Uncategorized • October 19, 2023

How Buying a Multi-Generational Home Helps with Affordability Today

by LaDawn Sperling

In today’s world of rising housing costs, many buyers are looking for ways to still be able to buy a home. Some of them have found a solution in multi-generational living.

Multi-generational living is when two or more adult generations live together under one roof. This includes siblings, parents, or even grandparents. Here’s an in-depth look at why more buyers are choosing this option today, so you can see if it may be right for you too.

Reasons To Buy a Multi-Generational Home

According to a recent study by the National Association of Realtors (NAR), the top two reasons people are opting for multi-generational homes today have to do with affordability (see graph below):

Cost Savings: About 28% of first-time buyers and 11% of repeat buyers are deciding on a multi-generational home to save on costs. By pooling their resources, households can share the financial responsibilities like mortgage payments, utilities, property taxes, and maintenance, to make homeownership more affordable. This is especially helpful for first-time homebuyers who may be finding it tough to afford a home on their own in today’s market.

More Space: Another 28% of first-time buyers and 18% of repeat buyers are doing it because they want a larger home they couldn’t afford on their own. For some of the repeat buyers who listed this as a main motivator, it could be because they find themselves taking care of older parents while also welcoming back young adults who’ve returned to the nest. With everyone chipping in and combining their incomes, suddenly, that big dream home with more space is within reach. As the Triangle Business Journal explains:

“Choosing multi-gen living allows people to purchase a home much larger than they could afford on their own by leveraging the combined income, credit and a down payment of those that they will be occupying the home with.”

Lean on an Expert

If you’re interested in this too, partner with a local real estate agent. Finding the perfect multi-generational home isn’t as simple as shopping for a regular house. That’s because there are more people with even more opinions and needs that should be considered.

You’ve got to make sure everyone has their own space, find room for shared household time, and possibly even create adaptable areas for older relatives. It’s a puzzle, and the pieces need to fit just right. Your real estate agent has the expertise and local knowledge to help you find that home where everyone can be comfortable without breaking the bank. As MoneyGeek.com puts it:

“Having a good multigenerational property can improve the prospects of success when living with loved ones. A multigenerational home should fit the specific needs of most family members regardless of age or health. Speaking to a real-estate agent can help you gain clarity and locate a fit.”

Bottom Line

Buying a multi-generational home can be a smart way to tackle some of today’s affordability challenges. When you team up to share expenses, you can make your dream of homeownership more attainable. If this sounds like an option for you and your loved ones, let’s connect to help you find a home that’s the perfect fit.

Market Updates • October 17, 2023

The Market is Shifting – October 2023 Metro Denver Market Update

by LaDawn Sperling

Pending sales and new listings decreased month over month while active inventory increased significantly. Average days on market increased month-over-month, and closed sales decreased showing that the market has continued to slow.

September’s vital statistics for all homes – detached single family (DSF) and attached single family (ASF) combined – included:

The average price for homes was up 0.63% compared to the previous month and up 3.13% from September 2022.
The average days in the MLS increased 15.38% from the prior month and are up 15.38% from a year ago. The median days in MLS increased from 11 days to 14 days month over month.
Active listings at months-end were up 11.24% from August and down 0.70% from this time last year.

The Denver Metro real estate market is experiencing a shift, transitioning from the unpredictability of the spring season to the traditional slowdown in residential sales typical of the fall. Key indicators from this month’s data reveal a changing landscape: new listings decreased by 5.92%, while active listings at month-end surged by 11.24%. Pending and closed sales both dropped significantly, leading to a 20.88% decline in sales volume. Meanwhile, months of inventory increased by 47.24%, and the median days on the market rose by 27.27%, reaching 14 days, indicating a more patient market. Interestingly, despite growing inventory, the median price point increased by 0.69% to $585,000, highlighting the continued strength of prices in the Denver Metro area.

While these changes are relatively marginal, they underscore the resilience of the Denver Metro market. Buyers are not primarily negotiating on price but are increasingly seeking concessions, a trend that has been on the rise this year, making it easier for buyers to navigate the market. First-time homebuyers, untethered from the memory of historically low interest rates, are leading the charge, recognizing that purchasing a home is a faster way to build wealth and gain equity compared to renting. With properties spending more time on the market and sellers more willing to reduce prices, first-time buyers have the leverage to request concessions, making this an opportune market for them to enter without the fierce bidding wars of the past. If you need any advice or assistance navigating our real estate market, contact me today at 303.710.5817 or ladawn.sperling@cbrealty.com I am never too busy for your referrals.

This update is based on information provided by the Denver Metro Association of Realtors® for the period of September 1, 2023, through September 30, 2023, for the following counties: Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park.

Real Estate News, Tips, & Tricks • September 29, 2023

The Many Non-Financial Benefits of Homeownership

by LaDawn Sperling

Buying and owning your own home can have a big impact on your life. While there are financial reasons to become a homeowner, it’s essential to think about the non-financial benefits that make a home more than just a place to live.

Here are some of the top non-financial reasons to buy a home.

According to Fannie Mae, 94% of survey respondents say “Having Control Over What You Do with Your Living Space” is a top reason to own.

Your home is truly your own space. If you own a home, unless there are specific homeowner association requirements, you can decorate and change it the way you like. That means you can make small changes or even do big renovations to make your home perfect for you. Your home is uniquely yours and by buying, you give yourself the freedom to tailor it to your individual style. Investopedia explains:

“One often-cited benefit of homeownership is the knowledge that you own your little corner of the world. You can customize your house, remodel, paint, and decorate without the need to get permission from a landlord.”

When you rent, you might not be able to make your place really feel like it’s yours. And if you do make any modifications, you might have to change them back before you leave. But if you own your home, you can make it just the way you want it. That level of customization can give you a sense of pride in where you live and make you feel more connected to it.

Fannie Mae also finds 90% say “Having a Good Place for Your Family To Raise Your Children” tops their list of why it’s better to buy a home.

Another important factor to think about is what stage of life you’re in. U.S. News breaks it down:

“For those with young children, buying a home and putting down roots is a major driver. . . . You don’t want the upheaval of a massive rent increase or a non-renewed lease to impact your sense of stability.”

No matter which of life’s milestones you’re in, stability and predictability are important. That’s because the one constant in life is that things will change. And, as life changes around you, having a familiar home and not worrying about moving regularly helps you and those who matter most feel more secure and more comfortable.

Lastly, Fannie Mae says 82% list “Feeling Engaged in Your Community” as another key motivator to own.

Owning your home also helps you feel even more connected to your neighborhood. People who own homes usually live in them for an average of nine years, according to the National Association of Realtors (NAR). As that time passes, it’s natural to make friends and build strong ties in the community. As Gary Acosta, CEO and Co-Founder at the National Association of Hispanic Real Estate Professionals (NAHREP), points out:

“Homeowners also tend to be more active in their local communities . . .”

When you care deeply about the people you live near, you’ll do what you can to contribute to your local area.

Bottom Line

Owning your home can make your life better by giving you a sense of accomplishment, pride, stability, and connectedness. If you’re thinking about becoming a homeowner and want to learn more, let’s connect.

Real Estate News, Tips, & Tricks • September 21, 2023

Why Is Housing Inventory So Low?

by LaDawn Sperling

One question that’s top of mind if you’re thinking about making a move today is: Why is it so hard to find a house to buy? And while it may be tempting to wait it out until you have more options, that’s probably not the best strategy. Here’s why.

There aren’t enough homes available for sale, but that shortage isn’t just a today problem. It’s been a challenge for years. Let’s take a look at some of the long-term and short-term factors that have contributed to this limited supply.

Underbuilding Is a Long-Standing Problem

One of the big reasons inventory is low is because builders haven’t been building enough homes in recent years. The graph below shows new construction for single-family homes over the past five decades, including the long-term average for housing units completed:

For 14 straight years, builders didn’t construct enough homes to meet the historical average (shown in red). That underbuilding created a significant inventory deficit. And while new home construction is back on track and meeting the historical average right now, the long-term inventory problem isn’t going to be solved overnight.

Today’s Mortgage Rates Create a Lock-In Effect

There are also a few factors at play in today’s market adding to the inventory challenge. The first is the mortgage rate lock-in-effect. Basically, some homeowners are reluctant to sell because of where mortgage rates are right now. They don’t want to move and take on a rate that’s higher than the one they have on their current home. The chart below helps illustrate just how many homeowners may find themselves in this situation:

Those homeowners need to remember their needs may matter just as much as the financial aspects of their move.

Misinformation in the Media Is Creating Unnecessary Fear

Another thing that’s limiting inventory right now is the fear that’s been created by the media. You’ve likely seen the negative headlines calling for a housing crash, or the ones saying home prices would fall by 20%. While neither of those things happened, the stories may have dinged your confidence enough for you to think it’s better to hold off and wait for things to calm down. As Jason Lewris, Co-Founder and Chief Data Officer at Parcl, says:

“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”

That’s further limiting inventory because people who would make a move otherwise now feel hesitant to do so. But the market isn’t doom and gloom, even if the headlines are. An agent can help you separate fact from fiction.

How This Impacts You

If you’re wondering how today’s low inventory affects you, it depends on if you’re selling or buying a home, or both.

For buyers: A limited number of homes for sale means you’ll want to seriously consider all of your options, including various areas and housing types. A skilled professional will help you explore all of what’s available and find the home that best fits your needs. They can even coach you through casting a broader net if you need to expand your search.
For sellers: Today’s low inventory actually offers incredible benefits because your house will stand out. A real estate agent can walk you through why it’s especially worthwhile to sell with these conditions. And since many sellers are also buyers, that agent is also an essential resource to help you stay up to date on the latest homes available for sale in your area so you can find your next dream home.

Bottom Line

The low supply of homes for sale isn’t a new challenge. There are a number of long-term and short-term factors leading to the current inventory deficit. If you’re looking to make a move, let’s connect. That way you’ll have an expert on your side to explain how this impacts you and what’s happening with housing inventory in our area.

Market Updates • September 15, 2023

Moving towards a more balanced market – September 2023 Metro Denver Market Update

by LaDawn Sperling

Pending sales, new listings, and active inventory all increased month-over-month but are still down compared to this time last year. Average days on market increased month-over-month, and closed sales decreased showing that the market is still moving a bit slower than we saw earlier this year.

August’s vital statistics for all homes – detached single family (DSF) and attached single family (ASF) combined – included:

The average price for homes was down 0.25% compared to the previous month and up 4.88% from August 2022.
The average days in the MLS increased 13.04% from the prior month and are up 36.84% from a year ago. The median days in MLS increased from 9 days to 11 days month over month.
Active listings at months-end were up 8.87% from July and down 1.17% from this time last year.

As activity remains slower than we saw earlier this year, and inventory continues to grow, we are getting closer to a balanced market. This is giving buyers and sellers more equal footing. The median days on market increased to 11 days which may seem like a small jump, but this means some homes are sitting on the market for 70 days or more. As a result, buyers are increasingly interested in negotiating on price and receiving concessions to buy down their interest rate. However, it’s worth mentioning that we are not seeing a significant shift in negotiation dynamics, as the list-to-close price ratio remains in the 99th percentile. For sellers, pricing correctly is more critical than ever. Homes that are priced at market value or below are still selling quickly and may even receive multiple offers. On the other hand, homes that are slightly overpriced are sitting on the market until the price aligns with market expectations or the perfect buyer emerges.

For serious, qualified buyers, this market presents a great opportunity. You have the ability to negotiate on price and terms, especially when dealing with sellers whose properties have been on the market for an extended period. Additionally, in some cases, you may even have the opportunity to assume the seller’s loan at a much lower interest rate. If you need any advice or assistance navigating our real estate market, contact me today at 303.710.5817 or ladawn.sperling@cbrealty.com I am never too busy for your referrals.

This update is based on information provided by the Denver Metro Association of Realtors® for the period of August 1, 2023, through August 31, 2023, for the following counties: Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park.

Uncategorized • September 7, 2023

How Inflation Affects the Housing Market

by LaDawn Sperling

Have you ever wondered how inflation impacts the housing market? Believe it or not, they’re connected. Whenever there are changes to one, both are affected. Here’s a high-level overview of the connection between the two.

The Relationship Between Housing Inflation and Overall Inflation

Shelter inflation is the measure of price growth specific to housing. It comes from a survey of renters and homeowners that’s done by the Bureau of Labor Statistics (BLS). The survey asks renters how much they’re paying in rent, and homeowners how much they’d rent their homes for, if they weren’t living in them.

Much like overall inflation measures the cost of everyday items, shelter inflation measures the cost of housing. And for four consecutive months, based on that survey, shelter inflation has been coming down (see graph below):

Why does this matter? Well, shelter inflation makes up about one-third of overall inflation, as measured by the Consumer Price Index (CPI). So, when shelter inflation moves, it leads to noticeable moves in overall inflation. That means the recent dip in shelter inflation might be a sign that overall inflation could fall in the months ahead.

That moderation would be a welcome sight for the Federal Reserve (the Fed). They’ve been working to get inflation under control since early 2022. While they’ve made some headway (it peaked at 8.9% in the middle of last year), they’re still trying to get to their 2% goal (the latest report is 3.3%).

Inflation and the Federal Funds Rate

What’s the Fed been doing to lower inflation? They’ve been increasing the Federal Funds Rate. That interest rate influences how much it costs banks to borrow money from each other. When inflation climbed, the Fed responded by raising the Federal Funds Rate to keep the economy from overheating.

The graph below shows the relationship between the two. Each time inflation (shown in the blue line) starts to climb, the Fed raises the Federal Funds Rate (shown in the orange line) to try to get it back to their target of 2% (see below):

The circled portion of the graph shows the most recent spike in inflation, the Fed’s actions to raise the Federal Funds Rate to fight that, and the moderation of inflation that happened in response to that hike. As inflation gets closer to the Fed’s current 2% goal, they may not need to raise the Federal Funds Rate much further.

A Brighter Future for Mortgage Rates?

So, what does all of this mean for you? While the actions coming out of the Fed don’t determine mortgage rates, they do have an impact. As Mortgage Professional America (MPA) explains:

“. . . mortgage rates and inflation are connected, however indirectly. When inflation rises, mortgage rates rise to keep up with the value of the US dollar. When inflation drops, mortgage rates follow suit.”

While no one can predict the future for mortgage rates, it’s encouraging to see the signs of moderating inflation in the economy.

Bottom Line

Whether you’re looking to buy, sell, or just stay informed about the housing market, let’s connect.

Real Estate News, Tips, & Tricks • August 31, 2023

Why You Need a True Expert in Today’s Housing Market

by LaDawn Sperling

The housing market continues to shift and change, and in a fast-moving landscape like we’re in right now, it’s more important than ever to have a trusted real estate agent on your side. Whether you’re buying your first home or selling once again, it’s mission critical to work with an expert who can guide you through each unique step of the process.

The reality is, not all agents operate the same way. To truly make a powerful and confident decision as you buy or sell a home, you need a real estate expert who uses their knowledge of what’s really happening with home prices, housing supply , industry projections, and more to give you the best possible advice. Someone who can provide clarity and trust like that is essential to your success. Jay Thompson, Real Estate Industry Consultant, explains:

“Housing market headlines are everywhere. Many are quite sensational, ending with exclamation points or predicting impending doom for the industry. Clickbait, the sensationalizing of headlines and content, has been an issue since the dawn of the internet, and housing news is not immune to it.”

Unfortunately, when information in the media isn’t clear, it can generate a lot of fear and uncertainty for consumers. As Jason Lewris, Co-Founder and Chief Data Officer at Parcl, says:

“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”

But it doesn’t have to be that way. Buying a home is a big decision, and it should be one you feel confident making. You can lean on an expert to help you separate fact from fiction and get the answers you need.

The right agent can assist you in figuring out what’s going on at the national level and in your local area. They can debunk headlines using data you can trust. Experts have in-depth knowledge of the industry and can provide context, so you know how current trends compare to the normal ebbs and flows in the housing market, historical data, and more.

Then, to make sure you have the full picture, an agent can tell you if your local area is following the national trend or if they’re seeing something different in your market. Together, you can use all that information to make the best possible decision.

After all, making a move is a potentially life-changing milestone. It should be something you feel ready for and excited about. And that’s where a trusted expert comes in.

Bottom Line

If you want sound advice and trusted information about our local housing market, let’s connect.

Real Estate News, Tips, & Tricks • August 24, 2023

Equity Is a Game Changer for Homeowners Looking To Sell

by LaDawn Sperling

If you’re a homeowner, you might be torn on whether or not to sell your house right now. Maybe that’s because you don’t want to take on a higher mortgage rate on your next home. If that’s your biggest hurdle, understanding your equity may be exactly what you need to help you feel more comfortable making your move.

What Equity Is and How It Works

Equity is the current value of your home minus what you owe on the loan. And recently, that equity has been growing far faster than you may expect.

Over the last few years, home prices rose dramatically, and that gave your equity a big boost very quickly. While the market has started to normalize, there’s still an imbalance between the number of homes available for sale and the number of buyers looking to make a purchase. And it’s because homes are in such high demand that prices are back on the rise today. Rob Barber, CEO of ATTOM, a property data provider, explains:

“Equity levels were high even during the recent downturn, and now they are going back up and better than ever.”

How Equity Benefits You in Today’s Market

With today’s affordabilty challenges, that equity can be a game changer when you move. Here’s why. Based on data from ATTOM and the Census, nearly two-thirds (68.7%) of homeowners have either paid off their mortgages or have at least 50% equity (see chart below):

That means roughly 70% have a tremendous amount of equity right now.

Once you sell your house, you can use your equity to help with your next purchase. It could be some (if not all) of what you’ll need for your next down payment. It may even be enough to allow you to put a considerably larger down payment on your next home, so you don’t have to finance quite as much. And, if you’ve been in your current house for years, you may have even built up enough equity to pay in all cash. If that’s true for you, you’d be able to avoid borrowing altogether, so you wouldn’t have to worry about today’s mortgage rates.

How To Find Out How Much Equity You Have

The best way to learn how much you have is to reach out to a trusted real estate agent for a Professional Equity Assessment Report (PEAR).

Bottom Line

If you’re planning to make a move, the equity you’ve gained can make a big impact. To find out just how much equity you have in your current home and how you can use it to fuel your next purchase, let’s connect.

Real Estate News, Tips, & Tricks • August 17, 2023

Where Are People Moving Today and Why?

by LaDawn Sperling

Plenty of people are still moving these days. And if you’re thinking of making a move yourself, you may be considering the inventory and affordability challenges in the housing market and wondering what you can do to help offset those. A new report from Gravy Analytics provides insight into where people are searching for homes and what they’re prioritizing most right now. That information could help you plan your own move.

1. People Are Moving to Cities with Lower Housing Costs

One big factor motivating where buyers are going is affordability and that’s no big surprise. People are relocating to areas that have less expensive housing options. As a result, small cities are thriving. Hannah Jones, Economics Data Analyst at Realtor.com, summarizes why:

“Affordability is still very much front and center . . . a lot of what’s available is outside of the price range of many buyers. . . . so they look elsewhere for a little more bang for the buck.”

The takeaway for you? If you’re having trouble finding a home that fits your budget, it may help to browse other, more affordable locations nearby.

2. People Want to Live Where They Vacation

And, if you’re already expanding your search radius, you may be able to include a location that features your favorite type of destination, like a suburb near the beach or a mountain town. Data shows many other homeowners are making that type of move a priority today. According to the same report from Gravy Analytics:

“Whether it’s the opportunity to enjoy more weekend hikes in the mountains or to wake up to a lakeside sunrise, people are moving to areas that were once thought of as vacation spots.”

Even with today’s home prices and mortgage rates, here’s why a move like this could be possible for you. If you’re already a homeowner, the equity you’ll get when you sell your current house can help fuel that move and give you the down payment you’d need for your dream home.

3. People Who Work Remotely Are Taking Advantage of that Flexibility

Ongoing remote work is another major factor in where people are moving. A recent report from the McKinsey Global Institute says this about recent movement patterns:

“Many of these moves happened because employees untethered from their daily commutes began to care less about how far they lived from the office.”

If you’re a remote or hybrid worker, you don’t have to live in the same city, or sometimes even the same state, as your job. That means you can prioritize other things, like being closer to loved ones, when buying a home.

In fact, the same McKinsey Global Institute report notes for people who moved during the pandemic, 55% reported moving farther from the office. And since remote work is still a popular choice today, homebuyers will likely continue to take advantage of that flexibility.

Bottom Line

Lots of people are still moving today. If you want help navigating today’s inventory or affordability challenges, and expert advice to help you find your ideal home, check out this move meter on my website that helps you compare locations based on living affordability, average home prices, and other important factors.

Move Meter

Market Updates • August 16, 2023

Demand Slows But Deals Still Closing – August 2023 Metro Denver Market Update

by LaDawn Sperling

Pending sales and new listings decreased month-over-month. Active inventory has increased month over month but is down from where it was this time last year. Average days on market stayed the same month-over-month, and closed sales decreased showing that the market has started to slow.

August’s vital statistics for all homes – detached single family (DSF) and attached single family (ASF) combined – included:

The average price for homes was down 2.43% compared to the previous month and up 0.68% from August 2022.
The average days in the MLS were up the same from the prior month and up 76.92% from a year ago. The median days in MLS increased from 7 days to 9 days month over month.
Active listings at months-end were up 3.76% from June and down 14.48% from this time last year.

Although active listings at month-end increased month over month, we saw a large decrease in new listings month over month and compared to this time last year as interest rates remain high. Many would-be sellers love their historically low interest rate but no longer love their home, leaving them in the “golden handcuff” dilemma. Many buyers in the current market need to sell their home before purchasing a new one which has resulted in an increase in contingent offers. Sellers are becoming more willing to accept these contingent offers as they realize the market is shifting.

Buyers who do not need to sell in order to purchase their next are looking at 2-1 buy-down programs to reduce their interest rates until rates decrease and they are able to refinance. These programs allow buyers to purchase with a lower interest rate now as opposed to waiting on the sidelines for rates to go down. Seller concessions increased from 29.2% at this time last year to 48%, and the close-to-list-price ratio dropped below 100% to 99.88%. This shows that buyers finally have more ability to negotiate.

Even though demand is slowing, inventory is still low and we are still in a sellers market. If you need any advice or assistance navigating our real estate market, contact me today at 303.710.5817 or ladawn.sperling@cbrealty.com. I am never too busy for your referrals.

This update is based on information provided by the Denver Metro Association of Realtors® for the period of July 1, 2023, through July 31, 2023, for the following counties: Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park.

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