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

Why Sell Your Home in the Winter?

Nobody buys or sells a home in the winter. Right? Wrong!

According to Dave Ramsey, about 19% of all homes sold between September 2018 and August 2019 closed between December 2018 and February 2019.

Here are some reasons to sell when the air gets chilly:
The Internet Has No Seasons – It’s estimated that 93% of buyers use the
internet during their home search. Instant access to property listings has had an impact on the typical seasons buyers look for homes. While spring is still the hottest home-buying season, serious home buyers are always on the lookout.
Fewer Sellers – Come spring, more sellers will enter the market. During the winter, the number of sellers on the market is limited. Based on 2018 statistics, Dave Ramsey estimates there’s 12% fewer listings during the winter months which means less competition for sellers!
Winter Buyers Mean Business – Buyers trudging around in freezing weather or breaking away from their holiday schedule to look at your home are likely serious. Winter buyers often have a deadline, whether it’s an expiring lease, or a contract on their current home.
Time Off – While the holiday schedule can be hectic, many people also have more time off during the holidays. That means more time for browsing their favorite home apps, and scheduling home showings.
Getting Tax Breaks Before Year-End – Some winter home buyers are motivated to capture the tax benefits of buying a home before year-end. This may include tax deductions such as mortgage interest, private mortgage insurance (PMI) premiums, and real estate taxes. Investors may be motivated to close before the end of the year to replace a property that recently sold.
Tips for Selling in the Winter:
• Keep it simple. If you’re selling around a holiday and have decorations up, make sure they accent – not overpower – a room. Less is more.
• Crank up the cozy. Light a fire in the hearth, play soft holiday music in the background, and prepare fresh-baked goods or mulled cider for guests.
• Shine a light outside. Winter days get dark early. Brighten your home’s exterior with outdoor spotlights, including the area where agents and buyers are accessing the lock box and entry door.
• Avoid a winter wonderland. Buyers want to see details of the house, not a blanket of snow. Make sure you have clear-weather photos of your home.

Call me to talk about the reasons to sell your home this winter!
www.daveramsey.com

When to Reduce Your Listing Price

A seller’s market with low inventory can prompt buyers to raise their offer price to beat out competitors. Unfortunately, even in a seller’s market an overpriced listing will linger. Buyers pay attention to time on market and may assume something is wrong with a property that has not received an acceptable offer, and gone “stale.” It’s critical to determine what time frame is considered stale in the current market.

Since the summer of 2017, there has been a market shift in northern Colorado. While the shift does not suggest a full blown buyer’s market, signs of more balance between sellers and buyers is apparent.

Price reductions have increased compared to the first two quarters of 2017. It’s not unusual to now see a $5,000 to $10,000 reduction in the early weeks of the listing if an acceptable offer has not been generated.

Soaring home prices may make buyers pause, but houses are still selling fast. Nationwide, the average time a home spent on the market was 34 days in September. This is down from 39 days a year prior, according to the National Association of REALTORS®.

Some sellers may be adamant about “testing the market” with a higher than substantiated asking price. This strategy found success in the seller’s market of recent years. Currently however, limited showing activity and lack of an offer within the first 2-4 weeks of listing strongly suggest that the list price has missed the mark.

Sellers receiving market feedback that the property condition or features don’t support the list price can reposition swiftly and increase the likelihood of a quicker sale. Savvy buyers are watching the market for price reductions, especially for homes that appeal to them and they have already visited.

Source: “How to Know When to Drop the Asking Price on Your Home,” CNBC (Oct. 27, 2017)

Give our office a call or visit our website to discuss pricing opportunities for your home!

What’s Going On?…Mid-town Fort Collins

What’s Going On? is a monthly serialization of the commercial development planned in or in progress in and around Fort Collins. We start with a brief market overview and then the activity in a given area.

Between 2,000-6,000 apartments are in various stages of planning across Fort Collins. As many as 2,500 are planned for Mid-Town locations. Current median rents in Fort Collins are $900 for a one-bedroom apartment and $1300 for a two-bedroom. Rent in a proposed high-end project at the mall with studio and two-bedroom floor plans are within range.

Apartment vacancy in Fort Collins was 1.8% in 2015 and 2.7% in late 2016. The Colorado vacancy rate was recently at 5.2%. A vacancy rate of 5% is considered a balanced market. A vacancy rate less than 5% indicates that demand is greater than supply.

Mid-Town Fort Collins includes the Foothills Mall, which as of 2016, is reported to have 304,530 square feet leased (63% of the total square footage). Leases for another 40,000 square feet are nearing execution.

Activity in Mid-Town Fort Collins

Cycle Apartments are 405 high-end studio and two-bedroom apartments by McWhinney Development located on the east and north sides of the mall. Eighteen buildings with three to four stories will offer amenities including social fitness, clubhouse and pool, demonstration kitchen, social lounge, golf simulator, and bike and ski repair shops. Square footage for the apartments is 590-1119. Rents are $1,200 for the studio and $1,600 for the two-bedroom floor plan. Completion is mid-2017 with Baby Boomers and urban professionals as the target market.
225 Johnson Drive will include 195 apartments located north of Whole Foods behind Dog Pawlor, and south of Spring Creek Trail. The existing self-storage units and three duplexes will be razed. The five-story building will offer 4,000 square feet of office and retail space.
The gas station on College south of Spring Creek Trail, and across the street to the west of Chase Bank, will be redeveloped to an Elevations Credit Union.
Spring Creek Apartments will be located next to Whole Foods and include 168 units for occupants 55+ years young. Completion is anticipated in 2018.
Attorney Erik Fischer has plans to demolish five houses located at 1215 S. Shields and possibly build 97 apartments with one to two bedrooms and 11 single family homes.
Landmark Apartments plans to expand to the east of the current buildings with five additional two or three story buildings. In total, 68 apartments are expected.
At the northwest corner of Prospect and I-25, the Gateway at Prospect is a proposal for 650 single-family homes, apartments, and townhomes. The developer would have to widen Prospect to accomplish this project.
1,200 new apartments located by the new CSU stadium would include The Standard and The Slab. Beebe Christian School would be replaced with a five-story apartment complex.
100 apartments are proposed at 3425 S. Shields to replace a single family home.
The Overlook, located south of Horsetooth and JFK Parkway, would include 105 apartments.
A proposal for 170 apartments at 2800 S. Taft Hill Road for the 55+ years young market was submitted to the City of Fort Collins in April 2016, but there has been no further progress since that time.

6 Questions to Ask
When Considering Selling

These 6 questions will help you decide whether you’re ready for a home that’s larger or in a more desirable location. If you answer yes to most of the questions, you may be ready to move.

1. Have you built substantial equity in your current home?

Check your annual mortgage statement or call your lender to find out how much you’ve paid down. Usually you don’t build up much equity in the first few years of your mortgage, as monthly payments are mostly interest. But if you’ve owned your home for five or more years, you may have significant, unrealized gains.

2. Has your income or financial situation changed?

If you’re making more money, you may be able to afford higher mortgage payments and cover the costs of moving. If your income has decreased, you may want to consider downsizing.

3. Have you outgrown your neighborhood?

The neighborhood you pick for your first home might not be the same one in which you want to settle down for good. You may have realized that you’d like to be closer to your job or live in a different school district. Call one of our real estate experts to discuss what would be a good fit for you!

4. Are there reasons why you can’t remodel or add on?

Sometimes you can create a bigger home by adding a new room or building up. But if your property isn’t large enough, your municipality doesn’t allow it, or you’re simply not interested in remodeling, then moving to a bigger home may be your best option.

5. Are you comfortable moving in the current housing market?

If your market is hot, your home may sell quickly and for top dollar, but the home you buy will also be more expensive. If your market is slow, finding a buyer may take longer, but you’ll have more selection and better pricing as you seek your new home. Give one of our realtors a call with questions about our local market!

6. Are interest rates attractive?

Low rates help you buy “more” home, and also make it easier to find a buyer for your current home. Is the effort and cost of maintaining your current home becoming difficult to manage?

Source: RealtorMag.realtor.org, 2016