Buying A New Home Archives - Fort Collins Homes

Forecast: 2022 Real Estate Market Will Be A Mixed Bag

From remote work trends impacting where people can live to affordability issues cropping up as home prices rise, the real estate markets in 2022 will have a fair share of new challenges and opportunities. According to the realtor.com® 2022 Housing Forecast, next year is set to be a mixed bag.

Housing trends to watch in 2022:
• While 2020-2021 brought a homebuying frenzy largely fueled by first-time millennial homebuyers, potential homeowners will face increased competition for at least the
next three years.
• Workplace flexibility and higher incomes may give employees the advantage in 2022 with more sellers looking to move because they no longer need to live near the office.
• The suburbs will become increasingly popular compared to big urban metros as home shoppers search for more space— a trend brought on by the pandemic. However, as
demand is expected to outpace new construction growth, buyers may have to sacrifice space due to affordability constraints.
• Hispanic homeownership is predicted to rise in 2022, driving housing demand and impacting the homeownership rate for years to come.

The takeaway:
“Whether the pandemic delayed plans or created new opportunities to make a move, Americans are poised for a whirlwind year of home-buying in 2022,” according to
realtor.com® Chief Economist Danielle Hale.

While buyer competition will remain fierce, more sellers will be entering the market. “We anticipate strong home sales growth at a more sustainable pace than in 2021,” explained Hale.

“Affordability will increasingly be a challenge as interest rates and prices rise, but remote work may expand search areas and enable younger buyers to find their first homes sooner than they might have otherwise,” added Hale.

With more than 45 million potential millennial buyers between the ages of 26-35, the market is expected to remain competitive.

George Ratiu, manager of Economic Research for realtor.com®, commented, “With most real estate markets expected to be competitive in 2022, it’s important to remember that you’re in the driver’s seat of your real estate journey.”

“The bottom line for buyers is to make sure you’re comfortable with your timeline and budget — and especially for younger buyers making this massive financial decision for
the first time. For sellers, take into account your local market conditions as well as the likely increase in the number of homes for sale, and price yours competitively.”

Give me a call to discuss your real estate opportunities in 2022!

Source: rismedia.com

Greeley Ranks As One Of The Fastest-Growing US Metro Areas

If you think Denver has ballooned in recent years, there’s one pocket of Colorado where growth occurred at a significantly greater rate. And it’s probably not where you think.

Greeley, the county seat of Weld County, is an agriculture-based community that is attracting new residents from around the state and country. From 2010 to 2020, the population of the Greeley metropolitan statistical area (MSA) expanded from 252,825 to 328,981. The 30.1 percent increase makes it the fastest growing metro area in Colorado and the fourth fastest-growing metro area in the country, according to 2020 census data released in August, 2021.

The area’s growth is attributed in part to its location. Greeley sits 30 miles southeast of Fort Collins, about 53 miles east of Rocky Mountain National Park, and about 55 miles northeast of Denver.

While a large share of Weld County residents work in the Denver metro area, Weld’s proximity to Larimer County has also fueled both strong job and population growth.

Weld County is home to the University of Northern Colorado, which enrolls nearly 11,500 students. Large-scale factories include Leprino Foods, the world’s largest mozzarella cheese company, and JBS, one of the world’s largest meat processors. Weld County is represented as having a “pro-growth approach” in terms of attracting and retaining businesses.

Greeley’s development is also supported by a median home price that is significantly less than in surrounding communities. According to the Colorado Association of REALTORS® (CAR), the median sales price in July, 2021, for a single-family home in Weld County was $450,000, compared to $526,500 in Larimer County, $650,000 in Denver County, and $799,500 in Boulder County.

Another draw is that Greeley has “growth availability”. Unlike Boulder County with zoning laws and land-use regulations, or Broomfield County, the smallest county in Colorado, Weld has ample physical space to expand.

Folks seem to prefer Greeley’s small-town vibe. Its population of about 109,000 is large enough to have city amenities — chain restaurants, a Target, multiple shopping malls — yet small enough to retain a tight-knit feel.

Weld County’s younger population also played a role in its growth. In 2020, the average age of residents was 34.1, compared to 36.2 in Denver County, 37.8 in Larimer County, and the statewide average of 37.3, according to state data. Younger adults having children also contribute to the county’s growth.

The Hispanic population represents one of the fastest growing racial/ethnic groups in Colorado with a 21.6 percent increase in the past decade. Weld’s Hispanic population increased by 37.4 percent, likely contributing to Greeley’s growth.

Greeley is preparing to double in size in the next 40-50 years. Looking ahead, the focus is on responsible and diversified growth, including diversification of single family
residences and affordable housing, multi-family units, commercial properties, and industrial buildings.

Contact me with questions about housing opportunities throughout Northern Colorado!
Source: 5280 magazine

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

Can You Get a Mortgage If You’re Self-Employed?

Whether you’ve owned your business for many years or started a new one, know that self-employed people can and do get mortgages.

Typically, lenders ask for documentation that includes a minimum of two years of personal and business tax returns, recent bank statements, year-to-date profit and
loss statements, and documentation of other assets which prove financial stability. Lenders also consider details about the length of time you have been self-employed
and how long you’ve done the type of work you are doing.

Lenders may review legal documents that established the business entity as an S-Corp, LLC, or Partnership. The financial strength of the business, demand for its
products and services, and future outlook will all be considered in the approval process.

Exceptions to the two year rule for self employment do exist.

There is a difference between a borrower who is self-employed for one year who has worked in the same field for many years, compared to the borrower who is self-employed for one year in a new line of work.

For example:
• If you were a W2 employee in the same field of work for five to seven years, earning $50,000, and opened your own business less than two years ago, you may not need a two year self-employment history because you’re in the same field and earning similar or more income.

• If you are a self-employed borrower in a new line of work, you may need to wait until you can provide two years of income stability even if you have the current income to qualify and are making more than you were prior to opening your new business. In this example, you may have adequate income but lack a long-term history in your new line of work.

Bottom Line: Work with an experienced loan officer who is skilled in helping self-employed borrowers. They can look at your overall situation, review mortgage options, and advise you regarding the timeframe needed to satisfy underwriting guidelines and obtain a loan approval.

Contact me for recommendations of lenders who are experienced working with self-employed borrowers!

Source: Mortgage Market Guide