This week, take a listen to Matthew Gardner, Windermere’s Chief Economist as he discusses the current state of the housing market.
He takes a deep dive into interest rates, price appreciation and where the market is headed.
You can watch his video HERE
There is half of a month of inventory on the market. In other words, at the current pace of sales, it would take just two weeks to sell all of the homes currently listed for sale along the Front Range.
By definition, a market is balanced when there is 4 to 6 months of inventory. Anything less than that is a seller’s market.
The current inventory levels give us confidence about the future of price growth along the Front Range.
While we expect the pace of price appreciation to slow, the low supply of properties insulates us against any sort of price decline.
We’re officially 1/4 of the way through 2022 believe it or not. Every quarter I like to take a look at what’s happened with our neighborhood’s real estate sales.
So let’s take a look back to see how the Troutman Park Real Estate market has done through March 31 this year compared to the same time during other recent years. Here are the numbers:
2022 Q1 – 10 homes sold for $4,892,400. They ranged from $431,000 – $540,000 at an average of $489,240
2021 Q1 – 9 homes sold for $3,989,900. They ranged from $405,500 – $630,000 at an average of $433,322
2020 Q1 – 13 homes sold for $4,924,800. They ranged from $325,000-$420,000 at an average of $378,830
2019 Q1 – 12 homes sold for $4,439,400. They ranged from $325,000-$450,500 at an average of $369,950
2018 Q1 – 9 homes sold for $3,078,000. They ranged from $290,000-$394,000 at an average of $342,000
2017 Q1 – 7 homes sold for $2,377,200. They ranged from $257,500-$379,700 at an average of $339,600
2016 Q1 – 6 homes sold for $1,871,500. They ranged from $205,000-$400,000 at an average of $311,916
2015 Q1 – 15 homes sold for $4,004,175. They ranged from $218,325-$302,500 at an average of $266,945
What’s interesting about the start of 2022 is that the majority of homes that have sold in Troutman Park are on the small end of square footage for the neighborhood (right about 2,000 square feet or less with the exception of just one).
You can expect that the larger, updated homes in Troutman Park (around 2,400 square feet and bigger) will be selling in the mid $600,000’s to mid $700,000’s which is what comparable surrounding neighborhoods like Mountain Ridge Farm and The Gates at Woodridge have seen this year.
The reason for the continuation of rapid appreciation simply comes down to the current supply and demand. We have seen a few buyers start to head to the sidelines with rising interest rates that combined with escalating home values have priced some out of the market and created uncertainty with others. There do seem to be more stories of homes with only one offer in the 1st week which does bode well for active buyers.
The fact of the matter is that even with some buyers taking a break there still are not enough homes out there to supply the market’s appetite. To give you an idea the number of Sold Properties in Larimer County for the month of March 2022 was down -37% compared to last year at that time.
The end result means there is a lot of opportunity for sellers to take advantage of market conditions if they want to cash in on all the equity they have developed.
If you have questions about anything or if you’re curious about what your home might be worth, just let me know. I grew up right here in Fort Collins, I’ve worked in Real Estate since 2002, live right here in Troutman Park and I’m always happy to share.
While we frequently research and discuss average prices for properties that sell, it is also interesting to look at the average prices for properties that are active on the market but not sold yet.
These are the average prices, by area, for properties currently listed for sale and not sold yet:
If you are surprised that Weld County is higher than Larimer County, it’s important to note that there are several large acreage properties listed for sale in Weld County which are skewing the average.
These average active prices are all roughly 30% higher compared to a year ago and further emphasize the strong activity in the Front Range market.
The new CoreLogic Homeowner Equity Insights report shows that homeowners in the U.S. have seen their equity increase by a total of $3.2 trillion over the last 12 months.
Their data shows that 63% of all homes have a mortgage.
On average, U.S. homeowners gained $55,000 while the average increase in Colorado was higher at $75,000.
The other piece of good news from the report is that properties with negative equity reached the lowest amount in several years.
Only 2.1% of all properties across the U.S. have a value lower than the mortgaged amount. Negative equity peaked at 26% of all mortgaged properties back in 2009.
This week, for the first time in 32 months, mortgage rates hit 4%.
While this increase may feel painful for buyers currently looking at property, it is important to put today’s rates in perspective.
We believe we will look back a few years from now and see that a 4% rate was like buying money at a discount.
Interest rates hovered between 4.5% and 3.75% for the 8-year span of June, 2011 to June 2018
Between January, 2000 and December, 2010 rates were as high as 8.25% and as low as 5.0%.
When looking at the history of interest rates and researching economists’ forecasts, we believe it is reasonable for rates to hit 5% within the next 24 months.
When interest rates increase 1%, a buyer’s monthly payment increases 10%.
So, if rates do go to 5%, it is like an additional 10% price increase for a buyer.
Given all of this information, the biggest risk to a buyer in today’s market may very well be to wait.
Mortgage rates are likely on their way up and there is an opportunity to buy money at a discount today.
Homeowners who are preparing to sell are often faced with a dilemma about whether to remodel or sell their home in its current state. Each approach has its respective advantages and disadvantages. If you decide to remodel your home, it will likely sell for more; but the increased selling price will come at the cost of financing the remodeling projects. If you decide to sell without remodeling, you won’t spend as much money putting your home on the market, but the concern is whether you’re leaving money on the table.
Should I Remodel or Sell My Home As Is?
Every situation can be a very unique case so to answer this question, it’s important to understand the factors that could influence your decision and to work closely with your agent throughout the process.
Cost Analysis: Home Remodel vs. Selling Your Home As Is
Home Remodel
When you remodel your home before selling, you’re basically making a commitment to spend money to make money. So, it’s important to consider the kind of ROI you can expect from different remodeling projects and how much money you’re willing to spend. Start by discussing these questions with your agent. They can provide you with information on what kinds of remodels other sellers in your area are making and the returns they’re seeing as a result of those upgrades. This will help you determine the price of your home once your remodel is complete.
Then, there’s the question of whether you can complete you remodeling projects DIY or if you’ll need to hire a contractor. If hiring a contractor seems expensive, know that those costs come with the assurance that they will perform quality work and that they have the skill required to complete highly technical projects.
According to the Remodeling 2021 Cost vs. Value Report (www.costvsvalue.com1), on average, homeowners paid roughly $24,000 for a midrange bathroom remodel and about $26,000 for a minor kitchen remodel nationwide, with a 60.1% and 72.2% ROI respectively. This data shows that, for these projects, you can recoup a chunk of your costs, but they may not be the most cost-effective for you. A more budget-friendly approach to upgrading these spaces may look like repainting your kitchen cabinets, swapping out your old kitchen backsplash for a new one, refinishing your bathroom tub, or installing a new showerhead. Other high-ROI remodeling projects may allow you to get more bang for your buck, such as a garage door replacement or installing stone veneer. To appeal to sustainable-minded buyers, consider these 5 Green Upgrades that Increase Your Home Value.
Image Source: Getty Images – Image Source: stevecoleimages
Deciding not to remodel your home will come with its own pros and cons. By selling as is, you may sell your home for less, but you also won’t incur the cost and headache of dealing with a remodel. And since you’ve decided to sell, you won’t be able to enjoy the fruits of the remodel, anyway. If you sell your home without remodeling, you may forego the ability to pay down the costs of buying a new home with the extra money you would have made from making those upgrades.
Local market conditions may influence your decision of whether to remodel before selling your home. If you live in a seller’s market, there will be high competition amongst buyers due to a lack of inventory. You may want to capitalize on the status of the market by selling before investing time in a remodel since prices are being driven up, anyway. If you take this approach, you’ll want to strategize with your agent, since your home may lack certain features that buyers can find in comparable listings. In a seller’s market, it is still important to make necessary repairs and to stage your home.
In a buyer’s market, there are more homes on the market than active buyers. If you live in a buyer’s market, you may be more inclined to remodel your home before selling to help it stand out amongst the competition.
Don’t forget that there is a third option: to wait. For all the number crunching and market analysis, it simply may not be the right time to sell your home. Knowing that you’ll sell your home at some point in the future—but not right now—will allow you to plan your remodeling projects with more time on your hands which could make it more financially feasible to complete them.
If you have questions about what kind of improvements might make the most return on investment for your home just let me know.
Despite the extraordinarily low amount of standing inventory, it is important to understand there is still a steady stream of new inventory hitting the market.
Inventory is low. That is a reality.
New inventory is coming on the market at essentially the same pace as compared to the last few years. That is also a reality.
Because demand is so high, the inventory doesn’t stay on the market very long. Residential listings go from ‘Active’ to ‘Pending’ very quickly (assuming they are priced correctly).
Over the course of 2021, there were 66,308 new residential listings that hit the market in Metro Denver. That is only 5% less than 2020.
Larimer County had 8,342 which is 7% less than 2020.
Weld County had 8,499 which is 5% less than 2020.
While standing inventory is near 50% lower than last year, the stream of new inventory is fairly consistent.
It is time to register for our annual Market Forecast with Chief Economist Matthew Gardner. This year the event will be hosted online on Thursday February 3rd from 11:00 to 12:00.
You can register at www.ColoradoForecast.com
A fire breaking out in your home is a serious potential hazard. Fortunately, there are simple steps you can take to identify the early signs of a fire and to prepare for an emergency. The following list will help you and your household put together your fire safety plan.
Having properly functioning smoke and CO2 detectors is crucial to your safety. Test your smoke and CO2 detectors frequently and swap out the batteries when necessary. It is recommended to have a smoke detector outside each sleeping area and on each level of your home.
Always keep a fire extinguisher near the kitchen to combat flame outbursts from the stove or oven. It is best to have at least one fire extinguisher per floor for easy access. Keep in mind that fire extinguishers are used to control and extinguish small, contained fires. If a fire has spread throughout an entire room, or is beginning to engulf your home, know that fire extinguishers are no match for the blaze, and you should escape immediately.
A home fire can be very disorienting. During an emergency, it is critical that all members of your household know how to properly evacuate the home. Identify two ways to escape from each room in case one route is unsafe. Choose a meeting spot somewhere outside for everyone to meet a safe distance away from the fire. This can be across the street, down the block, at a neighbor’s house, or wherever makes most sense for you and your family. The most important thing is that you all have an agreed-upon rendezvous. Select an emergency contact whom you can reach out to if something goes wrong in the evacuation process or if a family member is missing.
When escaping your home, crawl as low as possible to stay beneath the smoke. Test closed doors before using them to escape. If they are hot, that’s a sign that there are flames on the other side of the door and you should use an alternative escape strategy. Be careful that you don’t burn your hand when testing closed doors. Make sure everyone in your household knows the procedure for calling 9-1-1 and properly alerting the fire department. If you have pets at home, include them in your evacuation plans. If you are forced to decide between evacuating safely and trying to rescue a pet, know that firefighters are trained experts at saving animals from house fires.
For more tips on how to plan for fire-related emergencies at home, read our blog for Wildfire Preparation and Evacuation Tips.
Facebook
Twitter
Pinterest
Copy Link