Are you considering buying a home this year? With a solid game plan and approach to buying a home, you can plan to win in 2024. Of course you’ll need to prepare. And hey, you’re off to a great start by reading this blog—we don’t want you to fall short of your goals either. But, like with just about anything, being prepared will have you ahead of the competition—and, if rates fall significantly, there will surely be competition. A persistent shortage of homes for sale will still likely cause challenges for buyers into 2024, leaving sellers in a favorable position. However, with interest rates falling, of late, could it be the year that buyers finally have the advantage?  If you're considering house hunting this spring, make sure to allocate enough time to find the right property and bring your best negotiation skills to the table. Until then, here’s a breakdown of what's happening in today’s market and how you can prepare. Home Prices Have Stabilized. Will They Begin to Climb? The real estate landscape is currently characterized by stable home prices. After a three-year-long surge, prices have mostly held steady this past year, with some regions experiencing slight decreases and others seeing modest increases. As of November 9th, the national median price for existing homes was $430,300, according to the National Association of Realtors (NAR). Looking ahead, NAR predicts a 0.9% increase in the median price for existing homes in 2024 compared to the previous year. Fannie Mae was among the most optimistic predicting a 2.4% increase, while realtor.com® predicts a 1.7% decrease in median home value in 2024. Here in Colorado, the median home value was significantly higher than the national average at over $612,000. That means you’ll really need to save for your down payment.  The NAR recently reported a discrepancy in cash (down payment) availability between first-time and repeat buyers. First-time buyers typically make a median down payment of 8%, while repeat buyers put down a higher median of 19%. Interest Rates Remain Relatively High  In 2024, it’s high time to acknowledge that historically low mortgage rates are a thing of the past, with rates rising to a 30-year peak in October 2023. However, beginning in November rates began a six-week decline, then stabilized at the end of the year. Currently, rates are holding well below 7% and some experts think we could see rates decrease into the high 5s at some point this year, perhaps as early as Q2.  NAR predicts the 30-year fixed-rate mortgage to average 6.3% in 2024; realtor.com® projects 6.5%. This likely will improve housing affordability and entice more home buyers to return to the market, according to NAR’s Chief Economist Lawrence Yun.  The Federal Reserve's efforts to curb inflation have contributed to this trend, with 3 interest rate decreases planned for 2024, if patterns hold (always a big if). While rates may impact initial mortgage costs, it's worth considering the option to refinance if rates decrease in the future. What Can You Afford? NAR’s data shows that rates near 6.6% enable the average American family to afford a median-priced home without devoting more than 30% of their income to housing, the threshold commonly used to measure affordability. We can recommend our trusted lender partners so you can quickly and accurately determine what’s truly affordable for your unique scenario.  Competing for That Primo House According to October 2023 data from NAR, over 25% of homes are still selling above their listed price, with 28% of homes achieving this in that month. The median time homes spent on the market was 23 days, and on average, each property received 2.5 offers, indicating a persistently competitive market. NAR’s Yun emphasized the significant impact of limited housing inventory on satisfying housing demand, stating, "Multiple offers, of course, yield only one winner, with the rest left to continue their search." On the other hand, cash transactions continue to play a notable role in the marketplace, with nearly one in three sales (29%) completed in cash, up slightly from the 26% reported in 2022. So, if you have cash, you’re in a better position than most of the market. However, financing is only one aspect of competing for a home and there are many other ways to stand out.  MORE >>> Offer Strategies that Win Flexibility and Compromise As a homebuyer, there are aspects of the real estate market you simply can’t control. For instance, you can't control inventory or when someone decides to put their house up for sale. What you do have control over is your own outlook and readiness. Consider that finding the absolute perfect home should remain your BHAG (big, hairy, audacious goal) but that a "good enough for now" home can kickstart your homeownership journey sooner and may keep you from having the market pass you by. This rings particularly true for first-time buyers eager to start building equity. It’s no secret that real estate presents opportunity as a very solid investment long term, and often in the short term. Putting off buying six months or a year might mean losing out on tens of thousands of dollars. That said, if you find yourself constrained by your options consider broadening the scope of your search to include smaller homes, additional areas, or even different types of housing options such as condos or townhouses, as a suitable compromise. Perhaps you can make do with fewer bedrooms or bathrooms or adapt to a slightly outdated interior.  And, while I’m not your dad, my best fatherly advice is: keep your spirits up—even if it means tolerating less square footage or putting up with quirky linoleum floors for a bit, you'll end up with equity to remodel or sell down the line. How to Prepare: Tips for Winning in 2024 No matter which direction rates go, it’s always great to be prepared for opportunity. If you’re one who likes to prepare (and we highly recommend you do) here are some tips to prepare for and compete in the housing market in 2024 (adapted from a recent article from NerdWallet): Get your finances in order: Review your budget, down payment capabilities, and credit score. Consider consulting with a loan officer for guidance on improving your financial profile. Understand mortgage options: Explore various mortgage options beyond the misconception of needing a 20% down payment. FHA and VA mortgages, as well as down payment assistance programs, offer alternatives. Shop mortgage lenders: Compare offerings from different lenders, considering not only interest rates but also the annual percentage rate (APR) and overall loan costs. Hire a good real estate agent: Choose a buyer's agent with market expertise who can guide you through the process, provide referrals, and navigate current market conditions. Make your best offer and negotiate wisely: Beyond monetary considerations, be flexible with terms such as the closing date. Negotiate wisely and only make concessions that align with your financial capacity. Don't give up: Persistence can pay off in a competitive market. Stay optimistic, be prepared to act swiftly, and seize opportunities when they arise. Bottom Line Don’t get down about the sky-high costs and the scarcity of options, especially if you're a first-time buyer who's been holding off on the house hunt. With today’s market conditions you may experience challenges.  Our advice? Consider the long game. Waiting around for lower rates might end up with you facing even higher prices and tougher competition. So, if your heart is set on buying, focus on finding a place that checks as many of your boxes as possible within your current budget, all the while remembering that buying real estate often means compromising. I always remind my homebuyer clients, “even the buyers at $2.3M may have to compromise on that infinity edge pool if they can only afford to get an in-ground pool when everything else is perfect.” Setting your sights on perfection can often lead to unnecessary disappointment. Homebuyers often expect that they’ll hit a home run with their very first first at-bat when making a purchase. Sometimes, I gently remind them that nothing conquers inflation like real estate, so being in the game is important, even if you start by just getting on base. In any case, staying informed and adapting your approach will be key to success in this ever-evolving real estate landscape… …and we’re here to help. You just have to ask.

  This month, we’re seeing mortgage rates climb back up, creating fresh opportunities for buyers while economic signals keep the market on its toes. From key updates on Denver’s inventory and affordability shifts to a national slowdown we haven’t seen since the ‘90s, October’s market is full of pivotal moves and strategic advantages for buyers and sellers alike. With the November Jobs Report, Election Day, and a Fed meeting right around the corner, expect continued volatility—and stay ready to take advantage of emerging trends. Let’s dive in. Mortgage Rates Update Should we be buckling up for a perfect storm? The average 30-year mortgage rate has edged back up near 7%, impacting buyer sentiment. Mortgage applications fell by 6.7% from last week and a striking 30% month over month, reaching the lowest level since July. Despite this, a strong economy (3% GDP growth, rising retail sales, wages up by 4%, and increased personal income) is driving higher rates. The consumer sentiment has hit a seven-month high, showing confidence, especially among those expecting a Republican win. A potential Republican sweep could elevate rates with lower taxes, increased tariffs, and a shift to equities from bonds. With key events like the November 1st Jobs Report, the November 5th Election, and the Fed’s November 7th meeting ahead, volatility is expected to persist. Though uncertainty remains, this market favors buyers who have a unique edge in today’s market. Think of recent rates as a rollercoaster ride—from September’s brief dip into the high 5% range to the current near-7%.  The upcoming weeks could bring crucial economic data, which might keep sellers motivated to negotiate, despite buyer hesitation. While rates are higher than last month, they remain 1% below last year. Greater Denver Metro Market Update According to the Denver Metro Association of Realtors (DMAR), there are 11,115 homes available across the Denver Metro, marking a 3.65% increase from last month and a 45.69% rise from last September. Median sales prices sit at $576,171—about a 2.34% decrease from last year. New listings totaled 5,053, a jump from last year’s 4,602, while the average days on market rose by 5.41% over the past month, extending the home-selling lifecycle. Although prices have dipped, inventory is climbing, creating more options and, potentially, negotiating leverage for buyers. Local Interest Is now a good time to buy or sell? What’s the outlook for 2025? The Wall Street Journal recently featured a story of local Denver buyers navigating this dynamic market. The report highlights the trend of buyers and sellers deferring moves despite significant life changes, which can lead to pent-up demand. Nationally, the housing market is at its slowest since 1995. Many have held off on transactions, but this is expected to change as we approach 2025 and 2026 when rates are projected to fall, making it a ripe time for buyers ready to act now. Here’s the link to the article: [Wall Street Journal Article] National News Key economic indicators are shaping the national real estate landscape and consumer confidence. The Federal Reserve recently reduced its benchmark rate for the first time in over four years, and inflation has dropped to its lowest point since early 2021, edging closer to the Fed’s 2% target. Despite stock market volatility, major indexes like the S&P 500 and Nasdaq remain significantly up year-to-date.  Seasonally, August saw a slight dip in national home prices from June’s peak, along with a higher inventory count—the most in almost four years—yet still low by long-term standards. Months’ Supply of Inventory (MSI) reached a four-year high, favoring buyers, as active listings rose and sales volumes dipped. Homes still go under contract relatively quickly, although not at pandemic-era speeds. Average days on market and offers per listing reflect cooler conditions than spring, while the rate of price reductions has slowed but remains elevated post-2022’s rate spike. Bottom Line The real estate market remains complex but offers unique advantages for well-informed buyers. As mortgage rates hover around 7% and economic data continues to shift, buyers gain leverage in negotiations, especially as many sellers await clarity from upcoming economic and political events. This seasonal slowdown could present a rare window for those ready to buy, with potential competitive pressure building toward 2025. For sellers, setting realistic expectations is key, while buyers should stay poised to act in an increasingly balanced market.

With a full first quarter behind us, we’re seeing improvements over last year, one of the slowest moving real estate markets in years. And, as always, we'll take a look at where the market’s been, where it’s at, and where it appears to be headed for the rest of 2024. Where We’re At | Local Housing Market (Denver & The Front Range) Local Market Insights: Easter Seasonality and Inventory Trends As Easter approached, a predictable softening in buyer engagement was observed, mirroring patterns from previous years. With families opting to spend time together, showings dipped slightly, impacting the number of homes going under contract. This seasonal adjustment serves as a reminder of the importance of aligning strategies with the natural ebb and flow of buyer behavior. Inventory Insights: Expanding Choices On a positive note, the landscape of available listings is widening, providing an influx of options for eager buyers awaiting their perfect match in the market. This expansion signals a healthier market environment that caters to diverse preferences and needs. Both new listings and pending transactions have seen adjustments, reflecting a delicate balance between homes entering the market and those securing contracts. Navigating these shifting tides effectively requires staying agile and well-informed. Market Momentum: Showings and Sales Trends Despite a decrease in showings, the quality of buyer interest remained notably high, with those venturing out during the holiday period demonstrating a genuine intent to purchase. This emphasizes the importance of prioritizing engagement quality over sheer quantity. Strategic pricing of listings continues to be pivotal, influencing the speed at which homes are snapped up and the adjustments sellers are willing to make to attract the right buyer. Key Market Metrics: Median Close Price: $595,000, marking a 3.5% increase month-over-month. Supply in Months: 1.67, down by 13/0.47 month-over-month. Median Days in MLS: 11 days, down by 52% month-over-month. Pending Sales: Up nearly 32% month-over-month. New Listings: Up over 16% month-over-month. Total Showings: 13,378, showing a slight decline of 12.1% week-over-week. However, it's important to note that achieving market balance, typically indicated by a six-month supply, would require a significant increase in total listings. This suggests that the market is currently operating below the desired level. Additionally, according to a recent study by Corelogic, Denver ranked in the top 10 (#9) for home price changes in February, experiencing a 3.2% increase compared to 2023. Miami saw the highest gain at 10.2% year over year, highlighting dynamic shifts in housing markets across different regions. Where We’ve Been | National Housing Home prices nationwide, including distressed sales, increased year over year by 5.5% in February 2024 compared with February 2023. Chief Economist for CoreLogic, Dr. Selma Hepp, said: “Home price growth pivoted in February, as the impact of the January 2023 Home Price Index bottom finally faded. As a result, the U.S. should begin to see slowing annual home price gains moving forward. Nevertheless, with a 0.7% increase from January to February 2024, which is almost double the monthly increase recorded before the pandemic, spring home price gains are already off to a strong start despite continued mortgage rate volatility. That said, more inventory finally coming to market will likely translate to more options for buyers and fewer bidding wars, which typically keeps outsized price growth in check. Still, despite affordability challenges, homebuyer demand appears to favor already expensive, coastal markets with a limited availability of properties for sale.”  Where We’re Headed | Spring Housing Market Forecast Altos data shows we only need stability in mortgage rates for a rebound in home sales. You may know that home sales have been slowish for the past 18 months or so. As mortgage rates began rising starting in 2022, payment affordability got dramatically worse and homebuyer demand slowed. At the same time, seller volume dried up. But now sellers are coming back into the market. New listing volume last week was 18% more than a year ago. Total available inventory is gradually climbing about 1% per week — last year it was still declining in April. As we roll into the second quarter, we should have accelerating inventory growth each week. The Economy’s Impact on the National Real Estate Market In a recent assessment of the job market and its implications for the real estate sector, Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), offers valuable insights into the current economic landscape and its potential impact on housing trends: "The job market continues to exhibit solid strength, with 303,000 net payroll job additions in March. That brings total job creation to 5.8 million from the pre-COVID peak four years ago. The construction industry added 39,000 net new jobs, up by 600,000 from four years ago. Therefore, more housing supply is on the way in future months. More jobs mean more potential housing demand in the future. But more jobs also mean the interest rate decline could stall as the Federal Reserve re-evaluates inflation risk. Wage growth was 4.1% in March after two straight years of above 5% gains. This decelerating wage growth can lessen consumer price inflation. Overall, mortgage rates are likely to remain unchanged, with no further measurable declines in upcoming months. High budget deficits will also hinder interest rates from falling as government borrowing crowds out mortgage funding availability. Even so, multiple offers on properties are still happening. Homeowners with record-high housing wealth should understand the current favorable environment for putting homes on the market." Economist Who’s Buying? | Millennials Take the Lead in Home Buying The housing market is experiencing a significant shift in demographics, with millennials emerging as the largest group of home buyers, according to the latest report from the National Association of Realtors® (NAR). The 2024 Home Buyers and Sellers Generational Trends report reveals that millennials, spanning both younger (ages 25 to 33) and older (ages 34 to 43) segments, now constitute a combined 38% of the home buying market, up from 28% last year. In contrast, baby boomers' share has decreased from 39% to 31%, relinquishing their position as the largest demographic of home buyers. Dr. Jessica Lautz, NAR deputy chief economist, attributes this shift to younger millennials entering homeownership for the first time and older millennials transitioning to larger homes to accommodate their changing needs. The report also highlights a rise in first-time buyers across generations, with younger millennials leading the charge. Additionally, the emergence of Generation Z (ages 18-24) in the housing market demonstrates diversity and independence, with a notable proportion of single female purchasers. Despite these changing buyer trends, baby boomers remain the largest home-selling generation, accounting for 45% of all sellers in 2023. The report also reveals variations in homeownership tenure among different generations, with older millennials typically selling their homes after just six years, compared to Gen X, baby boomers, and the Silent Generation, who typically stay in their homes for 15 years. The enduring appeal of homeownership is evident, with 82% of all buyers considering it a good financial investment, particularly younger millennials, 86% of whom share this positive outlook. Regardless of generation, the report indicates that buyers and sellers alike value the expertise and guidance provided by real estate agents, highlighting the essential role they play in realizing homeownership dreams. NAR President Kevin Sears emphasizes the universal value of owning a home, serving as a cornerstone for personal prosperity and community development. As market dynamics evolve, the reliance on real estate agents for expertise and guidance remains steadfast, underscoring the invaluable service they provide in facilitating homeownership. Bottom Line The local housing market on the Denver & Front Range experienced seasonal fluctuations as Easter approached, with a slight dip in buyer engagement. However, this was coupled with a positive expansion in inventory, offering more choices for buyers. Despite a decrease in showings, the quality of buyer interest remained high, emphasizing the importance of focusing on engagement quality over quantity. Key market metrics show promising trends, including a median close price increase and a significant uptick in pending sales and new listings. And now it’s also clear just exactly who is buying up the new inventory in 2024.

Where were you Tuesday morning? Wasn't that snow squall something? We woke up with no snow on the ground and no flurries in the air. By 10:00 AM most of the Metro Area was enveloped in a fast-moving snow squall that made it look like a February Christmas in less than 2 hours. The snow stuck to the streets and people were caught in whiteout conditions. Yet by noon in many areas, blue skies were peaking out again.   Let me tell you how that little snow squall saved an opportunity for some homebuyers I worked with earlier this week.   This past Monday, I had the opportunity to work with buyers in from out of town. Often, when a buyer comes into town we have a compressed amount of time to see properties. To my surprise, we were able to find twelve homes in their price range so we squeezed that into a long afternoon. Normally, I recommend not seeing more than 6 to 8 properties at any one time. It allows for processing what you've seen and not have the homes blend into one in your mind. In this case, however, it made sense to see the best of what was available since they had a plane to catch the following morning.   Weekends are typically the busiest for showings. More buyers than not are most often available on the weekends. Showing homes on a Monday, when the market is heating up, can sometimes lead to missed opportunities when the best properties begin to go under contract after a good weekend of showings. This past Monday was no exception, though it was still February. By the time we began our tour of those twelve properties, I had already received phone calls from listing agents saying their sellers had begun considering or even accepting offers. At 12:30 PM that had already occurred on two. Later that afternoon I received another couple of calls from agents saying we could show their listings but they too were accepting an offer and going under contract. By the time our afternoon ended, we were able to see 8 of the initial 12; the other four were under contract.   My buyers loved two of the eight we saw. They wanted to sleep on their decision, which is always a good idea, when you have the time. They also had a flight to catch Tuesday morning which took off just before the snow squall the hit the Denver Area. By the time they landed home another 3 had gone under contract!   Finally, Tuesday afternoon, my buyers had narrowed their search to one specific property. Good thing, because the other one they liked went under contract next.   We prepared to make an offer, all the while staying close and aware of the action all around us on their favorite listings. The dominos were falling. My buyers began to waffle a bit wondering why the property they were considering making an offer on hadn't gone under contract already. Were they missing something? Was this property really as good as it seemed? After all, we all agreed, it was hands down, the best property we toured on Monday. So why were they so fortunate to have their favorite still available? Hadn't anyone else loved that same property?   All along I had been communicating with the listing agent. They had indeed, received offers. In fact, the first offer, before we showed it, had come in with a protracted closing date. The sellers simply weren't interested in waiting that long. A second offer had been presented, but the agent who presented the offer turned out to be so aggressively difficult the sellers chose not to work with his buyers. He blew it for them. That's another story for another day.   Then the snow squall blew in Tuesday morning and the listing agent said that three buyers had canceled their showings. Only one showing still stood, scheduled for early evening.   We ended up being the third offer. We offered just before noon on Tuesday and set an acceptance deadline of 6:00 PM that same day knowing there was that other showing at 4:45 PM--just enough time for someone to sneak in and make an offer to compete with ours, though it would be tight. But what were the chances they too would love the property? Apparently pretty high becuase they did, in fact, try to get an offer in before our Acceptance Deadline. At 5:56 PM the sellers signed our offer and the other folks missed out. This listing had in fact, received 4 offers in 48 hours!   I share this story because it's a real life scenario of what's going on in some areas of our local market. People are ready to move this spring. These homes were priced between $740,000-840,000. The same price range that struggled to move last fall when mortgage rates blew past 8 percent.   In the end, we were saved by a snow squall and the market seems to have melted all the snow away…just in time for another not-quite-spring weekend. What happens later this spring…or if rates were to fall?

Mortgage rates inched up this week, prompting a pause among some prospective homebuyers. However, there are compelling reasons why waiting might not be the most advantageous strategy. Let's delve into the data and trends shaping the housing market landscape. Impact of Mortgage Rate Changes Home shoppers are keenly attuned to fluctuations in mortgage rates, as evidenced by the recent uptick in the average for the 30-year fixed-rate mortgage, reaching 6.77%. This increase led to a 3% decline in mortgage applications for home purchases, according to the Mortgage Bankers Association. While even marginal changes in rates can influence purchasing power, borrowing costs have generally stabilized. Jessica Lautz, Deputy Chief Economist at the National Association of REALTORS®, notes that despite the weekly uptick, mortgage rates have followed a downward trajectory since fall 2023, now sitting a full percentage point below recent highs. Considerations for Prospective Buyers Waiting for mortgage rates to decrease may not yield significant savings. Even a slight decrease in rates may not substantially alter monthly mortgage payments, particularly as home prices continue to rise. With the median price of existing homes reaching all-time highs and projected to climb further, buyers face the challenge of navigating a market characterized by low inventory and persistent price pressure. Regional Trends and Market Dynamics While national averages provide insights into broader trends, it's essential to examine regional nuances. In the Denver and Front Range area, for example, housing market dynamics may differ from the national landscape. The region has witnessed an increase in new listings, signaling growing interest from sellers. Additionally, inventory levels have seen a slight uptick compared to the previous year, potentially offering buyers more options. However, this increased inventory is accompanied by rising mortgage rates, which could impact buyer demand and price dynamics. Implications for Sellers and Price Dynamics As sellers ease back into the market, the region has seen a steady growth in active inventory, albeit at a fractionally slower pace than in previous weeks. While this may provide buyers with more choices, it also raises questions about the balance between supply and demand. Furthermore, the sensitivity of homebuyers to higher mortgage rates is reflected in the increasing number of price reductions, indicating a cautious approach among consumers. Future Outlook and Considerations As the housing market continues to evolve rapidly, monitoring key indicators such as inventory levels, sales growth, and price reductions is crucial for gauging future trends. While median home prices have remained relatively stable in recent weeks, the impact of sustained high mortgage rates on price dynamics remains uncertain. Whether home price gains will persist in the face of elevated mortgage rates is a question that warrants close observation in the coming months. Bottom Line In navigating the current housing market, prospective buyers in the Denver and Front Range area, like their counterparts nationwide, must carefully evaluate their options. While waiting for lower mortgage rates may seem tempting, the broader market context, including rising home prices and shifting inventory levels, suggests that delaying purchases may not necessarily result in significant savings. By staying informed and adaptable, buyers can make informed decisions aligned with their long-term goals in a dynamic real estate landscape.

I saw a post today that said “it’s always sunny in the Bahamas.” That’s probably mostly true. It’s often sunny here too, isn’t it? That’s what we love about Colorado. Yesterday, for instance, was beautiful. A great day for a walk. A nice day to get some sunshine and vitamin D infusion on the skin. Today is kinda February-like though isn’t it? I literally saw real estate for sale signs going in yards yesterday (a sign spring could be right around the corner) but a day like today reminds us that spring is officially still a month away.  There are signs of inventory picking up though.  The latest report from the Denver Metro Association of Realtors (DMAR) indicates that there are currently 4,871 attached and detached homes available in the entire Denver Metro area. This shows a significant increase (18.23%), in available properties, from January 2023—good news for homebuyers. And while mortgage rates have been up and down this week, homebuyer sentiment appears to be on the rise while NAHB (National Association of HomeBuilders) metric for measuring their confidence also rose 4% to its highest level since August of last year.  So how’s the market? The era of multiple-offer madness has simmered down from the fever pitch we experienced a few years ago, and yet about 20% of homes sold still have sellers celebrating selling at a price over list price. Agents are still helping buyers find inventive ways to lower interest rates, such as the 3-2-1 or the 2-1 rate buydown, and other concessions (ask us how).  Today’s homebuyers don’t seem deterred about rates trending back up a bit as they have been lately (yet),  “[The] Consumer Sentiment indicator this morning rose to a 31-month high on a strong job market. Inflation is still on a downward trajectory.  Remember, never does anything move in a straight line. Experts are expecting a lower inflation report next month and a return to the mid-6s by spring, officially starting in 7 weeks, with a gradual decline to 6.2% by year-end.” For those of you hoping for drastically lower rates to make your move, I recommend patience. The reality is no one knows when rates will move. There’s only what we know presently.  Meanwhile, affordability remains in the same range we’ve been seeing in the Denver Metro area. The median sales price is $565,000 this month. Whereas last month, the median sales price was $15,000 lower, near $550,000, but $25,000 higher than January 2023, which was $539,250. Bottom Line In the meantime, if you or someone you know is considering a move in town, out of town, downtown, or even in or to another state, I can help (yes, in other states). Let’s schedule a conversation.   

For many, it can make sense to keep your primary home as a rental property, especially if you’re looking to bolster your real estate investment portfolio. And for anyone who took advantage of historically low interest rates just a few years ago, they are faced with the dilemma of selling and getting rid of that epically low rate forever. Yet many are, especially when it just isn’t financially feasible to hang onto multiple properties or buy the next one without cashing in. For those who want to keep their property that cash-flows and has a wonderfully low rate, or is paid off, there are benefits. Here are ones we came up with for you to consider. Additional Income: Renting out your home provides a source of passive income, helping offset mortgage payments, property taxes, and other expenses. Diversified Investment Portfolio: Owning rental property diversifies your investment portfolio, potentially providing long-term financial stability and growth. Tax Benefits: Landlords may be eligible for various tax deductions, including mortgage interest, property taxes, depreciation, and maintenance expenses. Asset Appreciation: Real estate values may appreciate over time, allowing you to build equity and potentially generate a profit when you eventually sell the property. Flexibility: Renting out your home offers flexibility in case you need to move for work, travel, or other reasons, providing a backup plan for housing. Market Demand: If there's strong demand for rental properties in your area, you may be able to secure reliable tenants quickly and achieve competitive rental rates. Long-Term Investment: Real estate is often considered a stable, long-term investment, providing a hedge against inflation and market fluctuations. Property Utilization: If you're not currently occupying the property, renting it out allows you to make use of the space and generate income rather than leaving it vacant. Potential for Cash Flow: Depending on rental income versus expenses, your rental property could generate positive cash flow, providing financial stability and additional funds for other investments or expenses. Future Options: Renting out your home provides the option to move back in or sell it at a later date, maintaining flexibility. This can be an especially nice option if your move may be temporary and is helpful to combat market uncertainty and fluctuation.  If you’re considering hanging onto your primary home as a rental and the reasons above are speaking to you, it may just make sense in your case to do that.

As a REALTOR, I meet with a lot of people who are faced with the question of whether or not to sell their home in order to buy the next one in the event they can afford to do so. That question has become even harder to answer now that so many homeowners took advantage of the historically low interest rates in the post-pandemic world of the early 2020s. Of course the answer to this question is going to be personal to you and your situation. Let me suggest several reasons why it may NOT be a good idea to keep your primary home as a rental. Shopping for a Rental vs. Your Dream Home: The first reason that gets overlooked as much as any is the fact that when you shop for a rental you shop based on drastically different criteria than when you’re looking for your ideal dream home, if you will. You will have different aspects of a property that stand out and matter to you when you’re looking for a home you want to live in compared to when you shop for one to put renters in. That leads me to my next point… Personal Attachment: You may have emotional ties to your home, making it difficult to deal with potential tenant issues or changes to the property. Uncertain Rental Market: If the rental market in your area is weak or unstable, you may struggle to find reliable tenants or achieve desired rental income. Maintenance Costs: As a landlord, you're responsible for maintaining the property, which can incur significant costs over time, especially if the home is older or requires frequent repairs. And renters never care for your property the way you would…ever. Legal and Financial Risks: Landlords are exposed to various legal and financial risks, including liability for tenant injuries, property damage, and potential lawsuits. If you’re not familiar with your liabilities as a landlord, you’re going to want to bone up on them. Loss of Flexibility: Converting your primary home into a rental limits your ability to sell or make changes to the property without disrupting tenants or terminating lease agreements. Mortgage Considerations: Some mortgage lenders have restrictions or may require approval for converting a primary residence into a rental property, potentially complicating the process. Property Depreciation: Renting out your home could result in wear and tear that depreciates its value faster than if it were owner-occupied. Tenant Management: Dealing with tenant turnover, late payments, or disputes can be stressful and time-consuming, especially if you don't have experience as a landlord. Local Regulations: Landlord-tenant laws, zoning regulations, and homeowner association rules may impose restrictions or additional requirements on renting out your property. Potential Loss of Tax Benefits: Converting your primary home into a rental property may impact your eligibility for certain tax deductions or exemptions associated with homeownership. If you’re ready to take on these obstacles and it just makes financial sense for you, by all means, rent away. Our next blog focuses on several reasons why turning your primary home into a rental could be right for you.

With the new year already a month in, we’re already seeing exciting developments in the real estate market. And, in this update, we'll take a look at where the market’s been, where it’s at, and where it appears to be headed in 2024. Where We’ve Been | National Housing Reflecting on 2023, we drew a comparison to the conditions in 1995. Why? Existing-home sales hit a record low of 4.09 million in 2023, mirroring the 3.85 million recorded in 1995. However, the main difference in this comparison is that the U.S. population has grown from 266.6 million (1995) to 336.0 million (2023), contributing to challenges in inventory and affordability. Back in 1995, there were 1.58 million single-family homes available for purchase. In December 2023, this number dropped to 870,000, and the months' supply decreased from 4.8 to 3.1 months. Again, considering our substantial difference in population, you can see how available housing inventory would influence affordability, mirroring a typical supply-demand model.  Affordability concerns were underscored by the median home sales price, soaring from $114,600 in 1995 to a historical high of $389,800 in 2023. Despite a difference in mortgage interest rates, a difference from 7.93% in 1993 to 6.81% in 2023, housing affordability indices, qualifying incomes, and mortgage payment percentages underwent significant shifts. First-time homebuyers faced increased challenges, with their share of the market dropping from 42% in 1995 to 32% in 2023, and the age of first-time buyers rising from 31 to 35 years. Despite these challenges, there is hope for 2024. Mortgage interest rates are on the decline, buyers are entering the market, and new housing construction is helping to increase available inventory. If these trends persist, we anticipate a more positive outcome for the housing market this year. Where We’re At | Local Housing Market (Denver & The Front Range) In the metro Denver real estate market, a notable shift in the relationship between supply and demand is evident as well. New listings increased by 15.2% week over week, and pending transactions surged by 20.7%. The Odds of Selling increased by 4.2% to 53.0%, indicating a positive trend. To achieve balance, we would need 23,177 total listings, putting us at 19.9% of balance. Showings increased by 14.5%, with a median of 21 days on the market. Rates Rates Drop Significantly on “Fed Day”, but Not Because of The Fed The Fed met on January 31st, and rates experienced a notable drop, though the drop is not solely attributed to The Fed’s actions. Economic data and headlines about banking troubles contributed to this shift. While additional gains depend on incoming economic data, things just improved for potential homebuyers who are rate sensitive. Where We’re Headed | What Local Lenders are Saying Local lenders are noting unexpected increases in client introductions, pre-approvals, and applications, indicating a potentially busy spring market. Now sure looks like an opportune time to ensure a strong pre-approval, understand the next steps, and prepare for competitive market conditions…or get out ahead of them. One of our local lender associates wrote,  "If January is any indication of what’s to come in the Spring Market, then HELLO FEBRUARY! I experienced an unexpected increase in client introductions, pre-approvals, and applications this past month that was very welcome but not typical for this time of year. This tells me that we are in for a busy spring, which means NOW is the time to prepare. Anyone considering, talking about, or looking to buy this year should reach out to ensure that they have the strongest pre-approval possible and that they understand and are comfortable with the next steps. I focus on informing clients through communicating and listening to make sure they are as comfortable and ready when the time is right. If you know anyone who would like to be informed, listened to, taken care of, and prepared to successfully close on a new home in this competitive market, please send them my way." Bottom Line When navigating the real estate landscape, it is always crucial to stay informed and prepared. If you have any questions or need assistance, we encourage you to reach out. There’s no sense in wondering and wandering on your own.

As you embark on the journey of purchasing your dream home, it's crucial to delve into the details of the inspection phase, and one aspect that often deserves heightened attention is radon testing. Radon, a naturally-occurring radioactive gas, possesses the potential to impact your health, specifically increasing the risk of lung cancer. In this blog post, we'll explore the significance of radon testing, the associated risks, and the proactive steps you can take to ensure a safe and healthy living environment. To begin, it's essential to understand the nature of radon—it's colorless, odorless, and inert. These characteristics make radon testing a vital component of the inspection process, allowing you to uncover potential risks that may otherwise go unnoticed. For a comprehensive guide on radon, we recommend exploring the EPA's resource, which provides valuable insights into the testing process and mitigation strategies: EPA Radon Guide. In Colorado, the entire Front Range falls into the EPA's Zone 1 designation, indicating predicted average indoor radon screening levels greater than 4 pCi/L. Both the CDC and EPA recommend mitigation at a conservative level of 4.0 pCi/L, emphasizing the importance of addressing this concern during the homebuying process. Understanding that radon levels in the soil vary based on soil chemistry, it becomes apparent that the escape of radon into the house depends on multiple factors, including weather conditions and soil porosity. Particularly, the basement is susceptible to radon accumulation, making it a focal point for testing and mitigation efforts. Builders are increasingly recognizing the importance of radon mitigation, with some incorporating passive radon mitigation systems as a standard practice. Despite varying opinions on radon's significance in real estate transactions, it's evident that awareness and action are on the rise. Radon testing is a straightforward process, typically taking a couple of days. Most home inspectors can facilitate the testing, leaving the kit in the home for at least 48 hours. The results empower you to make informed decisions, such as requesting the seller to install a mitigation system or provide a credit for one. At the time this blog post was published the associated cost of radon testing generally ranges from $125 to $150. Beyond meeting regulatory requirements, testing for radon offers a specific understanding of your home's potential hazards. This knowledge provides peace of mind, especially when radon levels test low. Whether you're planning to occupy the basement regularly, the basement is already finished, or you have future finishing plans, radon testing is a proactive step toward ensuring the safety and well-being of your household. Bottom Line Because Colorado ranks among the top ten states in terms of radon prevalence in the US, it's clear that addressing radon during the homebuying process is not just a regulatory requirement but a crucial step in securing a healthy living space. Feel free to share your thoughts or reach out if you have any questions. Your proactive approach to radon testing contributes to the overall assurance of a safe and healthy home.

I don’t think it’s any coincidence that Prop HH is one of the longest and most complicated taxing measures ever seen on a Colorado ballot. It amounts to 48 pages of legal verbiage affecting all kinds of taxes in Colorado. Like any measure, it’s going to appeal to someone, and there are “good” “bad” and “ugly” aspects, in my opinion. The Good What this does is it puts a temporary freeze on how they calculate property taxes in Colorado, capping it at 6.7% for a whole decade and also knocking $40,000 off the taxable value. I've broken down how Colorado calculates property taxes and given an example below to make it easier to grasp, but for most folks, it means you can expect a nice $300 to $500 drop in your property tax bill for the next decade. The Bad This marks a substantial, enduring increase in income taxes for everyone, not limited to just homeowners. In return for the temporary reduction in property taxes over a decade, the State will retain a portion of your tax refunds. What's noteworthy is that the portion the state retains follows a progressive pattern, with the amount increasing over time. By 2023, the State will hold an additional $94 million, and this figure keeps climbing, reaching $358 million in 2024 and 2025. As we look ahead to 2033 when the property tax decrease period ends, it's projected that the State will have accumulated an extra $2.2 billion from withheld income tax refunds. The rationale behind the State's retention of these tax refunds is ostensibly to "reimburse" institutions such as schools, fire departments, and libraries that will receive reduced funding due to the property tax reductions. However, this approach forces these entities to appeal to the State for what they would have naturally received without this legislation, effectively centralizing control of tax funds and enabling the State to selectively allocate resources. Additionally, the bill imposes rules and restrictions on taxing districts' ability to seek tax increases, ostensibly to maintain fiscal responsibility. While this may seem reasonable, it also transfers more control from local authorities to the State, potentially limiting local autonomy. The Ugly I usually steer clear of delving into demographic politics, but I can't help but voice my concern about the glaring inequity of this proposed tax hike. You see, our tax system has largely been structured to be progressive, meaning those who have more, contribute more. However, this proposal does the exact opposite. Here's the kicker: About 62% of Coloradans are homeowners, and they will experience a modest reduction in their property taxes. Now, the tax refund retention and income tax increase doesn't just affect homeowners; it applies to everyone. But here's where it gets tricky from an equity perspective: Roughly 71% of white individuals in Colorado own their homes, compared to 53% of Hispanics and only 37% of Black individuals. Statistically speaking, homeowners have a net worth that's about 40 times greater than that of non-homeowners. The average net worth of a homeowner stands at $225,000, while a renter's average net worth is a mere $6,300. So, under this proposed tax scheme, everyone faces the same tax increase burden, but only homeowners reap any benefits, and that too, only for a decade. This is what makes it one of the most lopsided tax proposals I've come across. Colorado's method for calculating property tax assessments is already quite intricate, so let me offer a concise explanation: The taxable value of your personal residence in Colorado is currently calculated at 6.765% of the assessed value. It's important to note that this 6.765% rate is temporary, as the statutory rate is set at 7.15%. However, for 2023, there was a temporary reduction to 6.765%, and it will gradually increase to 6.976% in 2024 before returning permanently to 7.15% in 2025. Property tax is assessed in what they refer to as "mils," with a mil being one one-thousandth of a dollar ($0.001). To illustrate, let's take an example: If your home is valued at $500,000 in unincorporated Adams County, where the tax rate is 87.925 mils, the taxable value of your home would be $33,825.00 (6.765% of $500,000). Consequently, your property taxes would amount to $3,018.88 ($33,825.00 x 0.087925). Now that we have this baseline understanding of how Colorado property taxes and tax rates currently work let’s move onto Prop HH. Proposition HH brings about a noteworthy change in property tax assessments. It sets the assessment rate at 6.7% until the year 2032, after which it will revert to 7.15% in 2033. In essence, this freeze on the temporary reduction extends for a decade, which is certainly a positive aspect. Additionally, it introduces a $40,000 reduction in property valuation for the next 10 years, meaning that, for tax purposes, your $500,000 house would be considered as worth $460,000. This is unquestionably a property tax decrease. Using the same example from earlier, property taxes under Proposition HH would amount to $2,709.84, resulting in a tax savings of $309.04. It's a good deal, and I'd be inclined to support it wholeheartedly. For a couple earning $100,000 and filing jointly in 2024, the estimated tax increase is around $200. However, if this couple owns the property described above, they would actually experience a net tax decrease in 2024, saving $109.00. In 2025, this same couple is projected to face a tax increase of $246. When it comes to homeowners, it's anticipated that the tax increase will eventually surpass the benefit of the property tax deduction by the year 2026. I don't know if it’s for you or not, but on November 7th, you’ll have your chance to see Prop HH defeated. Click below and learn more facts about Prop HH that you’re asked to vote on, on your November ballot! https://factsonprophh.com/ As always, we’re here for you to be your real estate resource for life. Please reach out if we can be of service to you or someone you know.

Colorado Property Owners: Don't Overpay Your Taxes, Here's How to Protest If you're a Colorado property owner, you may have experienced the frustration of receiving a property tax bill that seems unfairly high. Early reports show some homeowners are facing as much as a 50+% hike in property taxes in one year! That's obviously a result of the rapid rise in property values experienced during the post-pandemic real estate boom of 2020-2022. Fortunately, there are steps you can take to protest your property taxes and potentially lower your bill. In this blog post, we'll share some top tips for protesting property taxes in Colorado. Understand the assessment process The first step in protesting your property taxes is to understand how your property is assessed. In Colorado, property taxes are based on the assessed value of the property, which is determined by the county assessor's office. This value is then multiplied by the mill levy, or tax rate, to calculate the amount of tax you owe. To determine the assessed value of your property, the assessor will consider factors such as the property's size, location, and condition, as well as recent sales of comparable properties in the area. It's important to review the assessor's records and make sure all of the information is accurate. Gather evidence To support your protest, you'll need to gather evidence that shows your property is overvalued. This could include recent appraisals, comparable sales in your area, and any physical defects or other issues that may affect the value of your property. In my opinion, your best bet is to protest on the basis of deteriorating condition, so if you've made a number of improvements, be prepared that your plight may fall on deaf ears with your county. It's also important to document any changes to your property since the last assessment, such as renovations or repairs, as these may affect its value. File a protest To formally protest your property taxes, you'll need to file a protest with the county assessor's office. The window to file a protest for the 2023 tax year is May 1, 2023 through June 8, 2023. For the 2023 property value assessment, your property was valued as it existed on Jan. 1, 2023, so it's important to act quickly. You can learn more on your county assessor's website. When filing your protest, be sure to include all of the evidence you've gathered to support your case. You can also request a hearing to present your case in person. Consider mediation If you're unable to reach a resolution with the assessor's office, you may be able to enter into mediation. Mediation is a process where a neutral third party helps you and the assessor's office come to an agreement on the value of your property. Mediation can be a helpful option for resolving disputes, and it may be faster and less expensive than going to court. Hire a professional If you're still having trouble resolving your property tax dispute, you may want to consider hiring a professional. A tax attorney or property tax consultant can provide guidance and support throughout the process, and may be able to help you negotiate a lower tax bill. However, it's important to be wary of scams or companies that promise to reduce your property taxes for a fee. Always do your research and make sure you're working with a reputable professional. Protesting property taxes in Colorado can be a complex process, but it's worth the effort if you believe your tax bill is unfair. By understanding the assessment process, gathering evidence, filing a protest, considering mediation, and hiring a professional if needed, you can increase your chances of success and potentially lower your property tax bill. Bottom Line If I'm being honest, you may find yourself with an uphill battle arguing with the county that your home's value has not increased over the past couple of years. However, a more arguable stance may be to question if your property taxes have truly gone up as much as the county says they have. Keep in mind that since property values have gone up at record-breaking rates over the past couple of years, it's no surprise that property taxes have also seen historic increases. Hopefully lawmakers are able to come up with a stopgap solution. If they do, it will be the third year in a row that special bills have been passed to reduce your tax burden. An overtaxed population is an unhappy population and, well, the next elections are right around the corner. FAQs How are property taxes calculated? You'll want to read up on this one. Click to see how property taxes are calculated according to Colorado.gov website. Can a real estate agent help me protest my tax bill? Yes, in that your agent may be able to provide relevant comparable properties that they might use to otherwise prove a home's value in a sale. You may want to inquire with your agent and strategize as to what properties would best serve your cause. Update (May 5, 2023): Wondering what's being done by lawmakers and State leaders to reduce Colorado property owners' tax burdens? Well, that remains to be seen, but here are three articles you may want to check out: What the 10-year Colorado property tax proposal would mean for you Governor, Democrats unveil 10-year plan to prevent Coloradans’ property taxes from rising too quickly Colorado property tax relief plan taps into TABOR taxpayer refunds