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November Market Update - Kelie Gray

by Kelie Gray
 

With many mountains opening, winter's officially here! We are excited that Keystone and Breckenridge have both reported record snowfall for the month of October. 

As you can see in my video, this is just a brief market update. For those of you that would like more details or to discuss how the market affects you personally, let’s talk! What are you doing for lunch next week?!!

With the graph below, I have included some additional interactive statistical links. These numbers will dive deeper into the comparison of the past to the present market.
  • There are approximately 630 active listings, and less than 450 under contract. Things are moving!
  • Still low interest rates
  • Very high consumer confidence
  • We will continue to see price appreciation and growth, but at a much slower pace than we have seen in the past several years.
Remember that even though many are predicting a recession before the next presidential election in 2020, this does not mean there will be a housing crisis.
The actual definition is 2 or more consecutive quarters of negative GDP growth. 
Check out this great article: "How will the Next Recession Affect the Housing Market" 
Interesting, right? Recession does NOT necessarily equal a housing crisis. 

I would love to be your local resource for all things Summit County.
I also have a great network of referral brokers across the country.
Consider me your local real estate expert!
1 of only 7 Summit County Real Estate Brokers with this Elite Designation.

The Summit Area Specialist Designation differentiates REALTORS
®
 who dedicate themselves through education, community involvement, and transactional experience. Those who gain the Summit Area Specialist Designation will have the localized knowledge, production, expertise, and community involvement to better serve Summit County, Colorado.
 
 
Click on image for an interactive graph
Additional Interactive Graph Links:
Active Listings
Average Days on Market
Median Sold Price Per Sq Foot
Median List Price to Sale Price Ratio
 
"Kelie Gray is the best. She helped us in our move from Indiana to Summit County. Working remotely with her was super easy and the process happened without any issues. Looking forward to working with her again." - Don Chastain


  Kelie Gray    Real Estate Matchmaker
  C: 970.406.0537      970.468.6800  
  
[email protected]
  SummitRealEstate.com


 
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Don't Fall into the Rental Trap

by KCM

62% of renters indicate they believe they are losing money by renting- and rents only continue to increase. Don't fall into the rental trap! If you're currently renting, let's get together to explore your homeownership options.

A Recession Does Not Equal a Housing Crisis

by KCM

Recently, there's been a lot of news surrounding an impending recession. However, the same experts predicting an economic slowdown also believe it will not be caused by the housing market. If you're thinking of buying or selling a home, there's no need to panic- let's get together to address your concerns and talk about what's really happening.

Summit County Market Update Fall 2019- Courtesy Allison Simson

by Allison Simson


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Market Update Fall 2019

Autumn is such a glorious time in Summit County!  Crisp mornings and warm days splashed with amazing colors all around- I never want to step foot outside the county this time of year!
The real estate market in Summit County is strong on so many fronts. Looking at several leading indicators – inventory & number of showings and as well as two lagging indicators – pending/closed sales and Days on Market –gives a good picture of where we’ve been and what may come.

Active Properties: 777 on the market early fall priced from $209,000-$18,000,000 – something for everyone! 
Showing data: The number of showings tends to dip slightly in the fall and pick up again when the snow flies and the skiers are back. Showings are still consistent.
Pending: Currently, there are 458 properties under contract.  The number of properties going under contract is on par with the summer months. 
This tells me Buyer demand is staying consistent, week after week.  While other aspects of the market go up and go down, we can depend on the Buyers to be here.  That's a good thing.
Sold properties: 1210 Sales Q1-Q3 2019 vs 1356 Q1-Q3 2018.  Number of sales is down overall by about 11%, but overall volume is up.
Interest rates also play a part of the equation- they are so low right now!  3.75% at the start of this quarter. The predictions of most economists at the beginning of this year for rising interest rates have not panned out – thankfully!  This helps with consumer confidence and makes properties more affordable.
Days on market: Median days on market is 19 this year vs 11 last year. A slight increase, but not statistically relevant.

The bottom line: High consumer confidence, low interest rates and buyers making offers gives the market a sense of confidence and predictability. That being said, we can expect, as we move toward winter, a gradual slow-down in transactions.  Much of the fall real estate market is driven by folks who want to get in and secure their ski getaway before the lifts start to turn!

Stay tuned to weekly updates on the Market click here: 

FRISCO — The town of Frisco is hoping to remove some of the unintended consequences of past deed restrictions placed on homes in town.

The Frisco Town Council unanimously voted to adopt a resolution at their regular meeting Tuesday night that would allow homeowners with a deed restriction on their property to opt in to a new housing covenant offered by the town. The move is meant to help incentivize home improvements on restricted properties, and provide more flexibility to sellers so they aren’t forced to take a loss, while still assuring affordability for buyers. Council members Jessica Burley and Melissa Sherburne recused themselves from the vote.

“We tried to address each problem that was identified,” said Nancy Kerry, Frisco’s town manager. “It isn’t a perfect solution. Not every homeowner will make money. That’s how the housing market is for anybody. The goal of the council was not about guaranteeing any sales prices. But it also isn’t to force people to lose money. So we’re trying to thread the needle to the right outcome with as few unintended consequences as possible.”

There are currently about 170 deed-restricted covenants in Frisco, and while they aren’t completely consistent in terms of restrictions, most include the same language in regard to maximum resale value for sellers. Kerry said that language is the heart of the problem.

Under most current covenants, sellers are only allowed to sell their homes for a sum that’s equal to the lesser of two scenarios: either the purchase price plus 3% a year (not compounded), or the purchase price plus a percentage increase equal to the percentage increase in the area median income (AMI) from the time the unit was purchased until the time it’s listed for sale.

This means that in some cases, when there’s a negative or static change in AMI from the time of purchase — calculated using a national formula by the U.S. Department of Housing and Urban Development, with local variations — homeowners would be forced to sell their property for less than they purchased it for or a very small profit. It also means individuals with similar properties may be forced to sell under extremely different circumstances based on when they sell their homes.

“Let’s say someone purchased a house in 2011,” said Katie Kent, a planner for Frisco, in an interview with the Summit Daily this summer. “You actually pull out this spreadsheet from 2011 and look at what the AMI was that year, then you look at the AMI in the year they want to sell it and calculate the difference, whether it’s positive or negative. It all depends on what year you bought. You can only look at the year you purchased and the year you’re selling. And because the covenant says lesser of, if that number has gone down, that’s the formula, and that’s how you get the negative sell price.”

The new resolution creates a voluntary covenant that owners of current deed-restricted properties can join to change the maximum sale price calculation on their covenant.  

The new formula would set the maximum sale price as the sum of the seller’s original purchase price, a 3% increase annually (not compounded or guaranteed), the cost of qualified capital improvements on the property, and the cost of real estate commission. Sellers can also add a 2% bump on the commission if they use the Summit County Housing Authority to list their home.

Of note, homeowners won’t be allowed to sell above the set maximum purchase price in the published Summit County AMI at the time, even if the new calculation suggests they should be getting more. The only time someone would be able to sell their property above the published AMI is if they would otherwise be forced to take a loss on the deal — at which point they could sell for the original purchase price.

The new calculation also doesn’t guarantee that homeowners will get to sell at their highest allowed price, as they’ll still have to find a buyer within the correct AMI threshold to agree to that price. Though, it does provide increased flexibility for both buyers and sellers. For the first 30 days a property is listed, members of the Frisco workforce will have priority to purchase the property at its original AMI. Though, if the home isn’t sold in those 30 days, a 20% AMI spread goes into effect opening the door for more buyers.

For example, if someone lists a property restricted to buyers at 100% AMI and it doesn’t sell in 30 days, individuals who qualify at up to 120% AMI would then be allowed to buy the home.

Town officials also hope that by adding capital improvements and real estate commissions to the calculation they can encourage homeowners to make improvements to their homes without fear of losing value when selling, and to use a real estate agent so buyers aren’t left unaware they’re purchasing into a deed-restriction.

Kerry said that individuals interested in changing their deed restrictions would have to fill out an application, and have an informational session with town staff to make sure they understand how the new covenant would affect them.

“The goal is to have an inclusive community, and we want a range of people to be able to afford to live here,” said Kerry. “But in manipulating the market there are unintended consequences, and that is true for all affordable housing programs. … You have to be really careful. You can’t think of every possible outcome. But you can try, and that’s why we gathered as much information as we could to try and find the real causes of the problem.”

Real Estate Market Predictions for rest of 2019

by KCM

We’re in the back half of the year, and with a decline in interest rates as well as home price and wage appreciation, many are wondering what the predictions are for the remainder of 2019.

Here’s what some of the experts have to say:

Ralph McLaughlin, Deputy Chief Economist for CoreLogic “We see the cooldown flattening or even reversing course in the coming months and expect the housing market to continue coming into balance. In the meantime, buyers are likely claiming some ground from what has been seller’s territory over the past few years. If mortgage rates stay low, wages continue to grow, and inventory picks up, we can expect the U.S. housing market to further stabilize throughout the remainder of the year.”

Lawrence Yun, Chief Economist at NAR “We expect the second half of year will be notably better than the first half in terms of home sales, mainly because of lower mortgage rates.”

Freddie Mac “The drop in mortgage rates continues to stimulate the real estate market and the economy. Home purchase demand is up five percent from a year ago and has noticeably strengthened since the early summer months…The benefit of lower mortgage rates is not only shoring up home sales, but also providing support to homeowner balance sheets via higher monthly cash flow and steadily rising home equity.”

Bottom Line

The housing market will be strong for the rest of 2019. If you’d like to know more about our specific market, let’s get together to discuss what’s happening in our area.


Heading into the spring buying market, there are strong trends starting to emerge.

The inventory of homes for sale has increased on a year-over-year basis for eight months in a row. Home price appreciation has continued to grow, although at a slower rate. The homeownership rate has reached heights last seen in 2014, with millennials and Generation X leading the way!

Let’s dive a little deeper into some of the recent reports that have been released and what they mean for the spring buying season!

1. National Association of Realtor’s Existing Home Sales Report

Sales of existing homes were down for the third consecutive month in January. Some of this can be explained by the natural seasonality that the real estate market experiences every year, and some can be explained even further by a lack of homes available for sale on the market.

Inventory

For the last eight months, the inventory of homes for sale has been higher when compared to the same month the year before. The challenge in the market is the mismatch of the type of home that is available for sale. First-time homebuyers looking for a starter home are often competing with other buyers to stand out, often outbidding each other.

Lawrence Yun, NAR’s Chief Economist, agrees that the market is still experiencing an inventory shortage.

“In particular, the lower end of the market is experiencing a greater shortage, and more home construction is needed.”

Home Prices

The median home price for homes sold in January was $247,500. This is up 2.8% from January 2018 and marks the 83rd consecutive month of year-over-year gains. The 2.8% growth in home prices represents the smallest year-over-year change since February 2012 but is a welcome change for buyers who had feared being priced out of the market.

Days on the Market

Properties that sold in January were on the market for an average of 49 days with 38% of homes on the market for less than a month.

Yun is positive about how today’s market conditions will help buyers this spring,

 “Existing home sales in January were weak compared to historical norms; however, they are likely to have reached a cyclical low. Moderating home prices combined with gains in household income will boost housing affordability, bringing more buyers to the market in the coming months.”

2. NAR’s Pending Home Sales Report

The national Pending Home Sales Index (PHSI) rose 4.6% to 103.2 in January from 98.7 in December. An index score of 100 is considered normal. All four major regions of the country experienced gains in January, with the largest increase coming in the South.

 “The PHSI is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.”

Increases in the PHSI often predict increases in the level of home sales in the coming months, which is great news for the housing market leading in to spring! Yun had this to say,

“Homebuyers are now returning and taking advantage of lower interest rates, while a boost in inventory is also providing more choices for consumers.”

Bottom Line

The housing market in 2019 will require homeowners to list their house at the right price to attract buyers. If interest rates continue to stay low while wages increase, and more inventory comes to market, 2019 could be one of the best years for home sales in recent history.

Displaying blog entries 1-7 of 7

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Summit Real Estate
The Bright Choice
330 Dillon Ridge Way, Suite 10
Dillon CO 80435
970-468-6800
800-262-8442
Fax: 970-468-2195

Allison Simson, Owner/Broker, is a licensed Colorado Real Estate Broker