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Real Estate Essentials Posts

Longmont Market Update: March 2019

Want to see how the market is trending so far this year? Check out this video. Let me know if you have questions. Sean Gilliam, RE/MAX Alliance

About the author: Sean Gilliam is a Realtor® with RE/MAX Alliance in Northern Colorado.  Sean can be reached at seangilliam@remax.net or by phone at 970-313-6706.  For additional articles see Sean’s blog or to search for properties see his web page.

Interested in buying a home or selling your current home?  I am committed to your success.  Give me a call at 970-313-6706 to get started.

2019 Northern Colorado Real Estate Forecast

As we are starting out the new year, we can reflect on the progress and stability of Northern Colorado.  There has been continued progress and growth in the real estate market, the economy, and the population, even more so than anticipated (see 2018 Forecast).  For instance, the median home price in Northern Colorado has appreciated by about 6 % in the last year, according to data from IRES MLS®.  Many are predicting that the real estate market is starting to move toward a more balanced market with homes taking longer to sell, more inventory on the market and slowing home price appreciation.  Some are wondering if the market is taking a deep breath before it takes another jump up in home values while still some are concerned that we are in a bubble and it is likely to burst soon. 

Looking at the data below, the strong fundamentals in our economy rule out the bursting bubble scenario.  That leaves the former two options.  While no one can say for sure, let’s take a look at the numbers to get a better idea of how things will likely turn out for 2019.  Some of the research compiled in this report, put out annually by the Leeds School of Business at University of Colorado in Boulder, shows that there are many contributing factors to our current real estate market.  Below are a few of the highlights from their research.

Colorado’s Economy:

Employment – Colorado saw an increase in job growth in 2018.  According to the 2019 Colorado Business Economic Outlook, the state saw 65,000 new jobs in 2018, higher than the forecasted number of 47,100.  For 2019 it is forecasted that there will be 53,200 new jobs in Colorado. 

The unemployment rate is estimated at 3 % for 2018, versus 2.8% in 2017.  The modest gain in unemployment is representative of a growing labor force and participation rate rather than a declining employment environment.  It is believed that 2019 will see an overall 3.1% unemployment rate.  The Labor Force Participation Rate is at 69%, the third highest in the nation.

Gross Domestic Product – The real gross domestic product (GDP) or the monetary value of all goods produced in Colorado, has grown by 2.9% in 2018 versus 2.2% in 2017.  It is estimated that 2019 will see around 2.7% GDP.  It is believed that while we have a robust economy, especially compared to the rest of the nation, it is slowing to a more sustainable rate. 

Colorado’s Population Growth:

Colorado has seen continued growth year after year, peaking in 2015 with a net migration of 69,100.  Net migration is the number of people moving to Colorado minus the number of people leaving Colorado.  Population growth is increasing but has slowed since 2016, dropping to 47,600 net migration in 2017.  However, 2018 has seen an increase of 53,000 in the population.  It is forecasted that 2019 will see an increase of 50,000 new residents moving in to Colorado.  When you consider natural increase, or the difference between births and deaths of Colorado residents, we’re looking at a projected increase in population of 76,200 in 2019.  The majority of the population growth will continue to be along the Front Range, particularly the North Front Range. 

Colorado’s Real Estate Market:

Home appreciation has been fairly steady in Northern Colorado.  We saw a 6% median appreciation in home values and it is anticipated that a similar rate will continue for 2019.  As usual, the Spring market saw multiple offers and/or homes being sold at or above list price.  However, we saw a bit of a slowdown in the fall market with properties staying on the market longer and prices being reduced.  There were also fewer new homes on the market in November, a decrease of .4%, compared to December of 2017.  In the same time period, there was a decrease of 3% in closed sales.  Months’ supply of inventory has gone up 5.3%, from 1.9 months to 2.  This is still low as a more balanced market would be indicated by 3-6 months supply of inventory. 

So what will 2019 look like?  I think we will still see modest price appreciation throughout the year.  We can expect a strong Spring market as inventory is still low and there is high demand for homes due to the ever-increasing population in Northern Colorado.  While we had a market slowdown in the fall, some speculate it may have been due to the volatile mid-term elections.  We’ll see how 2019 pans out to see if this was the case or if we’re moving toward a more balanced market.  Nonetheless, the driving forces of supply and demand will continue to shape how the market moves in 2019.  We have a strong economy that continues to make the real estate market sustainable.  However, those shopping in the lower price range (below $300,000) will struggle with affordability issues, especially if mortgage rates go higher. 

Things to look for in 2019:

  • Trade tensions with China.  Will these be resolved?  How will it impact investor’s confidence, cost of materials for building, etc.?
  • Stock Market volatility.  So far it has been helpful as investors are retreating to the bond market.  This has increased demand for bonds which typically cause the mortgage interest rates to go down. 
  • Affordability.  Many people cannot afford a home above $300,000.  Unfortunately, most new construction is geared toward higher income buyers.  Residential resale properties in this price range often have multiple buyers, many with cash, that makes it difficult for buyers with limited cash reserves to compete.  The solution will come as the market balances due to greater inventory and months supply (around 3-6 months is ideal).  Further, if builders target lower income buyers this will help many get into a home.  The other option is to buy a home where they are affordable and accept a longer commute.
  • New Construction. Not much has changed here.  Homes are being built but not enough to keep up with demand.  Labor shortage and higher cost of materials are making it difficult to price homes affordably for many.  See New Construction: The Solution to Low Inventory

References:

IRES MLS® Information and Real Estate Services LLC

2019 Colorado Business Economic Outlook.  Leeds School of Business, University of Colorado Boulder.

New Construction: The Solution to Low Inventory.  Sean Gilliam, Realtor®

2018 Northern Colorado Real Estate Forecast.  Sean Gilliam, Realtor®

About the author: Sean Gilliam is a Realtor® with RE/MAX Alliance in Northern Colorado.  Sean can be reached at seangilliam@remax.net or by phone at 970-313-6706.  For additional articles see Sean’s blog or to search for properties see his web page.

Interested in buying a home or selling your current home?  I am committed to your success.  Give me a call at 970-313-6706 to get started.

Special Assessment Insurance: What is it and why you need it.

If you plan on owning or currently own a condo, it’s standard to insure the living space within your unit.  The Home Owners Association (HOA) will have hazard insurance that covers the exterior of your unit and the common areas.  However, do they have enough insurance or the funds in reserve to cover the insurance deductible or any other costs should there be a natural disaster or needed repairs?  If not, they will send the bill along to all of the residents of the HOA community.  This is a Special Assessment.  That is, the HOA will assess the need for repairs and the associated costs that exceed their coverage or funds available and then require all owners in the association to pay the remainder. This could be to the tune of thousands of dollars per unit.  Most people aren’t prepared to write that size of a check, or if they are, it takes away from savings or plans to remodel, go on vacation, etc.  In any case it’s not a good thing. 

So how can you protect yourself?  Insurance companies provide a rider for special assessment insurance, also called loss assessment insurance.  This endorsement will cover special assessment fees that are sent to members of an HOA.  This way, if you are notified by your HOA of a fee that you will have to pay, you can make a claim with your insurance company to cover the fee rather than pay it out of pocket.  The standard protection is $10,000 but some insurers may allow a higher amount.  Best practice is to talk to your insurance agent or shop around to see who can give you the best coverage.  This way, you are protected should your HOA notify you of a special assessment. 


About the author: Sean Gilliam is a Realtor® with RE/MAX Alliance in Northern Colorado and is a Certified New Home Specialist™.  Sean can be reached at seangilliam@remax.net or by phone at 970-313-6706.  For additional articles see Sean’s blog or to search for properties see his web page.

Interested in buying a home or selling your current home?  I am committed to your success. Give me a call at 970-313-6706 to get started.

Not All Lenders Charge the Same

Ready to buy a home? As you shop for a home you are determining whether or not a property will meet your needs and making sure that you’re not paying too much for it. You should shop for a lender in the same way. Consumers want a good price AND good customer service. Regarding the price, that is easier to evaluate. Each lender will be able to give you an estimate of their costs for the loan. The customer service aspect might be more difficult to assess so ask your local real estate agent for referrals.  I don’t/can’t take kickbacks from lenders so if I refer you to one it’s because I know they’ll get the job done in your best interest.

Let’s look at how to evaluate the cost of the loan. First, it is recommended that you get the opinion of three lenders to see how they stack up. With each prospective lender, get an itemized summary of their charges. Lenders will need some basic information such as your credit score income statements and any debt you may have incurred.   By law, within 3 days they will give you basic information on the cost of the loan such as lender’s fees and an estimation of your monthly payments, also known as a Loan Disclosure (formerly HUD-1).

Once you get a summary of the lender’s costs for the loan you wish to apply for, compare them side-by-side. Here’s what to look for:

  1. Interest Rate – There are various factors that impact your rate (i.e. your credit score, type of loan, loan discount points, etc.) but some lenders have a higher interest rate than others for the same loan product.
  2. Loan Origination Fees – some lenders will charge a flat fee or none at all. Some will charge a percentage of the loan amount, typically one percent (this is where your loan gets expensive).

Example: On a recent transaction, one lender charged 1% for loan origination on the same loan while another charged a flat fee of $1200. For a $400,000 loan you will be paying $4000 vs. $1200 for the same product.

  1. Underwriting Fees – This is the cost for the underwriter services for your loan.       Compare to see which one is higher.
  2. Additional Fees – Some fees you’ll see have miniscule differences but when added up, can make one lender look more attractive than another (i.e. Tax Service, Credit Report, Appraisal Fee, Flood Certification).

In addition to cost, the level of service provided by a lender is very important. This can make or break a transaction. Some questions to ask:

  1. What is the lender’s availability? Do they return calls/emails to you and your real estate agent in a timely fashion? Do they work weekends and nights if need be? This is crucial if you have important questions, especially those of a time-sensitive nature.
  2. Will you be working with an individual throughout the transaction or a team? Sometimes a personal touch can make all the difference. In any case, you’ll want someone that knows you, what your needs are and where you are at in the transaction. This is especially important with regard to getting the appraisal done on time.
  3. What kind of loans do they provide? Some lenders tend to provide a limited number of loans as they provide service in multiple states. Local lenders will provide basic loans (Conventional, FHA, VA) but also state specific products that will benefit you (i.e. down payment grant assistance programs).
  4. What happens if the lender makes a mistake? Will they correct the issue and compensate you?   It happens, we all make mistakes. A good customer service provider will fix it with the least amount of burden to you.

Once you’ve narrowed your prospects down to one lender, it’s wise to shop their offer around to the other lenders. They can evaluate whether or not they can meet or beat the other lender(s). Once you’re satisfied you have chosen the right lender, have them pre-approve you for a loan and then you are ready to go shopping for a home and start making offers!


About the author: Sean Gilliam is a Realtor® with RE/MAX Alliance in Northern Colorado and is a Certified New Home Specialist™.  Sean can be reached at seangilliam@remax.net or by phone at 970-313-6706.  For additional articles see Sean’s blog or to search for properties see his web page.

Interested in buying a home or selling your current home?  I am committed to your success.  Give me a call at 970-313-6706 to get started.

Things to do in Longmont this October

Looking for fun and interesting things to do in Longmont this October?  Below is the short list.  If you’re looking for more information on Longmont and all there is to do, check out visitlongmont.org.

Click on the link below for a larger image.


About the author: Sean Gilliam is a Realtor® with RE/MAX Alliance in Northern Colorado and is a Certified New Home Specialist™.  Sean can be reached at seangilliam@remax.net or by phone at 970-313-6706.  For additional articles see Sean’s blog or to search for properties see his web page.

Interested in buying a home or selling your current home?  I am committed to your success.  Give me a call at 970-313-6706 to get started.

Things to do in Longmont this August!

Looking for fun and interesting things to do in Longmont this summer?  Check out this list for the month of July.  For more events, check out visitlongmont.org.

 


About the author: Sean Gilliam is a Realtor® with RE/MAX Alliance in Northern Colorado and is a Certified New Home Specialist™.  Sean can be reached at seangilliam@remax.net or by phone at 970-313-6706.  For additional articles see Sean’s blog or to search for properties see his web page.

Interested in buying a home or selling your current home?  I am committed to your success.  Give me a call at 970-313-6706 to get started.

Longmont Events in July!

Looking for fun and interesting things to do in Longmont this summer?  Check out this list for the month of July.  For more events, check out visitlongmont.org.

 


About the author: Sean Gilliam is a Realtor® with RE/MAX Alliance in Northern Colorado and is a Certified New Home Specialist™.  Sean can be reached at seangilliam@remax.net or by phone at 970-313-6706.  For additional articles see Sean’s blog or to search for properties see his web page.

Interested in buying a home or selling your current home?  I am committed to your success.  Give me a call at 970-313-6706 to get started.

Scrumptious – Longmont Restaurant Review

Scrumptious…it’s all good!

Looking for great homemade ice-cream or hard to find candy?  Come to Scrumptious in downtown Longmont at 508 Main Street.  All of their ice cream is made in the store with natural ingredients.  They even take requests for specific flavors of ice cream you may fancy.  If they can make it, they may have it for you the next time you come in.

They also carry all sorts of candy from old-world, vintage styled candy to all the new candies on the market.  If you’re looking for bottles of soda from yesteryear, they have plenty of those too.  They even have a food truck that will deliver ice cream to your special events!

The shop has a warm, retro feel to it.  There is seating inside and on the sidewalk out front.  Like any good ice cream shop, you can sample their ice cream flavors for free.  Their servings are very generous.  The kids size was quite enough for me while my wife and daughter split one together.

It’s located in the heart of Main Street Longmont and is a great stop for those hot summer days or for that necessary craving for something sweet.  Check out their shop in Olde Town Arvada at 7523 Grandview Avenue.

 

Here’s a link to their website for more information: Scrumptious

 


About the author: Sean Gilliam is a Realtor® with RE/MAX Alliance in Northern Colorado and is a Certified New Home Specialist™.  Sean can be reached at seangilliam@remax.net or by phone at 970-313-6706.  For additional articles see Sean’s blog or to search for properties see his web page.

Interested in buying a home or selling your current home?  I am committed to your success.  Give me a call at 970-313-6706 to get started.