Blog - Fort Collins Homes

Is The Market Shifting?

Several indicators, including less offer competition, a decline in contract signings, and an increasing trend for buyers to feel remorse after their competing offer is accepted, all point to a changing market.

Lawrence Yun, chief economist for the National Association of REALTORS, notes that pending home sales have seesawed since January, 2021, indicating a turning
point for the market. “Buyers are still interested and want to own a home, but record-high home prices are causing some to retreat”, according to Yun.

Yun points to an increase in existing home sale prices of 23% between June, 2020 and June, 2021.

An anticipated rise in mortgage rates toward the end of the year in addition to higher overall home prices will add to the challenges that home buyers face.
Yun predicts the 30-year fixed-rate mortgage to increase to 3.3% by the end of the year and average 3.6% in 2022.

While bidding wars are still more common than a year ago, economists are noticing less competition. As more housing inventory gradually enters the market, buyers may face some relief.

In June, Redfin reported 65% of home offers faced competition, compared to 72.1% in May and 74.1% in April. But multiple offer situations are still higher than June, 2020, when the bidding rate stood at 56.8%.

Housing experts continue to note increasing buyer fatigue.

After losing out on a bidding war or getting priced out, some home buyers are choosing to wait for the market to ease before jumping back in.

Another emerging trend shows more listings returning to the market due to home buyers second guessing their accepted offer price, and subsequently backing out of the contract.

While a buyer may take an “I’ll offer anything” approach to win a bidding war, their enthusiasm for an accepted offer can wane as they crunch the numbers and experience pangs of regret over the price they agreed to pay. Flaws with the home that were initially overlooked may become more significant in the days leading up to closing.

These buyers may then look for an exit strategy, including the inspection contingency, assuming they didn’t waive it.

If they walk away from the deal, the house may go back on the market, sometimes with a stigma that there’s something wrong with it.

This trend continues to play out as bidding wars for a limited number of houses have grown more commonplace.

The housing market traditionally starts to ease as it heads into the fall. But real estate has hardly followed any historical normalcy over the past year since the pandemic.

Give me a call to talk about how to capitalize on the current real estate market!

Source: magazine.realtor

Is There a Housing Market Slowdown?

The rate of home price growth may be showing signs of slowing, and the competition for homes may be easing somewhat.

“The market’s topping out,” according to Mark Zandi, Chief Economist at Moody’s Analytics. It’s “starting to show cracks. It feels like we’ve hit the apex, and we’re moving to the other side of it.”

But that doesn’t mean the housing market is heading for a bubble. Real estate economists have long said the current frenzy in the housing market is not reminiscent of
the housing bubble nearly a decade ago.

Nationally, median home asking prices are more than 12% higher than they were after the first half of 2020.

Total national housing inventory is down 42% year over year as of June, 2021. There is still a severe shortage of homes for sale and some buyers are getting priced out of
the market.

Economists are generally predicting an overall slowdown in prices and more moderation. Many potential home buyers are still eager to purchase so they can take
advantage of low mortgage rates.

In Colorado, a strong month for new listings in June helped give potential homebuyers a little hope and opportunity. However, the volume of sales and homes going under
contract continued to grow as well.

Statewide, new listings in June rose 20% to just over 12,000 homes. Offsetting those new listings, June also delivered 10,256 homes statewide under contract. Further
diluting the gains in new inventory, another 9,857 single-family properties closed statewide according to the latest data from the Colorado Association of REALTORS® (CAR).

Across Colorado, average sale prices continue to set record highs that are as much as 50% higher compared to early summer of 2020, and inventory remains lower than a year ago at that time. However, there are some signs that suggest a slowing in some areas.

Colorado agents report a slowdown in showings, a reduced number of offers being submitted by buyers, and some price reductions showing up for homes that have not sold.

This is typical market activity for July and into August so the real question of whether the market is changing will be determined in the fall.

In spite of the signs suggesting a quieting of the market, prices are not expected to come down.

Danielle Hale, realtor.com®’s chief economist, believes, “Buyers aren’t going to get a deal, but they might be competing with fewer offers.”

For now, buyers have an opportunity to take advantage of some price reductions and a slower pace, and still get into the market.

When the time is right, let’s talk about how you can navigate the current market and make your next move!

Sources: magazine.realtor, realtor.com, coloradorealtors.com

Home Construction Hiccups

Prices for lumber have surged more than 200% since June, 2020, adding an estimated $36,000 to the price of an average new single-family home, according to the National Association of Home Builders.

The rising and volatile costs of lumber continue to hamper the new-home and remodeling markets. Lumber prices nearly doubled over a four-month period in 2020 and have continued to reach new highs. The price and availability of building materials have been cited as one of the top challenges that homebuilders face at a time when
the real estate industry is calling for more housing inventory to meet surging buyer demand.

Forty-seven percent of builders said they were “including price escalation clauses in their sales contracts” to help protect themselves from ongoing price increases in the lumber market, according to recent builder and housing surveys.

Builders are pre-ordering lumber to help avoid cost increases, and 22% are obtaining price guarantees from suppliers. But those price guarantees don’t often stretch past two months.

The sky-high prices may soon back off: Lumber futures have posted slightly weaker numbers as of early June.

Even as prices edge down slightly, they will still be well above historic averages, even as much as twice the average compared to the past 20 years.

Believing that a decrease in lumber pricing is inevitable as higher prices tame demand, some builders are recommending a delayed start of home building projects until fourth quarter, 2021, or first quarter, 2022.

How is the Northern Colorado New Home Market Affected?

Dana Spanjer with Spanjer Homes indicated that uncertainty surrounding COVID and recent price increases have delayed spec home construction for as much as a year. Material escalation clauses are included in their contracts for clients building custom homes.

Alexa with Landmark Homes reported one listing being released at a time for contract in each of their seven Northern Colorado communities and sale prices are subject
to material pricing. Build time is 8-10 months after the initial 1-2 month process of obtaining permits.

Jim Hauan, REALTOR representative for Sage Homes, shared that lot reservations are converted to contracts after completion of the foundation so the home can be priced with current lumber costs in mind. Turn around time from contract to close is 11 months.

Give me a call to talk about opportunities for working with a local builder for your next home!

Source: magazine.realtor

6 Tips for Buyers in a Seller’s Market

Inventory is bleak, but there are still ways you can find the right home.

The seller’s market is only getting stronger in 2021 as home prices continue to rise and inventories hit record lows across the country. While mortgage rates have inched up slightly, they remain low. Here are ways you can navigate the current seller’s market as a buyer.

1. Stay on top of your game.
Be clear about exactly what features you want in a home. There is no time to waste seeing homes that don’t fit the bill. Look at new
listings asap, and jump on opportunities as quickly as you can to stay competitive. Responsiveness and communication are key.
2. Have realistic expectations.
A lowinventory market is not a great time to wait for the perfect home to come along. Adjust your expectations about nonnegotiables. Paint colors can be changed, and additions can even be made in time, but things like location and lot size are permanent. Be prepared to accommodate the seller’s needs in many cases.
3. Avoid seeing houses at the top of your budget.
Inventory is low and competition is high. Homes are selling for more than list price, and bidding wars are common. If you’re already at the top of your budget and being asked to go even higher, it’s probably not a good use of your time to see homes at the maximum price range for which you are qualified. Consider homes at the lower or middle tier of your budget and leave room to bid a little higher than asking if necessary.
4. Consider alternative neighborhoods.
You may increase your buying opportunities by exploring neighborhoods that you may have not previously considered. Be open to seeing homes that fit your preferences but are located in areas that may not be your first choice.
5. What can you do to sweeten the deal?
Homes are frequently selling within a few days of being listed for sale, and multiple offers are common. When sellers are receiving multiple competitive offers in a short amount of time, anything you can do to help your offer stand out will put your offer ahead. Accommodating the seller’s specific needs and requests, and limiting contingencies, will improve your chances of having your offer accepted.

Life as we know it has changed, and for how long no one can be certain.

My service to you includes staying up to date on the latest market trends, predictions, data, and strategies. Give me a call to discuss your housing goals and how we can accomplish them together!

Source: Realtor magazine

Common Springtime Plumbing Issues

Spring brings warm weather, sunshine and an abundance of flowers, but it can also bring unique plumbing problems. As the weather warms up, be on the lookout for these four springtime plumbing issues.

Leaky Plumbing
Cold winter temperatures can cause pipes to contract or freeze, causing tiny cracks. Warmer weather causes pipes and these tiny cracks to expand. Dripping pipes, standing water, a musty odor or a mysterious increase on your water bill all suggest plumbing leaks. Fix leaking pipes right away to prevent water damage and mold growth.

Low Water Pressure
Poor water pressure can be caused by plumbing leaks inside your home or from outside pipes that lead into the house. Because plumbing leaks can be hard to locate, contact a plumber to find them and make needed repairs.

Slow Draining Sinks and Backed Up Pipes
Soil soaked by spring rains can put pressure on old or weak sewer pipes, causing backed-up sinks and toilets, as well as sewer water flooding your yard. The warmer weather also spurs plant growth, and tree roots can grow through a small crack in a drain line, causing a blockage. Backed up pipes area serious problem that need immediate
attention from a qualified plumber.

Sump Pump Failure
Early in the spring, have your sump pump checked to make sure it’s working properly. That way, you can easily avoid a flooded basement. Spring is just around the corner and
now is the time to make sure your plumbing survived the winter and will give you consistent support through the warmer months to come!

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