Uncategorized

COVID-19 and the Denver Real Estate Market

Let’s address the elephant in the real-estate-market-room: the Federal Reserve dropped interest rates to zero.

So… What does that mean?

The reason the Fed has dropped rates to zero is to support the economy during the nation’s current self-quarantine. It’s looking like COVID-19 is not going away anytime soon, and the economy is feeling that impact in several ways.

With everyone holed up to avoid the virus, consumer spending is down. Making up 70% of the GDP, consumer spending’s dip is negatively affecting industries such as travel, entertainment, hospitality, and dining. This loss of business may lead to the laying off of workers in those industries, in turn creating a further lack of spending. Last week, we shifted from a bull market to a bear market, meaning stock markets are down at least 20% from recent highs. Investors are converting to cash and to other, safer investments due to this consumer spending concern.

The drop to zero is also to provide easier access to business and personal borrowing to weather this financial storm. It will provide businesses the opportunity to acquire short-term loans to help maintain payroll, keep employees, and keep doors open. 

It’s important to note that mortgage interest rates are not necessarily directly correlated with the Fed’s rates. While mortgage rates are still at an all-time low, this doesn’t mean they will continue decreasing (however, this is still possible).

The good news in this is that the housing market remains strong. We ended February with a supply of 4,835 homes on the market (attached and detached). To add context to this, the record high for February was back in 2006, where we ended with 25,484 active homes on the market, while heading into a recession! So, demand is still high, and supply is still very low.

The buyer side of the market continues to be competitive, often with multiple offers over list price. With COVID-19 spreading, we anticipate a buyer slowdown as buyers avoid public places, like open house tours. However, this also presents an opportunity to continue (or begin) your home search in a less competitive environment, at least temporarily. Once the virus begins to stabilize and financial markets start to recover, you can bet it will be a mad dash to start touring listings. 

Sellers remain in the power seat in this market in almost all price points — this is with the exception of homes over one million, where buyers are able to take back the process a bit more. 

So, with the safety of our clients and our employees as our priority at this time, all Love Your Hood Brokers will be taking the recommended precautions against COVID-19. If anyone at Love Your Hood becomes sick, you can rest easy knowing they will be home, and another one of our amazing (and healthy!) team members will assist you with any property tours. We are also available to do virtual video tours of properties for you while you stay safely at home — please reach out to us to schedule one.

Here are the precautionary measures we will be taking to ensure that your home buying and/or selling journey is not affected:

  1. We will carry disinfectant wipes to clean all surface areas — particularly lockboxes, keys, and doorknobs.
  2. We will ask you to please refrain from touching any surfaces when touring homes. 
  3. If you’re showing signs of illness, please let us know. We can do a video tour on any available home.
  4. Our entire team will be working from home as much as possible to do our part in slowing the spread of the virus and flattening the curve.
  5. All meetings will be done via conference calls or virtual video chat.

 

We encourage you to visit the Centers for Disease Control and Prevention website for additional information regarding COVID-19.

With regards (and washed hands),

Your neighbors at Love Your Hood

Home sellers stretching for every last penny in metro Denver

Source: Aldo Svaldi of the Denver Post

If you were to search “overpricing a home” on Google, you’d find pages upon pages of articles and blog posts advising that it’s a bad idea. A year ago, one could get away with overpricing a home since putting it on the market alone would garner positive attention. Today, things have changed. Highlighting his reasoning with real time Denver market statistics, this article’s author advises slightly under-pricing a home when listing it these days. Agents and buyers not only know what the home is worth; they also know that a listing price must accurately represent the home’s worth in order to see a quick sale.

Read Article

Interest Rates Going Up, Denver Home Prices Coming Down

Denver Real Estate Market Snapshot - June 2018

Interest rates continued climbing throughout the second quarter, while median home prices started a two month decline. The struggle to find a home for the average buyer is still very real, there are some emerging trends worth keeping an eye on. Is the market changing or is it an early seasonal correction?

INTEREST RATES

Does the chart below remind you of the elevation gain during your last run? 2018’s interest rates started out at 3.9% and are currently at 4.57%. Most experts predict continued increases for the remainder of 2018. If you are currently under contract, a conversation with your lender to lock your rate should be priority number one.

The last time interest rates were at the 4.5% mark was in December of 2013. For those financing their purchase, increasing rates decrease buying power. For those on a budget, that means lowering your max price to accommodate the extra interest in your payment. (more…)