Lowest Inventory in the History of Ever

According to statistics compiled by the Denver Metro Association of Realtors (DMAR), the inventory of available homes in Metro Denver hit an all-time record low since the numbers have been tracked. 

This is great news for Sellers! People want to live in and around Denver, they’re willing to pay a premium to do so, and there aren’t enough houses, townhomes or condos to go around. It’s called a Sellers Market for a reason: the odds are in your favor, and this is an excellent time to maximize your homes potential and gain a return on your investment by selling your property, if you are in a position to do so.

The hot market we’re in right now is challenging for Buyers. Prices are strong. Inventory is low. Interest rates are on the rise. Factors like rising interest rates will eventually put a dent in the insane level of demand in our area because as financing becomes more expensive, fewer buyers will enter the marketplace. In the meantime though, if you are a buyer in the Metro Denver housing market, you need to do everything in your power to give yourself an edge.

Here are a few tips savvy Metro Denver Buyers can use to win at the game: 

Secure financing first. Don’t begin the hunt until you are fully approved for a loan, and don’t wait to apply. If you want to move in 6-12 months, apply for financing now.

Know your timeline. If you want to move in a year, don’t assume you can wait 10 months to begin your home search. Even if the market cools a bit as the Fed raises rates, Denver will likely still be hopping in a year. Plan for the possibility you’ll be searching for a home for several months, and don’t put off the process until the moment you want or need to move.

Don’t go it alone. Unless you are an expert negotiator and familiar with the ins and outs of real estate contract law, seek expert representation to secure a legal, smooth-as-possible transaction. Things move quickly in a market like this, and if you aren’t prepared, you’ll lose out and possibly hit legal snafus along the way. Work with an experienced real estate professional to avoid pitfalls.

Whittle down your must-haves. Wouldn’t it be nice if your next house had freshly painted walls, beautiful hardwood floors, newer appliances (included, of course) and stylish high end draperies in every room? In a Sellers Market, you may have to give up on some of your wishes and hopes in order to snag a deal. You can paint, upgrade the flooring or appliances and install fancy curtains later; if you aren’t able to successfully close on a house, none of those details will matter. Choose 5 absolute must-haves and mentally prepare yourself to look past minor imperfections.

Steel yourself – there will be disappointment along the way. The reality of a competitive real estate marketplace is this: you will likely make offers (notice I said offers – plural) that are ignored completely or rejected. You may come back with a higher/better offer on a house you love and be rejected a second time. It will probably bum you out every single time – at least a little. The key is not to let yourself fall in love on the first date. Not even once you are under contract – because sometimes contracts fall through. The time to really let loose with a victorious hoot-holler-we-did-it victory dance is the moment you walk away from the closing table with keys in hand. That’s when the house is really yours, and that’s when to breathe a sigh of relief and start dreaming big dreams about your new digs.

Are you thinking about selling, and wondering if it’s worth your while? Thinking about moving closer to work, into the city, or further out into Suburbia?

Call me or drop me a line in email. I’ve been helping people buy and sell homes across Denver for over 20 years, and I’d love to help you make your next move.

Jack Meyers

The Meyers Group
jackestate@aol.com
303.263.3050
Twitter: @jackestate

Advertisements

Denver’s at the Bottom of this List

How long have you been around to watch what happens in the Metro Denver real estate market? As a 21 year veteran of the biz here in Denver, I’ve seen highs, lows and somewhere-in-the-middle, and I watched my industry, and homeowners, struggle hard during the recession as both incomes and home values dropped right along with the stock market.

I invite you to join me in celebrating a wonderful new statistic about our fair city: according to a Denver Post article published this week, “Metro Denver reported the lowest share of distressed home sales out of 25 major metro areas in March, according to a report from CoreLogic.”

A “distressed sale” may be either a foreclosure (wherein the bank resumes possession of the property) or a short sale (wherein the bank allows the homeowner to sell the property for less than what is owed.)

In March of this year, about 1 in 43 home sales across the city was a distressed sale. Compare that figure to this staggering statistic from January 2009: at the peak of the housing recession, a whopping 32.4 percent of homes across Metro Denver (nearly 1 in 3) was a distressed property.

Buyers in this marketplace face challenges in the form of intense competition, low inventory and high prices compared to years past. They are feeling the squeeze as they try to find homes with the features, specifications and location they consider ideal. Consider, though, the alternative. For my part, I’ll take a bustling local economy and a thriving real estate market any day – and not just because I’m an active participant in the housing industry. Competition can be a healthy thing, and when you look at the numbers, 1 in 43 homes falling in the “distressed” category is a far happier place for our community to be than 1 in 3.

I’m grateful every day for the robust economy we’re enjoying here and the thriving Colorado individuals, couples and families represented by those numbers.

Happy Father’s Day fellow dads, papas and granddads! And if you, your buddy, your cousin or your own dear old dad need an expert guide in the competitive Denver real estate market, I’m here to help.

Jack Meyers

The Meyers Group
jackestate@aol.com 
303.263.3050
Twitter: @jackestate

New to Real Estate? Know these Terms.

Metro Denver is experiencing one of the hottest Real Estate markets in the country right now, and entering the marketplace for the first time as a buyer can be intimidating under any market conditions. Sellers have the edge in this market, which means it is especially important to be an informed, educated buyer as you approach the home search process.

When you stumble upon a word or phrase you don’t understand, don’t be afraid to ask clarifying questions. Even the savviest Realtor started off as a newbie with lots of questions. Your agent and your mortgage rep both want you to be comfortable and confident with the process, and asking questions (and doing a bit of research when necessary) is the way to get there.

Here is a list of common Home Lending terms you should familiarize yourself with:

Mortgage… the home loan – it’s as simple as that. There are a variety of mortgage types.

Prequalification… the process of qualifying for an approximate loan amount. Serious buyers should prequalify for a mortgage before the search begins.

FICO score… FICO stands for Fair Isaac Corporation, the largest and best known software provider for calculating credit scores. Your lender will check your credit score – probably from multiple sources, in order to qualify you for a loan and set your interest rate. Some lenders take an average of 3 scores, some take your mid score (the middle out of 3).

Debt to Income Ratio… in order to qualify for a home loan, your monthly debt payments cannot exceed 43% of your monthly income. For lending purposes, the debt-to-income calculation is always based on gross income. To determine your Debt to Income Ratio (DIR), take your gross income (all incoming paychecks in a month, before taxes come out) and take them times .43. If your outgoing debt payments are at or under this amount, you’re in the clear. If not, you’ll need to increase income or eliminate debt before you can secure a mortgage. Household expenses like food, gas, entertainment don’t count in this ratio, but all recurring debt payments (credit cards, child support, car loans) do.

Loan to Value Ratio… the Loan to Value ratio, sometimes referred to as LTV, is the amount of loan you are requesting compared to the appraised value of the home. This figure helps a lender determine the loan’s risk. For example, if you are buying a $300,000 house and requesting a $295,000 loan and your credit score is low, the perceived risk is high for the lender. If you are buying the same home with a $30k down payment and a mid to high credit score, the perceived risk to the lender is lower.

Good Faith Estimate… sometimes referred to as the GFE, the Good Faith Estimate is a document provided to you by the lender outlining all fees associated with your home loan transaction.

PITI… this term is the abbreviation for Principle, Interest, Taxes, Insurance – or the various payments that role into your monthly mortgage payment. It is important to understand each factor that will affect your monthly payment, and also how much money each month is chipping away at the principle amount of your loan and building your home equity.

PMI… on a conventional home loan with less than 20% down, the buyer will generally pay Private Mortgage Insurance as a premium to offset the risk the lender takes in providing the loan. The purpose is to protect the lender in the case of a buyer defaulting on the loan.

Escrow… the Escrow account or fund is where the lender will hold closing costs until the transaction closes. This ensures the security of the funds while the lender processes your deal.

Appraisal… A property Appraisal is an estimate of a property’s value based on factors including location, amenities, structural condition and recent sales of similar local properties. A licensed home appraiser conducts the process upon the request of the lender, and the buyer pays for the Appraisal in most cases. The cost is typically a few hundred dollars and can be paid up front or rolled into closing costs.

Are you seeking an expert guide to help you navigate the Metro Denver Real Estate market? Give me a call or drop a line for experienced, reliable service.

Jack Meyers

The Meyers Group
jackestate@aol.com 
303.263.3050
Twitter: @jackestate

 

 

A Pre-Search Checklist for Home Buyers

The Denver real estate market is fast-paced and competitive, and it is important for buyers to be prepared to act quickly once their search begins. If you find a house you love, you won’t have a week (or even a few days!) to mull it over. You’ll need to act quickly if you are serious about the property.

Ask yourself these questions before you begin your search:

1. How much of your pre-approved mortgage amount are you willing to spend?
2. Can you afford home repairs/renovations? (This includes updating flooring or appliances, finishing a basement, replacing hot water heater, etc.)
3. What suburb(s) or neighborhood(s) are you willing to consider?
4. Do you need to be close to public transit or specific routes? (E470, I-25, etc.)
5.  Does traffic noise matter to you?
6. Is the school district important? (Research schools before your home search.)
7. Ranch // Two Story // Townhouse // Condo?
8. How many bedrooms?
9. How many bathrooms?
10. What do you require in a garage or parking situation?

A seller’s market requires buyers to be flexible, quick on their feet and ready to make timely decisions. Before you get in the car, you should have a clear idea of the answers to each of these questions. A prepared buyer who knows what they want (and don’t want) is a successful buyer. Maximize the potential of your home search by thinking through these details before you start your hunt to improve your odds in the game.

Jack Meyers

The Meyers Group
jackestate@aol.com 
303.263.3050
Twitter: @jackestate

Denver Tops the List

The U.S. News and World Report this month ranked Denver at the top of the list of 100 best places to live in the USA!

Rounding out the top 5 cities are:

• Austin, TX
• Fayetteville, AR
• Raleigh-Durham, NC
• Colorado Springs, CO

For perspective on what this ranking actually means, consider the rank on this list of San Diego, CA – a city purported by many to be “the best place they’ve ever lived” by many (just ask anyone who’s lived there!) and a place former residents often long to return to. Sunny San Diego ranks 16th on the list – a full 15 spots down from Denver. That’s pretty incredible.

Factors used to determine this list include home values, the job market, average commute times, desirability and net migration (whether people are actually moving to a particular metro area.)

So, Denver – the rest of the country likes us. They really, really like us! And all the factors affecting our rank on this list are what continue to draw new residents to the Denver Metro area, lending additional strength to the Seller’s Market we continue to experience in Real Estate. According to the Denver Post, Denver’s population jumped by 101,000 between July 1, 2014 and July 1, 2015, and was outpaced nationally only by continued record growth levels in North Dakota due to the localized oil boom happening there.

Right now is an incredible time to sell a house – the market is strongly in your favor. And if you are on the hunt to find your next home in Denver or any surrounding suburb, you’ll need an experienced guide to help you negotiate the best deal possible, because there is a lot of competition and too few properties for sale for the demand we are seeing.

If you’re thinking about relocating to Denver or moving from one end of our fair city to another, drop a line. I’ve been helping people buy and sell Denver area real estate for over 21 years, and I’d be pleased to help you navigate our real estate marketplace.

Jack Meyers

The Meyers Group
jackestate@aol.com 
303.263.3050
Twitter: @jackestate

 

 

Buying in a Seller’s Market

There is no denying Metro Denver is in the midst of a hot-hot-hot Seller’s Market. So where does that leave you if you want or need to buy a home right now or in the near future? A Seller’s Market is defined by a number of houses for sale that is less than the pool of available Buyers: low inventory of any commodity + high demand = seller’s market, whether the commodity is houses or cars or apples.

As a Buyer in this marketplace, there are ways to prepare for the best transaction possible, and to give yourself a bit of an edge in a market that favors the Seller over the Buyer in most cases.

• QUACK! QUACK! Get your financial ducks in a row. In a Seller’s Market, it is not only advisable that you be prequalified for a home purchase – it is imperative. Sellers have every expectation of significant interest in their home, and possibly even multiple offers. They will not be impressed with an offer that is missing the all important prequalification letter. If you are serious about buying a home, come prepared to play ball – not play around.
• Hire an experienced Realtor. You probably wouldn’t hire the teenage neighbor boy to detail your Porsche. Don’t hire an inexperienced agent to help you purchase a home. You deserve excellent representation, and in a Seller’s Market, you will need the help of a keen professional to negotiate on your behalf. Ask your potential agent questions about his or her track record, how many transactions they closed last year, how long they’ve been in the business. Ask them to tell you about the most challenging deal they’ve closed, and how their efforts contributed to a successful outcome.
• Prioritize your home search. You don’t have to take a month off of work to find your next home, but you may need to take a long weekend. And you definitely need to keep your showing appointments and be prepared to seriously consider each home you look at. You likely have competition in the form of other Buyers for every single home you see, and once you find “the one,” you need to be ready to jump. Searching online beforehand and narrowing down a top 5 list of features you can’t live without (location, number of beds/baths, square footage, yard size, etc.) is a must.
• Decide which contingencies are a must before you shop. Everything in Real Estate is negotiable, but there are some aspects of the deal you may not be flexible on, such as the home inspection. I would rarely recommend that a home be purchased without a thorough inspection – even in a Seller’s Market. One example of a contingency that may be challenging in a Seller’s Market is a Sale Contingency, wherein you require a Seller to stay on the line while you wait for your current home to sell. A strong offer (full price or over the asking price) may convince a Seller to accept a contract of this nature, but when a Seller has other Buyers on the line, they will likely not tolerate the extra risk of waiting for your home to sell.
• Flexibility matters in all market conditions. Whether Sellers or Buyers are at the top of the heap in your marketplace, your transaction will go more smoothly if you are prepared for friendly flexibility along the way. Contract negotiations may be tense. Dates and details change. Inspections sometimes uncover surprises. Waiting for the appraisal to come in can be stressful. You hired an experienced Realtor to advocate on your behalf for a reason. Resolve to be patient, ask lots of questions, and don’t panic.

Are you considering a Metro Denver home purchase, or in need of a referral to a qualified agent out of state? Drop me a line. I’ve been helping Buyers and Sellers navigate the marketplace for 21 years, and I’d love to assist you in your next Real Estate transaction.

Jack Meyers

The Meyers Group
jackestate@aol.com 
303.263.3050
Twitter: @jackestate

Wheel of Fortune

Much like Pat Sajak and Vanna White’s Wheel of Fortune, the Real Estate market is a cyclical phenomenon.

The good news is, unlike the famous wheel, the marketplace is of a somewhat predictable nature at any given point in time. It may feel like you’re rolling the dice, but statistics hold true that certain circumstances – say, the sale of your home, are likely to fit within a somewhat predictable set of parameters based on the behavior of the rest of the marketplace. That’s where statistics come in.

REColorado has the following data points on file among Metro Denver housing market statistics for December:

• Month-over-Month, the median sold price of Denver-area homes rose 9.3%.
• There were 5,501 Active listings across Denver in December; this number is down significantly from December 2013 (7,345 Active listings that month), but up 3% from the same period in 2014.
• Year to date figures for the total number of listings in Denver rose 7.3% over the year before. Homes are still selling like hotcakes, but more of them are coming on the market.
• Year to date average days on market (the period from listing to under contract) was a whopping 48 in 2013, down to just 26 in 2015. That’s sign in the yard to SOLD in less than a month!

Even with the aid of statistics, the Real Estate market can and does change, and no crystal ball can tell us what’s next. What I do know though, is that Real Estate has always been and will continue to be cyclical in nature. The hot Seller’s market we’re enjoying right now continues to benefit homeowners and the entire economy, but at some point the market will begin to cool, and at some point in the future Buyers will once again hold the advantage.

The question I have for you is, “What are you doing about it?”

Right now is an incredible time to sell a home in the Greater Denver area. Prices are strong, homes are moving quickly, buyers are aplenty. If you’re on the fence, think about taking the leap. Your property will sell in any marketplace – so long as the price is right. In our current marketplace, many factors are in your favor, making this a great time to plan your next move.

Jack Meyers

The Meyers Group
jackestate@aol.com
303.263.3050
Twitter: @jackestate