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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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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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7 Tips To Help Sell A Home In The Autumn

selling your home in autumn

While the real estate market tends to slow down as the weather cools, there are still plenty of golden opportunities for sellers. Here are some ways you can pique buyer interest and close at the right price before the winter is upon us.

  1. Hire an experienced agent. During the fall, serious buyers are usually very motivated to buy quickly before the bad weather and busy holiday season set in. Unfortunately, since autumn is an off-peak season, there are fewer buyers than there are during the spring. When selling in a slower market, it’s important to rely on a seasoned real estate agent who knows how to target motivated buyers. When interviewing agents, ask about their experience and have them give you their strategies for selling a home in an off-peak season.
  2. Price your home to sell. During the fall, you need to have a price that will raise eyebrows for all the right reasons. While you shouldn’t expect a multiple-offer situation that will drive up the price, don’t feel compelled to accept low-ball offers. Using your agent’s expertise and neighborhood comparisons, settle on a good listing price that reflects realistic expectations based on the fall versus the spring.
  3. Illuminate your home. When days start getting shorter, the sun will cast broader shadows as it sits lower on the horizon. To give your home a bright, warm feel, it’s important to prioritize lighting. Open the shutters, pull up the blinds and push aside the drapes on each window. Turn on almost every light and consider brightening darker, windowless rooms by placing spotlights on the floor behind furniture.
  4. Tackle major and minor repairs. When the real estate market slows during the fall, buyers enjoy more negotiating power. The last thing you want to do is give them additional leverage or excuses to lower their offer prices. Be sure to address any issues that could be viewed as red flags in an inspection. This includes roof repairs, old water stains or HVAC system problems.
  5. Get your HVAC system inspected. During the fall, it’s very common for buyers to ask a seller to have a home’s furnace cleaned and inspected before closing. Get out in front of this task, so you can show prospective buyers the receipt early on in the process. This will also allow you to handle any unexpected repairs that might be uncovered during an inspection.
  6. Focus on outdoor areas. Modern homeowners want nice outdoor spaces where they can imagine themselves entertaining and enjoying time with family. Just because the weather is cooling off, doesn’t mean you can neglect this important part of your home.

sell home in autumn leavesOne of the greatest mistakes sellers make during the fall is ignoring their exteriors. In addition to framing outdoor living space in optimal light, you want to make sure you clean up your yard. Some of the most important autumn clean-up tasks include:

  • Removing debris and loose sticks
  • Raking up stray leaves
  • Weeding flower beds and removing dead plants
  • Trimming bushes, flowers and shrubs
  • Aerating the lawn and fertilizing grass roots

It’s also very important to clean out your gutters during the fall. This will show buyers that you have taken good care of the property, since clogged gutters can allow water to drain abnormally and damage roofing or compromise the integrity of a home’s foundation.

  1. Perform thorough indoor maintenance. Savvy buyers notice even the smallest details, and certain flaws are more noticeable during the colder seasons.

Before you schedule a showing, be sure to:

  • Insulate around doors and windows since drafts are much more noticeable in the fall.
  • Remove cobwebs, which tend to accumulate during the fall.
  • Address any eyesores; use touched-up paint and new caulking to freshen up bathrooms and the kitchen.
  • Replace air filters to prevent excessive dust and stale smells throughout the house.

Are you thinking about putting your home on the market? The Wheaton Team can help. Our experienced team specializes in residential real estate throughout El Paso County, including the Tri-Lakes area and Colorado Springs. Let us guide you through the complex selling process, so you can get a timely sale at a price that will leave you smiling.

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Selling a Home: 8 Questions to Ask Your Realtor

home selling questions to ask a realtor

Selling a house can be a complicated process fraught with all sorts of complications and potential mishaps. A good real estate agent can simplify the process and greatly improve your chances of success. To ensure that you enter the home-selling process with your eyes open, be sure to ask your agent the following key questions.

  1. What are your credentials?

If you’re thinking of selling your home, it’s important to hire a reputable agent with a state license. They should also belong to the local real estate trade association, which will give them access to the multiple listing service, or MLS, allowing them to list your property far and wide to attract more prospective buyers.

  1. Do you specialize in this area?

A local real estate expert can provide a huge advantage for sellers. Local agents are aware of available inventory, area market conditions and upcoming developments in the area. They will also know about plans for stores or other amenities that will impact the value of your home and determine how quickly it will sell. Local agents also know what local buyers are looking for in real estate. It’s important to remember that your agent needs to be able to sell not only your home but your entire neighborhood.

  1. What do I have to disclose to buyers?

While it makes sense to present your house in its best light, you must also be prepared to disclose some of its flaws. Colorado disclosure laws require sellers to alert buyers about the physical condition of a home, along with specific defects and the existence of dangerous materials or conditions. If you fail to adequately disclose specific facts, you could face lawsuits or various pending matters that could hold up the sale, impact property value or leave you liable for financial restitution. 

  1. Should I hire an inspector? 

Many buyers will include inspection contingencies in their offers. Sometimes, however, it makes sense for sellers to hire an inspector to perform a pre-inspection to check for potential problems before the property is listed.home selling questions for realtor

A pre-inspection can give you a chance to fix problems in advance and present buyers with a clean bill of health for the home. Since it will cost money, however, it’s best to check with your real estate agent to see if a pre-inspection is warranted for your property.

  1. How will you arrive at the listing price?

Few things are as critical to a seller than the price of a home. Your agent’s ability to set an appropriate listing price will go a long way toward determining your success. A home that is priced too high will languish on the market. If it’s priced too low, on the other hand, you may be leaving money on the table. It’s important to make sure your agent is an expert on the local real estate market and knows what similar homes have recently sold for.

  1. What is your sales plan?

A good real estate agent should have a written sales plan that identifies the marketing strategy to attract prospective buyers to your property. From listing services to social media to open houses, multiple marketing channels can help you secure a higher sales price. Make sure the agent is capable of providing professional photography, video and staging elements. This will make a better impression on buyers and improve the chances of a successful sale.

  1. What should I do to prepare my home?

Get your agent’s advice for necessary upgrades and repairs. Ask what hacks they might suggest for impactful, budget-friendly improvements that pique interest in buyers. Find out if they suggest whole-scale staging services or just some basic cleaning and decluttering.

  1. How will we communicate? 

Make sure your agent is willing to communicate according to your preferences, whether it’s by text, email or phone conversations. Knowing the frequency and method of communication can be important in selling your home. Your agent should be available to answer any questions that might come up along the way. They should also be willing to accommodate your schedule when it comes to planning open houses.

If you’re planning to sell your home, The Wheaton Team can help. We specialized in residential real estate in Colorado Springs, Monument and the entire El Paso County. Let us help streamline the complex selling process and help you sell your home for a price that meets your expectations. Contact us today to get started!