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REAL ESTATE INSIDER Vol. 46, No. 9 | OCTOBER 2022

WHY NOW MIGHT BE A GOOD TIME TO BUY A HOME

If you missed out on buying a home during the pandemic-inspired rush of 2020-2021, listen up. You hear it? That’s the sound of opportunity returning this fall to the American housing market.

While rising interest rates and limited supply clearly cooled the housing market during the spring and summer, the conditions are slowly shifting in homebuyers’ favor. Here are some signs of why now might be a good time to buy:

1. INVENTORY IS COMING BACK

Partly due to the slowing sales just mentioned, the supply of available homes for sale is picking up. Locally, July inventory was up by 67 percent in Loveland over July 2021, 51 percent in Greeley, 19 percent in Fort Collins and 14 percent in Windsor.

If you’re a buyer, that means more homes to choose from, likely less competition for the home you want, and a better negotiating position between you and the seller. While inventory is still tight, it is increasing and our markets are becoming a bit more balanced.

2. INTEREST RATES SETTLE DOWN

After a surge that saw average rates on 30-year home loans jump from about 3 percent at the start of the year to around 6 percent by early summer, borrowing costs largely leveled off in the late summer. There could be a benefit now to locking in a rate that is still in line with historical averages (remember, the average rate between 1998-2008 was also around 6 percent).

3. RENTS KEEP RISING

If you’re renting while you put off buying, then you’ve already seen your monthly housing costs increase—or know they will soon. With home ownership, you get the predictability of a monthly mortgage that won’t change.

4. PRICE APPRECIATION IS STABILIZING

As the market has enjoyed a healthy level of price appreciation over the last 12 months all signs are pointing to a moderation in the rate of appreciation going into the fall. This should showcase a positive value to both buyers & sellers with regards to equity gain over the years of homeownership.

Call me to discuss if it might be a good time for you to buy—or sell—a home.

TIME TO TAKE A CLOSER LOOK AT REVERSE MORTGAGES

With home values surging in recent years, older Americans have been piling up equity. A recent report states that American homeowners 62 and older increased their collective housing wealth during the first quarter of 2022 by $520 billion, an increase of nearly 5 percent. The estimated total home equity for this age group, $11.2 trillion!

That figure, which comes from the latest NRMLA/RiskSpan Reverse Mortgage Index, is bringing fresh attention to reverse mortgages—a method for senior citizens to use their home equity to fund retirement.

The “reverse” mortgage allows homeowners 62 and older with sufficient equity to borrow against their equity without the monthly payments required in traditional “forward” mortgages. The loan balance doesn’t come due until the owner moves out permanently, sells the home, or passes away.

As a funding tool, the reverse mortgage is useful for seniors who may be tight on cash, but flush with housing wealth. Still, it’s not a free lunch. For instance, you would lose your mortgage interest tax deduction you’re still paying on the mortgage; there are also insurance fees and closing costs, and you still need to keep up on property taxes.

But the benefits can be ample. And if you live in a place where home values appreciate on a regular basis (sound familiar?), your property could be worth even more at the time you or your heirs need to pay off the loan.

Call me if you’d like to learn more about reverse mortgages and if one is right for you or a loved one.

BE WARY OF TITLE INSURANCE SCAMS

As the real estate market soared during the COVID-19 pandemic era, real estate-related scams seemed to keep pace. And one of the top forms of real estate crime is home title fraud, which typically occurs at the time of transaction. Criminals use title fraud to siphon equity from home sellers, or to con homebuyers out of their closing fees.

Sellers are stung when a title company is tricked into wiring the net sale proceeds to a scammer upon the closing. That can occur when a scammer impersonates the seller and provides the title company with false wiring instructions, so the money ends up in the wrong bank account.

Buyers are vulnerable if they are fooled into sending their closing funds (which can be up to $80,000 on a $400,000 home), to a cyber scammer. Criminals impersonate a title company and issue instructions to wire the funds to the wrong account.

Here are some tips to protect yourself from these types of wire fraud:

  • Talk to your title company up front about how and when closing funds will be transferred.
  • Verify wiring instructions before sending funds. Do not call a phone number that’s included with the wiring instructions, or reply to an email that delivered the instructions.
  • Once you’ve made the transfer, confirm that the proper party has received the funds.
  • Be cautious of any messages giving you revised wiring instructions.
  • Overall, be careful with your incoming email, texts, and phone messages. If you’re uncertain about a message related to your home sale or purchase, contact your REALTOR® or your mortgage lender.

Contact me if you have any questions about title insurance, transferring funds, or any potential real-estate related scams. I care and want to make sure that no one takes advantage of you!

THE GROUP EXPANDS TO 8 LOCATIONS WITH PURCHASE OF STEAMBOAT SPRINGS BROKERAGE

We’ve been recognized as the innovative leaders in Northern Colorado real estate since 1976, and we’re pleased to announce that The Group Real Estate acquired Colorado Group Realty of Steamboat Springs and its two offices on August 1. The acquisition was approved unanimously by CGR’s board of directors.

“We are honored and proud to join forces with the amazing brokers and resource staff at Colorado Group Realty,” said The Group Real Estate President and CEO, Brandon Wells. “We have had a long-standing synergy with CGR and have worked closely together over the years. To finally come together to strengthen our culture of excellence in real estate service, relationships, and involvement in our local communities is a dream come true.”

The two like-minded real estate firms are affiliates of Leading Real Estate Companies of the World, and both are practitioners of the Ninja Selling sales philosophy created by The Group co-founder Larry Kendall. Each company is an industry leader in its respective market, and together they combined for nearly $3.3 billion in sales volume in 2021.

The Group now gains a presence in one of the country’s most dynamic resort communities. With easy access from Northern Colorado (no I-70 traffic), Steamboat is also an increasingly popular destination for residents of Larimer and Weld counties; nearly 25 percent of Steamboat buyers are Front Range residents.

In all, 84 people—including 70 agents and 14 staff—are joining The Group from CGR. The management team for the Steamboat and Hayden offices includes Josh Miller, regional sales manager, and Shelly Stanford, the managing broker. Miller joins the firm from Vacasa, a property management firm in Steamboat, where he was the general manager. Stanford joined the firm in 2000 and became the Employing/Managing Broker in 2018.

“We’re thrilled to become part of The Group,” said CGR’s Shelly Stanford. “With the vast amount of knowledge, amazing systems, and strong support tools and people, we will have the good fortune to pass all of that along to our clients. The Group’s culture is amazing — caring and supportive — very much like the culture Colorado Group has thrived on. What a tremendous asset to our clients, friends, and community.”

CGR is adopting The Group’s branding, a process that is expected to be completed this fall.

“Steamboat Springs and the Yampa Valley are truly special, and we are honored to be a part of these communities,” Wells said.

REAL ESTATE BY NUMBERS

  • 65.8 percent. Share of the U.S. population that lived in a home they own as of the second quarter of 2022. That’s up from 65.4 percent the year before, according to U.S. Census data.
  • 491. Number of housing units in Home Springs, an affordable housing project proposed in southwest Greeley by the Greeley-Weld Habitat for Humanity. As planned, the project will be built on 43 acres near the Walmart Super Center at 32nd Street and 23rd Avenue.
  • $37 million. Price paid by Dallas-based investors for the 125-unit Sunset Park mobile home park in east Loveland.
  • 127,000. Estimated shortage of homes needed in Colorado, according to Up for Growth, a nonprofit that specializes in housing policy nonprofit.
  • 706. Number of homes recently approved for development by the Evans City Council. The housing project, known as Liberty Draw, would include 357 single-family homes and 349 townhomes. The builder is Baessler Homes.
  • $55.75 million. Sale price for Pinyon Pointe Apartments, a 166-unit complex in south Loveland at 451 14th St. SE. Pinyon Pointe, which includes a mix of studio, one-, two- and three-bedroom apartments, opened to residents four years ago.
  • $100 million. Listing price for a 10-bedroom home in Aspen with ski-in, ski-out access. The listing value is the state’s most expensive available property by $15 million. The 14,154-square-foot mansion sits on 1.4 acres on Aspen Mountain.
  • $128,482. Average home equity loan taken out by Colorado homeowners so far in 2022, according to survey by LendingTree. The average home equity loan across the U.S. is $83,872.
  • $6.8 million. Price that residents of the Parklane Mobile Home Park paid to acquire the 68-lot community in east Fort Collins. The residents formed a nonprofit organization to make the purchase.
  • $20.95 million. Price paid by investors for two buildings in Longmont on the Boulder County Front Range Community College campus. Together, the buildings cover 117,000 square feet.
  • 12.2. Percentage of households across the United States that don’t have internet access, according to a report by LendingTree.
  • $85.25 million. Price paid by Los Angeles-based investor for a four-building office campus in east Boulder. The complex, to be called Boulder 38, includes 164,000 total square feet.
  • $59 billion. Total investment by international buyers in American housing for the 12-month period between April 2021 and March 2022. According to the National Association of REALTORS®, that’s 2.6 percent of total sales volume.
  • 33 percent. Share of all declined mortgage applications that are due to insufficient closing cost funds or a disqualifying debt-to-income ratio, according to a recent analysis by Down Payment Resource.
  • $51 million. Sale price for the Kensington Apartments, a 164-unit apartment complex near the University of Colorado campus in Boulder. The 49-year-old complex was purchased by a Tennessee-based investor.

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