Buyers & Sellers • Housing Trends • March 20, 2021

107 Straight

by Heather Patel

According to research from the National Association of Realtors, home prices have appreciated for 107 straight months.

The median price in the U.S. is now $309,000.

The U.S. region with the highest median price is the West at $461,800. The lowest is in the South at $263,300.

All regions showed double-digit price appreciation from one year ago.

While prices are going up all across the U.S., inventory is going down. The number of properties for sale has declined for 20 straight months.

Low inventory and high demand are causing properties to sell quickly. It now takes an average of 21 days for a property to go under contract compared to 43 days one year ago.

So, the dynamics we notice locally are also occurring nationally.

Buyers & Sellers • Housing Trends • March 20, 2021

Relocating for Remote Work

by Heather Patel

As the ubiquity of working from home continues, many homeowners are making the decision to move. Whether the motivation for relocating is to lower the cost of living, to be closer to family, or simply a fresh start, there are various factors to keep in mind when relocating for remote work.

Before You Relocate

Before you make the jump to a new life in a new place, making time for some strategic planning will help ensure your relocation goes as smoothly as possible. A logical first step is to consider the financial impact of your move. Depending on your company’s policy, there may be adjustments to your pay when you relocate. If this is the case, factor in your pay change as you form your relocation budget. Research the cost of living in your new hometown to understand how a compensation adjustment may affect your home search and your lifestyle once you move.

If you are moving out of state, relocating could affect your benefits and your taxes as well. There’s a chance that your employer’s health insurance plan does not offer coverage in the state you’re moving to. Talk to your employer to discuss your options. Before moving out-of-state, find out whether the two states have a reciprocal tax agreement, especially if you’re moving between states that have differing income tax regulations.

Your New Home for Remote Work

Working remote has given homeowners the freedom to choose their desired location, unbound by a work commute, especially if their company has indicated that there are no clear signs of returning to in-person work anytime soon. Knowing your desired work environment will help to tailor your home search. If you’re looking for peace and quiet while you work, explore listings in rural areas. If the hubbub of city life is your idea of a comforting backdrop, direct your attention to metropolitan areas.

For the remote worker, it’s more important than ever that your home accommodates your working needs. As many homeowners have experienced throughout the pandemic, you spend a great deal of time in your home office, so finding the home with the best workspace for you should be a priority. If you desire a private area where you can focus, a home with an open floor plan may not be the best choice. Instead, you may want to look for homes with a separate bonus room or extra bedroom.

Once you’ve moved into your new home, it’s time to put together your home office. Whether your previous home office was a professionally curated environment or a makeshift workspace in the corner of a room, a new home means a fresh start for your remote work. Like many homeowners, by now you’ve likely got a solid grasp on what your ideal home office looks like. Keep those elements alive when you relocate and enjoy productive workdays in your new home.

Housing Trends • Sellers • March 18, 2021

10 Costs Associated with Selling Your Home

by Heather Patel

Selling a home is an exciting time for homeowners. Once you and your household have decided that you’ll hit the market, it’s easy to think solely about the revenue that comes with the sale. However, selling a home comes with its own set of costs. Knowing what these costs are will help you budget throughout the selling process.

Here are 10 most of the most common costs that come with selling a home:

1. Commission fees

Of all the expenses that come with the sale of a home, agent commission fees are usually the largest and for good reason. Real estate agents are professionals, wielding their industry knowledge and local expertise to get the job done and save countless hours of work for the homeowner. The commission is split by the agents representing both buyer and seller, typically totaling between five and six percent of the sale price.

2. Pre-sale home inspection

Pre-sale home inspections are not mandatory, however, if a seller does not conduct one, it could lead to major costs down the road. The inspection allows the seller to find any issues with the home and properly disclose them to the buyer. If the buyer’s home inspector finds repairs that need to be made, they can ask the seller for a price reduction or require that they be fixed in order for the sale to go through.

3. Home repairs

There are varying degrees of home repairs that can increase the value of your home. Cosmetic fixes like improving your landscaping will do wonders for your curb appeal. Painting and decluttering help to present the home in the best light for buyers. Larger projects like replacing appliances, roofing, plumbing, and full-scale upgrades are a more significant investment but can increase your home’s value.

4. Staging costs

During the selling process, it pays to put effort into the presentation of your home. Staging helps buyers to visualize living in the home. Professional stagers will enhance your home’s qualities while minimizing its deficiencies. Their cost will depend on the level of staging your home requires.

5. Utilities

In the interim period between when you move out and the buyers move in, you’ll want to continue paying utilities. Without running water, electricity, and heat, your home could be difficult to show to buyers.

6. Remaining mortgage

Another cost of selling your home is the remaining loan balance on your mortgage. If you have been steadily paying your mortgage, your home sale will greatly aid in paying back the remaining amount, if not cover it completely.

7. Escrow fees

In a home sale, there’s always the question: Who handles the cash? That’s where escrow comes in. It’s common for buyers and sellers to split the cost of escrow services. Be mindful of additional costs during escrow such as transfer fees and notary services.

8. Capital gains tax

The capital gains tax is assessed by taking the difference between what you paid for your house and what you sold it for. There are common exclusions for the tax, but there are situations where the exclusions may not apply. For example, if the home was not your primary residence, you could end up paying taxes on the whole gain. Talk to your Windermere agent for more information.

9. Property tax

If your home sale takes place after you’ve paid taxes for the year, you may get a rebate at closing. In this case, the buyer reimburses the seller for the applicable taxes paid. Otherwise, the seller should pay the prorated share of property tax until the sale closes, placing the money in escrow.

10. Moving costs

Finally, the home sale is final, and you’re ready to move. Whether you’re moving locally or across the country, moving costs can add up quickly. Moving as many of your items yourself can save money, but for larger, more difficult to transport items, you’ll likely need to incur the cost of hiring professional movers to ensure your items arrive at your new home safely.

These are just some of the costs associated with selling your home. Each home sale is different, and the costs vary accordingly. Knowing what you can expect to spend throughout the selling process will help you budget accordingly.

Buyers & Sellers • Housing Trends • Market Trends • March 12, 2021

Enormous Equity

by Heather Patel

Hot off the press is the Core Logic Homeowner Equity Report. This is their quarterly look at what is happening with homeowners’ equity across the country.

Here are the staggering numbers coming out of their research:

Collectively, U.S. homeowners with mortgages have realized a $1.5 Trillion gain in equity over the last 12 months.
Only 2.8% of all mortgaged properties have negative equity meaning the home is worth less than the loan amount.
In Colorado, just 2.5% of homeowners have negative equity. For comparison, the percentage in Louisiana is 10.7%.

This research is one of many reasons why we don’t see any sort of impending housing crisis like we experienced in 2009. In the fourth quarter of 2009 for instance, 26% of all homeowners had negative equity.

Buyers & Sellers • Homeownership • March 10, 2021

Ways to Save Money by Going Green

by Heather Patel

Contrary to popular belief, going green does not have to be hard or cost money, in fact it can even save you money. There are many small things that you and your family can do within your home to save money while reducing landfill waste and the use of natural resources. Discover a few ways to go green and save some money by choosing a green home.

Changes the city can help you can make in your home

If you are a utility customer of Fort Collins Utilities or Loveland Water and Power they offer a Home Efficiency Assessment to the community at absolutely no cost to you. These minor changes in the house can actually make a very large impact on your personal water and energy use, while helping you lower your utility bill! They are happy to provide this service virtually and drop products off at your doorstep, just note that you will be needing to walk around your house to show them some data and appliances. Whatever qualifies for an upgrade can be done with these products, and most are fairly simple to install. **Homeowners and renters are eligible for this free service

♦Home Efficiency Assessment

During the assessment they will…

Conduct a basic inspection of your home, appliances, windows, toilets, and heating/cooling system.
Install appropriate efficiency measures based on your home’s needs. These products may include LED light bulbs, water conserving shower-heads and aerators, smoke/carbon monoxide detectors, clotheslines and high-efficiency toilets.
Educate you about water and energy efficiency practices and services.

For more information or to schedule your assessment visit their website.

https://www.larimer.org/ewd/young-adults/lccc/home-efficiency-assessment

Changes you can make in your own home

♦Compost Bin

Composting is free and can provide you with rich soil to garden with. You will never have to buy soil and can easily grow plants and vegetables. To create your own bin, get a large trashcan with a locking lid, then drill about 25 holes all around the bin and attach the bin to small platform (allows it to drain). Once you start putting approved items in the bin go outside and roll it around in the grass every few days.

♦Energy Efficient Light Bulbs

You can save approximately $75 dollars a year by replacing your traditional incandescent with energy efficient light bulbs. On average energy efficient light bulbs typically use way less energy and can last much longer, not needing to be replaced as much.

♦Laundry

There are quite a few options to save money and energy when it comes to laundry. Here are a few: wait till you have a full load of laundry to wash, line dry your clothes, wash your clothes in cold water and when it comes time to get a new washer and dryer buy an energy efficient one.

♦Weather-Strip & Caulk

One of the main ways we use a lot of energy, especially in hot and cold climates, is through air-conditioning and heating. One way to reduce the use of heating and air-conditioning is to properly weather strip and caulk all windows and doors keeping your home cool and warm when needed.

♦Reuse and Reduce

Use items more than once when you can to avoid throwing them out; this might mean buying quantity over quality. Another way is to join The Freecycle Network or Buy Nothing group on Facebook you can swap used goods with neighbors for free and also keeping more waste out of landfills.

♦DIY Cleaning

Start making your own cleaning products. Not only can you customize, make them eco-friendlier but you will also save money buying products. On average, most DIY cleaners cost less than a $1 to make per bottle compared to $5-$15 per store bought bottle.

♦Unplug & Turn Off

Put all your major electronics on a power strip and shut off when they are not in use. Even if your electronics are shut off, they still will continue to draw electricity thought out the day. Another tip is to make sure you unplug your cellphone when completely charged and always power everything down while not in use to save on battery life.

♦Toilet

There is an extremely easy way to make your toilet a low flow toilet. Simply add a brick, wrapped in a waterproof bag or take a plastic water bottle and fill it with sand putting it into your tank. This will reduce the amount of water with every flush. Once you are ready for a new toilet purchase a low-flush toilet.

♦Shower

Change up your shower head with an energy-efficient shower head that will use half the amount of water. These shower heads are low flow but will significantly cut your water bill down. Another option is to install a tap aerator which will also cut down water usage without changing the water pressure.

Buyers & Sellers • Home Remodeling • March 5, 2021

Simple Bathroom Upgrade

by Heather Patel

The thought of upgrading a bathroom often brings to mind large-scale renovations, demolition, and hefty price tags. Even projects like replacing a backsplash or repairing tile can be more involved than you might think. However, it’s possible to give your bathroom a makeover without breaking the bank (or your back). Whether you’re looking to just freshen it up or make it feel like your own personal spa, these simple projects can help take your bathroom to the next level.

Upgrade your Décor

If you want to make a big splash without spending big money, consider upgrading your bathroom with new décor. A fresh coat of paint on the walls or a bold, patterned wallpaper can completely change the character of the space, while accent pieces like a new shower curtain and towel racks can reinforce your color choices. Installing shelving is a simple, functional tactic that gives dimension to your walls. Whether it’s in the shower, above your toilet, or beside your vanity, a shelf can save surface space while helping to tie the room together.

Upgrade your Tub

Upgrading your tub doesn’t have to mean buying a replacement. Simply refinishing your tub will have it looking brand new and helps you save money. Over time, tubs accumulate cracks, dings, and discoloration due to mold, but refinishing can cure these imperfections right away. Start by removing all hardware from the tub. Sand the whole surface, fill in any cracks or holes with putty or epoxy, then sand them smooth. Apply multiple layers of primer and topcoat, give it a buff, and enjoy your brand-new bathtub.

If refinishing your tub is too much to handle, consider simply touching it up. Fill in any cracks and apply a fresh line of caulking around the surface. After this is done, shop around for new tub hardware to polish off your cost-effective bathtub makeover.

Upgrade Your Vanity

With just a few tweaks, you can turn your vanity area from a mirror with counter space to an impactful centerpiece. Instead of going all out with a new cabinet install, simply replacing your cabinet hardware and drawer pulls can make a big difference. Think of ways your new hardware can reinforce the style of your bathroom. Match them with your shower rod, faucet, and showerhead to make your bathroom more eye-catching.

Your vanity also offers a great opportunity to add some color to your bathroom. Giving it a fresh coat of paint will help to liven up the space at a low cost. For wooden vanities, a re-stain is a great way to give them new life. Start by removing the doors and drawers. Apply wood stripping to all surfaces, then let them sit for the recommended time. Now you can begin to scrape away the old finish. Sand down all surfaces and apply the primer before staining the wood. Once your stain settles in, apply a second coat and your vanity will be good as new.

Finishing Touches

Well-organized surfaces and compartments will help to create serenity in your bathroom. Whether it’s in the shower, the medicine cabinet, or below the vanity, look for multipurpose organizers that help cut down on bathroom clutter and save space. Add in natural elements like bamboo and river rocks to make your bathroom feel like a soothing sanctuary.

For more ideas on affordable home makeovers, check out our tips for upgrading your bedroom, home office, and kitchen.

Buyers • Market Trends • March 1, 2021

Days of Inventory

by Heather Patel

In the residential real estate industry, inventory is typically measured in months.

For example, the definition of a “sellers’ market” is when there is less than 4 months of inventory on the market. Meaning, at the current pace of sales, it would take less than four months to sell all the homes currently for sale.

Today it makes more sense to measure inventory in days instead of months.

Here is the number of residential properties currently listed for sale in each market:

Larimer County = 255
Weld County = 261
Metro Denver = 1,645

Here is the current pace of sales in each market:

Larimer County = 10/day
Weld County = 10/day
Metro Denver = 112/day

So, at the current pace of sales, this is how long it would take to sell all the residential properties currently for sale in each market:

Larimer County = 26 days
Weld County = 27 days

Metro Denver = 15 days

Buyers • Housing Trends • February 26, 2021

The Importance of Pre-Approval

by Heather Patel

To set yourself up for a smooth and successful home purchase, getting pre-approved is perhaps the most productive first step you can take. It strengthens your buying credibility, informs your home search, and speeds up the closing process.

The Pre-Approval Process

There is an important distinction to made between two important steps of your mortgage application process: pre-qualification and pre-approval. They are similar in that they both help to inform your financial standing, but there are key differences between the two.

Pre-qualification

Pre-qualification is the first step in your mortgage application process. It will help you to understand the approximate loan amount you can expect to qualify for. You’ll begin by sharing your financial information—debt, income, assets, etc.—with you bank or lender. After reviewing the information, the bank or lender will give a loan estimate. The process is relatively simple, only taking a few business days to process.

Pre-approval

The pre-approval process is more involved than pre-qualification. After submitting a mortgage application, your lender will require all the necessary info to conduct a thorough credit history check and review of your financial health. Getting pre-approved will give you a better idea of how much you can borrow, estimated monthly costs, and what interest rates you can expect on your loans. Mortgage pre-approvals are typically valid for 60 to 90 days.

Benefits of Pre-Approval

Credibility

The truth is, each home on the market can only go to one buyer. To maximize the chance that your offer is accepted, sellers need to know that your offer is serious. Getting pre-approved shows that you are financially prepared and, in the event that your offer is accepted, there will be no hold ups in obtaining your mortgage. This assurance is what sellers want to know about their potential buyers, especially in a seller’s market.

Home search

Not only does pre-approval help to bolster your case as a buyer, but it also Indicates your affordable price range. By knowing your budget, you will be able to hone your home search and start preparing offers, eliminating any potential wasted time looking at houses you can’t afford.

Closing process

Once your offer is accepted, you’ll be counting down the days to move-in. Unfortunately, the closing process can often drag on, leaving buyers feeling like they’re in post-purchase limbo. Pre-approval will speed up the closing process, since the mortgage approvals have already been taken care of, allowing you to focus on next steps like appraisals and inspections.

When to Get Pre-Approved

Being financially prepared for a home purchase is a solid indicator that you’re ready to go about getting pre-approved, but what does that look like? Buying a house means taking on serious debt, so it’s important to either have your remaining debt paid off or have a clear path to becoming debt-free before getting pre-approved. Having adequate savings for a down payment is a sign that you’re ready to make your offer. For any questions about the pre-approval process and to get connected to a mortgage professional, contact your Windermere agent.

Home Remodeling • Homeownership • February 22, 2021

DIY Remodeling vs Professional Remodeling

by Heather Patel

Deciding whether to DIY a remodeling project or leave it to a professional is a matter of weighing the risks and rewards, time, and budget. Before you start applying a new coat of paint or go about knocking down a wall, create a plan for your remodel to help you decide which projects you can handle, and which ones belong in the hands of a pro.

Create Your Remodeling Plan

Knowing your plans for your remodel will help to determine your timeline and budget, which will inform your DIY-vs-Pro decision-making. Set specific goals for each project so you’ll know when you’re getting off track but remain flexible in your planning to leave room for any unexpected hurdles that will inevitably pop up in the remodeling process. Your budget will also help you decide who should execute certain projects. For example, if you’re budgeting more for a kitchen remodel than any other project, that is a likely candidate for professional help.

If you’re having trouble deciding the best route to take with your remodeling projects, ask yourself the following questions:

What risks am I comfortable taking on?
How much time am I willing to dedicate to this project?
Does this project require a permit?
Do I have any experience with this kind of remodel?
Am I comfortable giving up control of this project?

DIY Remodeling Pros and Cons

Pros: Taking a DIY approach to remodeling projects pays dividends in many ways. Without having to pay labor costs, you stand to save significant money by tackling a project on your own. Going DIY also allows you to set your own schedule for the project. And of course, the sense of ownership and pride you will feel knowing you completed the project on your own is a priceless feeling for a homeowner.

Cons: DIY projects can be consequential. Mistakes at any point in the renovation process can lead to greater costs and sometimes, hiring a professional to fix the mistake. Unfortunately, this can result in the loss of significant time and money.

Professional Remodeling Pros and Cons

Pros: Professionals are inherently more experienced, bringing their specialization to the table on every home renovation project, so you can expect them to perform high-quality work that will increase the value of your home.

Cons: Getting professional quality work means paying for it. When budgeting, expect higher costs for any project you’re thinking of outsourcing to a pro. Bear in mind that, especially for large-scale renovation projects, your home will become a construction site. Accordingly, you may need a back-up plan, such as a temporary kitchen set-up or a short-term rental home .

DIY Remodeling vs Professional Remodeling: Around the House

The following list breaks down which projects are typical DIY candidates and which ones homeowners commonly opt for professional help to complete. However, the decision is ultimately up to you. If you have your heart on tackling a project on your own, gather your tools and make it happen!

Kitchen

Professional: Any large-scale structural changes, new gas lines, or new plumbing projects should be handled by a professional.
DIY: Simpler kitchen projects like a backsplash or faucet replacement and any cabinet finishing tasks are perfect DIY candidates.

Bathroom

Professional: Plumbing installation, running electricity, or any projects involving an expansion or alteration to your bathroom structure.
DIY: If your bathroom is simply in need of some new tile work, basic medicine cabinet restoration, or minor flooring improvements, roll up your sleeves and DIY.

Backyard

Professional: Consider hiring a professional for any significant outdoor projects like concrete builds, in-ground pools, and technical deck work.
DIY: Common backyard DIY projects include building a garden tool shed, building a fence, and refinishing a deck.

General

Professional: It is best to hire pros for new roofing, any foundation work, and extensive demolition projects. For asbestos and drywall finishing, it’s easiest, and safest, to go with the pros.
DIY: Any interior painting projects, basic electrical work, or simple trim and door upgrades.

If you’re planning on going through a remodel while you live at home, read this first. For more information on how certain renovations may impact the value of your home, talk to your Windermere agent.

Economics 101 • Market Trends • February 19, 2021

Q4 2020 Colorado Real Estate Market Update

by Heather Patel

The following analysis of the Metro Denver & Northern Colorado real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere agent.

REGIONAL ECONOMIC OVERVIEW

The job recovery that appeared to be firmly in place in the summer has started to wane. Though Colorado has recovered more than 209,000 of the jobs lost due to COVID-19, employment levels remain almost 210,000 below the level seen last February. Even with employment growth stalling, the unemployment rate stands at a relatively respectable 6.4%, down from a peak of 12.2%. Regionally, unemployment levels range from a low of 5.4% in Boulder to a high of 6.9% in Greeley. Rising COVID-19 infection rates continue to impact the job recovery, and I do not see much in the way of palpable improvement until a vaccine becomes freely available, likely in the second half of this year.

COLORADO HOME SALES

❱ In the final quarter of 2020, 12,207 homes sold. This represents an increase of 21.8% compared to the fourth quarter of 2019, but 19% lower than in the third quarter. I am not concerned, though, because seasonal influences tend to impact sales in the winter.

❱ Sales rose in all markets other than El Paso compared to the fourth quarter of 2019. I believe sales are only limited by the number of homes on the market.

❱ Inventory levels remain well below what I would like to see. The average number of homes on the market in the fourth quarter was down 55% from the same period in 2019.

❱ Pending sales were 34% lower compared to the third quarter. Again, seasonality and a lack of homes to buy impact this figure. Pending sales are still 13% higher than a year ago.

Colorado Counties Graph

COLORADO HOME PRICES

Price appreciation in various Colorado counties.

❱ Home prices rose significantly in the fourth quarter, with the average price increasing 13.7% year-over-year to $532,492. Prices were up 1.8% compared to the third quarter of this year.

❱ Interest rates are unlikely to drop much further and this will lead price growth to slow as we move through 2021.

❱ Year-over-year, prices rose across all markets covered by this report, with significant appreciation in Clear Creek, Gilpin, Park, and El Paso counties. Every county but Arapahoe saw double-digit price gains.

❱ Affordability in many Colorado markets remains a concern as prices continue to rise at well-above-average rates. That said, I anticipate we will see price growth moderate in 2021.

A bar graph showing the annual change in home sale prices in various Colorado counties.

DAYS ON MARKET

❱ The average number of days it took to sell a home in the markets contained in this report dropped 15 days compared to the final quarter of 2019.

❱ The amount of time it took to sell a home dropped in every county contained in this report compared to the fourth quarter of 2019.

❱ It took an average of 26 days to sell a home in the region, down 3 days compared to the third quarter of 2020.

❱ The Colorado housing market continues to demonstrate solid demand, and buyers are clearly competitive as suggested by the short length of time it is taking to sell a home.

A bar graph showing the average days on market for homes in various Colorado counties

CONCLUSIONS

A speedometer graph indicating a seller's market in Colorado.

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

Home sales and prices are significantly higher than a year ago, and demand for housing is very much in place. Naturally, this favors home sellers who are still in control of the market. I do expect to see some improvement in listing activity this year, which, in concert with modestly rising interest rates, will likely start to take some of the steam out of the market. However, any moderation in the market has yet to appear. Even given the possible headwinds mentioned above, I am moving the needle a little more in favor of sellers, as demand is likely to exceed supply for the time being.

ABOUT MATTHEW GARDNER

Matthew Gardner - Chief Economist for Windermere Real Estate

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.