Real Estate Trends in 2014

Predictions and estimates of real estate trends in 2014.

More Homes Will be Available

If you had trouble in 2013 with the diminished real estate market, this 2014 trend will be a breath of fresh air for both buyers and sellers. More homes will be on the market this year, returning the housing inventory to a more regular level. However, in many areas, homes quickly get sold and they don’t stay on the market for a long time.

Mortgage Rates Will Rise

Predictions are that mortgage rates will be up to 5% by the end of the year; while this means homes will be a little more expensive to finance monthly, 5% is still very low. The silver lining? Increased mortgage rates means mortgages should be easier to get. Lenders’ refinancing business will decrease, forcing them to compete for buyers by loosening their lending requirements.

Home Prices Will Rise

Online sites like Zillow and Redfin are predicting that home prices will rise between 3% and 5% in 2014. While this is a plus for sellers, it’s not the greatest news for buyers. Sellers know that because of the smaller market and quickly rising prices, buyers are more eager to find a home sooner rather than later.

Ownership Will Decline

In 2014, homeownership rates will fall below 65%. With home affordability declining and mortgage rates increasing, along with income levels that just aren’t keeping up, it is predicted that the number of homeowners will drop.

People Will Move

With prices on the rise, some will put their properties on the market and consider downsizing.

Apartment and Condo Developments Will Drop

Following an increased demand from homeowners-turned-renters in 2013, there may have been too much multi-family construction that year. Now that an emerging desire for homes has returned to the market, the demand for apartments is expected to quiet down in 2014. Along the same lines, condo development will be put on hold since market conditions for condos haven’t been favorable in recent years.

Foreclosures Will Decrease

2014 will continue to see waning foreclosures, a trend the market has seen since 2012. This trend should continue with the overall housing recovery.

Reasons to GET Your Home on the Market

Waiting for a reason to list your home for sale on the market? There are more reasons this year to list your home on the market. If you’ve been following the market, then you know that it is in a slow and modest recover. 2012 was the start of the first signs of improvement that were consistent in years. 2013 has continued that trend, and the market is in an upswing. The Colorado market is becoming a seller’s market, and homes are going fast.

Inventory Supply is Low

For the past five years, Denver, Colorado has always sold about 4K homes per month. Many homeowners faced financial distress sending their properties into foreclosure. In years past, the market has been flooded with foreclosed homes and short sales. In 2012, we saw fewer foreclosed homes on the property, and 2013 is even better. Interest rates are at historic lows, giving buyers more incentive to purchase, now. The economy is more stable, homes are selling faster, and values are going up, and supply in inventory down, which benefits home sellers.

New Construction is Coming Back

For the past several years, the construction industry has been in a slump. In 2012, the industry picked up, and now in 2013 it is even better. With a recovering market, more builders are jumping back in, and home sellers will be more competition with new home construction in the picture- days on the market will increase, and resale pricing will stay down.

Interest Rates Are at Historic Lows

With the economy and housing industry in a slow and modest recovery, interest rates will continue to go up. Now is the ideal time to list your home for sale on the market as more and more home buyers are taking advantage of the low rates before they continue to go up. Since the fall of 2012, interest rates have already gone up, and they are expected to continue to do so.

Conditions are turning to a seller’s market. Home values rising, inventories low, interest rates low, the economy steady, and homes are building equity faster, making now a prime time to list your home for sale.

US Housing Market in a Slow and Modest Recovery Heading Back to Normal

According to a Fiserv (FISV) Case-Shiller forecast the market will experience a rise in home prices at an average of 3.3% annually in the coming five year period ending Sept. 2017.

The past five years have been anything but close to normal for the housing market.  2012 was the start to a slow and modest recovery with the year ending in a positive light.

During the past 15 years the housing market has been unpredictable with home sales and prices being crushed by crash psychology or boosted by a bubble mentality.  Since the bubble burst in 2006, home prices fell by 30.5 percent through Sept. 2012’s end.  This was a hard hit for the market, and one that hasn’t looked encouraging until this past year, and the forecast for the coming years.

Late in 2011, markets began to stabilize with a rise in home prices of 3.6 percent between Sept. 2011 and Sept. 2012. According to Fiserv out of 384 metro areas tracked, 62 percent reported a rise in home prices during the same period a year earlier with a rise from just 12.5 percent.

Among price gains some of the biggest were experienced by the hardest hit areas during the housing bust.  For instance, Sa Jose, California experienced jumped 12.5 percent, Detroit jumped nearly 16 percent, and Phoenix jumped nearly 21 percent.

Other areas were not so fortunate.  Long Island, N.Y., for instance experienced a price fall of 8.1 percent.  The median income also lagged in comparison to the rest of the US.  Valdosta, Georgia and Brunswick, Georgia were also down.

The year is expected to continue with an upswing in the housing market.  Home prices are expected to continue to climb in almost all metro areas.  Syracuse, New York is expected to climb 5 percent, Billings, Montana 5.5 percent, Santa Fe, and New Mexico 8.1 percent.

There are some big gains forecasted for the year, which is another contributor to the rise in home sales.

Market trends are positive.  Prices are still affordable.  Interest rates are at an historic low.  Home buyers and investors’ are more confident and housing inventory is in higher demand.

More Homes Coming on the Market


At February’s end, there were only 6,786 homes available on the market in the Denver, Colorado area.  This is the lowest number in available homes for sale in memory.

The start of 2013 was favorable with more new homes coming on the market.  The January and February 2013 new home listing amounted to 8,258 new listings.  The year prior 8,111 new active listings were recorded for January and February.  When looking at unsold home comparisons for January and February 2013 from 2012, figures are down by 32.7 percent.

While the unsold homes on the market are off when compared to the prior year the market is bringing more homes on the market in 2013.   A jump in contracts for homes of 23.9 was reported in January and February 2013 with a total figure of 9,464 when compared to that of 2012, which had a total figure of 7,636.

Other stats show that closings rose to 5,920 from 4,966 resulting in a 19.2 percent increase.

The market has been in a slow and modest recovery.  Now, we are experiencing a record number of sales.  There are a significant number of homes that are being brought to the market and the inventory is quickly picking up.  Homes are being purchased nearly as fast as they are listed.

According to Denver Coldwell Banker’s broker, Chuck Fetterhoff, a client listed his home with their office just under $200K and by the end of the day the house was shown 40 times and had a cash offer of $240K on it.

Lower priced homes are going nearly as fast as they hit the market for substantially more than the asking price.

There are homes that are failing to sale, however, and for these home sellers it is discouraging.  Buyers are grabbing what’s not over-priced and looks good.  Home sellers that appear to be taking advantage of the rise of home prices are often the ones left disappointed.

Those that are pricing their homes at market value or slightly below seem to be getting the quick sale.  Home owners that have their homes listed and they are not selling are finding it beneficial to take the home off the market, spruce them up, and re-list them.

How Do I Find a Buyer’s Agent?

“How do I find a buyer’s agent” is a common question among homebuyers.  Representation in the legal process to purchase a home is crucial for a majority of home buyers.  With that in mind, we thought that we would offer a few top suggestions regarding how to find a buyer’s agent.

How to Find a Buyer’s Agent

•    Ask your family, friends, or co-workers for suggestions about any real estate agents that they may know who they would recommend.
•    Look for realtors in your local area.  Your local paper, the Yellow Pages, and the Internet are all ideal sources to find local agents.  Consider the company’s advertising, their history and professionalism, and any testimonials that are offered.
•    Select a few companies with a solid reputation.  Let the company know what you are looking for in a real estate agent and ask them to make a few recommendations.
•    Interview agents.  Ask questions, and determine their skills.  You should feel comfortable with the agent.

What to Ask a Prospective Agent

Q.  How long have you been a real estate agent?
Real estate agents with experience are typically the best choice.  They have experienced the real estate market’s ups and downs and have acquired the skill to negotiate.  However, you want to be certain that they have the time available to dedicate to your home search- which is often a benefit of a fresh real estate agent.

Q.  Are you a full-time real estate agent?
The benefit of a full-time real estate agent is that their focus is 100% on real estate.  Full-time agents typically utilize the latest technological advancements and developments, as well.

Q.  Have any clients ever filed a complaint?
If you find that a complaint has been filed against them, then ask for all the facts.

Q.  Do you have referrals I can contact?
Ask for references and by all means, call them.

Q.  How much time will you spend with me?
If you are only available on certain days of the week, or certain hours, than you need to ensure that the real estate agent works those hours.

Q.  Do you work as part of a team?
If the real estate agent is part of a team, ask if other agents will be showing you homes, as well.

Q.  How many buyers have hired you in the last year?
If you find that the agent does not have a high volume of buyers he / she has worked with, then this may be an indication that they prefer to work with sellers, which may be where they are best.

Q.  Are you a specialist in the area I want to shop?
Agents that specialize in the area where you are shopping for a home, will be a benefit.  Ask the agent if he specializes in the area and what is his specific knowledge.

Q. Do you work in my price range?
Ask the agent if they work in the price range that you are shopping for.  For example if you are looking for a home in the $200K price range, and the real estate agent work in the high end price range, the agent won’t likely be a good fit.

When you interview agents you should be attracted to their experience, communication, and personality.  Communication throughout your real estate experience is vital.
With the right agent, the buying process is less stressful.

Should You…or Shouldn’t You? Things to Consider when You Sell Your Home

There are many factors homeowners consider when it comes time to put their home on the market- should you list the home “For Sale by Owner?”  Should you put a lot of work into the home in order to improve its value before you place it on the market?  Should you wait until peak season to put your home on the market?  There are many things to consider.  Let’s take a look at a few.

Home Improvement Tips

Home improvements are one of those “Should I, or Shouldn’t I” questions. The real estate market has been improving steadily with many predictions that the recovery will continue this 2013.  Home improvements will help your home to stand out above others on the market.  It is important that you carefully calculate high dollar improvements, repairs and upgrades and weigh to ensure that they will add value to your home (your real estate agent can help you here).   Following are the top home improvement projects that attract buyers.

1.    Painting.  A fresh coat of paint is one of the easiest and cheapest home improvements you can make that will attract buyers.  A fresh coat of paint gives the appearance that the home has been well cared for and gives the home a fresh smell. To attract the largest volume of buyers, paint in neutral colors.
2.    Clean or replace the carpets.  Stained carpets and / or carpets with odors diminish the value of a home, the appearance of the home, and don’t sit well with potential buyers.  Dirty carpets are not welcoming, and give they give the impression that the home was not well-kept.
3.    The kitchen is one of the biggest factors in a home for home buyers.  No matter what the layout or appliances in your home, your kitchen should be updated.  A fresh coat of paint, or finish to the cabinets, updated fixtures, and new lighting will all enhance the appearance of the kitchen to attract more buyers.  If your appliances are outdated, then consider new energy efficient, stainless steel appliances.
4.    The exterior of your home should be in stellar condition as this is the first impression of your home that homebuyers will have.  Power wash the exterior of the home, the sidewalks, and the driveways.  Paint and repair the exterior if necessary.  Mow the lawn and have all trees and bushes trimmed.  If your home has decks and patios, consider refinishing the deck and staging it for the homebuyer.
5.    Bathrooms are another room in the home that should be immaculate.  Re-caulk and re-grout the showers, sinks and tubs.  Also stage the bathroom with fresh scented soaps and personal hand towels.

Should You Wait Until Peak Season to Sale?

Peak season is during the summer and fall, and a common question among homeowners is whether they should wait until peak season to sell their home.
One factor that home sellers have to consider is that there are buyers at all times of the year.  While many real estate agents may advise to wait if the home seller is not in a rush to sell their property, with the right agent, anytime of the year can be beneficial.

Should You List Your Home For Sale by Owner?

Selling a home “For Sale by Owner” means a substantial savings.  The process is a legal process, and there is a lot of money involved, and it will be necessary that the seller has specific knowledge before he / she places the home on the market.

Home sellers will need to possess market knowledge in order to ensure that they properly price the home and use marketing strategies to sell the home.   The home seller will need to have good communication skills to interact with potential home buyers and will need to have good negotiating skills.  They will also have to detach themselves emotionally from their home, as an emotional connection to the home can stand in the way of one’s ability to sell the home.

The advantages of a real estate agent are that the agent is an expert in market knowledge and expertise.  Agents specialize in local real estate markets and have the tools to market the property in multiple channels thus bringing in high volumes of potential buyers.  Real estate agents act on behalf of the seller in each step of the process, from helping to stage the home, to setting a price, to showing a home, to negotiating the deal, to closing the deal.  Sellers who don’t have specific knowledge, or the necessary time or skill to show the home, will benefit from the assistance of a real estate agent.

Warning Signs of a Bad Neighborhood

When you shop for a new home, the neighborhood is an important consideration.  Knowing the signs of a bad neighborhood can save you from a tremendous amount of heartache, including purchasing a property that is not worth its value.  Following are warning signs that the neighborhood is bad.

Vacant homes. If the neighborhood has a lot of foreclosed, neglected, or if it is vacant you should consider this a warning sign.  Empty homes and buildings can result in a lower market value of properties.

Unkempt yards are another sign of a bad neighborhood simply because this shows a lack of pride on the part of the homeowners.  The exterior of the home should be clean and well maintained.

Also, steer away from neighborhoods that have cars kept on the lawns and that are high in graffiti.

The neighborhood should show signs of residents!  If you don’t see anyone walking around the neighborhood or kids playing then this is a
sign that the neighborhood may not be safe.

Few or vacant businesses. When there are few or vacant businesses in the area, then there are many customers.  This is a sign of a rundown area.  Also, take a look at what type of businesses are in the area.

Property values that show a downward trend. A sure sign that the neighborhood is declining is a decline in property values. You’ll find that when a neighborhood is going bad, the homes don’t appreciate as well.

An unusually high amount of rental properties.  If the neighborhood has a large number of renters, you may find that the neighborhood / homes are not as well maintained.  Renters don’t seem to have the interest in a property like the actual owner.

A lot of police patrolling the streets. One sign of a high crime neighborhood is a lot of police cars.  Typically speaking, it means that there is a high crime rate.  The crime rate is something you always want to check out before you move into a neighborhood.

Expect Colorado to Add Jobs in 2013

The forecast looks good for the addition of jobs in Colorado State this 2013!  It is expected that 35K new jobs will be added this year in various sectors.  Yes, the economy is still uncertain, but, like the housing recovery, things continue to look good.

Summit Economics in Colorado Springs senior partner, Tom Binnings, was among the speakers who discussed his forecast for 2013 at the Colorado Business Report’s 2013 Economic Forecast.  The event was held at the Northern Colorado University and 460 people attended the event.  Talk focused on the energy and health care, real estate and banking industries in Northern Colorado.

According to Binnings, there would continue to be a bit of uncertainty not only because of the current economy, but, because of the way in which the US will handle its national debt.  Binnings continues that we will see improvements in sectors like homebuilding while sectors such as retail would have a difficult year.


Joe Bonner, Community Banks of Colorado president discussed the topic of future lending this year.  He stated that we’ll likely see more loans issued this year, but, banks should be certain to lend “prudently.  He added that the days of issuing loans to the candlestick maker, the baker, and the butcher are long overdue.

Bonner also discussed the issue of uncertainty at the national levels that banks are confronted with.  He claims that with proper management of their money, they should not have a problem nurturing economic growth in both a responsible and sustainable manner.
Northern Colorado is among the lucky US States due to having exceptional economic fundamentals which are among the best in the nation.

Real Estate

Michael Ehler of Realtect Commercial Real Estate states that the real estate market should continue to improve.

Ehler forecasts that financing rates should remain attractive which should nurture continued transaction activity.

According to the presentation high rents and low vacancy rates will continue in the multifamily sector where vacancy rates have been below 5% all year, as well as, in retail space, particularly in Downtown Fort Collins and in Loveland’s Centerra development.

Industrial space in Weld County continues to be at a premium, making it likely for the addition of some new construction, if financing is obtained.  In Greeley, the Leprino cheese plant is expected to open its third phase which will not only boost activity, but create new jobs.

Health Care

Donna Lynne of Kaiser Permanente stated that most changes in the health care industry will occur in 2014.

According to Lynne, although Colorado State has the slimmest population, it does not have the healthiest and the state’s health care costs are among the top one third of the nation.  Lynne also states that with the Affordable Care Act more employers will be offering their employees health coverage.

It is estimated that 700K more Colorado residents will be eligible for Medicaid with its expansion or will enroll in new insurance exchanges.

It is projected that with the Act, the industry will feel a lot of turmoil according to Lynne.

According to Greg Pachner of Noble Energy Inc., a gas and oil company based in Houston, it is expected that an annual growth rate will result from the Niobrar shale formation in the DJ Basin.  This projection is expected to be  at a 20% growth rate over the next five years.

He predicted the Niobrara shale formation in the D.J. Basin will fuel a compounded annual growth rate of 20 percent through the next five years.

The company, which bills itself as the largest producer in Northern Colorado, has reserves of 2.1 billion barrels of oil-equivalent in the region, he said.

“It’s a premier oil play that has outstanding well economics,” he said.

Better Business Bureau Word of Advice- Start 2013 with Strong Passwords

One means consumers have to protect themselves, according to the Better Business Bureau is through the strong use of passwords.  The BBB suggests with the new year, you should also change all of the passwords for your online accounts, especially if the password is “password!”

According to a study by Splash Data, “password” is one of the most common passwords of 2012.  According to experts, net users should change their passwords every six months; but, each three months is preferred.

One suggestion to create your new passwords is to take a phrase or sentence that you know well and to take the first letter of each word.  Then pick out your favorite numbers and insert them into the letters.

If your accounts need separate passwords some experts say that it is best to use one strong password with seven or eight characters and a combination of letters, symbols and numerals.  Other experts claim that each account should have a unique password.  Experts are experts because they have studied the statistics and know the facts, and it is likely a good idea to listen this 2013 especially if we don’t want our identity stolen.

Colorado Welfare Programs

Colorado needy families are provided assistance through various state welfare programs.  Most of the programs offer conditional on a temporary and conditional basis and the eligibility criteria for individual programs vary.  Social services that are available to individuals and families include medical and utility assistance, housing assistance and cash assistance.  For anyone who is interested in a charity cause, Colorado welfare programs are a great choice, and one that just might make the difference in a life of an individual, not to mention, a child.  There are many young families with children that are in need, and even a small donation will help to make the difference in their lives.

Colorado Welfare Programs

CDHS – Colorado Department of Human Services

The CDHS offers a number of welfare programs that are designed for youth and adults which include assistance for housing and homeless, foster care, child welfare, and food assistance.  Another service which the Colorado Department of Human Services offers is the “child health plan plus” program which is insurance cover for pregnant women and children in Colorado State that is offered for a low cost.  The plan is for those who are in the middle- they cannot afford health coverage, yet they do not qualify for Medicaid due to their income earnings.  The program is based on the number of household members of the family and family size.  Other programs include programs that are offered through the Division of Againg and Adult Service which are available to adults 18 years and older with functional impairments or disabilities.  The Colorado Department of Health Services also offers adult welfare programs which include drug and alcohol abuse assistance.  All those who are eligible for assistance will receive a number of transportation services, nutrition services legal assistance and more.

TANF – Temporary Assistance for Needy Families

Needy families with children may be provided assistance through TANF.  TANF is a federally funded program that is delivered in partnership with “Colorado works” and is designed to assist families in need.  Assistance is based on the income and size of the family, and families in need should they qualify, can receive assistance through the program for up 60 months.  Families that qualify and receive assistance must participate in work related activity training such as community or volunteer service, educational programs or job skills training and seek employment.

AHFY – Alternative Homes for Youth

Alternative Homes for Youth opened its doors in 1976 in Greeley, Colorado and has helped youth across Colorado who have been victims of poverty, neglect or abuse.  The AHFY provides housing assistance for the young as well as counseling services, educational programs and support groups.  On the grounds of the facility is a treatment center for all youth who have been traumatized or abused.  Independent living services are also provided. AHFY male adolescent treatment includes psych educational services, family therapy, behavioral group therapy, and GED preparatory classes.