I totally agree with this article regarding the economy and housing industry.  Here in Parker, Colorado and the Denver Metro Area, we continue to see a relatively strong market.  We've definitely seen some price declines.  But, not major rice reductions.  In my opinion, the price decreases are more due to "too high" original listing prices.  People, including we agents, are remembering those crazy prices a few years back and thinking nothing has changed.  

Inventory is still super low.  We are currently working with quite a few buyers and having a difficult time finding the right homes for them.  That condition, alone, has a major effect of keeping prices stable.  It's the classic "supply and demand" equation.

Hopefully, we will see more and more homes coming on the market over the next several weeks and months.  If you're thinking about buying a home now or in the near future, I would encourage you to get active right now.  If you can find the right home now, jump on it.  I strongly believe that we will see a very "hot market" in the spring.  And, if mortgage rates drop below 6%, it will be dramatic.  Result. Higher home prices.  If they drop to the 5% range, it will be crazy.

Cheryl and I have been around quite a while and know how to navigate different markets.  We would love to work with you if you're considering buying a home or selling the home you live in.  Call me at 720.220.5058 or Cheryl at 303.981.7339.  Visit our website at www.ParkerColoradoHomeCenter.com for more information.

Why the Economy Won’t Tank the Parker Colorado Housing Market

If you’re worried about a coming recession, you’re not alone. Over the past couple of years, there’s been a lot of recession talk. And many people worry, if we do have one, it would cause the unemployment rate to skyrocket. Some even fear that a spike in unemployment would lead to a rash of foreclosures similar to what happened 15 years ago.

However, the latest Economic Forecasting Survey from the Wall Street Journal (WSJ) reveals that, for the first time in over a year, less than half (48%) of economists believe a recession will actually occur within the next year:

“Economists are turning optimistic on the U.S. economy . . . economists lowered the probability of a recession within the next year, from 54% on average in July to a more optimistic 48%. That is the first time they have put the probability below 50% since the middle of last year.”

If over half of the experts no longer expect a recession within the next year, you might naturally think those same experts also don’t expect the unemployment rate to jump way up – and you’d be right. The graph below uses data from that same WSJ survey to show exactly what the economists project for the unemployment rate over the next three years (see graph below):

If those expert projections are correct, more people will lose their jobs in the upcoming year. And job losses of any kind are devastating for those people and their loved ones.

However, the question here is: will there be enough job losses to cause a wave of foreclosures that will crash the housing market? Based on historical context from Macrotrends and the Bureau of Labor Statistics (BLS), the answer is no. That’s because the unemployment rate is currently near all-time lows (see graph below):

As the orange bar in the graph shows, the average unemployment rate dating back to 1948 is 5.7%. The red bar shows, the last time the housing market crashed, in the immediate aftermath of the 2008 financial crisis, the average unemployment rate was up to 8.3%. Both of those bars are much higher than the unemployment rate today (shown in the blue bar).

Moving forward, projections show the unemployment rate is likely to stay beneath the 75-year average. And that means we won’t see a wave of foreclosures that would severely impact the housing market.

Bottom Line

Most economists no longer expect a recession to occur in the next 12 months. That’s why they also don’t expect a dramatic rise in the unemployment rate that would lead to a rash of foreclosures and another housing market crash. If you have questions about unemployment and its impact on the housing market, let’s connect.

This article is pointing out the benefits of selling your home now, rather than waiting until next year.  We've been in this market for the last 20 years.  Honestly, there is no best or worst time to sell your home.  Remember, if it's good for you, the seller, it will probably be worse for you, the buyer.  So, basically, I recommend you not worry about when to buy or sell.  Here is one exception.  If you want to sell at the highest price, and you're not going to be purchasing a home, then sell in the spring.  Here in Parker, Colorado, the best time to sell is during the months of March, April and May.  And, of course, the worst time to buy.  Year round, there are plenty of good homes for sale here in Parker, Colorado.  We would love to help you with your real estate needs.  We have over 20 years experience here in Parker and her surrounding towns (Castle Rock, Aurora, Centennial, Highlands Ranch, Littleton, Franktown, Elizabeth and more).  Call me at 720.220.5058 or Cheryl at 303.981.7339.

Reasons To Sell Your House Before the New Year

As the year winds down, you may have decided it's time to make a move and put your house on the market. But should you sell now or wait until January? While it may be tempting to hold off until after the holidays, here are three reasons to make your move before the new year.

Get One Step Ahead of Other Sellers

Typically, in the residential real estate market, homeowners are less likely to list their houses toward the end of the year. That’s because people get busy around the holidays and sometimes deprioritize selling their house until the start of the new year when their schedules and social calendars calm down. But that gives you an opportunity to get one step ahead.

Selling now, while other homeowners may hold off until after the holidays, can help you get a leg up on your competition. Start the process with a real estate agent today so you can get your house on the market before your neighbors do.

Get Your House in Front of Eager Buyers 

Even though the supply of homes for sale did grow compared to last year, it’s still low. That means there aren’t enough homes on the market today. While some buyers may also delay their plans to move until January, others will still need to move for personal reasons or because something in their life has changed.

Those buyers are still going to be active later this year and will be seriously motivated to make their move happen because they need to. Unfortunately, the challenge they'll face is a shortage of available inventory to meet their needs. A recent article from Investopedia says:

“. . . if your house is up for sale in the winter and someone is looking at it, chances are that person is serious and ready to buy. Anyone shopping for a new home between Thanksgiving and New Year’s is likely going to be a serious buyer. Putting your home on the market at this time of year and attracting a serious buyer can often result in a quicker sale.”

Use Your Equity To Fuel Your Move

Keep in mind that homeowners today have record amounts of equity. According to CoreLogic, the average amount of equity per mortgage holder has climbed to almost $290,000. That means the equity you have in your house right now could cover some, if not all, of a down payment on the home of your dreams.

And as you weigh the reasons to sell before year-end, it's important to remember the reasons that sparked your desire to move in the first place. Maybe it’s time for a new home in a location that suits you better, one that offers the perfect space for you and your loved ones, or maybe your needs have evolved over time. A local real estate agent can help you determine how much home equity you have and how you can use it to achieve your goal of making a move.

Bottom Line

Listing your home before the new year can offer unique benefits. Less competition, motivated buyers, and your equity gains can all play to your advantage. Reach out, and let's achieve your goals before winter sets in.

I am a 100% supporter of the Multi-Generational Home concept.  The following article is great.  But, I would take it one step further.  Why not go together with a trusted friend that has similar needs when it comes to buying a home.  There are a lot of individuals out there who have very good income, down payment money and excellent credit, who still can't afford a home.  Or, the home they would like.  I've done the math.  Let's say one can afford a $500,000 home.  As crazy as it seems, $500,000 will not buy much of a home.  But, $700,000 will.  A really nice home.  By simply adding another equal income, the two individuals will be a able to purchase a very nice home.  And, in some cases, they might find a home with two actual living areas (i.e. finished basement with living room, bedroom, bathroom and kitchen).  Some issues need to be considered.  First of all, can we get along with each other, living in the same home?  Do we trust each other to meet our obligations regarding the home (i.e. mortgage payment, maintenance, etc.)?  Do we have a good exit plan when one of us decides to get married, has a job transfer, is tired of the situation, etc.)?  This concept is not for every one.  It's not for most.  But, when it works, it's a great way to buy a home far nicer than you could otherwise afford.  We see these kinds of properties all the time.  If this sounds intriguing to you, give us a call.  Call me (Bob) at 720.220.5058 or Cheryl at 303.981.7339.

The Benefits of Buying a Multi-Generational Home [INFOGRAPHIC]

Some Highlights

• If you’re ready to buy a home but are having a hard time affording it on your own, or, if you have aging loved ones you need to care for, you might want to consider a multi-generational home.
• Living with siblings, parents, and even grandparents can help you save money, give or receive childcare, and spend quality time together.
• Let’s connect to find a home in our area that’s perfect for you and your loved one’s needs.

I learned a new term from this article.  Accessary Dwelling Units.  I've always referred to them as a property with two or more homes on the property (LOL).  I'm not too technical about these kinds of things.  Anyway, it's definitely a great option for the right person.  Another trend we're seeing is people buying homes with separate living areas (bedroom, bath, living and kitchen) and renting them out.  Every once in a while there will be one of Lennar's Next Generation homes that comes on the market.  They are perfect.  But, the most common style that works is a home with a walkout basement and a walkway down the side of the house.  This allows the tenant to access their home without going through the main house.  In some cases, the rent almost covers the entire mortgage.  It takes some research to find the right house, but they are definitely out there.  If this is an option that you might consider, give us a call.  We can help find the right one for you.  Call me (Bob) at 720.220.5058 or Cheryl at 303.981.7339.

What Are Accessory Dwelling Units and How Can They Benefit You?

Maybe you’re in the market for a home and are having a hard time finding the right one that fits your budget. Or perhaps you’re already a homeowner in need of extra income or a place for loved ones. Whether as a potential homebuyer or a homeowner with changing needs, accessory dwelling units, or ADUs for short, may be able to help you reach your goals.

What Is an ADU?

As AARP says:

“An ADU is a small residence that shares a single-family lot with a larger, primary dwelling.”

“An ADU is an independent, self-contained living space with a kitchen or kitchenette, bathroom and sleeping area.”

“An ADU can be located within, attached to, or detached from the main residence. It can be created out of an existing structure (such as a garage) or built anew.”

If you're thinking about whether an ADU makes sense for you as a buyer or a homeowner, here's some useful information and benefits that ADUs can provide. Keep in mind, that regulations for ADUs vary based on where you live, so lean on a local real estate professional for more information.  

The Benefits of ADUs

Freddie Mac and the AARP identify some of the best features of ADUs for both buyers and homeowners:

• Living Close by, But Still Separate: ADUs allow loved ones to live together while having separate spaces. That means you can enjoy each other’s company and help each other out with things like childcare, but also have privacy when needed. If this appeals to you, you may want to consider buying a home with an ADU or adding an ADU onto your house. According to Freddie Mac:

“Having an accessory dwelling unit on an existing property has become a popular way for homeowners to offer independent living space to family members.”

• Aging in Place: Similarly, ADUs allow older people to be close to loved ones who can help them if they need it as they age. It gives them the best of both worlds – independence and support from loved ones. For example, if your parents are getting older and you want them nearby, you may want to buy a home with an ADU or build one onto your existing house.

• Affordable To Build: Since ADUs are often on the smaller side, they’re typically less expensive to build than larger, standalone homes. Building one can also increase your property’s value.

• Generating Additional Income: If you own a home with an ADU or if you build an ADU on your land, it can help generate rental income you could use toward your own mortgage payments. It’s worth noting that because an ADU exists on a single-family lot as a secondary dwelling, it typically cannot be sold separately from the primary residence. But that’s changing in some states. Work with a professional to understand your options. 

These are a few of the reasons why many people who benefit from ADUs think they’re a good idea. As Scott Wild, SVP of Consulting at John Burns Research, says:

“It’s gone from a small niche in the market to really a much more impactful part of new housing.”

Bottom Line

ADUs have some great advantages for buyers and homeowners alike. If you're interested, reach out to a real estate professional who can help you understand local codes and regulations for this type of housing and what’s available in your market.

Regarding the effect of foreclosures and bankruptcies on the housing market here in Colorado.  Very little effect.  Homeowners that are facing foreclosure still have tons of equity in their homes.  And, they can sell them at the market price.  Having said that, I will say that we've seen some price reductions recently.  But, in my opinion, these price reductions are really a result of home sellers pricing their homes too high, to bein with.  The well priced, good homes, still sell.  And, sell quickly.  For those of you thinking about buying, you better do it now.  Once mortgage interest rates go down (just a little bit), home buyers will come out of the closet and home prices will escalate.  I think we will see that happen sooner, rather than later.  For you sellers, you might want to wait, if you can.

Foreclosures and Bankruptcies Won’t Crash the Housing Market

If you've been following the news recently, you might have seen articles about an increase in foreclosures and bankruptcies. That could be making you feel uneasy, especially if you're thinking about buying or selling a house.

But the truth is, even though the numbers are going up, the data shows the housing market isn’t headed for a crisis.

Foreclosure Activity Rising, but Less Than Headlines Suggest

In recent years, the number of foreclosures has been very low. That’s because, in 2020 and 2021, the forbearance program and other relief options were put in place to help many homeowners stay in their homes during that tough time.

When the moratorium ended, there was an expected rise in foreclosures. But just because they’re up, that doesn't mean the housing market is in trouble.

To help you see how much things have changed since the housing crash in 2008, check out the graph below using research from ATTOM, a property data provider. It looks at properties with a foreclosure filing going all the way back to 2005 to show that there have been fewer foreclosures since the crash.

As you can see, foreclosure filings are inching back up to pre-pandemic numbers, but they're still way lower than when the housing market crashed in 2008. And today, the tremendous amount of equity American homeowners have in their homes can help people sell and avoid foreclosure.

The Increase in Bankruptcies Isn’t Dramatic Either

As you can see below, the financial trouble many industries and small businesses felt during the pandemic didn’t cause a dramatic increase in bankruptcies. Still, the number of bankruptcies has gone up slightly since last year, nearly returning to 2021 levels. But that isn’t cause for alarm.

The numbers for 2021 and 2022 were lower than more typical years. That’s in part because the government provided trillions of dollars in aid to individuals and businesses during the pandemic. So, let’s instead focus on the bar for this year and compare it to the bar on the far left (2019). It shows the number of bankruptcies today is still nowhere near where it was before the pandemic. Both of these two factors are reasons why the housing market isn't in danger of crashing.

Bottom Line

Right now, it's crucial to understand the data. Foreclosures and bankruptcies are rising, but these leading indicators aren’t signaling trouble that would cause another crash.

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This article gives some good advice for Gen Z home buyers.  Down payment assistant programs and living with relatives to save money are certainly good ideas.  But, I don't think that's the main problem for most people.  I believe the main deterrent to home ownership for most people is the monthly payment.  With the cost of housing and today's mortgage interest rates, many (if not most) prospective home buyers cannot qualify for the mortgage required to purchase their desired house.  So, they are either priced out completely or are forced to purchase a home far less appealing than they would prefer.  My solution is for individuals to go together and purchase a home.  Combining the incomes of two people will enable them to buy a much nicer and larger home.  It's not for everyone.  But, for those who can make it work, it's a great option.   I look back on my early adult years prior to marriage.  I had several very good friends with good jobs that could have gone in with me and purchased a home.  Of course, we didn't.  But, had we done it, we would have had some pretty nice equity by the time we got married and parted ways.  

Affordable Homeownership Strategies for Gen Z

The idea of owning a home has always been a big part of the American Dream. It's a symbol of stability, independence, and having a place to truly call your own. But for Gen Z, the "Zoomers" born between 1997 and 2012, making that dream a reality can feel like quite the challenge today with higher mortgage rates and rising home prices.

But achieving that goal of owning your first home can still be attainable, even today, with some strategic planning and resourcefulness.

Explore Financing and Down Payment Assistance Options

With prices rising all around you, it can be hard to save up for a home. If you've been struggling to stash away enough cash for that down payment, it’s worth it to look into the various down payment assistance programs available. These programs can really help you save big on the upfront costs of buying a home.

There are a lot more options out there than you may realize. According to Down Payment Resource, there are over 2,000 programs designed to help hopeful homebuyers with down payments and closing costs.

If you qualify for one of these programs, you may not need to save up as much money for your down payment. A local real estate agent can help you explore these programs in your area, making it much easier to turn your homeownership dream into a reality.

Consider Living with Relatives To Save

If you still need a bit more time to save, even with the down payment assistance programs out there, there are ways you can make that happen. Many savvy Zoomers have made a strategic choice to live with relatives so they can get to their savings goals even faster.

According to the National Association of Realtors (NAR), around 30% of Gen Z homebuyers transition directly from their relative’s home to a home of their own.

By sharing living costs, such as mortgage payments, utility bills, and even grocery expenses, you can substantially reduce your monthly expenses. This frees up more of your income to tackle any outstanding debt, boost your credit score, and reach your down payment target in less time. And, all of this can bring homeownership one step closer to becoming a reality. Clare Trapasso, Executive News Editor at Realtor.com, explains:

“Faced with ongoing housing affordability issues . . . we're seeing parents and children becoming roommates again in later years as the 'kids' save up to purchase their own place . . ."

The Road to Homeownership

When you're on the path to becoming a homeowner, it's a good idea to get some help along the way. And one of your best resources on this journey as a young homebuyer is a trusted real estate agent. They'll steer you through the process of buying a home and help you find one you can afford. 

Bottom Line

For Gen Z, the path to homeownership may not be straightforward, but it's still within reach. With the right strategies, you can turn your dream of owning a home into a reality.

Should you invest in your landlord or in yourself?  IF you can afford to buy a home, you should.  Not everyone can.  But, if you can, do it.  There are all kinds of reasons to purchase, rather than rent.  Three reasons that stand out for me are, stopping the future increases in monthly housing costs, enjoying the growing net worth created by home appreciation and the reduced income taxes gained by paying mortgage interest and property taxes.  In the long term, nothing beats home ownership.  And perhaps most important of all.  IT'S YOUR HOME.  I know rates are high.  And, you can't afford the home that you really want.  But, again, buy what you can.  Years from now you will be so glad that you made that decision.    

Invest in Yourself by Owning a Home

Are you wondering if it makes sense to buy a home right now? While today’s mortgage rates might seem a bit intimidating, here are two compelling reasons why it still may be a good time to become a homeowner.

Home Values Appreciate over Time

There’s been a lot of confusion around what’s happened with home prices over the past two years. While they did dip ever so slightly in late 2022, this year they’ve been appreciating at a more normal pace, which is good news for the housing market. And while looking at price movement over just a year or two can make you worry prices are usually this unpredictable, history shows in the long run, home values rise (see graph below):

Using data from the Federal Reserve for the past 60 years, you can see the overall trend is home prices have climbed quite steadily. Sure, there was an exception around the housing crash of 2008 that caused prices to break the usual trend for a time, but overall, home values have been consistently on the rise.

Increasing home values is one great reason why buying may make more sense than renting. As prices rise, and as you pay down your mortgage, you build equity. Over time, that growing equity gives your net worth a boost.

Rent Keeps Going Up Through the Years

Another reason you may want to consider buying a home instead of renting is the never-ending rent hike. If you've ever felt the pinch of rent increasing year after year, you're not alone. That’s because, rents have climbed steadily over the past six decades (see graph below):

By buying a home, you can lock in your monthly housing costs and bid farewell to those pesky rent hikes. That stability is a game-changer.

In the end, it all boils down to this: your housing payments are an investment, and you've got a choice to make. Do you want to invest in yourself or your landlord?

By becoming a homeowner, you're investing in your own future. When you rent, that’s money you never get back.

When you factor in home values consistently rising, plus the opportunity to get relief from never-ending rent hikes, homeownership can be a path to financial security. As Dr. Jessica Lautz, Deputy Chief Economist and VP of Research at the National Association of Realtors (NAR), states: 

“If a homebuyer is financially stable, able to manage monthly mortgage costs and can handle the associated household maintenance expenses, then it makes sense to purchase a home.”

Bottom Line

When it comes down to it, buying a home offers more benefits than renting, even when mortgage rates are high. If you want to avoid increasing rents and take advantage of long-term home price appreciation, let’s connect to go over your options.

Old news.  But, still worth talking about.  This article explains why home prices keep going up. Basically, there still aren't enough homes for sale for all the people who want to buy them.  That's really the issue.  And, that situation is not likely to change anytime soon.  My conclusion.  Buy what you can, NOW.  Pay the high mortgage rate.  If rates go down in the future, refinance to the lower rate.  If they never go down, be thankful you have an asset that benefits from inflation.

Why Home Prices Keep Going Up

If you've ever dreamed of buying your own place, or selling your current house to upgrade, you're no stranger to the rollercoaster of emotions changing home prices can stir up. It's a tale of financial goals, doubts, and a dash of anxiety that many have been through.

But if you put off moving because you’re worried home prices might drop, make no mistake, they’re not going down. In fact, it's just the opposite. National data from several sources says they’ve been going up consistently this year (see graph below):

Here’s what this graph shows. In the first half of 2022, home prices rose significantly (the green bars on the left side of the graphs above). Those increases were dramatic and unsustainable.

So, in the second half of the year, prices went through a correction and started dipping a bit (shown in red). But those slight declines were shallow and short-lived. Still, the media really focused on those drops in their headlines – and that created a lot of fear and uncertainty among consumers.

But here’s what hasn’t been covered fully. So far in 2023, prices are going up once more, but this time at a more normal pace (the green bars on the right side of the graphs above). And after price gains that were too high and then the corrections that followed in 2022, the fact that all three reports show more normal or typical price appreciation this year is good news for the housing market.

Orphe Divounguy, Senior Economist at Zillow, explains changing home prices over the past 12 months this way: 

“The U.S. housing market has surged over the past year after a temporary hiccup from July 2022-January 2023. . . . That downturn has proven to be short lived as housing has rebounded impressively so far in 2023. . .”

Looking ahead, home price appreciation typically starts to ease up this time of year. As that happens, there’s some risk the media will confuse slowing price growth (deceleration of appreciation) with home prices falling (depreciation). Don’t be fooled. Slower price growth is still growth.

Why Are Home Prices Increasing Now?

One reason why home prices are going back up is because there still aren't enough homes for sale for all the people who want to buy them.

Even though higher mortgage rates cause buyer demand to moderate, they also cause the supply of available homes to go down. That’s because of the mortgage rate lock-in effect. When rates rise, some homeowners are reluctant to sell and lose their current low mortgage rate just to take on a higher one for their next home.

So, with higher mortgage rates impacting both buyers and sellers, the supply and demand equation of the housing market has been affected. But since there are still more people who want to purchase homes than there are homes available to buy, prices continue to rise. As Freddie Mac states: 

“While rising interest rates have reduced affordability—and therefore demand—they have also reduced supply through the mortgage rate lock-in effect. Overall, it appears the reduction in supply has outweighed the decrease in demand, thus house prices have started to increase . . .”

Here’s How This Impacts You

• Buyers: If you've been waiting to buy a home because you were afraid its value might drop, knowing that home prices have gone back up should make you feel better. Buying a home gives you a chance to own something that usually becomes more valuable over time.
• Sellers: If you've been holding off on selling your house because you were worried about how changing home prices would impact its value, it could be a smart move to work with a real estate agent and put your house on the market. You don't have to wait any longer because the most recent data indicates home prices have turned in your favor.

Bottom Line

If you put off moving because you were worried that home prices might go down, data shows they’re increasing across the country. Let’s connect so you can understand how home prices are changing in our local area.