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What It Means To Be in a Sellers’ Market

 

If you’ve given even a casual thought to selling your house in the near future, this is the time to really think seriously about making a move. Here’s why this season is the ultimate sellers’ market and the optimal time to make sure your house is available for buyers who are looking for homes to purchase.

The latest Existing Home Sales Report from The National Association of Realtors (NAR) shows the inventory of houses for sale is still astonishingly low, sitting at just a 2-month supply at the current sales pace.

Historically, a 6-month supply is necessary for a ‘normal’ or ‘neutral’ market in which there are enough homes available for active buyers (See graph below):What It Means To Be in a Sellers’ Market | MyKCMWhen the supply of houses for sale is as low as it is right now, it’s much harder for buyers to find homes to purchase. As a result, competition among purchasers rises and more bidding wars take place, making it essential for buyers to submit very attractive offers.

As this happens, home prices rise and sellers are in the best position to negotiate deals that meet their ideal terms. If you put your house on the market while so few homes are available to buy, it will likely get a lot of attention from hopeful buyers.

Today, there are many buyers who are ready, willing, and able to purchase a home. Low mortgage rates and a year filled with unique changes have prompted buyers to think differently about where they live – and they’re taking action. The supply of homes for sale is not keeping up with this high demand, making now the optimal time to sell your house.

Bottom Line

Home prices are appreciating in today’s sellers’ market. Making your home available over the coming weeks will give you the most exposure to buyers who will actively compete against each other to purchase it.

Let The Wheaton/Wass Real Estate Team help, call today: 719.822.1444

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How Smart Is It to Buy a Home Today?

How Smart Is It to Buy a Home Today? | MyKCM

Whether you’re buying your first home or selling your current house, if your needs are changing and you think you need to move, the decision can be complicated. You may have to take personal or professional considerations into account, and only you can judge what impact those factors should have on your desire to move.

However, there’s one category that provides a simple answer. When deciding to buy now or wait until next year, the financial aspect of the purchase is easy to evaluate. You just need to ask yourself two questions:

  1. Do I think home values will be higher a year from now?
  2. Do I think mortgage rates will be higher a year from now?

From a purely financial standpoint, if the answer is ‘yes’ to either question, you should strongly consider buying now. If the answer to both questions is ‘yes,’ you should definitely buy now.

Nobody can guarantee what home values or mortgage rates will be by the end of this year. The experts, however, seem certain the answer to both questions above is a resounding ‘yes.’ Mortgage rates are expected to rise and home values are expected to appreciate rather nicely.

What does this mean to you?

Let’s look at how waiting would impact your financial situation. Here are the assumptions made for this example:

  • The experts are right – mortgage rates will be 3.18% at the end of the year
  • The experts are right – home values will appreciate by 5.9%
  • You want to buy a home valued at $350,000 today
  • You decide on a 10% down payment

How Smart Is It to Buy a Home Today? | MyKCMHere’s the financial impact of waiting:

  • You pay an extra $20,650 for the house
  • You need an additional $2,065 for a down payment
  • You pay an extra $116/month in your mortgage payment ($1,392 additional per year)
  • You don’t gain the $20,650 increase in wealth through equity build-up

Bottom Line

There are many things to consider when buying a home. However, from a purely financial aspect, if you find a home that meets your needs, buying now makes much more sense than buying next year.

We can help, call today: 719.822.1444

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Where Have All the Houses Gone?

In today’s housing market, it seems harder than ever to find a home to buy. Before the health crisis hit us a year ago, there was already a shortage of homes for sale. When many homeowners delayed their plans to sell at the same time that more buyers aimed to take advantage of record-low mortgage rates and purchase a home, housing inventory dropped even further. Experts consider this to be the biggest challenge facing an otherwise hot market while buyers continue to compete for homes. As Danielle Hale, Chief Economist at realtor.comexplains:

“With buyers active in the market and seller participation lagging, homes are selling quickly and the total number available for sale at any point in time continues to drop lower. In January as a whole, the number of for sale homes dropped below 600,000.”

Every month, realtor.com releases new data showing the year-over-year change in inventory of existing homes for sale. As you can see in the map below, nationwide, inventory is 42.6% lower than it was at this time last year:Where Have All the Houses Gone? | MyKCM

Does this mean houses aren’t being put on the market for sale?

Not exactly. While there are fewer existing homes being listed right now, many homes are simply selling faster than they’re being counted as current inventory. The market is that competitive! It’s like when everyone was trying to find toilet paper to buy last spring and it was flying off the shelves faster than it could be stocked in the stores. That’s what’s happening in the housing market: homes are being listed for sale, but not at a rate that can keep up with heavy demand from competitive buyers.

In the same realtor.com report, Hale explains:

Time on the market was 10 days faster than last year meaning that buyers still have to make decisions quickly in order to be successful. Today’s buyers have many tools to help them do that, including the ability to be notified as soon as homes meeting their search criteria hit the market. By tailoring search and notifications to the homes that are a solid match, buyers can act quickly and compete successfully in this faster-paced housing market.”

The Good News for Homeowners

The health crisis has been a major reason why potential sellers have held off this long, but as vaccines become more widely available, homeowners will start making their moves. Ali Wolf, Chief Economist at Zondaconfirms:

“Some people will feel comfortable listing their home during the first half of 2021. Others will want to wait until the vaccines are widely distributed.”

With more homeowners getting ready to sell later this year, putting your house on the market sooner rather than later is the best way to make sure your listing shines brighter than the rest.

When you’re ready to sell your house, you’ll likely want it to sell as quickly as possible, for the best price, and with little to no hassle. If you’re looking for these selling conditions, you’ll find them in today’s market. When demand is high and inventory is low, sellers have the ability to create optimal terms and timelines for the sale, making now an exceptional time to move.

Bottom Line

Today’s housing market is a big win for sellers, but these conditions won’t last forever. If you’re in a position to sell your house now, you may not want to wait for your neighbors to do the same. Let’s connect to discuss how to sell your house safely so you’re able to benefit from today’s high demand and low inventory.

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The Luxury Market Is Attracting Buyers in 2021

As more people continue to identify their changing needs this year, some are turning to the upscale housing sector for more space or finer features. In their most recent Luxury Market Report, the Institute for Luxury Home Marketing (ILHM) shares:

“In a snapshot of 2020, despite the devasting effects of the coronavirus pandemic, the luxury real estate market has seen one of its strongest years since 2008. In comparison to experts’ predictions in early 2020, it is remarkable how significant demands for property type, location, and amenity preferences have changed amid the pandemic.”

With more opportunities to work from home and a growing interest in having extra space for things like virtual school, working out, and cooking more meals, the desire to own a home that can meet these needs continues to increase. Additionally, record-low mortgage rates are creating opportunities for homebuyers to stretch their legs into higher price points or even expand their real estate portfolios. The ILHM report continues to say:

Experts believe that the demand for exclusive residential properties outside the metropolitan areas will continue well into 2021; even with the introduction of vaccines, the pandemic is far from over.

For those who have moved to the suburbs and beyond, moving back to the city full time is unlikely while the work from home trend remains. Many of these affluent homeowners are now making their secondary properties their primary residences for the foreseeable future.”

If you’re interested in buying a home this year, it appears that some higher-priced markets may have more homes to choose from than those at lower price points. Javier Vivas, Director of Economic Research at realtor.comnotes:

“Interestingly, markets, where new supply is improving the fastest, tend to be higher priced than those that have yet to see improvement, suggesting sellers are more active in the more expensive markets.”

Bottom Line

If you’re hoping to buy the home of your dreams, this could be the year to achieve that goal. Let’s connect today to explore your possibilities.

Call now and let The Wheaton/Wass Real Estate Team help you in the Luxury Home Market: 719.822.1444

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Is 2021 the Year to Size-Up Your Home?

2020 was a year for change. Many lifestyle adjustments and plenty of time at home. During that time, you may have started to think about how much your current home suits your needs, even if you thought at one point that the home you’re in could be your forever home.

Last year impacted the needs of many in a variety of ways, and it’s okay to recognize that the home in which you currently live might not fit your lifestyle now. If you’ve turned a room in your home into a makeshift office or school space, you’re trying to exercise at home, or you are just spending more time in your own four walls than you ever expected to, you may be ready to move onto something bigger.

With an inventory drop of 22% over the last year and home price appreciation at 7.3% year-over-year, it has never been a better time to sell. Inventory has decreased and demand has increased, which has driven prices have been driven up. This is great news if you are a homeowner and you’re thinking about selling. Your home equity has likely risen as prices have increased and there’s a large pool of buyers searching for the perfect home.

If you can relate to all of the above and are weighing your options when it comes to selling and finding a bigger space, let’s chat today.

The Wheaton/Wass Real Estate Team  719.822.1444

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What Does 2021 Have in Store for Home Values?

 

According to the latest CoreLogic Home Price Insights Report, nationwide home values increased by 8.2% over the last twelve months. The dramatic rise was brought about as the inventory of homes for sale reached historic lows at the same time buyer demand was buoyed by record-low mortgage rates. As CoreLogic explained:

“Home price growth remained consistently elevated throughout 2020. Home sales for the year are expected to register above 2019 levels. Meanwhile, the availability of for-sale homes has dwindled as demand increased and coronavirus (COVID-19) outbreaks continued across the country, which delayed some sellers from putting their homes on the market.

While the pandemic left many in positions of financial insecurity, those who maintained employment and income stability are also incentivized to buy given the record-low mortgage rates available; this is increasing buyer demand while for-sale inventory is in short supply.”

Where will home values go in 2021?

Home price appreciation in 2021 will continue to be determined by this imbalance of supply and demand. If supply remains low and demand is high, prices will continue to increase.

Housing Supply

According to the National Association of Realtors (NAR), the current number of single-family homes for sale is 1,080,000. At the same time last year, that number stood at 1,450,000. We are entering 2021 with approximately 370,000 fewer homes for sale than there were one year ago.

However, there is some speculation that the inventory crush will ease somewhat as we move through the new year for two reasons:

1. As the health crisis eases, more homeowners will be comfortable putting their houses on the market.

2. Some households impacted financially by the pandemic will be forced to sell.

Housing Demand

Low mortgage rates have driven buyer demand over the last twelve months. According to Freddie Mac, rates stood at 3.72% at the beginning of 2020. Today, we’re starting 2021 with rates one full percentage point lower than that. Low rates create a great opportunity for homebuyers, which is one reason why demand is expected to remain high throughout the new year.

Taking into consideration these projections on housing supply and demand, real estate analysts forecast homes will continue to appreciate in 2021, but that appreciation may be at a steadier pace than last year. Here are their forecasts:What Does 2021 Have in Store for Home Values? | MyKCM

Bottom Line

There’s still a very limited number of homes for sale for the great number of purchasers looking to buy them. As a result, the concept of “supply and demand” mandates that home values in the country will continue to appreciate.

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6 Tips for Holding An Open House During the Holidays

holiday open house

If you’re trying to sell your home during the holidays, there are a few considerations that can help or hinder the process. Here are some tips for planning a successful open house during the winter holiday season.

1. Make Things Cozy

During the holidays, warm and inviting homes make buyers want to stay at an open house longer. Try to make things as inviting as possible. If you have a fireplace, make sure it’s running. You should also consider baking cookies or offering a cup of warm cider to your guests.

2. Keep Things Classic

Elegant decorations provide a more understated, traditional look and feel that will appeal to more buyers. Avoid overly kitschy or extravagant holiday décor which can put certain buyers off, especially if they don’t share your religious beliefs. You should also be careful not to cover up any of the house’s important assets with decorations.

While most people are generally not offended by seasonal décor, avoid going overboard. A tasteful evergreen holiday wreath on the front door can add a bit of inviting style, and a few clean white lights inside a home can provide some simple, classic sophistication. On the other hand, you should try to avoid the gaudy cartoon Santas and snowmen.

Ideally, you should try to make the main focal points in your house look holiday-ready, or your home might feel gloomy. If the mantle is left plain, for instance, it can look out of place this time of year and give prospective buyers a vague feeling of discontent.

3. Focus on Safety

snow shoveling drivewayIt’s important to keep your driveway and walkways free of ice and snow to make your home more approachable and inviting. You also want to avoid any liability issues that could occur if someone suffers an injury due to a fall.

Solar lights along walkways can help illuminate a path for open house attendees. A layer of sand can also help keep visitors safe when the walkways start to ice over. You should also knock off any icicles and snow drifts that might fall on an unwitting prospective buyer.

If your open house will run into late afternoon, set a timer on the porch light so visitors will be able to easily spot the house number. On the porch, place a welcome mat for muddy or wet feet, so guests don’t soil carpeting or flooring as they come and go.

4. Monitor the Weather

If the weather outside is expected to turn frightful, consider rescheduling the open house. Some people travel long distances to look at a home, so be sure to keep an eye on the forecast in case any storms seem to be brewing on the horizon.

5. Avoid Leaving Gifts Out in the Open

Anytime you have strangers in your home, it’s best to put away your treasures. Even if you aren’t concerned about theft, you may risk having something damaged as prospective buyers and their children make their way through your home.

In addition to making a home look more cluttered, too many presents can also make a property feel awkwardly personal for buyers who are trying to imagine their futures in a home. While a few gifts can add a seasonal feel to a home; a huge pile is likely to distract visitors and turn off prospective buyers.

6. Market Broadly, Early and Creatively

Although winter is not an ideal time to sell a home, it does bring out serious buyers. That said, while people who venture out for open houses during the holiday season might be the most serious buyers of all, they don’t always arrive in large numbers.

To make sure you attract a decent crowd, start your event marketing as soon as possible. Talk to your real estate agent about all the potential ways you can creatively publicize your open house, whether it’s by leveraging social media or putting up signs near a local holiday festival or fair.

With more than six decades of collective experience, The Wheaton Team specializes in residential real estate throughout all of Colorado Springs, the Tri-Lakes area and El Paso County. Contact us today and let us guide you through each step of the selling process, so you can achieve your real estate goals.

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The Holidays Aren’t Stopping Homebuyers This Year

The Holidays Aren’t Stopping Homebuyers This Year | MyKCM

Black Friday and Cyber Monday are behind us, yet finding the perfect holiday gifts for friends and family is certainly still top of mind for many right now. This year, there’s another type of buyer that’s very active this holiday season – the homebuyer.

Each month, ShowingTime releases their Showing Index which tracks the average number of appointments received on active U.S. house listings. The most recent index notes:

“The Showing Index reported a 60.9 percent jump in nationwide showing traffic year over year in October, the sixth consecutive month to see an increase over last year.”

Here’s the breakdown of the latest activity by region of the country compared to this time last year:

  • The Northeast increased by 65.5%
  • The West increased by 64.7%
  • The Midwest increased by 55.7%
  • The South increased by 54.7%

Why is the traffic so active?

The health crisis definitely put homebuying plans on pause for many earlier this year. Buyers, however, are in the market and making moves well past the typical busy homebuying seasons of spring and summer.

One of the main reasons buyer traffic has continued to soar in the second half of 2020 is how dramatically mortgage rates have fallen. According to Freddie Mac, the average mortgage rate last December was 3.72%. Today, the rate is a full percentage point lower.

Bottom Line

There are first-time, move-up, and move-down buyers actively looking for the home of their dreams this winter. If you’re thinking of selling your house in 2021, you don’t need to wait until the spring to do it. Your potential buyer is very likely searching for a home in your neighborhood right now.

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Buyer’s Market vs. Seller’s Market

buyers market

Most people have heard the real estate terms “buyer’s market” and “seller’s market.” But what do these mean, and how do they affect your ability to sell or buy a home? Read on to learn how supply and demand influence home prices.

What is a Buyer’s Market?

With a buyer’s market, the supply of available homes for sale outnumbers the amount of motivated buyers who are interested in purchasing a home. Because they have so many options, buyers can afford to be pickier. This forces sellers to be more reasonable with their pricing.

If you’re searching for a new home, a buyer’s market is the best time to make a move. In many instances, you will be able to get a home for a lower cost than you would if you were shopping during a seller’s market.

On the other hand, if you are hoping to sell a home, you will have a harder time during a buyer’s market. Not only will you have to price your home to compete with other available inventory; your home may take longer to sell. If your home stays on the market for a while, you may also have to lower your asking price or make certain concessions to secure a buyer.

What is a Seller’s Market?

With a seller’s market, the supply of available homes for sale is less than the number of motivated buyers who are interested in purchasing a home. Because they have fewer options and increased competition, buyers cannot afford to be as picky. This allows sellers to raise their asking prices.

sellers marketWhenever demand exceeds supply, multiple buyers often become interested in a single home, resulting in bidding wars. If you’re planning to sell your home, a seller’s market is the best time to make a move. In most instances, you will be able to secure your asking price; you may also be able to get a higher offer if there are multiple interested buyers.

If you’re trying to buy a home in a seller’s market, the seller will have the advantage. If there are other buyers interested in the same home you’re making an offer on, you will find it very difficult, if not impossible, to haggle for a better price. In fact, you might even lose the opportunity to buy the property if a competing buyer swoops in with a higher offer.

Seller’s markets are also commonly referred to as “renter’s markets” because potential buyers often need to keep renting until they can either accumulate a higher down payment to help compete with other buyers or wait for market conditions to change.

How Do You Determine the State of the Market?

There are a number of different factors that determine real estate market conditions, both nationally and locally. If an area has a booming economy with a lot of great employment opportunities, more people are going to want to live there, and limited housing opportunities will create a seller’s market. The same works in reverse.

Shifting mortgage rates can also drive buyer demand since they help determine loan affordability. At the same time, the supply of local housing is constantly in a state of flux. Home inventory can increase when people move elsewhere, whether they’re downsizing or moving into a larger home for an expanding family. Similarly, inventory can increase with new home construction.

On the other hand, housing inventory can decrease due to natural disasters such as earthquakes, fires and floods. Limited land availability can also lead to plot shortages that limit new home construction and make existing properties more valuable.

The real estate market can also go up and down based on the season. There are typically more homes for sale in the summer. This means you could have a seller’s market during the winter and a buyer’s market when the weather warms up.

With all this in mind, it can be difficult for ordinary buyers and sellers to assess current market conditions. One way to determine if it’s a seller’s or buyer’s market is to analyze available inventory. If inventory is low, it is most likely (though not always) a seller’s market. If inventory is high, it is most likely (though not always) a buyer’s market.

With so much to consider, however, it’s generally best to seek counsel from a reputable real estate agent to help you get a clear understanding of existing market conditions.

With 60-plus years of combined experience, The Wheaton Team specializes in residential real estate throughout Colorado Springs and all of El Paso County. Let us guide you through each step of the buying and selling process, so you can achieve your real estate goals. Contact us today to get started.

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Improving Your Home Value With Solar

solar panels increase home value

We all know that solar panels are good for the environment. But do they increase the value of your home? Research indicates that even a moderately sized solar array can boost home value. Whether that added value will cover the cost of installation, however, is another question. Read on to learn if you can improve your home’s value by adding solar panels.

How Much Value Can it Add?

According to a report from the federal government, solar energy systems typically improve the value of most homes. In most instances, solar panels are viewed as upgrades, and buyers are willing to pay a premium of approximately $15,000 more for a property with an average-sized solar array. Homes with solar panels also tend to sell faster than homes with no solar features.

With all of this said, the actual value of solar can vary based on the location of your home. In California, for instance, research has shown that buyers are willing to pay nearly $6,000 per watt of installed solar capacity. This isn’t the case everywhere, however.

After analyzing sales of solar-equipped properties in eight different states over a decade, one relatively recent report found that homebuyers are consistently willing to pay about $4 per watt of installed solar capacity. For a 6-kilowatt solar PV system, this means that solar could add $24,000 to a home’s resale value.

Whatever the case, it’s clear that solar can boost a home’s value. But is it enough to justify the expense?

Will it Cover the Installation Costs?

A solar home’s selling price is usually about 3% to 4% higher or more compared to properties without solar. The price of a typical rooftop solar installation and battery is also generally recouped in the property’s sale price. What’s more, households purchasing solar are usually rewarded with lower energy bills and, in many cases, healthy tax incentives that can help cover all or a large portion of the system’s costs over the life of its warranty.

This can create a valuable selling point for buyers and help differentiate properties from similar inventory on the local market.

Modern Buyers Want Energy-Efficiency

These days, people strongly consider monthly electric bills when buying a home. When assessing a property’s long-term financial value, they’re increasingly open to paying more for a solar-ready property.

solar panel installationIn addition to increasing home values over comparable non-solar properties in the area, solar systems provide other financial benefits including:

  • Federal solar investment tax credits (ITCs)
  • State rebates and other incentives such as net metering
  • Replacing standard grid electricity with a potentially cheaper and sustainable option

When it comes time to sell a solar property, homeowners enjoy several benefits, including:

  • Solar homes often sell faster.
  • Buyers view solar panels as upgrades.
  • Sellers usually get a full return on solar investment.
  • Sellers can set higher asking prices than similar properties without solar.

Homeowners with a solar energy system should note that buyers usually want documentation showing that the solar installation was done properly by a reputable dealer. They also typically want documented proof that the solar system is reducing electric bills.

When deciding whether to install solar features, homeowners should know that the overall value of the upgrades go up over time as solar energy becomes more accepted in a city and region. Since Colorado Springs is just beginning to embrace solar, homeowners should expect values to increase over time. This makes investing in solar a wise decision for homeowners who plan to live in their homes for a few more years before selling. At the same time, solar can still be a good way to pique buyer interest and differentiate your property in the current marketplace. At minimum, you should be able to get an equal return on your investment, and you might end up making a profit overall.

With six decades of combined industry experience, The Wheaton Team provides invaluable guidance and expert advice for clients. Specializing in residential real estate throughout Colorado Springs and the Tri-Lakes area, our team can guide you through the complicated buying, selling and financing process, so you can achieve your real estate goals. Contact us today to learn more.

To learn more about solar panels, read our blog on the pros and cons of solar.