How Covid-19 Is Changing The Real Estate Landscape

Real estate sales are continuing during the pandemic.

As stay-at home orders keep more Americans physically distant, the real estate industry is rushing to find ways to show properties for
those wanting to pursue a home purchase.

The use of online virtual tours has quickly increased and in some areas, agents are conducting private video showings.

Virtual tools give buyers a feel for homes — and are leading to offers.

A quarter of REALTORS® recently surveyed by the National Association of REALTORS® reported that their clients put contracts on homes without physically seeing the property.

Buyers who are looking for a home are being very decisive and acting quickly.

While offers are continuing for now — albeit in different ways — the real estate industry warns a slowdown is inevitable while the economy is shut down.

“Expect second-quarter home sales activity to slow down with the broad observance of stay-at-home orders, but sales will pick up when the economy reopens as many potential home buyers and
sellers indicate they’re still in the market or will be in a couple of months,” says NAR’s Chief Economist Lawrence Yun. “Home price remain stable as deals continue to happen with the growing use of new technology tools.” Yun further commented that as of mid- April, 10% of REALTORS® reported the same level or more business activity following the economic lockdown.

The April survey indicated that one-third of REALTORS® reported no closing delays from the COVID-19 outbreak. For those who did report delays, the top reasons cited were delays due to financing,
appraisals, and home inspections.

The entire home buying process is being adapted. A home inspector may be on the premises alone and video chat with buyers and their agents to review the inspection assessment. Some appraisals are being completed without a physical visit to the property.

The final walkthrough prior to closing may be conducted via video, or by allowing buyers to walk through on their own. Buyers are advised not to touch anything, maintain a distance of at least six feet from one another, and wash their hands when entering and exiting the house.

Here is an overview of recent changes occurring in the real industry:
• Increased use of virtual tours of listings
• Virtual showings
• Earnest money paid by wire transfer
• Virtual inspections with electronic delivery of reports
• Increased use of exterior only appraisals
• Electronic signing of contract and closing documents
• Drive through closings
• Remote Notary

Let’s talk about your options for buying or selling your home in the current market!
Source: National Association of REALTORS, REALTOR Magazine

Things To Do While You’re Stuck Inside

Things To Do While You’re Stuck Inside

• Go for a hike (https://www.larimer.org/naturalresources/parks)
• Go to a park (if not crowded)
• Go for a drive
• Catch up with friends, on the phone or on social media
• Read a book
• Piece together a puzzle
• Try a new recipe
• Play a board game
• Draw
• Do a craft
• Organize your home
• Take a virtual tour of museums around the world (www.artsandculture.google.com)
• Find an on-line workout
• Have a picnic in your living room or at a park
• Try a new recipe
• Catch up on podcasts
• Find an online learning class
• Find live events on Facebook
• Declutter a room and prepare a box to donate at a future time
• Start inside seed boxes for springtime planting
• Start a journal or blog
• Watch a long movie that you haven’t had time to watch
• Learn a foreign language online
• Finish your taxes if they’re not already done
• Write notes and letters to family and friends
• Write birthday cards ahead of time
• Read the magazines piled up on your desk
• Do coloring books
• Do easy home repairs
• Clear out your camera roll
• Buy gift cards from your favorite restaurants and coffee shops
• Have a Scrabble tournament
• Rearrange your furniture
• Update your will
• Donate money to food banks
• Get lots of sleep

Housing Market Predictions

The year has so far been a promising one for would-be home
buyers as home prices started to level off and mortgage rates
dipped to unexpected lows. While first-time buyers can expect less competition than last
year, it’s still very much a seller’s market in most places. But
overall, it’s a good time to move forward with a home
purchase. Here’s what industry experts predict for the remainder of
2019 and beyond.

Millennials will drive the market.
Consider it the year of the first-time home buyer.
More than half of all mortgages originated by Fannie
Mae and Freddie Mac went to first-time buyers last
year, and with Millennials hitting their prime
home buying years, those numbers are only
going to grow.

Inventory will improve –but not by much.
Total housing stock is well below
the nation’s pre-recession
volumes. Although recent data
shows that inventory is rising for starter homes and trade-up
properties, it’s likely not enough to satisfy demand. Housing
supply has increased compared to last year, but overall
inventory levels are still quite low, especially in the lower
price ranges.

Home prices are headed up.
Prices have been on the rise since 2012, outstripping their
pre-recession peaks early last year. The slowdown in price
appreciation and the escalation of wage growth is helping to
improve affordability for many would-be buyers. Still,
experts warn that home prices aren’t done rising yet.
Increasing demand and the limited inventory of homes for
sale suggests continued price appreciation.

Mortgage rates will stay low.
Mortgage rates recently hit their lowest point in three years,
averaging 3.80%, according to Freddie Mac, causing a surge
of refinancing. Experts expect that rates could go even lower.
Experts predict that the 30-year, fixed-rate mortgage rate will finish
out the year between 3.9% and 4.1% – lower than 2018’s full-year
average of 4.54%.

Buyers can take their time.
Despite an influx of younger buyers,
competition isn’t going to be as stiff as in years
past. National data shows that just 15% of offers
in April sparked a bidding war – down dramatically
from 60% in April, 2018. Nationally, the overall inventory of available homes is
expected to remain stable this year, so buyers shouldn’t feel
as pressured to move quickly.

Some markets are better than others.
Overall, the signs aren’t overwhelmingly pro-buyer or proseller.
Industry experts don’t foresee an extreme dip or a
major spike in prices or rates. And at the end of the day,
housing conditions vary by market.
Give me a call to discuss our local market conditions and
your plans to buy or sell!

Source: Aly J Hale, contributing writer for Forbes

Purchasing a Condo? Make Financing Easier!

In the process of choosing a home, you may consider buying a condo. There are a number of things to be aware of regarding your mortgage when purchasing, and this short article will help give you the background and the tools necessary in order to purchase your new condo with the lease amount of stress! We will start with some big picture items, and finish with a little more detail for each loan product.

“Is the condo warrantable?”

The term thrown around the most when someone is considering a unit is “warrantable,” as in “is the condo warrantable?” Warrantability is about whether the proposed mortgage on the property can be sold to Fannie Mae, Freddie Mac or another entity. Fannie Mae and Freddie Mac purchase many conventional loans, but they do not purchase government loans like FHA. Each loan type (conventional, FHA, etc.) has its own guidelines for condos. One may not be “warrantable” or salable with FHA, but warrantable with Fannie Mae.

There are more rules surrounding condos due to the potential risks to the lender. They have characteristics that are historically risky. In order to explain without diving too much into the weeds, lenders want to be sure that the property they are financing on will keep its value, not be involved in litigation, etc. This is the reason for more stringent rules when acquiring a loan secured by a condo.

Do not let the extra rules scare you though! A knowledgeable lender will guide you regarding the details of your loan and the property’s parameters. However, there are certain things you can be aware of ahead of time on your hunt for your condo. These things are highlighted below.

“Purchasing or Renting?”

With a conventional loan, your lender will review the property’s insurance, the HOA’s budget, etc. Many buyers can get caught up on how many of the units are rentals and how many are occupied by the owner. If you are purchasing a home in which to live, this question doesn’t matter. If you are purchasing a rental, then it matters. Additionally, if you are willing and/or able to invest a 10% down payment, the rules get much easier!

Approval by the FHA

With an FHA loan , the only thing to be aware of is whether or not the condo project is approved by FHA. IF the approval has expired, then the condo is not eligible for FHA financing. A VA loan works the same way with its own approved list of condo projects.

When determining the type of loan to use when purchasing a unit, your options may be limited. For instance, if you can only qualify for an FHA loan, but you want to purchase a condo, you will only be able to buy a condo that is approved by FHA. Again, a good loan officer will guide you through all of the rules to help you get the best loan for your new condo!

Source: Dexter Finley

Want more information?

New Rules For Warrantable & Non-Warrantable Condo Mortgage Loans | themortgagereports.com

Condo-Buying Walkthrough: Obtaining a Mortgage For Your Condo | investopedia.com

Northern Colorado Re-Sale Market Loosening … A Bit

Home Sellers Grip on the Northern Colorado Re-Sale Markey Loosening

As the last days of summer wind down, a REALTOR.com analysis of housing data for the first three weeks of August reflects a national market that is tipping slightly toward buyers’ favor in the Colorado re-sale market. While sellers still have the advantage, it’s showing signs of lessening, a national analysis notes.

Jonathan Smoke, REALTOR.com’s chief economist, commented that the August market represented “the time of year when both inventory and demand typically reach their peak.” “This year we’re seeing inventory continue to grow in August. And while overall demand is strong, the trend on median days on market is suggesting that the market is finding more of a balance — and that bodes well for would be buyers who have been frustrated by the inability to find a home to buy this spring and summer.”

During the first three weeks of August, nationally, inventory of for-sale homes increased 3 percent month-over-month. Median list prices nationwide rose 8 percent year-over-year to $233,000. Also, the median days on the market of listings was on the rise in August, increasing to 75 days as houses advanced notice OCTOBER 2015 take slightly longer to sell — another sign reflecting a market that is slightly tilting to the buyers.

This swing towards equilibrium is also supported locally, where in August 2015 home sales dropped to 303 homes sold, a decline of 3.3% from the 313 sales in July 2015, but were up 3.8% from the 292 sales in August 2014. This would seem to establish the seasonal slowing trend that began in June, but it’s worth noting that the decline has been a gradual one.

In northern Colorado, home prices also fell in August 2015, with the median price dropping to $320K, a loss of 4.7% from $335K in June 2015, while the average price declined 6.4% to $358K from $381K in July 2015. While this may be a statistical anomaly, the trend line provides a more accurate read on what’s happening and that continues to show upward strength over time.

Inventory is still rising, but remains lower than optimal for market balance. There were 618 homes on the market in August 2015, an increase of 5.3% from 587 homes in July 2015, but 14.6% less than the 708 on the market in August 2014. The months supply of inventory (MSI) increased slightly to 2.0 months from 1.9 months in July 2015, so the very strong seller’s market conditions persist, despite the slight reversal of trend. What are the current market trends in your neighborhood?

“Is the condo warrantable?”

“Purchasing or Renting?”

Approval by the FHA

Want more information?

Contact an agent today for an analysis!