The attached article is really "right on".  I agree with all of it.  But, I do have some other reasons why I don't think a possible recession is going to hurt the housing market here in Parker Colorado.  I actually think it might help it.  As I've pointed out in previous messages, the lack of inventory and over supply of demand continues to fuel this market.  Here in Colorado, I believe the job market will remain stable and strong.  Even if it goes down, there will still be more buyers than homes available.  Right now, we have a huge segment of homeowners that are sitting in homes with 2.5% to 3.0% mortgages.  We call this a "rate locked" situation.  They can't afford to give up those low rates for a 6% to 7% mortgage.  If we have a mild recession (which most economists are predicting), mortgage rates will probably fall.  A rate reduction to under 5% will stimulate the market.  If that happens, home prices will increase.  Another reason that we're not going to see much negative in the housing market.  Tons of home equity.  Almost everyone has lots of equity.  Here in Colorado, most homes have doubled in value over the last 10 years.  Most of that increase has occurred over the last 3 years.  These people are not going to lose their homes.  If need be, they will sell their home for a huge profit, rather than lose it to a foreclosure.  So, in conclusion, I still maintain that now is the time to buy.  It's not going to get better.  Unless, you buy now.  Then, it will get better every day.

A Recession Doesn’t Equal a Housing Crisis Here In Parker Colorado

Everywhere you look, people are talking about a potential recession. And if you’re planning to buy or sell a house, this may leave you wondering if your plans are still a wise move. To help ease your mind, experts are saying that if we do officially enter a recession, it’ll be mild and short. As the Federal Reserve explained in their March meeting:

“. . . the staff’s projection at the time of the March meeting included a mild recession starting later this year, with a recovery over the subsequent two years.” 

While a recession may be on the horizon, it won’t be one for the housing market record books like the crash in 2008. What we have to remember is that a recession doesn’t always lead to a housing crisis.

To prove it, let’s look at the historical data of what happened in real estate during previous recessions. That way you know why you shouldn’t be afraid of what a recession could mean for the housing market today.  

A Recession Doesn’t Mean Falling Home Prices 

To show that home prices don’t fall every time there’s a recession, it helps to turn to historical data. As the graph below illustrates, looking at recessions going all the way back to 1980, home prices appreciated in four of the last six of them. So historically, when the economy slows down, it doesn’t mean home values will always fall.

Most people remember the housing crisis in 2008 (the larger of the two red bars in the graph above) and think another recession will be a repeat of what happened to housing then. But today’s housing market isn’t about to crash because the fundamentals of the market are different than they were in 2008. Back then, one of the big reasons why prices fell was because there was a surplus of homes for sale at the same time distressed properties flooded the market. Today, the number of homes for sale is low, so while home prices may see slight declines in some areas and slight gains in others, a crash simply isn’t in the cards. 

A Recession Means Falling Mortgage Rates

What a recession really means for the housing market is falling mortgage rates. As the graph below shows, historically, each time the economy slowed down, mortgage rates decreased.

Bankrate explains mortgage rates typically fall during an economic slowdown:

“During a traditional recession, the Fed will usually lower interest rates. This creates an incentive for people to spend money and stimulate the economy. It also typically leads to more affordable mortgage rates, which leads to more opportunity for homebuyers.” 

This year, mortgage rates have been quite volatile as they’ve responded to high inflation. The 30-year fixed mortgage rate has hovered between roughly 6-7%, and that’s impacted affordability for many potential homebuyers. 

But, if there is a recession, history tells us mortgage rates may fall below that threshold, even though the days of 3% are behind us.

Bottom Line

You don’t need to fear what a recession means for the housing market. If we do have a recession, experts say it will be mild and short, and history shows it also means mortgage rates go down.

This article points out why owning is probably better than renting. Basically, it gives two reasons. One, you'll probably get a bit more home if you buy. And, two, over time you will be accumulating equity. Both, great reasons to buy. But, to me, it's much more than that. Financially, let's add the tax benefits of owning. Being able to deduct your mortgage interest and your real estate taxes has a significant affect on your income. But, most important, it's yours. Yours to make any changes that you desire. Yours to keep. As long as you make your mortgage payment, it can't be taken away. Home ownership is the way to go. Buy what you are comfortable with and you'll be darn glad you did.

Why Buying a Home In Parker Colorado Makes More Sense Than Renting Today

Wondering if you should continue renting or if you should buy a home this year? If so, consider this. Rental affordability is still a challenge and has been for years. That’s because, historically, rents trend up over time. Data from the Census shows rents have been climbing pretty steadily since 1988. 

And, data from the latest rental report from Realtor.com shows rents continue to grow today, even though it’s at a slower pace than we saw at the height of the pandemic:

“In March 2023, the U.S. rental market experienced single-digit growth for the eighth month in a row . . . The median asking rent was $1,732, up by $15 from last month and down by $32 from the peak but is still $354 (25.7%) higher than the same time in 2019 (pre-pandemic).”

With rents much higher now than they were in more normal, pre-pandemic years, owning your home may be a better option, especially if the long-term trend of rents increasing each year continues. In contrast, homeowners with a fixed-rate mortgage can lock in a monthly mortgage payment for the duration of their loan (typically 15-30 years). 

Owning a Home Could Be More Affordable if You Need More Space

The graph below uses national data on the median rental payment from Realtor.com and median mortgage payment from the National Association of Realtors (NAR) to compare the two options. As the graph shows, depending on how much space you need, it’s typically more affordable to own than to rent if you need two or more bedrooms:

So, if you’re looking to live somewhere where you have two or more bedrooms to accommodate your household, give you more breathing room to spread out your belongings, or dedicate the extra space to practice your hobbies, it might make sense to consider homeownership.

Homeownership Allows You To Start Building Equity

In addition to shielding you from rising rents and being more affordable when you need more space, owning your home also allows you to start building your own equity, which in turn grows your net worth. 

And, as home values typically rise over time and you pay off your mortgage, you build equity. That equity can set you up for success later on because you can use it to help fuel a move to an even bigger space down the line. That’s why, according to Zonda, the top reason millennial homeowners bought their home over the past year was to build their own equity instead of someone else’s.

Bottom Line

If you’re trying to decide whether to buy a home or continue renting, let’s connect to explore your options. With rents rising, it may make more sense to pursue your dream of homeownership.  

Here's a video that Cheryl and I did several years ago of downtown Parker Colorado. 

For the most part, the downtown is still the same.  But, there have been some major changes (all good) that have made our downtown even better.  

Are you waiting for home prices to come down? Regardless of what you might be hearing or reading, the facts just do not call for home prices to fall.  We have a major shortage in inventory.  At least, here in the Denver Metro Area.  We are working with several buyers in the price ranges from $500,000 to over $1,000,000.  A few new listings come up every day. If they are priced correctly and are in relatively good condition, they will be under contract within a day or two.  They will have received multiple, over asking price, offers.  We have cash buyers, willing to make aggressive offers.  We're still trying to get one under contract.  We will succeed.  We always do.  But, it's definitely a seller's market and will continue to be for quite a while.  So, if you're delaying purchasing a home because you think it's going to be better in the future, don't do it.  Buy now.  

Think Twice Before Waiting for Lower Home Prices Here In Parker Colorado 

As the housing market here in Parker, Colorado continues to change, you may be wondering where it’ll go from here. One factor you’re probably thinking about is home prices, which have come down a bit since they peaked last June. And you’ve likely heard something in the news or on social media about a price crash on the horizon. As a result, you may be holding off on buying a home until prices drop significantly. But that’s not the best strategy.

A recent survey from Zonda shows 53% of millennials are still renting right now because they’re waiting for home prices to come down. But here’s the thing: the most recent data shows that home prices appear to have bottomed out and are now on the rise again. Selma Hepp, Chief Economist at CoreLogic, reports:

“U.S. home prices rose by 0.8% in February . . . indicating that prices in most markets have already bottomed out.”

And the latest data from Black Knight shows the same shift. The graph below compares home price trends in November to those in February:

So, should you keep waiting to buy a home until prices come down? If you factor in what the experts are saying, you probably shouldn’t. The data shows prices are increasing in much of the country, not decreasing. And the latest data from the Home Price Expectation Survey indicates that experts project home prices will rise steadily and return to more normal levels of appreciation after 2023. The best way to understand what home values are doing in your area is to work with a local real estate professional who can give you the latest insights and expert advice.

Bottom Line

If you’re waiting to buy a home until prices come down, you may want to reconsider. Let’s connect to make sure you understand what’s happening in our local housing market.

There's not much I can add to today's article that I just read. 

I do think there is merit in expanding the areas that might work for you.  I know that we always recommend our clients consider, in addition to Parker, other towns like Castle Rock, Elizabeth, Centennial and specific areas of Aurora. 

Financing and down payment assistant programs can be helpful.  We have several trusted lenders that we work with.  In reality, though, as the saying goes, "it is what it is".  The best advice I can give.  Buy what you can qualify for and what you're comfortable with.  And, buy with the confidence that in the long run, you'll be making the best investment available to you.  Nothing better than home ownership.

Ways To Overcome Affordability Challenges in Today’s Housing Market [INFOGRAPHIC]

Some Highlights

• With so few homes on the market right now here in Parker, Colorado, widening the scope of your search to include nearby areas could help you find more options in your budget.
• You can also work with a trusted lender to consider alternative financing options and search for down payment assistance.
• If you’ve been searching for a home but are concerned about rising costs, make sure you have a team of trusted real estate professionals, Like Bob and Cheryl Bustin for expert advice.

The Three Factors Affecting Home Affordability Today Here in Parker, Colorado

There’s been a lot of focus on higher mortgage rates and how they’re creating affordability challenges for today’s homebuyers. It’s true that rates climbed dramatically since the record-low we saw during the pandemic. But home affordability is based on more than just mortgage rates – it’s determined by a combination of mortgage rates, home prices, and wages.

Considering how each one of these factors is changing gives you the full picture of home affordability today. Here’s the latest.

1. Mortgage Rates

While mortgage rates are higher than they were a year ago, they’ve hovered primarily between 6% and 7% for nearly eight months now (see graph below):

As the graph shows, mortgage rates have experienced some volatility during that time. And even a small change in mortgage rates impacts your purchasing power. That’s why it’s so important to lean on your team of real estate professionals for expert advice to stay up to date on what’s happening in the market. While it’s hard to project where mortgage rates will go from here, many experts agree they’ll likely continue to remain around 6%-7% in the immediate future. 

2. Home Prices

Over the past few years, home prices appreciated rapidly as the record-low mortgage rates we saw during the pandemic led to a surge in buyer demand. The heightened buyer demand happened while the supply of homes for sale was at record lows, and that imbalance put upward pressure on home prices. However, today’s higher mortgage rates have slowed down price appreciation.

And, the truth is, home price appreciation varies by market. Some areas are seeing slight declines while others have prices that are climbing. As Selma Hepp, Chief Economist at CoreLogic, explains:

“The divergence in home price changes across the U.S. reflects a tale of two housing markets. Declines in the West are due to the tech industry slowdown and a severe lack of affordability after decades of undersupply. The consistent gains in the Southeast and South reflect strong job markets, in-migration patterns and relative affordability due to new home construction.”

To find out what’s happening with prices in your local market, reach out to a trusted real estate agent.

3. Wages

The most positive factor in affordability right now is rising income. The graph below uses data from the Bureau of Labor Statistics (BLS) to show how wages have grown over time: 

Higher wages improve affordability because they reduce the percentage of your income it takes to pay your mortgage since you don’t have to put as much of your paycheck toward your monthly housing cost.

Home affordability comes down to a combination of rates, prices, and wages. If you have questions or want to learn more, reach out to a real estate professional who can explain what’s happening locally and how these factors work together.

Bottom Line

If you’re planning to buy a home, knowing the key factors that impact affordability is important so you can make an informed decision. To stay up to date on the latest on each, let’s connect today.

I would agree with everything in this article.  We need to be ready for a very strong seller's market this Spring. 

In fact, I don't think we will be out of a seller's market for years to come.  There are simply more people that need homes, than homes available.  It will be up to home builders to pull us out of a seller's market.  Existing homes have nothing to do with it.  The number of homes standing needs to grow faster than the number of people that need a place to live.  I don't see this leveling out for years to come.  When you think about it, if you're a buyer and you're worried about paying too much in this market, why would you.  Now you're a seller.  You're back in the driver's seat.  The moral of the story.  It will be the time to buy for years to come.  And, the time to sell.  Real estate is the best investment you can make.

What Are the Experts Saying About the Spring Housing Market

In Parker, Colorado?

The housing market here in Parker, Colorado has been going through a lot of change lately, and there’s been uncertainty surrounding what will happen this spring. You may be wondering if more homes will go on the market, what’s next with home prices and mortgage rates, or what the best advice is for someone in your position right now.

Here’s what industry experts are saying right now about the spring housing market and what it means for you:

Selma Hepp, Chief Economist, CoreLogic:

“We see more competition among buyers . . . Housing supply also tends to grow during the spring months. And this is also the time of year when relatively more migration happens, as people graduate and move elsewhere looking for jobs.”

Greg McBride, Chief Financial Analyst, Bankrate:

“I don’t expect big moves in prices in the span of a month, but like the flower buds of spring, the housing market is showing signs of improvement. A pick up in activity with inventory still low does bode well for home prices.”

Rick Sharga, Founder and CEO, CJ Patrick Company:

“If you can find a home you love and can afford at today’s prices, don’t wait. Home prices in most of the country are unlikely to crash, and mortgage rates will only come down very gradually if they decline at all this year.” 

Jeff Tucker, Senior Economist, Zillow:

“The market is still much friendlier this spring for buyers who can overcome affordability hurdles, but buyers are going to see more competition than they might expect because there are not many homes on the market to go around. New listings are increasing, which they almost always do this time of year, but not nearly as quickly as usual.”

Bottom Line

If you’re thinking about selling your house, this spring’s a great time to do so while inventory is still so low. And if you’re in a good position to buy, lean on your team of expert advisors for the best advice. Whatever your plans, let’s connect to make sure you’re able to navigate the spring housing market with confidence.

New Homes For Sale In

Parker Colorado

We know just about everything possible about all of the new home developments in Parker, Castle Rock, Lone Tree, Highlands Ranch, Centennial and Aurora.

Over the past 19 years we have worked with most of the home builders in the Denver Metro area. We know the good ones. And, we not know the not so good ones. We are among the few agents with the knowledge and experience to navigate you through the process of finding the right builder, in the right neighborhood, and at the best terms.  

Here's what you can expect from us as your New Home Buyer's agents.  

• We will guide you to and through all of the new home developments that meet your specific criteria. You're on a very tight time schedule.  You've got a few days to "take care of business".  You can't waste your time going to communities that do not fit your "wants and needs". We will make sure you see only those new home communities and builders that have what you're looking for.

• We will represent you as a Buyer's Agent.  This is very important. Guess who the new homes sales person works for?  It's not you.  It's the builder.  Their mandate is to sell as many homes as possible and at the highest profit for the builder.  That's as it should be.  But, that's not our job.  You hired us to find you the best home, in the best neighborhood and at the best terms. And, that's what we will do.

• We've been around quite a while.  We've sold a lot of homes.  There aren't many builders that we haven't dealt with.  You can rest easy that we'll introduce you to the good ones.

• Often times, buyers assume that the best way to negotiate with a builder is with price.  Not true.  The best way is through upgrades.  Builders do not want to lower their prices. It's deadly to them when negotiating with future buyers.  And, it hurts the current homeowners who just moved into there new home.  So, they tend to negotiate with upgrades and financing incentives.  Cheryl's background in interior design has enabled her to help all of our past clients in the design centers.  She knows what to pick and what not to pick for maximum value and future resale value.

• If we're in the "to be built" stage, we will help you pick the best lot within the development. We are aware of any future development that might affect perimeter lots.  Knowing what's planned for the future is critical in insuring that you don't have problems selling you home in the future.

• Most of our out of state clients come in to town, do their shopping, contract a home and then return to where they currently live.  When you're having a home built it's kind of nice to be in the area.  So that you can drop by from time to time to observe how things are going.  Out of state home buyers can't do that.  They're pretty much dependent on the skill and integrity of the builder and its sub contractors.  You need some one here, on the ground, to routinely visit the building site and report back to you.  As your buyer's agent, we will do that for you.  We're not professional inspectors, but at least you have some one watching out for you.

• There are two "walk-thrus" toward the end of construction.  The first one is usually a couple of weeks before closing.  The builder's representative takes us through the home, pointing out all the features and things to be done.  It's our opportunity to identify issues that we want handled.  Things like the wrong fixtures, wrong paint color, spots in the carpet, etc..  You're probably not going to be here for that.  We will represent you.  The final walk through is one or two days prior to closing.  It's to make sure all those issues got handled.

Finally, it's closing time.  We'll be there to make sure there are no "hiccups".  Closing are usually pretty smooth.  Usually fun.  Then it's "high five" time and a hug.  Done deal!

This is a video that Cheryl and I did a few years ago.  We just drove all through Parker, Colorado, pointing out what we were seeing as we drove around the town.  Enjoy.

This article emphasizes the importance of being pre-approved for your mortgage loan before making an offer on a home. Here in Parker, Colorado, Cheryl and I always require our homebuyers to be pre-approved before we make any offers on homes. In today's market, it's imperative. There is so much competition, including cash buyers, that sellers will not consider your offer without the pre-approval. Regarding pre-approval letters, we like to see our buyers get FULL pre-approval letters. This goes much farther than a pre-qual letter. A pre-qual letter means that the lender is using information from the borrower (not yet documented and an in-file credit report). It's based on assumptions. A full lender approval letter means that the lender has done full documentation of the buyer's application (tax returns, employment verification, asset verification, full credit report, etc.). This requires quite a bit more effort on the buyer's part. But, it's worth it, as the sellers can rest assured that they have a buyer who is fully approved and ready to close.

The Power of Pre-Approval for buying a home in Parker, Colorado

If you’re buying a home here in Parker, Colorado this spring, today’s housing market can feel like a challenge. With so few homes on the market right now, plus higher mortgage rates, it’s essential to have a firm grasp on your homebuying budget. You’ll also need a sense of determination to find the right house and act quickly when you go to put in an offer. One thing you can do to help you prepare is to get pre-approved.

To understand why it’s such an important step, you need to know what pre-approval is. As part of the process, a lender looks at your finances to determine what they’d be willing to loan you. From there, your lender will give you a pre-approval letter to help you understand how much money you can borrow.

Freddie Mac explains it like this:

“A pre-approval is an indication from your lender that they are willing to lend you a certain amount of money to buy your future home. . . . Keep in mind that the loan amount in the pre-approval letter is the lender’s maximum offer. Ultimately, you should only borrow an amount you are comfortable repaying.”

Basically, pre-approval gives you critical information about the homebuying process that’ll help you understand how much you may be able to borrow so you have a stronger grasp of your options. And with higher mortgage rates impacting affordability for many buyers today, a solid understanding of your numbers is even more important.

Pre-Approval Helps Show You’re a Serious Buyer

That’s not the only thing pre-approval can do. Another added benefit is it can help a seller feel more confident in your offer because it shows you’re serious about buying their house. And, with sellers seeing a slight increase in the number of offers again this spring, making a strong offer when you find the perfect house is key.

As a recent article from the Wall Street Journal (WSJ) says:

“If you plan to use a mortgage for your home purchase, preapproval should be among the first steps in your search process. Not only can getting preapproved help you zero in on the right price range, but it can give you a leg up on other buyers, too.”

Bottom Line

Getting pre-approved is an important first step when you’re buying a home. It lets you know what you can borrow for your loan and shows sellers you’re serious. Connect with a local real estate professional and a trusted lender so you have the tools you need to purchase a home in today’s market.