Home prices, Mortgage Rates to rise in 2019 – Chris Mygatt

 

Home Prices, Mortgage Rates to Rise in 2019

Buying a home will be more expensive in 2019 as mortgage rates and home prices rise, according to economists with the National Association of Realtors® and realtor.com®.

NAR’s chief economist Lawrence Yun predicts home prices will continue to rise in 2019, but at a slower rate, with the national median home price increasing to $266,800, up 3.1% from 2018. Danielle Hale, chief economist at realtor.com®, provides a similar forecast, predicting that prices will rise 2.2% nationally. These increases are down from nearly 5% in 2018 and more than 5% in 2017. In addition, Yun expects home sales to flatten and become more stable in 2019, rising by just 1%.

Hale said the 2019 housing market will see modest inventory gains of less than 7%, but many of those properties will be in the mid to higher-end price range. And with mortgage rates expected to hit 5.5% by the end of the year, Hale estimates that the expected increase in prices and interest rates translates to an 8% increase in the average monthly mortgage payment. That will put homeownership out of reach for some, including cash-strapped first-time home buyers. However, as more buyers are priced out of the market, those who are able to remain will find less competition.

In recent interviews with USA Today, both Hale and Yun offered some advice for sellers and buyers in 2019:

Hale said sellers should price their home realistically and be mindful of competition, especially for more expensive properties, and be prepared to reduce the price or offer other incentives to close a deal.

Since there is less competition among buyers and will be more inventory, buyers should take their time to find a home that fits into their budget, Yun said.

Meanwhile, there is positive news. The overall health of the economy is good, Yun said in presenting his 2019 housing and economic forecast in November 2018. Yun cited low unemployment, record high job openings, historically low jobless claims and wages starting to increase as positive signs supporting the housing market, even as interest rates rise.

If you are considering listing your property in 2019 or looking for your dream home, get started by contacting a Coldwell Banker Residential Brokerage independent agent or visiting ColdwellBankerHomes.com to view all properties for sale in your area.

By | January 11th, 2019

About the Author:

A real estate veteran with more than two decades of experience, Chris Mygatt is the President and Chief Operating Officer of Coldwell Banker Residential Brokerage in Colorado. When not overseeing the daily operations of Colorado’s largest real estate and relocation company, Chris enjoys Colorado’s active outdoor lifestyle including cycling, skiing and hiking, and is an avid pilot, sea captain and scuba diver. Chris is also a strong supporter of Habitat for Humanity, Angel Flight, Up with People, Bike Denver and regularly participates in actively helping many other non-profit organizations in Colorado.

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Conquering the clutter before the spring selling season – Chris Mygatt December 2018

Conquering the Clutter Before the Spring Selling Season

If you plan to put your home on the market this spring, one of the first steps you should take is corralling the clutter and getting your home organized. There’s a lot to do before the for-sale sign goes up, and spring will be here before you know it, so why not start the process after the holidays. Here are a few ideas to get you started.

Sort through decorations. Make the dreaded annual ritual of taking down decorations more productive by using it to begin decluttering. Before stuffing all your decorations back into plastic bins, take stock of everything you have – lights, wreaths, figurines – then toss items that don’t work and donate decorations you no longer use. In the end, you’ll likely have fewer containers to stow, freeing up space in storage areas.

Get one, donate two. For each gift received – an article of clothing, toy or gadget – donate or get rid of two counterparts. As you put away new possessions, take a little extra time to scour closets and bookcases and weed out worn-out items or those your kids have outgrown. Whether you donate, sell or throw them out, you’ll be making progress toward preparing your house for the spring market.

Depersonalize your home. Once you finish your post-holiday decluttering, it’s time to do a sweep of tables, dressers, shelves and the mantle to clear out personal items such as knickknacks and family photos. The goal is to make buyers feel like your home could potentially become theirs.

Scale down furniture. Nearly every home shows better with less furniture, so remove excess or older furniture to make your home look more spacious. While you might think rooms look empty, it will enable buyers to envision their own furnishings and belongings in the same space.

Rent a storage unit. Once you’ve cut the clutter, consider renting a storage unit for the furniture and other things you’ve removed. That way, you won’t have to store them in your basement or garage when it comes time to stage and show your home. And here’s an added bonus: Taking care of this now means you’ll have one less chore to do when it’s time to move!

If you are considering listing your property this spring, contact a Coldwell Banker Residential Brokerage independent agent today or visit ColdwellBankerHomes.com. A Coldwell Banker® affiliated agent can provide guidance and advice as you prepare to sell your home.

By | December 3rd, 2018

About the Author:

A real estate veteran with more than two decades of experience, Chris Mygatt is the President and Chief Operating Officer of Coldwell Banker Residential Brokerage in Colorado. When not overseeing the daily operations of Colorado’s largest real estate and relocation company, Chris enjoys Colorado’s active outdoor lifestyle including cycling, skiing and hiking, and is an avid pilot, sea captain and scuba diver. Chris is also a strong supporter of Habitat for Humanity, Angel Flight, Up with People, Bike Denver and regularly participates in actively helping many other non-profit organizations in Colorado.

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The Benefits of Hiring a Real Estate Agent – 9/17/2018

The Benefits of Hiring a Real Estate Agent

While buying or selling a home can be a complex process, working with a real estate agent can make things easier and more efficient.

A local Colorado agent has the area expertise, marketing knowledge and familiarity with transaction requirements to guide you step by step through the entire process, keeping everything on course. Here are just a few of the many benefits of working with an experienced agent for your home purchase or sale.

1. If you are looking to purchase a property, there’s no substitute for a professional agent who knows what you are looking for, has deep knowledge of neighborhoods and can help you find a perfect match. An agent can arrange for you to visit homes that interest you, at your convenience. Many agents even have access to homes that are about to be listed, which could help you in areas where homes are selling quickly.

2. Although the internet makes it easy to search for properties for sale, it doesn’t take the place of having an agent assist in your search. Agents can quickly conduct searches to find homes that meet your criteria and call listing agents to set up appointments for viewing. If you’re selling, an agent can field these calls for you, make appointments and answer questions.

3. An agent can provide a competitive market analysis (CMA) that shows comparable properties that are currently on the market or have recently sold. This can help you price your home right the first time, an important factor that minimizes the chances of price reductions or having your home languish on the market.

4. If you’re looking for a new house while trying to sell your current home in the same area, it can greatly simplify the process if you work with one agent to list and market your current property and help you find your new home. Since the same agent will work closely with you throughout the process, they will know you and your specific needs and make scheduling easier.

5. An agent can help you negotiate the complex terms of your contract. Selling or buying a home involves dealing with multiple contacts and contracts, including the buyer or seller, their agent, home inspection company, appraiser, banks and sometimes attorneys. Your agent can help you navigate the entire process in a timely manner, so you can experience a smooth and seamless transaction.

If you are considering listing your property or purchasing your dream home, contact a Coldwell Banker Residential Brokerage independent agent today or visit ColdwellBankerHomes.com. A Coldwell Banker® affiliated agent can provide guidance and advise you on what you need to know so you can make the best possible decision.

By | September 17th, 2018

About the Author:

 A real estate veteran with more than two decades of experience, Chris Mygatt is the President and Chief Operating Officer of Coldwell Banker Residential Brokerage in Colorado. When not overseeing the daily operations of Colorado’s largest real estate and relocation company, Chris enjoys Colorado’s active outdoor lifestyle including cycling, skiing and hiking, and is an avid pilot, sea captain and scuba diver. Chris is also a strong supporter of Habitat for Humanity, Angel Flight, Up with People, Bike Denver and regularly participates in actively helping many other non-profit organizations in Colorado.

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A Survival Guide for Spring – by Chris Mygatt, April 17th, 2018

 

A Survival Guide for Spring

Real estate agents are reporting increased showings at open houses, bidding wars, and multiple offers over asking price within days, sometimes even hours.  Basically, it’s a jungle out there.

Before you jump into the fray, ask a Coldwell Banker Residential Brokerage affiliated sales professional to guide you through the process.

As a homebuyer, this time of year and competitive environment can seem overwhelming, but it doesn’t have to be. As you enter the busiest selling season, here are a few tips for both buyers and sellers that should make the entire process easier.

Buyers, take the time to review your credit score. A sound financial track record and solid credit score may help you lock in a loan at lower interest rates, and try to obtain a mortgage pre-approval, which you may need in this fast-paced selling environment.

Keep in mind your housing priorities, preferences and desired locations when hunting, and remember your budget. Don’t get caught-up in the emotional drama of bidding, and price yourself higher than you can afford. Of course, select and work with an affiliated Coldwell Banker Residential Brokerage sales professional who will guide you through the entire process.  A local real estate expert with years of negotiating experience is invaluable when it comes to closing the deal in this competitive market.

Sellers, while homes are selling faster, you still need to do your homework as well.  Do some spring cleaning, painting and sprucing.  Be forewarned that buyers are still looking for a great deal, so ensure that your home is priced accordingly and in good condition. Again, work with a local real estate expert who can advise you on a pricing and marketing strategy.

For those sellers sitting on the fence, don’t try to time the market. By the time most sellers sense a shift, the tables have typically already turned. Focusing instead on lifestyle needs is usually the better option.

For survival guidance during the spring selling season for buyers and sellers, contact a Coldwell Banker Residential Brokerage affiliated sales professional today. While the process may be challenging, your sales associate will lead your way.

By | April 17th, 2018

About the Author:

A real estate veteran with more than two decades of experience, Chris Mygatt is the President and Chief Operating Officer of Coldwell Banker Residential Brokerage in Colorado. When not overseeing the daily operations of Colorado’s largest real estate and relocation company, Chris enjoys Colorado’s active outdoor lifestyle including cycling, skiing and hiking, and is an avid pilot, sea captain and scuba diver. Chris is also a strong supporter of Habitat for Humanity, Angel Flight, Up with People, Bike Denver and regularly participates in actively helping many other non-profit organizations in Colorado.

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10 things you need to know about the new tax law – Bill Bischoff

 

Reuters

Paul Ryan after a closed conference meeting on Capitol Hill on Dec. 12, 2017.

The Tax Cut and Jobs Act was passed by Congress and will be signed by President Trump. The final bill reflected some compromises and is substantially different than the earlier House and Senate bills. The new law includes many expected changes, some unexpected ones, and some changes that were expected but didn’t make the cut. Here are the most important things that individual taxpayers need to know.

1. New individual tax rates and brackets

For 2018 through 2025, the new law keeps seven tax brackets, but six are at lower rates. In 2026, the current-law rates and brackets would return. The temporary rate brackets under the new law are as follows.

Single

Joint

Head of
household

10% tax bracket

 $0 – $9,525

$0 – $19,050

$0 – $13,600

Beginning of 12% bracket

$9,526

$19,051

$13,601

Beginning of 22% bracket

$38,701

$77,401

$51,801

Beginning of 24% bracket

$82,501

$165,001

$82,501

Beginning of 32% bracket

$157,501

$315,001

$157,501

Beginning of 35% bracket

$200,001

$400,001

$200,001

Beginning of 37% bracket

$500,001

$600,001

$500,001

Most folks will benefit from the new rates, but some who are currently in the 33% marginal tax bracket will find themselves in the 35% marginal bracket next year. This unfavorable change will mainly affect singles and heads of households with taxable income between $200,000 and $400,000. However, the new lower rates on income below $200,000 will offset some or all of the negative effect of being in the 35% marginal bracket. For comparisons, see the table at the bottom of this story for the 2017 rate brackets.

Year-end planning impact: Most individuals will benefit from year-end planning moves that push income into next year and pull deductions into this year.

2. No change in taxes on long-term capital gains and dividends

The new law retains the existing 0%, 15% and 20% tax rates on long-term capital gains and dividends. For 2018, the rate brackets are as follows.

Single

Joint

Head of
household

0% tax bracket

 $0 – $38,599

 $0 – $77,199

$0 – $51,699

Beginning of 15% bracket

$38,600

$77,200

$51,700

Beginning of 20% bracket

$425,800

$479,000

$452,400

Year-end planning impact: These brackets are almost the same as what they would have been under old law, with the only change being in the way the inflation adjustment for 2018 is calculated. Therefore, the traditional year-end tax planning strategies for securities held in taxable brokerage firm accounts still apply.

3. No mandatory FIFO stock basis rule

Starting next year, the Senate version of the tax reform bill would have forced you to use the first-in-first-out (FIFO) method to calculate the tax basis of shares that you sell from taxable accounts. If the price of the shares stair-stepped higher as you bought them, having to use the FIFO method would have meant that your taxable gain would be figured by treating the oldest and cheapest shares as being sold first. That would maximize your gain and maximize the resulting tax hit. Fortunately, this proposed change didn’t make the cut, so it’s business as usual.

Year-end planning impact: None. You need not sell shares before year-end just to avoid the now-discarded mandatory FIFO stock basis rule. Good!

4. Higher standard deductions, but no more personal and dependent exemption deductions

The new law almost doubles the standard deduction amounts, starting in 2018. However, personal and dependent exemption deductions, which would have been $4,150 each for 2018, are eliminated. Obviously, these changes will benefit some taxpayers and harm others. If you have many dependents, you may not be pleased. The 2018 standard deduction amounts are as follows.

• $12,000 for singles (up from $6,350 for 2017)

• $24,000 for joint-filing married couples (up from $12,700)

• $18,000 for heads of households (up from $9,350)

Additional standard deduction amounts for the elderly and blind are still allowed.

5. New limits on deductions for state and local taxes

Under old law, you could claim an itemized deduction for an unlimited amount of personal state and local income and property taxes. You could also choose to forego any deduction for state and local income taxes and instead deduct state and local general sales taxes.

Also see: The Trump tax calculator — will you pay more or less?

Starting next year, the new law limits your deduction for state and local income and property taxes to a combined total of $10,000 ($5,000 if you use married filing separate status). Foreign real property taxes can no longer be deducted. So no more property tax write-offs for your place in Cabo. However, you can still choose to deduct state and local sales taxes instead of state and local income taxes.

Year-end planning impact: Traditional year-end tax planning advice includes prepaying state and local taxes that would otherwise be due early next year. That way, you get a bigger deduction on this year’s return. However, the new law says you cannot get any tax-saving benefit from using this strategy to prepay state and local income taxes. Specifically, you cannot claim a 2017 deduction for state or local income taxes that are imposed for a tax year beginning after Dec. 31, 2017. How this rule could be enforced is a mystery. The good news: you can still prepay state and local property taxes before year-end and claim a 2017 deduction. That could be a really good idea in view of the new $10,000/$5,000 deduction limitation that takes effect next year. However, if you will be an alternative minimum tax (AMT) victim this year, deductions for state and local property taxes (prepaid or otherwise) aren’t allowed under the AMT rules. So prepaying could do you little or no tax-saving good.

6. New limits on home mortgage interest deductions

Effective next year, the new law reduces the maximum amount of mortgage debt to acquire a first or second residence for which you can claim itemized interest expense deductions from $1 million (or $500,000 if you use married filing separate status) to $750,000 (or $375,000 if you use married filing separate status). However, this change doesn’t affect home acquisition mortgages taken out under binding contracts in effect before Dec. 16, 2017 as long as the home purchase closes before April 1, 2018.

Also, the old-law $1 million/$500,000 limits continue to apply to home acquisition mortgages that were taken out under the old-law rules and are then refinanced after this year (as long as the refinanced loan principal doesn’t exceed the old loan balance at the time of the refinancing). Starting next year, the new law also eliminates the old-law rule that allowed interest deductions on up to $100,000 of home-equity loan balances.

7. No change in home sale gain exclusion rules

The new law preserves the valuable break that allows you to potentially exclude from federal income taxation up to $250,000 of gain from a qualified home sale, or $500,000 if you are a married joint-filer. The earlier House and Senate bills both included restrictions on this break, but none of the proposed changes made the cut. So it’s business as usual. Good!

8. Expanded medical expense deduction for 2017 and 2018

The House version of the tax reform bill would have killed the itemized deduction for medical expenses. Instead the new law preserves the deduction and actually expands it to cover medical expenses in excess of 7.5% of adjusted gross income (AGI) for 2017 and 2018 (the old-law deduction threshold for 2017 was 10% of AGI).

Year-end planning impact: Since it is now easier to exceed the percent-of-AGI deduction threshold, consider loading up on elective medical expenses, such as vision care and dental work, between now and year-end if that would net you a bigger 2017 deduction.

9. Education tax breaks preserved

The new law leaves existing education-related tax breaks in place.

Year-end planning impact: If your 2017 AGI allows you to qualify for the American Opportunity higher-education tax credit (worth up to $2,500 per qualifying undergraduate student) or the Lifetime Learning higher-education tax credit (worth up to $2,000 per tax return and covering most postsecondary education expenses including graduate school), consider prepaying tuition bills that are due in early 2018 if that would result in a bigger credit on this year’s Form 1040. Specifically, you can claim a 2017 credit for prepaying tuition for academic periods that begin in January through March of next year.

10. Other important changes and non-changes

• Starting next year, you will not be able to reverse the conversion of a traditional IRA into a Roth account. Under the old-law rules, you had until October 15 of the year after an ill-advised conversion to reverse it and avoid the conversion tax hit. At this point, it is not clear if this change would prevent you from reversing a 2017 conversion by 10/15/18 or if would only prevent you from reversing a conversion done in 2018 and beyond. So if you have a 2017 conversion that you already know you want to reverse, get it reversed before year-end to be on the safe side.

• Unfortunately, the new law retains the individual alternative minimum tax (AMT), but the AMT exemption deductions are significantly increased and phased out at much higher income level, starting next year. For many folks AMT exposure was caused by high itemized deductions for state and local income and property taxes and lots of personal and dependent exemption deductions. Those breaks were disallowed under the AMT rules. With the new limits in deductions for state and local taxes, the elimination of personal and dependent exemption deductions, and larger AMT exemption deductions, many previous victims of the AMT will find themselves off the hook, starting next year.

• Starting next year, the maximum child credit is increased to $2,000 per qualifying child, and up to $1,400 can be refundable (meaning you can collect it even if you don’t owe any federal income tax). In addition, a new $500 nonrefundable credit is allowed for qualified non-child dependents.

• Starting next year, deductions for moving expenses and most miscellaneous itemized expenses are eliminated.

• Starting next year, itemized deductions for personal casualty and theft losses are eliminated, except for personal casualty losses incurred in a federally-declared disaster.

• Starting in 2019, you will no longer be able to deduct alimony payments if they are required by a divorce agreement entered into after 12/31/18. Recipients of nondeductible payments won’t have to include them in taxable income.

• Tax breaks for adoption expenses are preserved.

• The tax credit for qualified plug-in electric vehicles is preserved. For details on this credit, see: You can get a $7,500 tax credit for a new electric vehicle.

• Starting next year, the unified federal gift and estate tax exemption will basically double — to about $11.2 million or $22.4 million for a married couple. Wow! That is indeed a tax break for the rich.

The last word

This isn’t really the last word. For the next few months, you will see many more words about other changes in the new law along with more details and analysis and tax planning strategies. My next column will cover the 10 most important changes for small-business owners. So please stay tuned.

Table: 2017 individual federal income tax brackets

Single

Joint

Head of
household

0% tax bracket

$0 – $9,325

 $0 – $18,650

$0 – $13,350

Beginning of 15% bracket

$9,326

$18,651

$13,351

Beginning of 25% bracket

$37,951

$75,901

$50,801

Beginning of 28% bracket

$91,901

$153,101

$131,201

Beginning of 33% bracket

$191,651

$233,351

$212,501

Beginning of 35% bracket

$416,701

$416,701

$416,701

Beginning of 39.6% bracket

$418,401

$470,701

$444,551

 

 

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Reality Check with Chris Mygatt – July 25, 2017

Vacation Homes Offer Great Income-Generating Potential

The arrival of summer is always a popular time to scout for the perfect vacation home, whether it be in the mountains or near the beach. Many people dream about purchasing a vacation home and there are many benefits to owning one. Not only can the home serve as a family retreat, it can also serve as a dream home for eventual retirement.  Additionally, vacation property owners who are open to renting their properties during peak season will often discover that the rental income generated can help offset the cost of the mortgage.

In the recently published National Association of REALTORS® (NAR) 2017 Investment and Vacation Home Buyers infographic, 42 percent of vacation home buyers plan to use their property for vacations or as a family retreat. The same chart shows that 37 percent of investment property buyers purchased to generate income through renting the property.

Given the rising popularity and availability of online resources for owners to manage short-term and long-term property rentals throughout the country, it’s no surprise that there was increased interest in purchasing second homes in 2016.  According to NAR, 44 percent of investors, and 29 percent of vacation buyers, did or tried to rent their property last year and plan to do so in 2017 – saving them hundreds or thousands of dollars.

Regardless of the reason, over the decades owning a second or more homes has typically generated income because real estate offers a tangible asset that appreciates with time, and offers many tax and practical advantages. You can’t live in a mutual fund, stock or bond, but you can live in a vacation property whenever you want or need to.

If you are considering the purchase of a vacation home, it helps to find a real estate agent who has a deep understanding of the local market. To learn more, visit www.ColdwellBankerHomes.com.

By | July 24th, 2017

About the Author:

A real estate veteran with more than two decades of experience, Chris Mygatt is the President and Chief Operating Officer of Coldwell Banker Residential Brokerage in Colorado. When not overseeing the daily operations of Colorado’s largest real estate and relocation company, Chris enjoys Colorado’s active outdoor lifestyle including cycling, skiing and hiking, and is an avid pilot, sea captain and scuba diver. Chris is also a strong supporter of Habitat for Humanity, Angel Flight, Up with People, Bike D

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Chris Mygatt – Realitycheck January 2017 – Will the Seller’s Housing Market continue?

Outlook for 2017: Will The Seller’s Housing Market Continue?

Over the past year, the Denver Metro Area has seen a strong seller’s market for housing – thanks in large part to a shortage of homes on the market, strong demand by buyers and mortgage interest rates that hovered near historic lows. But as 2017 gets underway, the question is whether that seller’s market will continue, especially given a recent uptick in interest rates.

According to Freddie Mac, the average 30-year fixed-rate mortgage nationwide climbed to 4.16 percent in mid-December (the latest figures available), up more than a half a percentage point just since the November presidential election. Economists say the increase is due to more optimistic economic growth projections, higher-inflation expectations, and the Federal Reserve’s recent rate hike.

Although mortgage rates remain relatively low by historical standards, the sudden increase in rates is one of several factors that could impact the housing market in the coming year: Will low inventory levels begin to rise? With the job market remain strong and continue to grow? What impact will the new Trump administration have on the housing market and the economy?

All of those factors could play a role in how the housing market shapes up in the new year.

A panel of industry economists in a recent article in Inman News, the national real estate trade publication, said they generally expect 2017 will remain a seller’s market in much of the country. But they believe that trend could begin to give way to more favorable conditions for buyers in 2018 and 2019.

“2017 is probably going to skew more toward the seller’s market,” Svenja Gudell, chief economist at Zillow, told Inman. “Most markets will skew more toward seller’s markets, and even in the Midwest there are probably more seller’s markets than buyer’s markets compared to their own history.”

But Jonathan Smoke, chief economist at realtor.com, said the three laws of real estate – location, location, location – will be ever more important this year.

Markets in the western U.S. have seen the most significant price appreciation, making it difficult for first-time buyers to find success. Smoke expects that trend to continue, but sees great variations geographically – even from city to city and neighborhood to neighborhood in a particular market.

“We’re seeing some clear patterns emerge within markets — one might be slowing down and cooling off where another part is really heating up,” he told Inman. “Real estate is so local that I would argue that a neighborhood view is really where you can see the differences and disparities and changes that are occurring around the country.”

The economists did project that inventory levels will likely rise in 2017 and new construction will pick up as well, giving frustrated buyers a bit more to choose from.

The upshot is that sellers might find that it will take a little longer to sell their property this year than it did in 2016. However, the increase in listings and construction probably won’t be enough to offset pent-up demand from buyers as long as the job market remains strong.

The National Association of REALTORSâ publication, realtor.com, said the days of multiple offers and bids well over the asking price probably won’t go away in 2017 – although they may not get much worse from a buyer’s standpoint.

Citing rising mortgage rates and a shortage of affordable homes for sale, realtor.com projected a smaller increase in sales in 2017 than last year and slightly slower price appreciation of about 4 percent on average nationally, down from 5 percent in 2016.

“2017 will be a year of growth in both sales and prices, but that growth will be slower than what we’ve seen over the last three years,” according to Smoke.

Much of what happens in the coming year could depend on how high mortgage interest rates go. Smoke projects 30-year fixed mortgage rates to rise to 4.5 percent in 2017, while Gudell of Zillow expects a peak rate of 4.75 percent following additional Fed rate hikes.

No one knows for sure what will happen to interest rates or the housing market. But if you have been thinking about buying or selling your home, now may be a good time to make your move before rates go higher and while demand for housing remains strong.

By | January 10th, 2017

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Colorado Housing Market in 2016 – Chris Mygatt, Coldwell Banker

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December, 2016
Colorado Housing Market Turns in Strong Performance in 2016

Colorado’s housing market had its challenges in 2016, including low inventory of homes for sale, rising prices that challenged would-be buyers, and political uncertainty with the presidential election. But despite the headwinds, this turned out to be a good year overall for our local housing market.

Many home sellers once again enjoyed strong gains in sale prices. The median sale price for single-family homes in the Denver Metro Area in October (the latest data available) reached $355,000, up 12.6 percent from the same month a year ago, according to local MLS data analyzed by Coldwell Banker. The median sale price of a condo in the region gained 4 percent between October 2015 and October 2016.

Meanwhile, the average sale price of all homes in the Denver Metro Area – single-family and condos – year to date through October was $398,000, up 14 percent from the same 10 months in 2015.

Strong buyer demand, a healthy local economy, including growth in the technology sector, and a continuing decline in the inventory of homes on the market all combined to make 2016 a seller’s market in the Denver Metro Area and elsewhere in Colorado.

The year also saw a continuation of mortgage rates that remained near historic lows much of the year, helping make home purchases more affordable. But in recent weeks, key lending rates began to tick higher, which could present challenges to the market if that continues into the new year.

According to Freddie Mac, 30-year fixed rate mortgages in the U.S. averaged 3.94 percent in the week ended Nov. 17, up 40 basis points from its 2016 low. However, average rates are essentially flat from a year ago and below historical averages. During the height of the housing market in 2007, for example, the rate surpassed 6 percent.

Freddie Mac Chief Economist Sean Becketti in analyzing the recent bump in mortgage rates stated, “If rates stick at these levels, expect a final burst of home sales and refinances as ‘fence sitters’ try to beat further increases, then a marked slowdown in housing activity.”

One of the biggest challenges for the housing market in 2016 was insufficient listings to meet buyer demand.

Although inventory has gradually improved in some areas, overall the number of homes for sale in October was down 14.1 percent in the Denver Metro Area in October from the year before. In Boulder, inventory fell 11.4 percent, and in the northern area it was off 3 percent.

The shortage of homes for sale, especially in the Denver and Boulder areas, continued to result in multiple offers for some properties, which resulted in sales for certain homes at above-list price.

Limited inventory for buyers to choose from may have also been one important reason why overall home sales in the Denver Metro Area were fairly flat year over year. As of October, sales year to date totaled 43,212, down 1.8 percent from the 44,005 sales during the same period in 2015.

Sales were down even more significantly in Boulder County where year to date closed sales through October were 3,668, down 12.6 percent from the same period last year. In the northern counties, sales were down 2.6 percent.

As 2016 draws to a close and we look ahead to 2017, there are reasons to be encouraged about the outlook for the Colorado housing market. The greater Denver Metro Area’s growth in high-tech jobs and solid economy should continue to create demand for housing in our area.

If you’ve been thinking about selling your home, now may be a good time to make your move. Mortgage rates are still low by historical standards, although that could change in the coming year if rates continue to rise. And for now, we’re still enjoying a seller’s market in many of our communities.

If you have questions about making a move, including what your home might be worth and what the market looks like in your neighborhood, I’d be happy to help. Please give me a call or e-mail me and we’ll get started today!

©2016 Coldwell Banker Real Estate LLC. All Rights Reserved. Coldwell Banker® is a registered trademark licensed to Coldwell Banker Real Estate LLC. An Equal Opportunity Company. Equal Housing Opportunity. Each Coldwell Banker Residential Brokerage Office Is Owned And Operated by NRT LLC. Nothing herein is intended to create an employment relationship. Any affiliation by you with the Company is intended to be that of an independent contractor sales associate.

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THE DOWNSIDE TO SELLING YOUR HOME BY YOURSELF – Chris Mygatt, Coldwell Banker

THE DOWNSIDE TO SELLING YOUR HOME BY YOURSELF


By Chris Mygatt

Colorado’s real estate market has rebounded sharply in the past several years in the aftermath of the recession, with home prices near or even above their highs of 2007 and 2008. A shortage of listings in many communities is resulting in some homes receiving multiple offers, even over the asking price.

In this kind of a “seller’s market” it’s understandable that some homeowners may believe that they should try selling their home on their own to “save” money. However, do-it-yourself sellers (also known as “For Sale By Owner” or “FSBO”) could end up losing money in the long run – and create lots of headaches in the process.

Here are just a few of the reasons why selling your own home rather than letting a professional do it could cost you time and money in the long run:

  • You may not save as much as you think – if at all. Homes without professional representation often remain on the market longer and end up selling at a lower price than those marketed by a real estate agent. The National Association of REALTORS® found that the typical FSBO home nationwide sold for an average price of $210,000 as compared to the average price of $249,000 for agent-assisted home sales in 2014 (the most recent figures available).
  • Other costs can eat away at any “savings.” While you might save some of the commission cost of a seller’s agent, you may still end up paying 2-3 percent to the buyer’s agent in order to attract a larger pool of buyers. Additionally, the true “savings” may be far less after you add all the other costs associated with selling – advertising, brochures and fliers, for-sale signs, etc.
  • Much time and effort go into selling a home. There’s a reason that just 8 percent of sellers sold their own home last year, according to NAR. It’s hard work! Professional real estate agents develop comprehensive marketing plans, take professional photos, arrange inspections and appraisals, oversee staging, hold open houses, place print and online ads, seek out potential buyers and negotiate with buyers’ agents on price and terms. Homeowners need to ask themselves if they really have the time or expertise to do all of that on their own.
  • Determining the right listing price is critical. Real estate professionals review comparable sales, local market conditions, as well as the pluses and minuses of your home in helping you set the list price. As an owner, you may not have a clear or objective sense of what that price should be. The right list price may get your home multiple offers or a faster sale depending upon what you want. Setting the list price too high may cause potential buyers to not even look at your home.
  • Negotiating against pros. If you try to sell your home on your own, you may end up negotiating with a professional real estate agent working for the buyer whose expertise may cause you to end up selling your home for less money and/or with other contractual terms that may not be in your best interests and could also cost you more in the long run.
  • Limiting your pool of buyers. FSBO properties are often not able to utilize as many of the real estate search engines and websites as properties sold by REALTORS®. This is potentially a significant obstacle in an era when more than 90 percent of buyers start their home search on the Internet, according to NAR. Those selling their own home typically cannot leverage the advertising, marketing and networking resources that are needed to reach the potential buyers that agents are reaching every day.


Even in a good market, properly marketing and selling a home is far more complicated than most people suspect.  It’s very easy for non-professionals to make costly mistakes. Since the sale of one’s home is often the single biggest financial transaction that most of us will ever make in our lives it is critical that it is handled as expertly as possible. When it comes to selling your home, it truly pays to rely on an experienced real estate professional to help guide you through the process.

Chris Mygatt is the President and Chief Operating Officer of Coldwell Banker Residential Brokerage in Colorado. When not overseeing the daily operations of Colorado’s largest real estate and relocation company, Chris enjoys Colorado’s active outdoor lifestyle including cycling, skiing and hiking, and is an avid pilot, sea captain and scuba diver. Chris is also a strong supporter of Habitat for Humanity, Angel Flight, Up with People, Bike Denver and regularly participates in actively helping many other non-profit organizations in Colorado.

Original Source: Colorado Home & Style

 

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