Blog - Fort Collins Homes

Is It Time To Downsize?

Downsizing Your Home To Reduce Debt - Requirements & Challenges

At some point, most older adults will consider moving to a smaller space. Roughly fifty-one percent of retirees ages 50 and over move into smaller homes after retirement, while sixty-four percent of seniors say they plan to stay in their current homes.

How do you decide to stay in your home or move?

Downsizing and decluttering can make life easier and safer. It can also be stressful and emotional, especially if you’ve lived in one place for a while.

When you downsize your house, you not only cut down on spending for frequent purchases like groceries, you often end up downsizing household bills like your mortgage payment, energy costs, and maintenance requirements.

The potential windfall in the form of home equity from the sale of your present home can help you buy a home that better suits your needs today.

Questions To Ask
If you’re thinking about downsizing, consider these questions:

• Do the original reasons I bought my current house still stand, or have my needs changed since then?
• Do I really need and want the space I have right now, or could somewhere smaller be a better fit?
• What are my housing expenses right now, and how much could I save by downsizing?
• Can I afford to stay in my current home for five, ten, or twenty more years?
• Is my yard easy to maintain?
• Do I feel isolated?
• Do I have too much stuff to manage?
• Do I have a lot of equity in my home?

Why Downsize?
Knowing the benefits of downsizing may help you decide whether to move forward or not.

• A more intimate home environment. While larger homes are great when you have a family, many smaller homes offer open floor plans that also make socializing easy.
• Safety. Stairs, multiple levels, outdated bathrooms, or long driveways and walkways become more dangerous as we age. Moving to a one-floor space that’s easy to access and navigate can help you age in place longer.
• Medical needs. Seniors with chronic conditions or needing more frequent medical care may need to relocate to be near their doctor or adult day care, or move into a space that can accommodate specific medical equipment.
• Better weather. One study shows that 25 percent of older adults plan to move to a warmer climate.
• More freedom. With less financial stress and maintenance responsibilities comes more freedom to live your life outside of your home.
• Simplify your lifestyle. The less you have, the less you have to maintain. A larger home also requires a larger amount of maintenance. If you are older or living alone, that upkeep can end up taking up a large amount of your time.

Bottom Line
If you’re looking to save money, downsizing your home could help you accomplish your goal. Give me a call to discuss your housing goals for the coming year.

Sources: www.keepingcurrentmatters.com, raleighrealtyhomes.com, www.seniorliving.org

Who’s Buying And Who’s Selling?

The NATIONAL ASSOCIATION OF REALTORS® Profile of Home Buyers and Sellers is an annual survey of home buyers and sellers who recently completed a transaction, and has been published since 1981.

The annual report provides insight into detailed buying and selling behavior. Let’s take a look!

In 2021, as buyers moved to be near friends and family, or felt the need for a larger home, the average distance moved from the last home increased from 15 miles to 50 miles.

During the second half of 2022, housing affordability was an ongoing theme with both the rise in home prices and the recent rise in mortgage interest rates. That year, the share of first-time buyers shrunk to just 26 percent, the smallest share since data collection started.

In 2022, 97% of first-time buyers financed their home purchase with a down payment of six percent, similar to 2021. In comparison, the share of repeat buyers who financed their purchase dropped to 73 percent from 83 percent in 2021 with a typical down payment of 17 percent.

For 47 percent of buyers, the source of the down payment came from their savings. Thirty-eight percent of repeat buyers cited using the proceeds from the sale of a primary residence, while 22 percent of first-time buyers used a gift or loan from friends or family for the down payment.

The age of both first-time buyers and repeat buyers climbed to the highest levels reported. The typical first-time buyer in 2022 was 36 years old, rising from 33 in 2021, while the typical repeat buyer age climbed to 59 years.

Twelve percent of buyers purchased a new home, and 88 percent of buyers purchased a previously-owned home.

For buyers, 49 percent cited quality of the neighborhood as the most important factor determining the location. Convenience to friends and family and overall affordability of homes were both cited at 37 percent.

In 2022, buyers typically searched for their home for 10 weeks, an increase from eight weeks seen in the 2020 and 2021 reports. Ninety-six percent of buyers used online tools in the search process.

The typical home seller was 60 years old, an increase from 56 in 2021.

For all sellers, the most commonly cited reason for selling their home was the desire to move closer to friends and family (21 percent), moving due to retirement (11 percent), or the neighborhood becoming less desirable (11 percent).

Sellers typically lived in their home for 10 years before selling. This is an increase from eight years in the 2021 report, but reverts back to the same tenure seen in 2019 and 2020.

Source: National Association of REALTORS

Commercial And Residential Real Estate Continues To Ride The Tailwinds

Both the residential and commercial markets in Northern Colorado are robust according to industry experts, despite the headwinds of higher interest rates, a potential recession and changes in how Americans work.

Residential
The residential market experienced upheaval in the past several years with growth during the pandemic followed by a dip starting in 2022 as interest rates ticked up.

Longmont and Johnstown were among the communities topping the charts for sales over the past couple of years. Median prices are rising but not at the previous rate of growth.

The Northern Colorado population continues to grow. By 2050, the Weld County population is forecast to reach 610,000 people and the estimate for Larimer County is 495,000 people. That means more homes will be needed.

Key points:
• Inventories will remain low, but the number of potential buyers has declined because of interest rates. Homeowners with mortgage rates below current market rates are reluctant to move.
• Builders are not keeping up with demand, even though newly built homes are selling a bit slower compared to 2021 and 2022.
• Home appreciation is expected to be flat or see a slight increase.
• Inflation will taper off.
• If a recession happens, it will be a slowdown instead of a full-fledged recession.
• The market is normalizing compared to recent years that were epitomized by “rushes”. Since 2020, 75% of the people who bought houses express “buyers remorse” which could result in increased sales activity as people attempt to correct their situations.

Commercial
In comparison, the commercial market in Northern Colorado remains better than most.

Short-term interest rates, which jumped from 3% to 7.5% in a short period of time, affected construction loans and likely caused some projects to be delayed. As rates begin to level off, they will remain manageable at about 5%.

Compared to the prior year, retail commercial properties have recovered fairly well with supply and demand in balance. Fort Collins retail has completely recovered from the pandemic, and Greeley has almost recovered. Overall along the Front Range, construction of new retail is low.

The office market is the segment in most distress since the pandemic forced many office workers to move home. Nationwide, the return-to-office rate has been about 50%.

Since Northern Colorado doesn’t have as many large corporate offices as found in Denver, its vacancy rates have been lower.

Larimer office vacancies are at 5.7% and Weld’s vacancy rates are at 7.6%, compared with 15.4% in Denver.

The bright spot in commercial real estate, like last year, has been industrial and warehouse uses. Industrial rental rates are growing 4% in Weld County and 6% in Larimer, and everything that’s been built is being absorbed.

By comparison, and taking Amazon distribution center in Loveland out of the equation, industrial is seeing five times more demand than office and retail.

Call me to discuss your future ideas about buying and selling!

Source: bizwest.com

FHA Borrowers Will Pay Reduced Mortgage Insurance Premiums

300+ Free Dollar Sign & Money Images - Pixabay

On February 22, 2023, the Department of Housing and Urban Development released details of a long-anticipated plan to reduce the annual MIP (mortgage insurance premiums) that are currently charged to FHA borrowers by 30 Basis Points (0.3% of the loan balance).

The FHA mortgage insurance premium is the monthly fee homeowners pay to insure their mortgages. The fee is calculated as a percentage of the loan amount and paid in addition to the monthly principal and interest payments.

The annual FHA mortgage insurance premium will reduce from 0.85% to 0.55% for most new borrowers.

The National Association of REALTORS® applauded HUDs move to reduce the MIP for Federal Housing Administration loans, saying the financial relief will help more homeowners and buyers weather affordability challenges, and potentially save borrowers with FHA-backed mortgages hundreds of dollars a year.

FHA loans offer down payment options as low as 3.5% to first-time and low- to moderate-income home buyers. Eighty percent of FHA borrowers are first-timers, and more than 25% are minorities.

Homeownership is currently the principal source of wealth creation for most American households, but due to a nationwide shortfall in the supply of affordable homes, first-time homebuyers have struggled in recent years to achieve homeownership.

FHA loans offer a small down payment and more flexible underwriting, enabling credit worthy borrowers to begin building wealth through homeownership earlier than they might otherwise.

National Association of REALTORS President Kenny Parcell said in a statement: “Mortgage rates have doubled over the past year, and home prices have increased more than 30% in some counties. In this competitive market, new and low- to moderate-income buyers are often left behind.”

With a $400,000 FHA-insured mortgage, the MIP reduction could save a borrower approximately $1200 in the first year of homeownership.

The MIP reduction is the result of several factors: an improvement in the credit quality of borrowers in the FHA mortgage portfolio, home price appreciation, and significant refinance volume. As a result, the FHA’s mortgage insurance fund has seen gains in its capital reserves.

The FHA mortgage insurance premium reduction became effective in March, 2023.

Find more details about the FHA MIP reduction and savings on page 2 this month’s newsletter!

Contact me about specific loan programs for first time homebuyers available to you or someone you know!

Source: nar.realtor/magazine, nationalmortgageprofessional.com, https://www.mortgagenewsdaily.com/news/02222023-fha-mortgage-insurance

Delivering Water To Northeastern Colorado

Delivering Water To Northeastern Colorado.

During the 1930s, Colorado suffered through the Great Depression and a devastating drought. Entire fields of topsoil were blowing away and one-third of the farms in Larimer County were put up for sale.

In the summer of 1933, the Greeley Chamber of Commerce organized the Grand Lake Committee to pursue a water diversion project. The committee preceded a group
formed in 1935 to propose the Colorado-Big Thompson Project as a supplemental water source to Northeastern Colorado farmers.

In May 1937, the Colorado Legislature passed the Water Conservancy Act, laying the groundwork to create the Northern Colorado Water Conservancy District the same year.

The Northern Colorado Water Conservancy District, or Northern Water, was created to jointly operate and maintain the federally-owned Colorado-Big Thompson Project. In
1937, the main purpose of the C-BT Project was to provide supplemental irrigation water to farmers in Northeastern Colorado.

Today, the C-BT Project collects supplemental water west of the Continental Divide for delivery to approximately 1 million people and 615,000 irrigated acres in Northeastern
Colorado for agricultural, municipal, domestic and industrial purposes.

The C-BT Project began its first year of water deliveries to the full district in 1957 and since then has collected and delivered more than 200,000 acre-feet of supplemental water each year on average. The project is designed to collect and store water from the melting snowpack near the headwaters of the Colorado River and bring it underneath
the Continental Divide to Northeastern Colorado.

In addition to the original C-BT infrastructure, Northern Water has worked cooperatively to create enterprises to finance and build additional water infrastructure,
including the Northern Integrated Supply Project.

In 1970, Northern Water’s Municipal Subdistrict, a separate and independent conservancy district, was created by six Front Range municipalities: Boulder, Estes Park,
Fort Collins, Greeley, Longmont and Loveland.

The Municipal Subdistrict began formal efforts to develop and construct the Windy Gap Project in the summer of 1967. Currently the Subdistrict is constructing Chimney Hollow Reservoir near Loveland, the main component of the Windy Gap Firming Project.

The Windy Gap Project consists of a diversion dam on the Colorado River that creates a 445-acre-foot Windy Gap Reservoir, a pump plant and a six-mile pipeline to Lake Granby. Currently, Windy Gap water is pumped and stored in Lake Granby for delivery to water users via the C-BT Project. Windy Gap Project water utilizes both West Slope
Collection and East Slope Distribution infrastructure to reach Windy Gap participants.

Northern Water provides cities, towns, rural-domestic water districts and industries with year-round water deliveries. During the primary growing season between April
and October, water is also delivered to more than 120 ditch, reservoir and irrigation companies serving thousands of farms and more than 500,000 acres.

With growth continuing in Northeastern Colorado, more than 1 million residents are now served by Northern Water. This area encompasses portions of eight counties:
Boulder, Broomfield, Larimer, Logan, Morgan, Sedgwick, Washington and Weld.

Source:www.northernwater.org