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

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

5 Reasons to Sell This Fall

1. Demand Is Strong
The latest Buyer Traffic Report from the National
Association of Realtors (NAR) shows that buyer demand
remains strong throughout the vast majority of the country.
These buyers are ready, willing, and able to purchase…and
are in the market right now.

2. There Is Less Competition Now
Housing inventory is still below the 6-month supply that
indicates a normal market. In some cases, homeowners have
been reluctant to list their homes during the last few years,
fearing they would not find a replacement home. For now,
there are not enough homes to satisfy the number of buyers,
and buyers are competing for available homes.
As home values continue to appreciate, more homeowners
are seeing their home equity increase, and gaining confidence
to make a move. When these homeowners decide to sell, the
inventory of available homes will increase. Buyers will have a
larger selection of homes from which to choose and sellers
will be competing for these buyers.

3. The Process Will Be Quicker
Today’s competitive environment has forced buyers to
strengthen their negotiating position by obtaining preapproval
for their mortgage financing. Buyers know what
they can afford before shopping for a home. According to
Ellie Mae’s latest Origination Insights Report, the average
time needed to close a loan is 43 days.

4. It’s a Good Time to Move Up
There are buyers looking for their starter home, just as you
may be considering a move up. If you’re considering a larger
or upgraded home purchase, you will find increased
inventory for sale at higher price ranges. As prices continue
to escalate, delaying the purchase of your next home may
require a larger down payment and higher mortgage.

5. It’s Time to Move on with Your Life
Look at the reason you decided to sell in the first place. Is it
worth waiting for more money or is it more important to
have the freedom to go on with your life? Only you know the
answers to these questions. Perhaps the time has come for
you and your family to move on and start living the life you
desire.

Game-Changing Real Estate Trends in 2018

From housing inventory to price appreciation to generational shifts, look for real estate markets to “reshape” in 2018, according to the National Association of REALTORS®.

Game-changer #1: Supply finally catching up with demand

After three years of a shrinking supply of homes for sale, the realtor.com economists predict that the shortfall will finally ease up win the second half of 2018.

“The majority of the year should be challenging for most buyers. But we do expect growth in inventory in the fall,” says Danielle Hale, chief economist for realtor.com.

If housing inventory increases as predicted by fall, that will be the first net inventory gain since 2015.

Bullish construction is the engine that’s turning this ship around, bringing new home inventory to the market and creating opportunity for people to trade up into new homes.

But first time buyers may have to be patient for a while longer.

“Overall, prices are expected to increase, and we’re expecting to see more of that in lower-priced homes,” Hale says.

Along the Front Range, appreciation for homes priced above $750,000 will slow down while homes priced less than $500,000 will continue to see appreciation but not at the rate seen in recent years. This is due to the lack of supply (many builders are focusing on higher price point properties) and a large demand for real estate as a result of continued net migration.

Game-changer #2: Millennials starting to come into their own

The housing market in 2018 will continue to present challenges for millennials but there are some bright spots on the horizon.

Because of the strengthening economy and their developing careers, millennials are taking on larger mortgages and bypassing entry level homes.

As millennials reach their 20s to 30s when they’re settling down and starting families, they’re particularly motivated to buy. Millennials could make up 43% of home buyers taking out a mortgage by the end of 2018, up from an estimated 40% in 2017.

With mortgage rates expected to increase during 2018 due to stronger economic growth, millennials would be wise to buy sooner than later.

Game-changer #3: Tax reform

The new tax plan will change things up, in a nutshell causing short-term rates to rise more rapidly than anticipated as the Federal Reserve seeks to “get ahead” of possible inflation. The tax plan will also flood the market with a little more liquidity, keeping the economy moving at least another year.

Sources: Glen Weinberg, www.cobizmag.com, Cicely Wedgeworth, www.realtor.com

Give our office a call to discuss your real estate plans for 2018!