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

State of the State in Colorado Real Estate

While the median price of a Colorado home remained flat in December 2016 at $315,000, buyers and sellers experienced a 10 percent increase in the median sales price over the course of the year, according to the latest statewide housing report from the Colorado Association of REALTORS® (CAR).

The past year featured a shrinking housing inventory and continued strong demand from a growing Colorado population. These elements shaped a consistent theme for the 2016 Colorado housing market: an incredibly strong sellers’ market.

State of Single-Family Homes

Single-family homes across Colorado ended the year with a median sales price of $335,000. The price is up 8% for the year, but 4.3% less than the price of $350,000 in June. The state’s townhouse/condominium sales price rose to $260,000, up 14.3%, a record for attached dwellings.

State of Condominiums/Townhouses

The 3,900 single-family home listings added in December were 30% less compared to November 2016. As of December, there were 13,332 single-family active listings in the state, just 1,200 more than the 12,153 single-family listings added in June 2016 alone. New townhouse/condo listings in December were 1,384, reflecting an annual low. This brought the total active listings for attached dwellings statewide to 3,349 down 40% from the July 2016 peak.

Overall, the combined total for single-family and condo/townhouse listings on the market in December was less than 16,700. This figure was the lowest total in more than a year.

End of year inventory supplies for both single-family homes and townhome/condominiums were at 1.9 months and 1.5 months, respectively. A market is considered balanced with a 4-7 month supply of inventory.

Sold listings in December 2016 compared to November were down 6.7% to 6,331 for single-family homes. For condominiums/townhouses, sold listings were down 7.1%. However, when reviewing 2016 as a whole, most regions experienced increased sales totals for the year.

Despite the limited inventory, the average number of days on market from listing to sale (DOM) edged up for both types of housing. The DOM for single family homes in December was 59, its highest average since the first quarter of 2016. The condominium/townhome average was 50 DOM, comparable to first quarter, 2016.

Affordability, a measurement based on the relationship between housing prices, prevailing interest rates and local income levels, also dropped. In 2016, affordability for single-family homes was down 12% while the townhouse/condominium affordability index dipped more than 16%. Finally, the foreclosure market posted less than .5% defaults on loans, reflecting a tight credit market.

Is the Current Pace of Home Sales Sustainable?

Is the Current Pace of Home Sales Sustainable

There are some experts questioning whether the current pace of residential home sales is sustainable. Are too many people buying homes like in 2004-2006? Are we headed for another housing crisis? Actually, if we look closely at the numbers, we can see that we are looking at a very healthy real estate markets.

Why the concern?

Some are looking at the pace of the last three years of home sales and comparing them to the three years just prior to the housing bubble. Looking at the graph below, we can understand that thinking.

concerns-chart

However, if we go further back in history, we can see the real picture. After taking out the “boom & bust” years, the rate of sales is growing at a quite natural pace.

existing-home-sales-pic

And new home sales are way below historic numbers. Trulia’s Chief Economist Ralph McLaughlin explains:

“Adjusted for population, [new home sales] are at about 63% of their fifty-year average level — way better than 2011, but nowhere near heated.”

Bottom Line

The current pace of residential home sales definitely seems sustainable.

Source: KeepingCurrentMatters.com

Do you like what you see? If so, feel free to contact one of our agents here!

6 Questions to Ask
When Considering Selling

What Questions Should You Be Asking-

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

More Good News For Homebuyers

Home_Buyers

Don’t Worry Homebuyers, Things Are Looking Up!

Homebuyers no longer need to tremble all the way to the lenders’ office or have nightmares over being denied a home loan — all the troubles that have been prominently spotlighted by many news reports in recent years. A new report confirms: It’s getting easier to get a mortgage — and as a bonus, borrowing costs are still low.

Over the past year and a half, the federal government and enterprises have taken several steps to open up the credit box, and the efforts may finally be showing signs of paying off.

Credit scores on closed loans in September dropped to the lowest level since Ellie Mae began collecting the data in August 2011, according to Ellie Mae’s latest Origination Insight Report. The average FICO score for closed loans has fallen throughout the year — from 731 in January to 723 in September.

“Average credit scores declined to the lowest levels we’ve seen since 2011,” said Jonathan Corr, president and CEO of Ellie Mae.  We are also seeing rates fall while the time to close is also decreasing.”

Closing rates remained high with more than 66 percent of all loan applications  closing for the third consecutive month. The closing rate on purchase loans rose to 71 percent. Also, the time to close on all loans dropped for the fourth consecutive month to 46 days. In northern Colorado, the average time to close has been 30-35 days. However, new federal regulations that took effect on October 1 will likely extend the average to 45 days, and it may be unlikely for purchases that include financing to close in less time.

And more good news for buyers: The 30-year fixed-rate mortgage continues to remain well-below 4 percent. Freddie Mac reported this week that average rates were 3.79 percent nationwide for the week ending Oct. 29, down from 3.98 percent a year ago. Fifteen-year fixed-rate mortgages averaged 2.98 percent, down from 3.13 percent averages a year ago.

Source: “Is the Credit Box Finally Showing Signs of Opening Up?”
HousingWire (Oct. 21, 2015) and Freddie Mac

Looking For More Information?

2016 Housing Market Predictions | Housingwire.com

Freddie Mac 2016 Housing Market Predictions | Housingwire.com