or principal on a loan for an agreed-to period of time
9% were given a loan modification

3. There Is No Political Will to Foreclose on These Households

The government also seems determined not to let individuals or families lose their homes. Bloomberg recently reported:

“Mortgage companies could face penalties if they don’t take steps to prevent a deluge of foreclosures that threatens to hit the housing market later this year, a U.S. regulator said. The Consumer Financial Protection Bureau (CFPB) warning is tied to forbearance relief that’s allowed millions of borrowers to delay their mortgage payments due to the pandemic…mortgage servicers should start reaching out to affected homeowners now to advise them on ways they can modify their loans.”

The CFPB is proposing a new set of guidelines to ensure people will be able to retain their homes. Here are the major points in the proposal:

The proposed rule would provide a special pre-foreclosure review period that would generally prohibit servicers from starting foreclosure until after December 31, 2021.
The proposed rule would permit servicers to offer certain streamlined loan modification options to borrowers with COVID-19-related hardships based on the evaluation of an incomplete application.
The proposal rule wants temporary changes to certain required servicer communications to make sure borrowers receive key information about their options at the appropriate time.

A final decision is yet to be made, and some do question whether the CFPB has the power to delay foreclosures. The entire report can be found here: Protections for Borrowers Affected by the COVID-19 Emergency Under the Real Estate Settlement Procedures Act (RESPA), Regulation X.

4. If All Else Fails, Homeowners Will Sell Their Homes Before a Foreclosure

Homeowners have record levels of equity today. According to the latest CoreLogic Home Equity Report, the average equity of mortgaged homes is currently $204,000. In addition, 38% of homes do not have a mortgage, so the level of equity available to today’s homeowners is significant.

Just like the banks, homeowners learned a lesson from the housing crash too.

“In the same way that grandparents and great grandparents were shaped by the Great Depression, much of the public today remembers the 2006 mortgage meltdown and the foreclosures, unemployment, and bank failures it created. No one with any sense wants to repeat that experience…and it may explain why so much real estate equity remains mortgage-free.”

What does that mean to the forbearance situation? According to Black Knight:

“Just one in ten homeowners in forbearance has less than 10% equity in their home, typically the minimum necessary to be able to sell through traditional real estate channels to avoid foreclosure.”

Bottom Line

The reports of massive foreclosures about to come to the market are highly exaggerated. As Ivy Zelman, Chief Executive Officer of Zelman & Associates with roughly 30 years of experience covering housing and housing-related industries, recently proclaimed:

“The likelihood of us having a foreclosure crisis again is about zero percent.”

Blog • Buyers • Buyers & Sellers • Economics 101 • Friday Fun Facts • April 16, 2021

Record Highs

by Suzanne Ekeler

While our temperatures felt like record lows this week, real estate prices have been hitting record highs along the Front Range.

Here is the average price for residential sales so far this year in each of our Front Range markets (includes both single-family and multi-family):

Fort Collins = $567,000
Loveland = $449,000
Windsor = $537,000
Greeley = $376,000
Metro Denver = $544,000

These prices are generally up 10% or more compared to last year.

If you are curious to know what your personal property is worth today, even if you aren’t considering moving any time soon, we are happy to do the research for you. Just let us know!

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At Windermere Real Estate we are taking Social Distancing very seriously and are following our Safe Showings protocol.

Buyers & Sellers • Sellers • April 13, 2021

The Risks of FSBO

by Suzanne Ekeler

A young woman and man sit at their dining room table sorting through paperwork.

Selling a home is a complex process that requires patience, knowledge of the market, and a deep understanding of the financial processes. And that’s just the beginning. Accordingly, many homeowners trust in a professional to sell their home by working with a real estate agent. Despite the expertise an agent brings to the table, some homeowners choose to go it alone, bearing the responsibility of a successful home sale on their own shoulders. If you’re thinking about selling “For Sale by Owner”, or FSBO, know that there are certain risks and obstacles that can easily cause your home selling journey to veer off course.

The Risks of FSBO

Real estate agents are professionals who possess a vast knowledge of both the industry at large and local market conditions acquired through years of training, certifications, and working with clients. For FSBO sellers, the complexities of the home selling process can easily illuminate a lack of experience and leave them feeling unsure of how to continue, or worse, situations may arise where proceeding incorrectly could jeopardize the transaction. This lack of expertise could lead to incorrectly pricing your home, which will attract the wrong buyers. An accurately priced home requires market knowledge and an objective approach to the home’s value, which can be tough for homeowners. The more time an overpriced home spends on the market, the more likely the price will have to be lowered. A home with a lowered price that has been on the market for some time is less appealing to buyers than an accurately priced new listing. An underpriced home could leave significant money on the table for the seller.

A common motivating factor for wanting to sell FSBO is that, in the case of a successful sale, the seller avoids paying commission to an agent. However, what that commission ultimately pays for is a vast skill set that is specifically trained to get you the most money for your home. Agents not only have access to all kinds of information on local market conditions, trends in the real estate market, and data on comparable homes in your area, they are also connected to a network of potential buyers and have the marketing know-how for appealing to them and any others in your market. To attempt to approach this same level of visibility while selling FSBO means incurring additional expenses like ad placement, signage, hiring a photographer, and more.

Selling a home takes up a great deal of time. FSBO sellers can expect to stage the home, host showings and tours, answer phone calls from buyers, interview home inspectors, and coordinate open houses, all while gathering data on the local market—and that’s all before any negotiations or paperwork. When an offer comes through, FSBO sellers must dive into the extensive documentation required for the mortgage, title transfer, and any other legalese involved in the transaction. It’s like having another job that you may simply not have time for, whereas a real estate agent’s job is to dedicate their time, energy, and experience to the successful sale of your home.

All these factors make selling FSBO a risky proposition. Mistakes in the selling process can lead to both financial and legal implications, but part of a real estate agent’s expertise is knowing how and when these dangers can arise and navigating them properly. If you’re looking to sell your home, we’re happy to connect you with an agent here: Connect With an Agent

Buyers & Sellers • Home Living • Sellers • April 9, 2021

7 Ideas for Creating a Beautiful Yard

by Suzanne Ekeler

A craftsman house with a healthy green lawn and well-tended shrubbery lining the driveway.

Spring is in the air and homeowners everywhere are preparing for a season of tending to their yards. Whether you’re looking to tackle a complete makeover, boost your home’s curb appeal, or simply make a few DIY upgrades, these ideas will help you make the most of your home’s landscaping.

1. Remodel Your Patio

The best patios are durable and long-lasting. If your patio requires repair, a remodel can play a significant role in creating the beautiful backyard you envision. Think about how your patio will be used before choosing materials. For example, if you plan on using it as a dining area, an uneven material like cobblestone may not be the best choice. Design your new patio pattern, including gaps between pavers for loose materials, before getting started.

2. Upgrade Your Deck

Decks can often be the focal point of a backyard. A few upgrades can easily transform the look and feel of the space. If you are building a new deck, take your local climate into account when deciding on materials. To upgrade your existing deck, create a seating area using chairs or a bench and decorate the area with plants to make it feel more welcoming. Pergolas and patio umbrellas will help to keep the area shady and cool while adding some color to the space. If you are rebuilding, consider building in seating during construction.

3. Start a Vegetable Garden

Gardens don’t just pop up in your backyard overnight, they take time to grow. Start by building your garden beds, aligning them north to south for maximum sunlight. Choose an area of your backyard where your veggies will have direct access to sunlight, without being blocked by shade from trees and shrubs. Research your local climate to determine which vegetables you should grow and what kind of yield you can expect. To protect your garden from weeds, insert a barrier in the bottom of the beds.

4. Edge Your Walkways

Nothing catches the eye in the garden like clean, crisp edging. Edging comes in a variety of materials, from plastic to more durable options like aluminum or steel. Before you install the edging, use a lawn edger or spade to make the cuts and shape the pattern. Tap the edging it into the ground with a mallet to solidify it into the ground and to protect it from animals.

5. Add Landscape Lighting

A beautiful backyard deserves to be enjoyed around the clock. Landscaping lighting can extend those days spent in the yard well into the nighttime. There is an array of landscaping lighting options to choose from, including spotlights, floodlights, in-ground lighting, outdoor post lights, and more. Choose the one that best highlights the features of your yard.

6. Install a Fire Pit

Fire pits help to tie a backyard together. The style of your fire pit should match other features in your backyard to bring cohesiveness to the space. Traditional fire pits are usually accompanied by circular seating, while more modern options like fire troughs provide a centerpiece to take in surrounding views. Wood fire pits provide a classic, crackling environment, gas pits burn cleaner than wood and come with an on-off switch, while gel-powered fire pits create a smaller frame and are typically used for accent lighting.

7. Add Garden Containers

Garden containers of all shapes and sizes can be very useful in the yard, especially for homeowners with limited garden space. By adding pots, wooden boxes, or bowls to your yard, you’ll provide a flexible home for a variety of plant life. Just make sure each container has proper drainage holes. If not, you’ll need to make the holes yourself, or you can opt for self-watering pots.

Blog • Buyers & Sellers • Sellers • April 9, 2021

7 Costly Mistakes in the Selling Process

by Suzanne Ekeler

Sellers dream of a flawlessly executed home sale where everything goes smoothly, and they end up with a satisfied buyer. To achieve this ideal end goal, it’s important to be aware of the mistakes along the way that could potentially derail the sale. Mistakes in the selling process come in all sizes, but some can be more costly than others.

1. Incorrect Pricing

Simply put, sellers want to get the most value for their home. Inaccurately priced homes create complications in the selling process and can be costly. Overpriced homes are unable to compete with other homes in a more expensive bracket, reducing its appeal to buyers. The longer a home stays on the market, the more likely the seller will have to lower the price, and this could result in a final asking price that is well below what the home is worth. Underpricing can be used as a strategy to generate added interest among buyers and thereby drive up the home’s market value, but it requires that a bidding war take place among buyers.

2. Underestimating Selling Costs

There are many costs associated with selling a home that can easily pile up if not planned for. Commission fees take up a significant portion of selling costs, typically between five to six percent of the sale price. Sellers must budget for home inspections, making repairs, and staging the home to get it market-ready. During closing, sellers need to prepare for various costs including sales tax, attorney fees, and any fees related to the transfer of the title, and more. Not accounting for any of these costs can come as an unpleasant surprise.

3. Selling When Underwater

It may be tempting to think of selling a home solely as a revenue-generating event. However, if a seller still owes more on their mortgage than what their home is worth, or if the property has gone down in value, they still may not make enough money on the sale to pay off the mortgage. Any homeowner who finds themselves underwater on their mortgage should consider building more equity before they sell.

4. Selling FSBO

Selling a home “For Sale By Owner” (FSBO) presents sellers with the opportunity to save on commission fees but is a complex and risky process that can easily lead to serious costs. Not only does selling FSBO mean that the seller will incur all costs an agent would have taken on to market the home, but they are accepting added liability as well. If any mistake occurs during the offer process, negotiations, or closing, the seller finds themselves without the representation of an experienced professional. This leaves a great opportunity for costly mistakes that could potentially jeopardize the sale.

5. Failing to Disclose Repairs

If a seller fails to disclose any outstanding repairs and issues inherent in the home, they will likely come to light during the buyer’s inspection and can create a very costly situation for the seller. These losses can be avoided by being transparent about what repairs are needed ahead of time. Sellers can also opt to conduct a pre-listing inspection, which can be especially helpful in competitive markets. Disclosure rules vary by state.

6. Neglecting to Stage Your Home

Home staging is a critical element for getting the most value for a home and selling it quickly. By neglecting to stage, sellers are opening the door for lowered offers and reduced sale prices. The staging process is also the perfect time for sellers to inspect their home for any minor or cosmetic repairs that can be addressed quickly.

7. Not Choosing the Best Offer

Naturally, the highest offer received on a home may seem like the most enticing. But just because an offer may be higher than another doesn’t mean it’s the best one. It’s critical for sellers to communicate with their agent about the full terms of the offer to understand its contingencies, how it affects their bottom line, and how those components align with their needs and preferences.

If you’d like more information on selling your home and how to avoid costly mistakes, an experienced Windermere agent is ready to help. Click here to connect with an agent today.

Blog • Buyers • Economics 101 • Friday Fun Facts • April 2, 2021

New Rate Prediction

by Suzanne Ekeler

Windermere’s Chief Economist, Matthew Gardner has made his new mortgage interest rate prediction for 2021.

You can see his breakdown of interest rates and other economic factors by clicking on the image below and watching his newest video.

By the end of the year he predicts rates will rise to 3.63%. By the end of the 3rd quarter, he sees rates at 3.48%.

This would be a 0.5% increase by year-end compared to today.

What this would mean for home buyers is a 5% higher monthly payment compared to today.

Buyers & Sellers • Economics 101 • Home Living • April 1, 2021

How Will COVID-19 Impact the Housing Market?

by Suzanne Ekeler

Real Estate Investing

Throughout this crisis, you most likely have a lot of questions about how COVID-19 is impacting the housing market. We want to make sure to provide you with the most information that we can so you can know what to expect when buying or selling your home.

How Is the Economy Going to Be Impacted by COVID-19?

During the past few weeks, the federal government has enforced that non-essential businesses either move to work remotely or shut down completely. Throughout this past quarter, there was a large growth in the economy in January and February. Towards the end of this quarter, things decided to slow down because of businesses closing. In the next quarter, the economy is expected to contract. In order for the economy to still grow and sustain, congress needs to approve a fiscal stimulus. This includes giving loans to small businesses in order to function throughout this period of closures.

How Will the Economy Recover From COVID-19?

The economy will eventually recover from a potential recession. The question is whether or not the recovery will be on a “V” shaped recovery or a “U” shaped recovery. A “V” shaped recovery means that the economy goes down quickly then it recovers quickly. A “U” shaped recovery means that the economy goes down, languishes down for a while then slowly recovers. According to Windermere Chief Economist Matthew Gardner, the second half of this year will be significantly better than the first half.

How Does COVID-19 Affect Housing?

Home sellers are becoming increasingly cautious about listing their homes, meaning that the amount of listings is likely to decrease the remainder of this quarter and even into the next. They want to make sure that proper precautions are taking place before strangers enter their home. However, this doesn’t mean that every market nationwide will be as greatly impacted by COVID-19 as others. On the other hand, homebuyers have a different perspective than home sellers. They want to take advantage of the low mortgage rates. Those with sturdy jobs throughout this time are more likely to move than those who are still at risk of being laid off. People who have to take money out of the stock market to purchase a home are also less likely to purchase a home at this point as well. There will likely be a 10-15% contraction in home sales across the market.

Will Interest Rates Be Affected?

While interest rates did drop significantly a few weeks ago, they actually increased this past week. Many people were refinancing their homes, causing these interest rates to suddenly increase. It is still very likely that interest rates will drop again in the coming weeks.

What Will the Next Several Weeks Look Like?

The weeks and months to come are expected to be very difficult; however, there is a light at the end of the tunnel. Different markets will be affected in different ways, but many of them are only going to experience short term problems. Casinos and resorts are likely to take a larger hit because people will not be able to visit them. The second housing market will also likely take a hit because those are discretionary purchases. Our best advice is to continue to support small businesses if you have the means by buying gift cards and ordering out in order to support the industries affected.

This is an uncertain time for everyone in the world, but the best thing you can do is educate yourself. Understand where the economy stands and where it is expected to go, so you can make the best decisions for yourself and your family.

Some Highlights

You might also enjoy reading…

Finding the Right Home to Remodel

Break Down Your Remodeling Costs

The Risks of FSBO

1. Remodel Your Patio

2. Upgrade Your Deck

3. Start a Vegetable Garden

1. Incorrect Pricing

2. Underestimating Selling Costs

3. Selling When Underwater

4. Selling FSBO

5. Failing to Disclose Repairs

6. Neglecting to Stage Your Home

7. Not Choosing the Best Offer

How Is the Economy Going to Be Impacted by COVID-19?

How Will the Economy Recover From COVID-19?

How Does COVID-19 Affect Housing?

Will Interest Rates Be Affected?

What Will the Next Several Weeks Look Like?

2020 Real Estate Market Forecast for Denver & Northern Colorado

How’s the Real Estate Market Right Now in Colorado?

Will Colorado Feel the Next Recession?