Summer Home-Buying Season May Be Much Hotter Than Expected

Summer Home-Buying

Summer home-buying season may be much hotter than expected!

Until recently, the prognosis for the housing market wasn’t great. With the economy in a free fall, some home sellers took down their “For Sale” signs and some buyers chose to wait out the pandemic. It was like the pause button was pushed on the normally bustling spring home-buying season.

But as states reopen their economies, the summer real estate market just might turn out to be hotter than anticipated. According to the Mortgage Bankers Association,
mortgage applications in May for home purchases increased compared to May 2019, rising an impressive 8.7% as buyers raced to lock in record-low mortgage rates.

Danielle Hale, Chief Economist for realtor.com, says “It’s a sign that we are going to see a delayed seasonal bump in home sales. There’s pent-up demand from people who
weren’t able to get out in the early part of the spring.”

“The pandemic really hit us right at the time when home-buying activity really ramps up,” says Joel Kan, economist for the Mortgage Bankers Association. That’s resulted in “a late home-buying season.”

The recovery may be due in part to more sellers listing their homes as cities and states loosen restrictions.

And, low mortgage rates are enticing buyers back into the market according to Lawrence Yun, chief economist of the National Association of Realtors®.

Plus, there is still a severe housing shortage, which has only gotten worse during the public health crisis. Sellers have pulled their properties off the market or are delaying listing until the virus is under control. That can make it tough for buyers to find the right properties.

“Buyers may be surprised by how competitive the market is,” says Hale.

This could result in higher prices this summer, as there could be more folks competing for homes than homes for sale. “Given the strength of this recovery, home prices will probably rise about 4% to 6% in 2020,” predicts NAR’s Yun.

If the coronavirus resurges in the fall and the economy continues to falter, prices could flatten or even dip a tiny bit by the end of the year. They’re not likely to plunge like
they did during the Great Recession, though, as demand is simply too high.

“We have so many millennials who are at ages when they want to settle down and they want to buy a home, and that really helps keep the market busy,” says Hale.

Give me a call when you’re considering your next home sale or purchase! https://ftcollinshomes.com/contact-us/

Source: Clare Trapasso, Senior News Editor of realtor.com®

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

Buying a Home Young is the Key to Building Wealth

Buying a Home Young is the Key to Building Wealth

Homeowners who purchase their homes before the age of 35
are better prepared for retirement at age 60, according to a
new Urban Institute study. The organization surveyed adults
who turned 60 or 61 between 2003 and 2015 for their data
set.

“Today’s older adults became homeowners at a younger age than
today’s young adults. Half the older adults in our sample bought
their first house when they were between 25 and 34 years old, and
27 percent bought their first home before age 25.”

The study goes on to show the impact of purchasing a home
at an early age. Those who purchased their first homes when
they were younger than 25 had an average of $10,000 left on
their mortgage at age 60. The 50% of buyers who purchased
in their mid-twenties and early-30s had close to $50,000
left, but traditionally had purchased more expensive homes.

Many housing experts are concerned that the
homeownership rate amongst millennials, those 18-34, is
much lower than previous generations in the same age range.
The study results gave a great reason why this generation
should consider buying instead of signing a renewal on their
lease:

“As people age into retirement, they rely more heavily on
their wealth rather than their income to support their
lifestyles. Today’s young adults are failing to build housing
wealth, the largest single source of wealth, at the same rate as
previous generations.

While people make the choice to own or rent that suits them at a
given point, maybe more young adults should take into account the
long-term consequences of renting when home ownership is an
option.”

Bottom Line
If you are one of the many young people debating whether buying
a home this year is right for you, or you know a young person who
can benefit from buying their first home, contact me to explore
available options!

Source: Keeping Current Matters

ftcollinshomes.com

6 Reasons Why Selling a House in the Winter May Be the Best Decision Ever

Spring is generally the most popular time of year to sell a house, with hordes of buyers looking to move into a new place before the school year begins. But if you decide to sell your home during the winter, experts say you could reap a reward in cold, hard cash.

“I have personally had my best months in real estate during the holiday season, so the idea that the markets are very tough to sell in the winter might be a myth,” says Emil Hartoonian, managing partner of The Agency in Beverly Hills, CA.

He’s not the only one who believes selling in the winter can make you a real estate winner. Read on for the top reasons why you should consider unloading when the temperatures drop.

1. Low inventory = less competition

Since spring is the most popular home-selling season, the housing market is ultracrowded with options at that time of year. And if you paid attention during Econ 101, you understand the law of supply and demand.

“Most sellers still think they need to sell in the spring, but that means there is more competition for buyers’ attention,” says Matt Van Winkle, founder of Re/Max Northwest in Seattle.

But in the winter, there are fewer homes for sale. That competition over low inventory can make winter an ideal time to sell your home.

“In the Atlanta market, January is one of the strongest months for homes to go under contract,” says Ally May of Atlanta Fine Homes Sotheby’s.

2. You get to show your home’s winter-readiness

Selling in the winter also gives you the opportunity to show that a home is designed to handle the harsh elements.

“Sellers in places like Lake Tahoe can show off features like a south-facing driveway to speed up snow melting, how snow will fall off of a roof, a short driveway that will minimize shoveling or plowing, heat tape on the north side of the roof to avoid snow accumulation, and how recently the roof and furnace have been replaced,” says Sandy Soli, regional manager at Engel & Volkers in Lake Tahoe, NV.

Plus, during winter months, homes with features like fireplaces and hot tubs are certainly more appealing.

3. New parents may be looking to upgrade

The baby boom in September may lead to more buyers later in the year. According to data from the Center for Health Statistics and the Social Security Administration, there are more birthdays in the month of September than any other time of the year. Therefore, there’s likely to be a crop of growing families looking to buy a larger house.

“Once baby is home and settled, these parents may want to start the year in a new, and more spacious, family home,” according to Melissa Temple, real estate adviser and partner at Engel & Volkers in Aspen, CO.

4. Winter brings out the serious buyers

News flash: Not everyone looking at houses intends to make a purchase. Some people are contemplating moving and may just want to see what’s on the market. Since more homes tend to go on the market in spring and fall, this is also when window shoppers are likely to be out looking.

However, these looky-loos tend to be scarce during winter months, according to Jennifer Baldinger, licensed associate real estate broker at Julia B. Fee Sotheby’s international Realty in Scarsdale, NY.

“When I have buyers looking for homes in January and February, they’re real buyers looking to make a purchase–especially if it’s a great house. They don’t want to take the chance of waiting until spring and losing out on the home,” Baldinger says.

“There may be less people at these open houses, but I would rather have 10 real buyers come through than 20 people who are just curious,” she says.

5. Year-end financial bonuses and payouts

As a seller, year-end performance reviews could mean that more people have money to spend on a home.

“End-of-year financial bonuses or workers retiring with large payouts could mean opportunities for these buyers to upgrade their living situations or for first-time buyers to enter the housing market,” according to Temple.

6. Corporate relocation

You could also encounter buyers who are relocating for a job.

“One of the biggest months for corporate relocation is January/February, so those buyers, who need to move quickly, are out in full force looking for new homes,” Baldinger says.

Relocators typically have a limited amount of time to uproot their families and, as a result, don’t have the luxury of spending a lot of time looking at properties. The kids need to get settled into school, and dealing with selling their old home can add another level of urgency and stress. So it’s likely that once they find a home that meets their requirements, these buyers will be ready to sign on the dotted line.

Source: Terri Williams | www.realtor.com

 If you’re looking to buy or sell a home this holiday season, give us a call at 970-221-5995!

5 Myths Perpetuated By “Fixer-Upper” Television

The chances are good that you’ve seen “reality shows” featuring BEFORE/AFTER home renovation projects. While these popular home improvement shows have made buyers more interested in fixer-upper properties, they also have the potential to create unrealistic expectations. Consider these five common myths about “fixer-upper” properties.

Myth #1 – It’s Easy To Find A Good Fixer-Upper

This may have been true over a decade ago when home prices were rising. It seemed easy enough to sell a house for a handsome profit after a few easy updates. While there are still good investment opportunities in today’s market, it takes some time and effort to find them. If you want to bargain-hunt, understand that you will be competing with investors who likely have extensive experience and are often able to pay cash.

Myth #2 – I Can Save (Or Make) A Lot of Money

Renovation costs vary widely depending on how much work is needed, who is doing it, and other factors. Professional real estate investors suggest that the budgets quoted on home improvement shows are unrealistically low and the final resale price is overly optimistic.

This could be due to regional cost variations. However, many expenses are completely overlooked, including transaction costs (closing fees and commissions), building permits, dumpsters, insurance and other carrying costs.

It’s also possible that the “real world” cost differences stem from comparing cosmetic updates to more expensive structural issues or requirements to meet stricter building codes.

Myth #3 – Things Will Go According to Plan

Most renovation projects require strong doses of both patience and tenacity due to cost overruns, delays and unexpected repair issues. While the reality shows often include a “bad news” discovery, these “surprises” may be designed to merely inject a little drama into the story. With real life “fixer-upper” homes, things rarely go according to plan.

Myth #4 – It Won’t Take Very Long

Finding, purchasing, and moving into any home is a time-consuming process. Add a major renovation project or the need to find buyers when the project is complete extend timelines even more.

Home improvement shows give the impression that everything  falls into place at lightning speed. Of course, an episode that only featured waiting on inspectors to show up, or a delayed delivery of new windows is about as interesting as watching paint dry.

Myth #5 – It Will Be Easy To Nail The Design Updates

The proliferation of home renovation websites has armed consumers with many excellent design tips. However, good home design still requires both skill and judgment, and there are a number of ways things can go wrong.

In an attempt to impose a particular style on a home, important architectural details might be inadvertently removed, such as solid wood six-panel doors or elaborate moldings. Or, the purchase of any home can go wrong by executing the updates poorly.

When you’re thinking about a home remodel project, or possibly embarking on your own “fixer-upper” investment, give me a call and let’s discuss your ideas!

Source: Real Estate Buyer’s Agent Council, Inc., Newsletter, March 2018