Everyone will likely agree that the real estate market here has shown excellent signs of recovery. The return back to a thriving market in Colorado has not come without some challenges, and there are several on the horizon that could impact both the industry and consumers wishing to buy or sell real estate.
The first challenge is the inventory shortage we are seeing in many areas of Colorado. It is widespread and the cause is easy to identify, savvy homeowners have, up to this point, seen signs of recovery and as a result, are holding out for the highest price they can get for their homes. The pricing issue itself here has many obstacles, including the fact that buyers are observing over-bidding practices which have recently been featured in the media; as a result, many are asking too much for their homes. Certain specific areas and properties are very high demand, however, outside of those areas, prices remain either on a slight increase or decrease and are appraising very close to their actual value. This is an obstacle not only for the listing agent, but for a new potential buyer because if they will require financing, the bank will only consider the loan up to the appraised value. Any difference over and beyond the actual appraisal will be up to the buyer to produce, and buyers who require financing often are challenged to meet down payments financially, much less pricing overage differences. With regard to the inventory shortage, it is not expected to recover to the levels that would be considered sustaining and healthy during this years’ selling season. Many brokers are reporting that the amount of activity they are currently trying to manage has far exceeded what they saw pre-2006 and expect that pace will continue through the summer selling season. Their challenge is ferreting out the perfect property for their eager buyers. A recent top city ranking shows Denver in the top five cities across the United States for actual time a property stays on the market before it is sold. Denver ranks 4th with an average of 29 days – beat out only by 3 cities in California, San Francisco, San Jose and Oakland. This April Housing Summary from Realtor.com also shows Denver in 15th place, up from 18th place in overall activity and median price changes year over year from 2012. Bottom line on the inventory and pricing is, demand is driving prices up, and inventory shortages are expected to continue as homeowners, predominantly in the single-family home sector, are trying to wait to get as much as they can for their properties.
The next challenge is where the ‘rubber meets the road’. And that is the interest rate. In a much anticipated move, the Federal Reserve has mapped out changes to their monetary policy, May/2013, and will now begin easing back from measures the took to try to enhance the economy recovery, which ultimately created the historically low interest rates. As a result, leading economists and financial experts expect these interest rates to begin climbing as early as the 4th quarter of this year. Those either in the mortgage and finance industry as well as those closely connected in real estate know this could potentially lead to disappointed buyers that waited or couldn’t find a property and for sellers that waited to long. Understanding why buyers might qualify right now, based on the low interest rate, is easy. Understanding why sellers might be affected is a bit more complex; sellers whose homes are likely to attract buyers that require financing may be disappointed that the buyers are no longer able to qualify for a home at their price point after interest rates begin to rise. Even a tiny, fractional change upward can affect buyers and may make it impossible for them to qualify as their income will not rise to meet the new ratio figures after rates go up, along with median prices being driven higher in the hotter markets due to the inventory shortage and demand for housing.
You need a buyers agent in this market. It takes an extensive amount of time, in many cases, to thoroughly research a property and show it to a perspective buyer. If you are a buyer researching several properties at once, which is often the case, you may loose several properties in the time it takes you to research just one. This is happening to many buyers who check the current availabilities first thing in the morning and get there by 9 or 10 only to find that multiple offers have already been made on the property. A buyers agent has the current, most up to date information and can save you a great deal of time in your research and sometimes many thousands of dollars in the end-game, the price negotiations. A buyers agent represents you only, and has no potential conflicts with the seller or their agent, as the seller’s agent would be working to get as much money as possible for the seller.
Buyers Agents will help you all the way through the home buying process – click below to watch our video!
Boulder – Community Honors
We enjoy the opportunity to feature different areas of Colorado and this week we offer information on one of the most unique, eclectic communities nearby Denver Metro. Boulder, CO has long held the reputation of one of the best places to be in Colorado for many reasons. First and foremost is that it is home to University of Colorado – Boulder, (22% of its resident population), and this feature alone carries influence into many lifestyle areas including shopping, transportation and restaurants and many other city amenities. Many may not be aware of other noteworthy Boulder designations, for instance, the fact that it has been dubbed the least obese Metro area in the US, (Gallup Poll – April, 2013). Boulder also picked up these additional 2013 community honors: Dynamic Locales for Walkable Living, (Where To Retire – April, 2013); Tree City USA for the 29th consecutive year, (National Arbor Day Foundation – April, 2013); Top 10 Metros for Female Executives, (#1 slot), (Avalanche Consulting – Feb, 2013); The 20 Most Innovative Cities in the US, (#5 slot), (Business Insider – Feb, 2013) and renown (Milken Institute designation Best Performing Cities, (#15 slot) – January 2013).
And the year is yet young, as many honors received in 2012 came later in the year. To be certain, Boulder offers a diverse, robust economy and lifestyle for all ages with education as a key focus within the community, a very attractive feature for families with school-aged children, especially those preparing for high school with college programs in their near future. Boulder is considered host to one of the most educated populations in the United States.
Boulder – Community Amenities
Recreation both inside and just outside Boulder is a huge feature for the area, with over 45,000 acres of open space and 150 miles of biking and hiking trails and over 300 days of sunshine. Boulder offers excellent opportunities for art, cultural, dining, entertainment and shopping. In addition, Boulder as very high-quality healthcare and sustainable environmental policies. Conveniently located to Denver, it’s only 30 minutes from downtown and 45 minutes from Denver International Airport.
Boulder is host to significant industry presence featuring aerospace, bioscience, data storage, light manufacturing, natural and organic products, outdoor recreation, photonics, professional and scientific services, renewable energy and energy research, software, and, of course, tourism.
To be certain, when compared with many metro areas across the United States, Boulder is definitely a city that is thought of as “having it all”, offering big city features and amenities within a small town atmosphere. As a result, the projected growth rate of Boulder is approximately 20% from now looking forward to 2035. No doubt, median property values will respond to increased housing demands and other valuation pressures during that time period, making right now the best time to consider entering the market.
Colorado is considered one of the top destinations in the United States real estate market for ranch property and acreage and still has a great supply of these wide open spaces. There are a couple of strong drivers in the marketplace right now – investor’s and second home and luxury real estate purchases. This trend will continue in the market until it is completely depleted of inventory, according to many real estate news sources. So where is there still ‘real estate gold’ left? Land – wide open space still for sale, and by all accounts, plenty of it in many parts of Colorado. Land is an excellent investment and compared to other types of investments, seems to be the preferred investment of choice for many for a couple of reasons. The 2013 is still seeing lower than average market prices for acreages.
Top considerations for purchases of acreages are pointing towards location when evaluating homesites in master planned communities. Next in preferences were views from the homesite – (waterfront, mountain, golf & wooded), amenities, price and actual size of home site.
The Value and Benefits of Acreage Compared to Other or Traditional Investments
Acreage is considered a safe, stable long term investment nationwide, according to and informal survey by landthink.com. This is really no surprise, as the economy is not considered either stable or certain and both are premier considerations in evaluating paper investments such as stocks. One of the biggest advantages to purchasing land is not just the investment, but the recreational enjoyment of the land during ownership. Those in the city or suburbs in communities with average size lots enjoy the opportunity to escape the city heat and congestion by taking family time weekends to the high county in more secluded, scenic mountain lands.
Enjoy Your Acreage Now As You Grow Your Investment
Acreages offer unspoiled opportunities to get close to nature, enjoy the views and the wildlife that aren’t readily available in the city. There aren’t too many camping experiences that can top taking a drive to your own land and pitching up a tent for the family and enjoying that type of fellowship over the weekend.
There are a great number of incentives for acreage purchase – desire to own forested land, to hunt and fish, to ride ATV’s – Colorado acreage offers it all! Searches across the state show an excellent selection of properties that may be used for various purposes, can be built upon in many cases, nearby to utility services, and in all types of shapes, sizes and locations.
Let your qualified buyers agent identify what you find most attractive in a piece of land and consider buying while land prices are still at all time lows in many areas.
Welcome to the digital real estate age. Although computers have been around for many years, recent technology advances and enhanced, comprehensive website information portals have forever changed the landscape of real estate, both in home search procedures that buyers might use and in marketing and advertising strategies that sellers might use.
This is timely, as in may areas of the country, markets are inventory deficient and, as a result, every advantage must be used to either buy or sell a house in a ‘hot market’.
Where buyers are concerned, hiring and establishing a solid relationship with a buyers agent will free up a buyer to look for enhanced information that may directly influence their decision to purchase, while the buyers agent concentrates on the ‘meat and potatoes’ of information gathering regarding a specific property or properties.
What and How To Search
It is remarkable that even the most technologically disadvantaged individuals can now purchase and use digital devices with ease. One of the most useful devices in real estate searches is arguably the iPad or a tablet with excellent navigation features and mapping applications. It is very advantageous in the middle of a property search that may involve visiting several properties in a short period of time that a person can open and move freely between several screens and applications. For instance, one example might be a property search that involves several locations in the same county. All addresses can be input in the map for easy location discovery, the internet can be accessed via 3G or 4G and the county appraisers website can be pulled up and left open regarding the property history, the tax information can be pulled with ease, the neighborhood data can be pulled, population data and crime statistics, school locations and addresses, all shopping and restaurants in the area and a plethora of additional information. In addition, one can consult large consumer websites such as Zillow for information that appears on a map showing houses that have sold and what they sold for, houses directly next to the one you may be looking at and what it’s estimated value is, and remarkably, barring unrecorded or recent modifications or upgrades, the layout of the houses nearby including number of bedrooms and other important home valuation data. It is important to note that while Zillow is an excellent reference tool, your buyers agent will have more current and up-t0-date information or the necessary contact information about a property you need information on.
This is a great time to dive in! All of the information above will help turn a mediocre search effort into a comprehensive, robust collection of information that will help both buyers and sellers in their efforts. Such comprehensive searches did not exist so readily exist years ago, making buyers and sellers more dependent on their real estate agents ability to locate information, and, at that time, without such comprehensive data available digitally, made these very necessary efforts extraordinarily time consuming and cumbersome.
So, welcome to the new and improved digital age – make it work for you and your existing or next home purchase and enjoy the extensive information available to you.
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