2018 Real Estate Market Trends

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Have you heard that sellers are making drastic price reductions in order to get their home to sell in this market? 

Or maybe you've heard that homes are selling in just a few days, often times receiving multiple offers?

So which is it? Is the real estate market hot or not?

Is the real estate market hot or not? Well, believe it or not, both statements are true. Statistical data can be sliced and diced in so many different ways that the information can often seem contradictory and confusing.

For example, even though we've seen an increase in days on market for single family homes and condos, when you look at just single family homes, days on market has actually decreased and we only have five or six weeks of inventory which is why we're seeing multiple offers.

However, in the luxury market, which is one million plus, we've seen record-breaking numbers in sales and days on market has actually decreased. However, there are about eight months of inventory still available which might be some of the price reductions you've seen. Overall inventory in January also hit an all-time record low of just 3,869 total active homes.

In addition, Colorado was ranked the ninth fastest growing state and grew by 77,000 new residents. Now while this may down from the 90,000 that we welcomed in 2016, we still have 167,000 extra people to house in the last two years. Simple laws of supply and demand will tell us that when inventory levels are low and demand is high, home prices will naturally go up.

Here's What You Need to Know Going into Spring

Sellers, if you're looking to sell your home, know that buyers are thirsty for more inventory. But it's still important to have it priced right. No matter how hot the market is, over-pricing your home will be detrimental to maximizing the final sale price. In fact, your home may be even more susceptible to price reductions and stigmatizations in a hot market where buyers are expecting the best homes to go off the market quickly.

It's more important than ever to make sure that no detail is overlooked in listing your home.

Working with a reputable agent that will ensure your home receives maximum exposure, by getting it in front of as many agents and qualified buyers as possible while also ensuring it shows exceptionally well in person, in print, and online, will work to limit the total days on market and command the highest price for your home.

Buyers, don't let the low inventory stop you from finding the home you desire.

Instead, take action now and start your search early. I recommend at least six months from when you need to move. If you plan on getting a loan to purchase your home, you must get pre-approved from a lender.

In this market, a seller will not even look at your offer without a lender letter or a proof of funds. This is the one step in the entire transaction where the seller really holds all of the power, because the seller gets to decide whether or not to accept your offer. And in the case of multiple offers, you want to make sure that you come across as the most prepared, qualified, and desirable buyer that will actually make it to close.

And believe it or not, love letters work.

The key is to be authentic and find ways to relate to the seller. I've even had my buyers include pictures of their family. Who can say no to puppies and babies? Working with a realtor who is not only knowledgeable about the real estate market, but who can be strategic in writing your offer as well as an aggressive negotiator will ensure you get the best terms and price in this competitive market.

So there you have it, we're teed up for an exceptional 2018 in Colorado. If you have any real estate questions or if you or someone you know is considering selling or buying a home this year, give me a call. I'm your realtor, Milena Joy. I know changing where you live, can change how you live.

How to Manage Your Home Equity

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Did you know that by the time the average American reaches 65 years of age, 83% of their personal wealth will come from their home equity?

Wait, what? Yep, you heard me right.

83% of your personal wealth will come from your home equity.

That means managing the equity that you have in your home and looking for ways to maximize that equity will be imperative to increasing your overall net worth and ensuring you have the money you need for retirement.

So how do you maximize your equity?

Well there are a lot of different ways and that's why so many homeowners get overwhelmed and do nothing. That's why I'm gonna give you a simple, yet powerful tool called Homebot. It'll take out the confusion and empower you to manage the largest asset you may ever own.

It will show you exactly what you can do, when you should do it and potentially how much wealth you can build. Homebot tracks your current and historical estimated market value of your home so you can see how it changes month by month. You can see a breakdown of the principal and interest that you've paid so far and your potential savings or loss by refinancing to a 15 or 30 year loan.

Now, I think a really cool part of the Homebot tool is that it will let you see how much interest you could save by paying an extra $100 a month on your mortgage. You can choose any amount and run different scenarios. It's pretty eye-opening once you see how much you can save.

Thinking about buying an investment property or moving up to a bigger home?

The tool will show you exactly how much home you can afford. You can even run income scenarios for renting your home or a room in your home on a service like Airbnb. From there it calculates how much you can save by putting that money towards your mortgage payment. You can also see the cash-out potential for doing things like consolidating high interest debt or increasing your home value through home improvements like a kitchen remodel.

As your Realtor, this tool is my gift to you as I know that your home should not only make time with friends and family more enjoyable, but it should also give you the financial security you need to help you live your best life now and through retirement.

To get started with Homebot just click the link below.

You'll be asked to fill out quick form with your address and you'll receive an email digest with a link to start managing your real estate wealth. There's no login or app to download and it's completely free. I know you're really going to love this tool. In the meantime, feel free to message me with your real estate questions or to buy or sell your next home. Until next time, I'm your Realtor Milena Joy. I know changing where you live, can change how you live.

Denver Metro Real Estate Market Cooling

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Now unless you've been living under a rock, inside a cave near the center of the earth, you know that the real estate market here in Denver, Colorado is hot, hot, hot! But what you may not know is that most recent home sale reports show a slight cooling off with the average single family home price decreasing by 2.75% from last month to just under $484,000.

This cooling has caused all sorts of chatter especially among those skeptics concerned about a looming real estate bubble.

If we go back and look at 2016 during the same time period from July to August, you will notice a very similar trend. The average home price went from just under $458,000 to $446,000 for a 2.65% decrease. And what's even more noteworthy is that even with the decrease in average home price, prices are still up 8% over last year.

That's still an impressive growth rate.

So it's important to acknowledge that this cooling off that everyone's so hyped about is more likely driven by a very typical seasonal trend. So don't be fooled or mislead by the rumors of a cooling market. I like to think of it as the temperature going from 110 to 105 degrees. That my friends means it's ♪ Hot in, so hot in here ♪ -

So what does this mean for buyers and sellers going into the fall?

For buyers, fall has always been and will remain a great time of the year to get a good deal on a home. Although inventory is lower in the fall compared to spring, which means you have fewer homes to choose from, there are also fewer people competing for those homes.

So if you're one of those people who are getting outbid and burned out on your search this spring, you may just want to relaunch your search this fall. Or if you're hoping to be in a new home by next spring, it would be smart to start your search now as the money you could potentially save on both interest rate and price could far outweigh any early lease termination fees.

So what does this mean for sellers?

It means you should have sold your home months ago like I told you to. No, I'm just kidding. If you're a seller that needs to sell and buy, it's a pretty ideal position to be in because while your home may not sell at the absolute peak of the market, we're still in a high plateau with growth rates between eight and 10% over the last few years. So you'll still be able to get top dollar for your property.

Your home may stay on the market a bit longer, maybe a couple weeks compared to just a few days like we've seen recently, but you'll be grateful to have a bit more time to find the perfect home at a more favorable price.

Bottom line as we head into fall, the real estate market is following trend with a slight cooling. Take advantage of it and call me to make your next move. Thank you for listening. I'm your realtor Milena Joy. I know changing where you live, can change how you live.

6 Things You Must Know before buying new construction

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Buying a new construction home versus a resale home can be quite appealing. It's never been lived in so you don't have to worry about those mysterious stains on the carpet or when that old furnace might stop working. And while there are certainly a lot of benefits to buying new construction, the sales process can be quite different from your typical resale transaction. So here are the six things that you must know before buying a new construction home.

Number one, builders use an escalating pricing model.

Unlike a resale home where the seller will lower the price the longer it sits on the market, a new construction home may actually go up in price. Typically, builders will offer the lowest price and best incentives to those who commit early and sign a contract during the early months of construction or even pre-construction. Then as more units are sold and the project comes closer to completion, they will increase prices on their remaining units to meet the demand. Now this of course is assuming that it's a healthy market and a desirable project.

By planning ahead and starting your search for your new construction home early, even as much as a year or more, you can ensure you will get the lowest price and best incentives.

Number two, a builder's contract is written by the builder to protect the builder.

When it comes times to submit an offer on your new home, rather than signing the standard Colorado approved contracts, which are written to protect the buyer, you'll likely be signing a builder's contract. Now each builder's contract will vary, but you'll find that many of them do not contain an inspection contingency, an appraisal contingency or even a favorable loan contingency. Now without these contingencies in place, getting out of a builder's contract without penalty, which usually means losing your earnest money, can prove to be a bit more difficult. In addition, dates and deadlines including the date of completion are written with very lenient terms because material shortages, bad weather and permits can all cause delays for the builder.

Therefore, you'll not only want to be confident in your decision to go under contract on your new construction home, but also be flexible with your move-in date.

Number three, every thing is negotiable including the sales price.

Just because you're signing a builder's contract, doesn't mean you can't negotiate specific terms of the contract. This is where having a knowledgeable Buyer's Agent on your side to help you, can be a huge advantage. I know this first hand because I started my real estate career working for a new home builder. When buyers were working with a real estate agent, it usually made the entire transaction go more smoothly so the builder and I were more willing to negotiate the terms.

And as your buyers agent, I have the real estate market knowledge to help justify and negotiate a lower price and additional incentives.

Number four, your property taxes may increase after the first year.

In Colorado, property taxes are assessed every two years, so there's a big chance that your new construction home was assessed prior to your home being built. Now depending on the condition of the property prior to construction and when you closed on your home, you may find that your first year or two of taxes are actually quite low. However, when your property taxes are re-assessed, you may see an increase in your property taxes because the value of your property has gone up since the last assessment.

This is simply something that you are going to want to take into consideration when evaluating the cost of home ownership for your new construction home.

Number five, time is of the essence for selecting finishes.

One of the most attractive reasons to buy new construction is the opportunity to select some of the finishes like flooring, tile, lighting and even paint colors to help personalize your home. The builder will likely have deadlines for selecting these finishes, but it's not unheard of for those deadlines to fall within the first couple months of construction. And as the builder gets closer to completion, some options may not be available or already selected by the builder.

You'll want to clarify with the builder which finishes and appliances will be included in your new home and be sure to get in early to make those selections.

Number six, custom changes aren't always possible.

Now while it never hurts to ask and everything is negotiable, many builders will be reluctant to agree to custom changes and this is for good reason. Each change request opens the door to additional risk and opportunity for error. If for any reason you don't close on the home, the builder is stuck with your custom change that may not be appealing to the next buyer. Additionally, with so many hands on the project, a simple request for a custom paint color could ultimately result in the wrong paint color or even the wrong home being painted, which in turn can cause additional project delays and cost to the builder.

Keep in mind that once you've closed on your home, you'll have more liberty to make those changes yourself. However, if you find yourself wanting a lot of changes, especially structural ones, you may want to consider working with a custom builder instead.

So there you have the six things that you must know before buying a new construction home. Now it wasn't my intention to convince you that buying a new construction home is any better or worse than a resale home, but simply to make you aware of the impact of those differences so you can feel more prepared and confident in moving forward in the search for your next home. Thank you for listening. I'm your realtor, Milena Joy. I know changing where you live can change how you live. So give me a call and live your best life in your next home.