Tight Inventory

The numbers that we find to be most interesting right now are all related to inventory.

 

Long story short, inventory is tight.

 

It was already tight pre-coronavirus and now it’s even tighter.

 

Here are the numbers.

 

Active properties for sale versus one year ago are down:

  • 11% in Larimer County
  • 20% in Weld County
  • 26% in Metro Denver

 

This low inventory is one of several reasons that prices are generally still up across the Front Range.

At Windermere Real Estate we are taking Safer at Home and Social Distancing very seriously.  Our people are following our Safe Showings protocol, staying connected to their clients, and providing help wherever needed.


Posted on June 12, 2020 at 3:23 pm
Elizabeth Dolton | Posted in Uncategorized |

Another Meltdown?

The reason why?  People wonder if we are going to have another housing meltdown nationally and going to see foreclosures and short sales dramatically increase.

It turns out that the numbers show that today’s housing environment is quite different than 2007, right before the housing bubble burst.

Specifically, homeowners are in a vastly different situation with their mortgage compared to the pre-Great Recession’s housing meltdown.

In addition to much higher credit scores and much higher amounts of equity compared to 2007, the most significant difference today is in the amount of ARM mortgages.

Back in years leading up to the housing bubble, Adjustable Rate Mortgages were very prevalent.  In 2007 there were just under 13 million active adjustable rate loans, today there are just over 3 million.

The number of those ARMs that would reset within three years was 5 million in 2007 compared to only 320,000 today.

It’s those Adjustable Rate loans resetting to a higher monthly payment that caused such a big part of the housing crisis back in 2008 to 2010.

Back then not only was people’s employment impacted, but many were facing increased monthly mortgage payments.

That’s why there were so many foreclosures and short sales in 2008 to 2010.

That is not the case today and one of many reasons why we don’t foresee a housing meltdown.

 


Posted on May 1, 2020 at 4:34 pm
Elizabeth Dolton | Posted in Uncategorized |

Why No Crash

Matthew talked about a variety of topics that are on people’s mind right now including home values.

Matthew sees no evidence that home values will crash and actually sees signs that they may rise this year nationally.

Here’s why he says this:

  • Mortgage rates will remain under 3.5% for the rest of the year so there won’t be any interest-rate pressure on prices
  • Inventory, which was already at record-lows, will drop even further keeping the supply levels far below normal
  • New home construction will continue to be under-supplied and will be nothing like the over-supplied glut of inventory that we saw in 2008
  • The vast majority of employees being laid off and furloughed are renters
  • Homeowners have a tremendous amount of equity in their homes right now compared to 2008 which will prevent an influx of short sales and foreclosures

If you would like to receive a recording of the webinar we would be happy to send it to you.  Feel free to reach out and ask for the link.

 


Posted on April 24, 2020 at 7:00 pm
Elizabeth Dolton | Posted in Uncategorized |

Leading Indicator

We are watching close to see where the real estate market is headed. Anecdotally we can tell you that the vast majority of transactions that are under contract are still closing. We have seen very few transactions cancel because of employment issues or the wild swings of the stock market.

An interesting leading indicator was announced this week that sheds some light as to where the market is headed. Each week the Mortgage Bankers Association releases their index which tracks new mortgage applications.

They track both purchase applications and refinance applications. To no one’s surprise, the index was down this week but not as much as you may have guessed.

New purchase applications were down 11% compared to the same week this last year. Refinance activity fell more sharply, down 34%.

This is a statistic we will watch closely as time goes on.

Each week our Chief Economist produces a video with the latest on the national economy and the housing market. Reach out to us if you would like to see that video.

Posted on March 27, 2020 at 3:39 pm
Windermere Windsor | Category: Fun FactsWindermere Real Estate | Tagged 

Posted on March 27, 2020 at 4:37 pm
Elizabeth Dolton | Posted in Uncategorized |

Designing Your Home Office

Working from home is an aspiration for many of us, but to do so effectively takes effort. A disorganized space at home can be just as troublesome as a hectic office. The most disciplined telecommuters will tell you that you need a structured routine and organization in order to be successful.

Image Source: Canva

 

Having a designated workspace is one of the most important elements to your success when you make the switch to telecommuting. Even if you live in a small space, you need to find a balance between home and office. People who work from home often have a difficult time separating their work hours from their non-work hours because it’s so easy to keep at it late into the night. But maintaining a balance and shutting down the computer is important for overall wellbeing. What are some other must-haves for a successful home office? Here are the top five:

 

  1. Natural Light – Study upon study tells us that natural light is needed to boost productivity and mood. Make sure to set your desk up as close to a window as you can. If being near a window isn’t an option, a natural light lamp is the next best thing. It helps balance your body clock and leaves you feeling rested and refreshed.
  2. To-Do List or Planner – Start each day off by making a to-do list outlining what you need to get done before the end of the workday. Make sure to set a realistic time frame in which all of that should be completed, so you can check each one off the list and feel immense accomplishment once you’ve completed them all.
  3. Storage – If you have a big enough space, put in a large bookshelf where you can organize everything (think storage boxes). It reduces clutter and looks stylish. Using your walls and cabinetry is the most efficient use of space.
  4. Calendar – Many people tend to rely on digital calendars these days because of their convenience. When all of your devices sync together and pop up with reminders, you never have to worry about missing an appointment. However, many people find that it helps to keep a paper calendar handy too so you can easily view your whole month at a glance. Choose which options works best for you by playing with both options, or something in between and see which one lets you be more productive with the least amount of stress.
  5. Space for Inspiration – It doesn’t matter what field you work in, having a source of inspiration in your workspace is essential. Whether it’s a photo of your family, your dream car, or that vacation you’ve been dying to take, having that inspiration right in front of you provides a constant reminder of why you do what you do.

 

Originally posted by Meaghan McGlynn


Posted on March 2, 2020 at 8:36 am
Elizabeth Dolton | Posted in Uncategorized |

Bubble Burst

To help answer that question it’s valuable to look at the reasons that caused the last one.

There were three main drivers of the bubble that burst in 2008:

  1. Easy Credit – loans were very easy to attain
  2. Over-Leverage – people were using their homes at ATM’s
  3. Over-Supply – too many new homes were being built

Now, let’s compare that to today:

  1. Stricter Credit – the average home buyer today has a FICO score of 755
  2. High Equity – collectively, U.S. homeowners have $19 Trillion of equity in their homes and collective mortgage debt has not increased for 13 years
  3. Under-Supply – today we are building only two-thirds of the new homes being built in 2004 yet the population is much higher

Given this healthy information, we are not concerned about another bubble forming today.

If you would like to see a video recap of our annual Market Forecast you can watch that HERE.


Posted on February 21, 2020 at 5:18 pm
Elizabeth Dolton | Posted in Uncategorized |

Lovely Stats

  • Prices are up 3.5% compared to last year
  • Inventory is up 10% which means there is more selection for buyers
  • We just had the most active January in terms of closings in over 10 years
  • Well over 13,000 residential properties representing $5.4 Billion of volume has sold in the last 12 months

If you would like to see a video recap of our annual Market Forecast you can watch that HERE.


Posted on February 14, 2020 at 5:32 pm
Elizabeth Dolton | Posted in Uncategorized |

Rate Forecast 2020

Our Chief Economist, Matthew Gardner, predicts that rates for a 30-year fixed mortgage will stay between 3.8% and 3.9% for 2020.

He doesn’t see rates going above 4.0% until at least the first quarter of 2021.

This is obviously great news for buyers as their payments will stay much lower as compared to having a rate at the long-term average of 7.5%.

If you would like to see the slides from Matthew Gardner’s Forecast presentation, we would be happy to get those in your hands.  Just let us know if we can help!

Posted on January 24, 2020 at 3:57 pm
Windermere Windsor | Category: Economics 101Mortgage | Tagged 

Posted on January 24, 2020 at 5:15 pm
Elizabeth Dolton | Posted in Uncategorized |

Millennial Buyers

Not true!  Especially on the Front Range of Colorado.

Based on research by our very own Chief Economist, Matthew Gardner, Millennials make up a significant percentage of all home buyers in Metro Denver and Colorado.

In Metro Denver, 50% of all buyers last year were in the Millennial demographic.

In Northern Colorado, the number is 41%.

It turns out that Millennials, as they move into their mid to late 30’s, see the value of home ownership and are at the point in their lives where it makes sense to own instead of rent.

Posted on January 17, 2020 at 5:55 pm
Windermere Windsor | Category: Fun FactsWindermere Real Estate | Tagged 

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Posted on January 17, 2020 at 7:09 pm
Elizabeth Dolton | Posted in Uncategorized |

2020 Economic & Housing Market Forecast

 

As we head toward the end of the year, it’s time to recap how the U.S. economy and housing markets performed this year and offer my predictions for 2020.

 

U.S. Economy

In general, the economy performed pretty much as I expected this year: job growth slowed but the unemployment rate still hovers around levels not seen since the late 1960s.

Following the significant drop in corporate tax rates in January 2018, economic growth experience a big jump. However, we haven’t been able to continue those gains and I doubt we’ll return to 2%+ growth next year. Due to this slowing, I expect GDP to come in at only +1.4% next year. Non-residential fixed investment has started to wane as companies try to anticipate where economic policy will move next year. Furthermore, many businesses remain concerned over ongoing trade issues with China.

In 2020, I expect payrolls to continue growing, but the rate of growth will slow as the country adds fewer than 1.7 million new jobs. Due to this hiring slow down, the unemployment rate will start to rise, but still end the year at a very respectable 4.1%.

Many economists, including me, spent much of 2019 worried about the specter of a looming recession in 2020. Thankfully, such fears have started to wane (at least for now).

Despite some concerning signs, the likelihood that we will enter a recession in 2020 has dropped to about 26%. If we manage to stave off a recession in 2020, the possibility of a slowdown in 2021 is around 74%. That said, I fully expect that any drop in growth will be mild and will not negatively affect the U.S. housing market.

 

Existing Homes

As I write this article, full-year data has yet to be released. However, I feel confident that 2019 will end with a slight rise in home sales. For 2020, I expect sales to rise around 2.9% to just over 5.5 million units.

Home prices next year will continue to rise as mortgage rates remain very competitive. Look for prices to increase 3.8% in 2020 as demand continues to exceed supply and more first-time buyers enter the market.

In the year ahead, I expect the share of first-time buyers to grow, making them a very significant component of the housing market.

 

New Homes

The new-home market has been pretty disappointing for most of the year due to significant obstacles preventing builders from building. Land prices, labor and material costs, and regulatory fees make it very hard for builders to produce affordable housing. As a result, many are still focused on the luxury market where there are profits to be made, despite high demand from entry-level buyers.

Builders are aware of this and are doing their best to deliver more affordable product. As such, I believe single-family housing starts will rise next year to 942,000 units—an increase of 6.8% over 2019 and the highest number since 2007.

As the market starts to deliver more units, sales will rise just over 5%, but the increase in sales will be due to lower priced housing. Accordingly, new home prices are set to rise just 2.5% next year.

 

Mortgage Rates

Next year will still be very positive from a home-financing perspective, with the average rate for a 30-year conventional, fixed-rate mortgage averaging under 4%. That said, if there are significant improvements in trade issues with China, this forecast may change, but not significantly.

 

Conclusion

In this coming year, affordability issues will persist in many markets around the country, such as San Francisco; Los Angeles; San Jose; Seattle; and Bend, Oregon. The market will also continue to favor home sellers, but we will start to move more toward balance, resulting in another positive year overall for U.S. housing.

 

 

About Matthew Gardner:

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

Originally posted in Economics 101 Videos and Market News by Matthew Gardner, Chief Economist, Windermere Real Estate


Posted on December 16, 2019 at 4:29 pm
Elizabeth Dolton | Posted in Uncategorized |