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New Home Sales Slow Despite Lower Prices

There’s a national housing crisis going on right under your nose, and this is pushing home prices downward quite quickly. Despite these low prices, home sales are slower than expected for a few reasons. Experts and economists agree – things may be moving toward a new trend.

A Slow but Steady Decline

A report provided by the US Department of Housing and Urban Development in conjunction with the US Census Bureau shows just how slow home sales have become. In April 2007, buyers purchased 569,000 new homes across the country. That’s an 11% decline from the month before. This number also accounts for an increase of just half a percent over April 2016’s numbers. There are several reasons for this, and economists seem to think a combination of factors led to the sharp decline in new home sales.

one story home 300x188 New Home Sales Slow Despite Lower PricesNew Home Sales and the Average Budget

Just as sales were down in April, so were overall home prices. The national average fell in April by about 3%, making the average home price $309,200 during that month and by nearly 4% from April of last year. Despite this, new homes simply aren’t fitting Americans’ budgets – especially if they’re first-time buyers. In fact, the average price of an existing home was just $237,800, which is 30% less than the cost of a new build. There just aren’t enough homes under the $200,000 price range available to moderate-income families.

The Impact on the Denver Area

The Western part of the country is seeing the biggest impact from significantly slower new home sales. Per the same survey, sales dipped just over 23% from March to April 2017, and they were down 13.7% over April 2016 numbers. This is much slower than other parts of the country during that same timeframe.

  • Northeast – Sales in the Northeast were down 7.5% from March to April, but were down only 5% from the previous year.
  • South – Sales in the south were up 4% annually, but down just 4% from the previous month.
  • Midwest – Month-to-month sales dropped 13% from March to April but were up overall from the previous year by 19.7%. This marked the most significant annual increase in new home sales in the country.

Will There be More Affordable Homes?

Builders seem to be constructing more luxury homes and higher-end homes in the $200,000 to $299,000 range because those are the homes that sell. What’s more, increasing labor, land, and material costs make it difficult for builders to create homes spacious enough for the average American family for less than $200,000. It’s far cheaper for Americans with low to moderate incomes to purchase existing homes, and that’s the route many people are taking. Builders aren’t likely to focus on building new homes for these budgets except for in places like the Midwest, where it seems that more people are moving toward the new home trend.

While there’s no shortage of homes for people who are considered upper-middle class and have above average incomes, the number of new builds being constructed for low to middle class incomes has slowed significantly. New home sales are on the decline everywhere for several reasons, and according to the economists, this may be the trend for many years to come.

The Housing Market Slump Still Exists in Some Locations

During 2016, home values climbed in 96 out of the 100 biggest metro areas across the country. This is great news for the US economy, but there are a few places where the housing market slump still exists. Even as home prices continue to soar to near-record highs, sellers in other parts of the country are struggling to find buyers.

2017 HVAC prices 300x200 The Housing Market Slump Still Exists in Some LocationsPrices are Rising

While home prices continue to rise due in part to the national housing shortage, they still haven’t returned to the same values that existed prior to the housing market slump. For example, Harvard University publishes an annual report called the State of the Nation Housing Report. In it, statistics showed that home prices did climb 5.6% through 2016. This is great news, but when you consider inflation, which continues to climb thanks to economic success, the outlook is a bit different. Home prices were right at 15% lower than they were before the crash, even after climbing 5.6% through 2016.

Where is Recovery Slower?

In 97 out of 100 of the largest metros in the country, home values climbed. Of these, though, only 41 reached new highs. Values in 32 locales actually decreased 15% when figuring for inflation, and while homes in metros along the East and West Coasts saw the biggest increases (more than 20% since the turn of the millennium), the Midwestern markets failed to meet expectation. While coastal metros seem to get more publicity than their inland counterparts, it’s areas just like the Midwest that make up the crux of the housing market – and those areas are still slowly recovering from the housing market slump.

Poorer Neighborhoods Recovering at a Crawl

Some of the poorer neighborhoods in the country are faring the worst at the start of summer 2017. On average, these areas were nearly 18% under where they were before the housing market slump compared to just over 3% for wealthier areas. Another reason why poorer areas are still suffering has to do with supply and demand. Because there’s not as much wealth in these locations, home tend to sit on the market far longer, which inevitably drives down their prices. What’s more, based on their locations, home values themselves are lower than in other parts of the country.

New Construction is Slow, Too

In the southern part of the country, new construction is booming – it went up 84% in just five years. However, in some parts of the country, which include the Northeast, and especially along the coast, construction has slowed down because of the cost of materials and land. Out West, in places like California, Phoenix, Las Vegas, and even Denver to an extent, new builds are anywhere from 40% to 80% below the peak prior to the housing market slump. Things are improving, albeit slowly.

While most of the country has seen the worst of the housing market slump and is well on the road to recovery, poorer communities, especially in the Midwest, are struggling to gain solid ground. There are improvements, however small, and new opportunities along with less stringent credit requirements may just help people in these locations become homeowners after all.

Things to Consider When Buying a Second Home

Whether you live in Denver and you’re thinking of buying a second home elsewhere, or you want to buy a second home in the Denver area, there are a few things to keep in mind to make sure the entire process goes as smoothly as possible. Here’s what you need to know when buying a second home.

Do You Know Your Long-Term Wants and Needs?

Buying a second home should never be an impulse decision. While it may seem like a great investment, there’s a lot that comes along with being the owner of two separate homes. You’ll need to think about several things, including how you plan to use the home, whether you want your second home to be your retirement home, and even whether you can rent it out when it’s not being used. These things will all factor into your decision, so be sure to carefully consider them before you buy.

get rich with denver real estate 300x169 Things to Consider When Buying a Second HomeDo You Like the Location?

While you may find a gorgeous house that you absolutely love, chances are good that you won’t love it for long if you can’t stand the area. Before you sign the paperwork, take the time to explore the location, including the immediate neighborhood and the “downtown” area, if applicable. Consider everything from the crime rate to the local restaurants, and this will help you make a better decision about your second home.

Is Your Real Estate Agent Local?

If you live in California but you want to buy a second home in Denver, it doesn’t really make sense to have your California real estate agent help you find a home. After all, he or she won’t know the area and the housing market as well as a Denver real estate agent will, which can put you at a disadvantage. When buying a second home, make sure you hire a reputable real estate agent who is from that local area. This way, you have someone on your side who knows the best locations and the best prices.

Do You Understand the Extra Expenses?

When buying a second home, you’ll need to worry about much more than an extra mortgage payment. You’ll have higher homeowner’s insurance rates (especially if your second home is in an area prone to flooding or hurricanes), more taxes to pay, and even increased responsibility for upkeep and maintenance. Now you’ll have two roofs to inspect, two fireplaces to clean, and more. Make sure you consider this carefully before making your purchase.

Can You Rent the Property When It Isn’t in Use?

If your second home will serve as a vacation home, either permanently or up until you retire, you may want to consider renting it out for the extra income. This can help you cover your mortgage payments, taxes, and maintenance expenses along the way, but for some homeowners, renting isn’t worth the headaches. You’ll have to be very careful about who you rent to, and you’ll also need to take a trip to inspect your home now and then.

Buying a second home is certainly exciting, but unless you’ve thought things through completely, you might find yourself in over your head. The considerations listed above will help you make a better choice about your purchase, both now and in the future.

Watch Out for These 4 Real Estate Scams

With the growth of the internet and technology, real estate scams have become prevalent in many parts of the country – including right here in Denver. Understanding what’s real and what’s attempted fraud can keep you and your bank account safe. Here are the top four real estate scams in the country today and some tips for avoiding them.

#1 – Title Fraud

Title fraud occurs when a scammer uses falsified documents to pose as the owner of a home. He or she will forge documents to transfer a property into his or her name, and then take out a mortgage on that property. Once the criminal receives the money, he or she simply leaves the owner of the home with the debt. The best way to prevent this type of fraud – or at least minimize it – is to make sure you have title insurance on your property. This way, you’re covered should the worst happen.

impact of crime on real estate values 300x200 Watch Out for These 4 Real Estate Scams#2 – Foreclosure Fraud

While it’s not as common now as it was a decade ago, foreclosure fraud does still occur. In these real estate scams, fraudsters target people who own homes, but who are behind on their payments and facing foreclosure. In most cases, the criminal will offer the homeowner what seems like a legitimate consolidation loan designed to help them avoid foreclosure in exchange for an upfront fee and exchange of the title to the property. However, the criminal keeps all the payments, remortgages the property, and pockets the upfront fee, leaving the homeowner high and dry. To avoid this, be wary of any type of loan that requires upfront payments or a title exchange.

#3 – Online Home Sales

The internet is a valuable tool for buying a home, but it’s important that you take the time to thoroughly evaluate every single situation. One of the biggest real estate scams today involves online home sales. Scammers find homes that are listed for sale and then impersonate real estate agents from the company that has the home listed. They’ll pretend to take paperwork and get loan approvals, and then they’ll take the buyer’s money. Unfortunately, when the buyers go to move in, they find the home already occupied by the real buyer. Avoiding this scam is easy enough; make sure you contact the real estate company yourself regularly.

#4 – Seminars, Courses, and Webinars

Many homeowners (and would-be homeowners) can benefit from legitimate courses, seminars, and webinars that educate them on buying and investing in real estate. While there are certainly several very good speakers and teachers out there, there are others who have only one true intention – getting you to “invest” in a surefire thing that will make you money. In the end, you may find yourself out hundreds of dollars in seminar fees, and if you actually purchase one of these so-called “investment” homes, you may find yourself the owner of a money pit, too. Always do your research on the speaker before purchasing anything.

Real estate scams aren’t as prevalent as they were during the housing market collapse, but they do still exist. The best way to protect yourself is to stay educated and understand the different ways in which fraudsters will attempt to con you out of your money.

Heartbreaking New Homes: Is the Construction Industry Failing?

Toward the end of November 2016, new homes were going up across the country at a record pace. While this should signify a strong economy, the people who are buying those homes are being met with heartbreak. Unfortunately, contractors seem to be rushing their way through the building process, which is causing some significant problems for buyers – even in luxury homes. Here’s what you need to know about the construction industry today.

A Growing List of Problems

Homeowners across the country are noticing problems with their brand-new homes, and in many cases, these issues are catastrophic. For example, a homeowner in Washington, DC, has a rodent infestation because of issues with her home’s foundation. An entire neighborhood filled with luxury homes in Virginia is also dealing with defects; some homeowners are experiencing significant roof leaks – in brand new homes – while others are watching nails retract from the woodwork and pop through the paint.

Why Is the Construction Industry Failing?

It’s the same story across the country. Numerous homes in new subdivisions are experiencing issues, and many homeowners believe these problems are the result of shoddy workmanship. In fact, they claim that with tens of thousands of homes going up each year across the country, the contractors are rushing through the work. That’s the only way to truly explain the seriousness and significance of the problems. However, even though construction companies claim their homes are of high quality, many of these companies, including D.R. Horton, are setting aside millions of dollars for legal claims and arbitration.

Why So Much for Legal Claims?

D.R. Horton, one of the largest and most prominent builders in the country, set aside $426 million in funds to use for arbitration in 2016 alone. Although the company says it builds high-quality homes, this dollar amount leads many homeowners to believe otherwise. Often, companies who are sued by homeowners will work to settle their cases out of court. Advocates for homeowners say it’s best to take these cases to court, especially when the problems are numerous. An out-of-court settlement may not pay for future problems, and if you don’t read the settlement carefully, you may be stuck with paying for further damages out of pocket.

How to Make Sure Your New Build is Up to Par

If you’re buying a new home, it’s vital to hire your own private inspector to look things over before you sign your contract. These individuals work for you – not for the contractor – so they’re more likely to point out potential issues. Next, hire a lawyer who will review your purchase contract, including any warranties on workmanship and materials. Finally, research your contractor very carefully before buying or agreeing to build. Choose a company with a solid reputation for quality, and pay attention to their typical response times when problems are reported.

Although buying a newly-built home – or building your own – is one of the most exciting experiences of your life, it’s important to be very careful about the construction company you choose. While these homes may look beautiful on the outside, it’s what’s on the inside that really counts, and as homeowners across the country have experienced, the inside may have some hidden flaws.

5 New Year’s Resolutions for Homeowners

With 2017 just around the corner, you’re probably getting your list of resolutions ready and preparing yourself to meet them. Aside from losing five pounds, quitting smoking, or going after that promotion you really want, there are some New Year’s resolutions for homeowners that you should also consider.

#1 – Review Your Insurance Policy

Most of the time, homeowners simply buy their insurance policies and then carry on, never stopping to consider that there may be better options available to them as time goes by. One of your New Year’s resolutions for homeowners should involve reviewing your insurance policy, then comparing your premiums to policies offered by other companies. You may be able to save yourself some money, or even better, get more protection for your money.

#2 – Get an Energy Audit

An energy audit will provide you with very specific information related to improving your home’s energy efficiency, which can not only lower your energy bills, but can also reduce your carbon footprint. Your local utility company may offer free energy audits to their customers, but if they don’t, you can hire an auditor who works in the Denver area through the Energy Star website. Their recommendations can make a tremendous difference.

#3 – Consider Refinancing

Whether you’ve been paying on your mortgage for six months or six years, it’s a good idea to look around at the options that are available to you. Perhaps your credit score has improved and you’ll qualify for a better rate, or maybe a different lender can provide you with lower interest. Although you should consider a refinance very carefully as it does take some time, it’s always a good idea to review the current state of things once a year. That’s why it’s one of the most popular New Year’s resolutions for homeowners.

Parker Colorado 300x200 5 New Years Resolutions for Homeowners#4 – Get Started on Home Improvements

Whether you’ve been putting off replacing your siding, buying solar panels for your roof, or even building that gazebo for entertaining in your yard, make it one of your New Year’s resolutions for homeowners to get started right away. Most home improvement projects will increase the value in your home, which helps you build equity or gain a larger profit if you choose to sell.

#5 – Hire a Landscaper

Last, but most certainly not least, a well-manicured and stylish lawn will provide unsurpassed curb appeal, and when it comes to Denver luxury homes, that curb appeal can go a long way – especially if you’re interested in selling your home. There are dozens of experienced, professional landscapers in the Denver area who can help you design and build the perfect concept, whether you want a koi pond or a trickling stream in your backyard.

New Year’s resolutions for homeowners can improve the value of your home, make it more comfortable, and even save you money in the long run. Add them to your resolution list and ring in 2017 with the most beautiful and energy-efficient home in your neighborhood.

Buying a Home? Don’t Forget the Roof Inspection

When you’re ready to buy a luxury home in the Denver area, chances are good that you will hire a building inspector to ensure that homes’ structures are up to par. Although these individuals can certainly help you, the truth is that their expertise is limited in scope. It’s important to have a roof inspection before you buy your home, too, since many building inspectors do not include the roof.

Reasons You Might Need a Roof Inspection

If you’re buying a luxury home, one of the worst things you can do is assume that everything has been installed properly and well-maintained. Rather than simply take a seller’s word for something – “The roof was just installed a couple of years ago.” – hire a roofing contractor to inspect it. Some of the best reasons to conduct your own roof inspection include:

  • Ensuring that the roof and the roofing materials are still within their expected lifespan;
  • Estimating the actual age of the roof and the roofing materials;
  • Locating any potential problem areas, such as leaks that may be undetectable from inside the home; and
  • Looking for signs of proper installation, including the correct installation of flashing.

Although most sellers are honest about the condition of their homes, the truth is that roof issues aren’t always apparent until water is leaking into the home. That’s the number one reason why a roof inspection is a great idea; a contractor can find issues that may not yet have an impact on the home.

roof inspection 209x300 Buying a Home? Dont Forget the Roof InspectionBuilding Inspector vs. Roofing Contractor

You might wonder why you should hire a roofing contractor when you’re already having the property inspected by a traditional building inspector. The truth is that a building inspector can save you time and money, but only to an extent. A roofing contractor, on the other hand, will inspect only the roof. He or she is far more thorough than a building inspector, which means you can rest assured that any potential problems will be uncovered. Roofing contractors typically offer affordable inspection services, too.

What If There Is a Problem?

Most of the time, when a building inspector uncovers a problem, the buyer and seller can negotiate one of two solutions.

  • The seller repairs the problem. Oftentimes, when a problem with a home is uncovered either during a building or roof inspection, the seller will assume the responsibility of fixing the problem prior to selling the home.
  • The buyer negotiates a lower price. On the other hand, the buyer also has the option of negotiating a lower price with the seller. Following the roof inspection, a contractor should provide you with an estimate or quote for repairing any issues that were found. You can ask the buyer to renegotiate the selling price and reduce it by the amount of the quote, thus freeing up the funds for you to repair the issue on your own.

Although building inspectors play vital roles in ensuring the structural integrity of a home, a roofing contractor takes things a step further. A roof inspection is a great way to make sure you’re getting the best possible value for your money, whether you’re buying a luxury home in Denver or even a commercial property.

Interesting Statistics about the United States Real Estate Industry

Real estate isn’t typically one of those topics brought up at gatherings to trigger interesting discussion. In fact, most people find it a bit dry – borderline boring. There are some fun statistics to think about, though, and these are always good conversation starters.

#1 – Homeownership Has Nearly Tripled

Back in 1900, 75% of Americans living in cities did not own homes. Instead, they lived in rented apartments, homes, or flats. Today, about 68% of all Americans in urban settings own homes.

#2 – Benefits over Renting

The next time someone points out the benefits of renting, let them know they can save 20% to 40% over renting – even with maintenance and homeowner’s insurance factored in – over the course of the first four to seven years of homeownership.

real estate 300x200 Interesting Statistics about the United States Real Estate Industry#3 – The Impact on the GDP

The housing market makes up some 15% of the United States GDP (Gross Domestic Product).

#4 – Vacancies

Despite the fact that more people than ever before own homes, the number of vacant homes in the US is startling. In fact, back in 2015, it was estimated that 18.5 million homes sat empty.

#5 – Online Marketing

Nearly $16 billion per year is spent on internet real estate marketing alone. The total number is $36 billion, which includes all forms of advertising.

#6 – The Worth of Commercial Real Estate

Estimates show that the total worth of commercial real estate in the United States – buildings used as office space, rental apartment space, small businesses, and more – is $5 trillion.

#7 – Impact on the Job Market

The real estate industry is directly responsible for the creation and maintenance of nearly nine million jobs across the country.

#8 – The Largest Group of Homebuyers

Generation X buys more homes – and spends more on those homes – than any other generation, including the baby boomers and Generation Y.

#9 – Fighting Homelessness in Utah

The State of Utah may be on the right track. They’ve been giving homeless people free housing since 2005. Homelessness in that state has been reduced by 74% as a result.

#10 – Size Matters

People in the US often feel their homes are too small. However, the average square footage of an American single-family home is roughly 2,477 square feet. In developing countries, the average size of a single-family home is a mere 75 feet.

#11 – Real Estate Agents Are Important

If you choose to use a real estate agent when you sell your home, your chances improve by 120%.

#12 – Underwater Homes

Some 28.4% of all single-family American homes with mortgages in the US are underwater. This means that the families owe more on their mortgages than their homes are actually worth.

As you can see, there are plenty of interesting facts about real estate that can help you better understand the market, start conversations, join debates, and even make a difference in how housing works in this country. The amount of money spent, the number of people who struggle, and the impact the industry has on the job market are all very important pieces of information.

The Impact of Crime on Real Estate Values

There are many, many things that determine the value of a property. The year it was built, its exact location, the number of square feet, and even the type of appliances can all add to or subtract from a home’s value. The impact of crime on real estate is also substantial. Here, you can learn about the impact of crime on real estate values in just about any city across the country, including Denver.

impact of crime on real estate values 300x200 The Impact of Crime on Real Estate ValuesThe Secondary Impacts of Crime

When it comes to crime as a while, there are primary and secondary impacts. The primary impact of crime affects the victim of the crime and the loved ones of the perpetrator. For example, if someone robs a house, the people she robbed are primarily impacted. If she has children and she goes to jail for her crime, then her children are also primarily impacted. These individuals experience the direct repercussions of that crime.

Secondary impacts of crime are often harder to pinpoint. They are often economic in nature, and they ripple outward to affect hundreds, thousands, or even millions of people. For example, if a murder is committed in a neighborhood, residents will often move to different neighborhoods, which shifts everything from the dynamic of the community to the local economy – both of which are secondary impacts.

What Studies Say

The impact of crime on real estate values has been extensively studied in some markets, and the results are nothing short of shocking. The Center for American Progress conducted a study in 2012 that looked at the primary and secondary costs of homicide rates in eight US metro areas – Seattle, Milwaukee, Jacksonville, Chicago, Philadelphia, Boston, Dallas, and Houston. At the conclusion of the study, it was found that the total direct cost of homicide in those areas was about $3.7 billion per year, or an average of $320 per capita.

This very same study also focused on the impact of crime on real estate values as it relates to homicide. Using the data they collected as well as simple algorithms, the researchers determined that a 10% drop in homicide rates would increase housing values by 0.83% the following year, simply because the secondary effects of those crimes would be reduced, and fewer people would be afraid to live in their neighborhoods.

Other Types of Crime

The impact of crime on real estate values doesn’t stop with homicide, either. Any type of crime, violent or otherwise, can have a significant impact on the way people feel about their neighborhoods, which can ultimately drive values down. For instance, in neighborhoods with high prevalence of drug use, or in neighborhoods with high concentrations of sex offenders, people tend to feel frightened and move away. People won’t want to move into the vacant homes left behind, which causes their values to drop significantly.

The impact of crime on real estate values is substantial, but it’s also a secondary and indirect impact. Crime can affect local economies tremendously for this very reason, and it’s the bigger cities across the country – including Denver – that have the most to lose.

The Top Luxury Features in High-End Denver Homes

The most expensive homes in the Denver area offer up incredible beauty, innovative technology, and unique spaces. Although no two executive homes in the area are exactly the same, there are some luxury features in high-end Denver homes that popular among homeowners and buyers alike.

Spa Bathrooms

Spa bathrooms are one of the most important luxury features in high-end Denver homes for a couple of different reasons. Everyone enjoys the feeling of being pampered in a beautiful and relaxing atmosphere, and having it available to at home makes it more accessible and more convenient. Some of the most popular elements in spa bathrooms include towel warmers, fireplaces, dimmable lighting, and electronic faucets.

luxury features in high end Denver homes 300x150 The Top Luxury Features in High End Denver HomesCustom Wine Cellars

Wine lovers around the world love having their own wine cellars. Not only does this give them the perfect opportunity to store all of their favorite bottles in just the right environment, but it also gives them plenty of room to do so. Wine cellars are another of the most popular luxury features in high-end Denver homes, and some even have wine bars built right in.

Home Automation Systems

Imagine being able to turn off lights, close blinds, or even adjust your thermostat from the opposite side of the globe! That’s exactly what a home automation system does, and it’s one of the most coveted luxury features in high-end Denver homes. These systems offer incredible security for expensive properties, and they can be customized to automate everything from your blinds to your heated doghouse.

Gourmet Kitchens

These days, everyone loves to cook their own meals at home. In fact, even when hiring a personal chef, a gourmet kitchen is a must-have. They come with professional-grade appliances, lots of comfortable workspace, and even some other unique and innovative technologies such as warming drawers and “smart” refrigerators that let you know when you’re out of an ingredient.

Outdoor Kitchens

Outdoor kitchens are one of the most in-demand luxury features in high-end Denver homes these days. Denver offers a lot of aesthetic beauty, and many of the executive neighborhoods have spectacular views. Outdoor kitchens provide the perfect location to host a get-together of any sort. Consider adding a refrigerator, stove, and climate-friendly seating to complete the setup.

Home Theaters/Rec Rooms

Denver luxury home buyers are all about dedicated rooms for recreation, and that’s why home theaters and rec rooms are so popular in executive homes. Projection screens with the latest technology and heated recliners can go a long way toward providing a true movie theater experience. As far as a rec room goes, these often offer up pool tables, foosball, darts, and other pub games along with a fully-stocked wet bar and lots of comfortable seating.

Whether you are interested in buying a home, selling a home, or simply renovating your home to improve its value, it is important to consider the most popular luxury features in high-end Denver homes. These can not only boost the value of a property, but also provide unsurpassed comfort and beauty.