A New Generation Of Homebuyers is on the Scene! Part 2
November 14th, 2010 categories: Real Estate News
In Friday’s post, I was discussing whether Generation Y will value home ownership the way Baby Boomers have.
There was much discussion at the recent Realtor’s convention about this topic. In the airport, waiting to fly home to Denver, a group of us were discussing it again. A little while after we settled in to wait for the flight, I felt a tap on my shoulder and an, “excuse me…”
Rachel Krill, a Realtor from Yuma, Arizona said, “I couldn’t help but listen to your conversation. I’m 23 and I sell a lot of homes to Gen Y’ers!” Rachel was (and is) an impressive young woman. She exuded a confidence and business savvy that is rare for someone without the benefit of years’ of experience and hard knocks. She is enthusiastic about her chosen profession, and I can tell she’ll be a force to be reckoned with.
Rachel wrote me a guest post to reflect her sentiments about home ownership:
A few days ago, I was sitting in the airport, and overheard a few Realtors talking about the real estate market and trends. I was leaving New Orleans after the National Association of Realtors conference. There was one conversation that my ears could not turn away from. The agents were talking about the real estate trend for Generation Y!
I am a Gen Y Realtor (23 years old), and have been for five years, so I was intrigued by this conversation! They were talking about a blog by Tinus Swanepoel (son of a well known real estate speaker and trend writer, and a Gen Y’er himself.) In his blog he says there is a current market shift taking place, as Baby Boomers desire to sell off their real estate, but Gen Y’ers are not interested in buying (at least not in the same numbers and at a later age,) thus creating a stand off. He states they (Gen Y’ers) are “too into” their fast paced life style, taking their focus away from home ownership. He says home ownership simply is not on the top of their list.
I disagree with the premise! I am a Gen Y’er who owns 2 houses and I sell a majority of homes to Gen Y’ers (40-50 percent). I have a few reasons why I believe Generation Y’ers will not abandon home ownership:
1. Generation Y does care about wealth and making money. As much as we are into our smart phones, $300 jeans, Sushi, and fast paced lifestyle, our end desire is to have money to pay for this lifestyle. Buying a home is the fastest way to create and build wealth. When a Gen Y’er is educated about the benefits of being a homeowner, including building their asset portfolios, most of them are on board immediately with asking how do I do it?!
2. No matter whom you are, Baby Boomer or Gen Y’er, you need a place to lay your head. With home prices down and interest rates at a record low, owning a home is very cost effective. When a Gen Y’er is shown the cost of owning vs. renting, in some states it is much more beneficial to own, or very close to the same price as renting. When they see the comparisons they jump on board with the home ownership philosophy.
3. Because Gen Y’ers live this fast paced lifestyle, our idea of home ownership is not that of our parents. Please don’t compare us! We don’t dream of the plot of land with a home and the white picket fence, but it doesn’t mean we are abandoning home ownership all together. Our idea in owning a home is how much money we can make on it and how fast, while still having a place to lay our heads. We see it more as an investment ~ rather then a dream.
I am not lumping all Gen Y’ers in this category; however, from my experience most Gen Y’ers are interested in owning a home, but their reasons for purchasing a home, and their emotions involved in doing so, differ dramatically from that of the Baby Boomers. I speak to young people in our local schools and talk to them about owning vs. renting. 90% of them say they WANT to own a home one day…and soon!
Yes, times are changing, life is fast paced, Gen Y’ers seem to be glued to their gadgets, but they still want to own homes. Maybe for different reasons, but I do not believe Generation Y will abandon home ownership! And I, for one, will work my hardest to make sure it doesn’t happen!
So there you have it. Differing opinions. It will be interesting to see how this plays out in the future. I’m signing off now because I need to go into the MLS and begin a search for Denver homes for my newest clients. I received a web inquiry yesterday from a 27 year-old woman. She and her fiancee are ready to buy their first home. They need a single family house with a yard for their two dogs.
Gretchen Faber is a real estate broker in Denver, Colorado. She sells homes in all price ranges and to any generation.
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A New Generation Of Homebuyers is on the Scene! Part 1
November 12th, 2010 categories: Real Estate News
I traveled to New Orleans last week to attend the largest real estate conference in the U.S.
The National Association of Realtors annual convention had 20,000 in attendance this year.
This is always an interesting event. I meet brokers from around the globe and throughout the U.S. Talk this year was about the latest tech tools, virtual vs. traditional brokerage, short sales and foreclosures – and whether the next generation of adults will value home ownership.
There were several experts citing statistics about Gen Y and saying they won’t aspire to be home owners like Baby Boomers have. The sentiment is that these young adults are more mobile, more transient and scared away from the burdens of a mortgage by the economic crisis. This was an interesting perspective, but not in tune with my own experience. I’m currently working with two young couples who are buying their first home and sold another young couple their first home a few months ago.
As I was listening to the analysis of future home buying trends, I remembered Timothy Leary’s “turn on, tune in and drop out.” I remembered my parents taking me on peace marches. I remembered the hordes of people living in parks in San Francisco. I thought, “Bet those kids scared the sh.. out of a few real estate brokers back in the day.”
Then those Leary followers got married, had babies and found out they might be able to trust someone over 30. And they bought homes.
Several of us were in the airport discussing the premise that Gen Y won’t be home buyers. We were reminiscing about our own youthful days hitchhiking across Europe and putting off college for a year to work or travel around in trailers. We talked about how much older we were when we first married and had babies as compared with our parents. And we speculated whether this theory that Gen Y won’t buy into buying a house will prove true in 10 years. We were all boomers (with one Gen X) so we didn’t have a Gen Y to ask. Our Gen X representative said he thinks they’ll buy homes because they need a place for all of their stuff. He said they like stuff, tech stuff, but stuff nonetheless.
A little while later, an adorable young women reached out to me and said, “excuse me…”
The rest of this story will be continued in part 2!
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Top 7 Reasons to Buy A Home Now
September 6th, 2010 categories: Market Trends, Real Estate News
Have you considered buying a home this year? Did you toy with the idea of making that purchase while the tax credits were still in play?
If you missed out on the credits, did you get back on the sidelines? You may want to reconsider jumping in. After all, there are more homes coming on the market every day and you just may find the perfect house tomorrow.
Here are 7 reasons why buying today may be in your best interest and why home ownership is still important:
1. Home owners build communities - In the recently released report The Homeownership Gap in Current Issues in Economics and Finance, the Federal Reserve Bank of NY states that, “Because owners have a financial interest in their property, they have incentives to take measures that will maintain or increase the value of that property. Some of these measures—such as fixing a leaky roof—are closely related to the house itself. Others, such as investing resources in the betterment of the neighborhood and the community, have broader beneficial effects on the local area, creating what economists call “positive externalities.”
2. We still have a mortgage interest deduction in the U.S. - Many countries around the globe do not allow their citizens to take a tax deduction on any interest they may be paying on a home. In the U. S. we have a huge opportunity and benefit by the MID policy. It has increased buyers’ ability to leverage their purchase and to often pay less than renting. As long as buyers are responsibly leveraging, this is a policy that supports homeownership, and buyers should consider their potential deduction when making a decision between buying and renting.
3. Owning a home is an investment in family - In the 2010 National Housing Survey, Fannie Mae asked renters why they would consider purchasing a home. To renters, owning a home meant a safe place to live, a good place to raise children and would give them control of their own space. We’ve owned the same home since our boys started Kindergarten 11 years ago. I can’t imagine a better environment than the neighborhood where we live. The boys have grown up surrounded by trusted friends and neighbors.
4. It can be cheaper to own - In Denver, rental vacancy rates are low. Therefore, the rental rates that landlords can command are increasing. With today’s low rates, renting in many neighborhoods would be more expensive than buying.
5. Rates are low ~ Unbelievably low - When we bought our first home in 1988 we assumed a 9 1/2 % mortgage. We were absolutely thrilled with the rate and the 30 year term. Today, you can find a 30 year loan in the 3 to 4% range, and even 15 year mortgages are in the 4’s. You can buy much more house than you could three years ago when rates were 6.25%. And prices have dropped dramatically since then too! If this isn’t the time to buy, I’m not sure when is. If you aren’t buying, you should consider refinancing (as long as you haven’t used up the equity with liens or lost value to the point where you can’t refinance.)
6. Real Estate is still a great investment - If you’re in your home for the long term, your investment will likely out perform the stock market. Mike Mandel, the former chief economist at Business Week and currently at The Wharton School said, “We’ve just had the biggest boom and bust in real history in recent history. Nevertheless, real estate has still greatly outperformed the stock market over the past ten years.”
7. Buying a home gives you roots - most people want a sense of community, permanence and belonging. My brother is the proverbial rolling stone (I’ll probably never sell him a home,) but most of us want to be a part of something. To contribute to our neighbors in a way that short-term housing solutions just can’t foster. Bankrate.com recently surveyed homeowners, and despite the recent rash of foreclosures, short sales and the ongoing (but stabilizing) housing crisis those homeowners said they did not regret their decision to purchase their home.
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Real Estate Buyers Facing Greater Lending Hurdles
June 27th, 2010 categories: Real Estate News, Relocation Tips
Denver, Colorado – Buyers who want to finance the purchase of their home should rethink carefully what they do financially in the time between obtaining their first conditional loan approval and the time they close on their new home.
Lenders are facing more regulations for underwriting mortgages. These standards will certainly ensure that buyers will need to do more than fog a mirror to get a loan.
If you’re considering purchasing a home, here’s what you’ll need to know:
- The lender will be pulling another credit score about three days before you close. If you opened a new credit card, bought the SUV you thought you had to have to live in Colorado or decided to max out a credit card with your new appliances, beware – your credit score could be negatively affected. Don’t let that happen. Put off your big purchases until after the closing and don’t open new credit.
- Employment verification – yes, the lender has to do this again too. Three days before closing. Don’t quit your job before you buy your house!
- As I said in a recent article about credit scores, buyers’ initial scores need to be higher than ever to get the best rates. Make sure you handle any credit repair issues in the months prior to applying for a home loan.
The best advice of all is to utilize a loan officer who clearly knows the guidelines, and who can advise you throughout the process. Use a loan officer in the community you’ll be buying in. Out-of-state lenders rarely know or understand the nuances of closing loans in another state. We see more delayed and messed up closings with out-of-state lenders than for any other reason. Now, buyers themselves may cause delays (and be at risk of losing their deposit) if they don’t heed the warning to leave well enough alone when it comes to their credit and employment.
Look for your new house here: www.GretchensDenver.com and click “contact me” to ask for references to great local Denver loan officers.
| Discussion: 3 Comments »
Denver is Most Improved in U.S. Real Estate
June 18th, 2010 categories: Real Estate News
Bloomberg BusinessWeek reported last week that Denver’s housing market is “most improved.”
I think we’ll settle for that. We’ve always said here in Denver that our economy is counter cyclical, setting the trend up or down. If Denver is improving, then much of the U.S. will follow. Our real estate market statistics showed a slowdown in May from April, but we were still up over 20% from last year. That’s a dramatic gain in sales and activity.
My Great Grandfather founded the Miss America Pageant in Atlantic City to promote a lengthened summer season at his beach resort. Did you ever wonder why the Pageant was in September? Advertising, positive spin on his city, hotel guest-counts, paying guests in September.
But to the contestants, it was more than hotel guest-counts, it was a lifetime dream. They wouldn’t want runner up or most improved. But being most improved is fine for us here in Denver – we’re happy about it! We want to be most improved! We don’t need to be Miss America.
Patty Silverstein, Chief Economist for the Denver Economic Development Corporation, said in a seminar yesterday that official employment figures don’t include the self-employed. We’re officially losing jobs, yet we added 89,535 new residents to Colorado in 2009. Adding people increases the likelihood that housing demand will increase as well.
It’s true that sales slowed from March and April to May. The tax credit had a lot to do with pushing the summer business forward. But with solid growth our improving real estate market will continue the positive momentum. Most improved means setting the trend. Crack open the Champagne!
Then search for your next home at www.GretchensDenver.com.
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Homebuyer Tax Credit Ends in 30 Days. Buyers Get Off the Fence Today!
April 1st, 2010 categories: Real Estate News
This isn’t an April Fool joke. It’s a serious money matter.
Could you be at risk for losing out on an $8,000 tax credit, or a $6,500 tax credit? Could you be risking interest rate increases?
Those are your risks if you aren’t under contract for a property by the end of this month. Properties must be contracted for by the end of April and must close by the end of June to qualify for the tax credit. And the longer you wait, the more likely you’ll fall victim to rising mortgage rates and lose out on your own version of the white picket fence.
Spend some time researching Denver Real Estate on the internet, get pre-approved with a qualified and knowledgeable mortgage lender and then get a Buyer’s Agent to help you wade through the process of buying a home.
We are a nation of homeowners. Despite the recent hit real estate has taken, and the legions of homeowners who have lately become renters, buying a house is still the American Dream. Just don’t use your house as a cash-machine. It’s a place to hang your hat, kick off your boots and close out the world. It’s a place that if you’re frugal, you could own free and clear by retirement. Now wouldn’t that be the American Dream?
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The Case (Shiller) for Denver Real Estate
December 29th, 2009 categories: Real Estate News
The Avalanche aren’t number 1 this year. The Broncos certainly aren’t number 1. The Nuggets? Remains to be seen, but number 1 is unlikely.
Denver real estate is number 1. According to today’s release of the latest S & P Case Shiller Report, Denver’s real estate market declined the least. We’re number 1 because housing values went down just .1% from October of 2008. The rest of the 20 cities monitored by the report declined more than Denver year-over-year. Not one monitored city increased values year-over-year.
Actually, if you break our market down further, there are some serious rays of sunshine in Denver. The condo market jumped 50% in number of sold properties since last year. The average sold price for single family homes in November was up 9.5% to $265,498. The starter home price point is so busy that buyers are competing for properties.
Our high end market is still languishing. Most days lately, I’m hearing stories about a high end sale here and there. That’s good news, but these sales are almost always coming with big price concessions from sellers. You can read more about a local perspective at John Rebchook’s Inside Real Estate News Blog.
We’ve been saying for awhile that Denver is turning a corner. Since I moved here in 1982, we’ve been a counter cyclical city. We’re ahead of the curve in recovery.
What does 2010 portend? The first half of the year will be very good for real estate sales here. But after the tax credits end, and when the U.S. stops buying Treasuries we may be in for a bumpier recovery. Let’s hope that we’ve laid good groundwork with increased job growth and a stable local economy to stand the test of time.
In the meantime, let’s go skiing!
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Denver Colorado Real Estate | November 2009 Market Statistics
December 21st, 2009 categories: Market Trends, Real Estate News
Busiest December Ever!
That’s not an exaggeration. It’s December 21st and I just got an offer on a listing which went under contract today. Our office rocking. The contracts keep coming in.
And we all had a great time dancing to the King of Pop last week at our office party. The mood is light years away from the dreadful, scary, morose feeling everyone had a year ago.
Not to say that things can’t fall apart on a dime. We’ve learned that a few times in the past decade. But when the going’s good you need to embrace it.
The Denver real estate market is setting the tone for an excellent 2010. This will be a very different year and buyers and sellers should be prepared to adjust quickly.
Looking at November’s market statistics (Christmas cookies took over for timely posting) you can see that Denver’s inventory is extremely low. This is more than just a typical seasonal adjustment. It’s a reflection of sellers’ pricing reality and buyers’ pent-up demand.
Our market is up 23% from this time last year! That’s an incredible statistic. In the words of Steve Harney, “You have to be dumb or broke not to buy a house right now.” A new house, an investment home, a move up, a downsize – this is your time, baby.
The average price is also up just a shade from last month and over 5% from last year. Sellers – don’t expect this number to magically increase at a rapid rate. Prices will remain deflated for awhile, but as the market picks up steam, prices will too.
With average days on market at 81 days, inventory will continue to sell off quickly and buyers’ lament will be that there’s nothing to look at.
After January 15th -when the market breathes new life every year – we should see an increase in inventory, and an increase in sales. Properly priced and showcased homes will not languish on the market in 2010.
Happy Holidays to everyone! Thanks for reading LifeStyleDenver for two years. Keep coming back and let me know if you want to list your house or find a new home in 2010.
| Discussion: 6 Comments »
Denver Colorado Real Estate | October 2009 Market Statistics
November 13th, 2009 categories: Real Estate News
I’m a little late this month with the real estate market statistics for Denver. It’s been a busy month! Good news for buyers, sellers and real estate brokers.
Denver sales continue to show bifurcated results – low to mid range homes selling like crazy, higher end homes still languishing a bit.
Inventory numbers are down from September – over 18% down. Days on market is down too, indicating increased sales rates. Inventory naturally adjusts this time of year, but sales paces have increased for some segments of the market causing further inventory reductions.
Prices are up nearly 3% from a year ago, but still we’re down from last month. That’s likely a result of the mix of homes that are selling. In other words, it’s not so much that prices have come down nearly 5% since September, but more likely that number is influenced by lower priced home sales.
Look for inventory to stay low through the holidays, which will result in pent-up demand by buyers after the first of the year. Buyers are motivated by the tax credit and they’re looking for good inventory to hit the market.
If you’re a seller, use the next few weeks to get your house in perfect showing condition, and carefully price your house when you do hit the market. If you position your home to come in first place in buyers’ minds – looking beautiful and priced very competitively – you’ll be the house that sells.
We’re in the perfect storm for a huge real estate recovery. Denver has already been at the front end of the recovery and recognized nationally as a stable place to buy a house. With interest rates remaining extremely low, prices depressed after several down years, and a tax credit for many buyers, 2010 is shaping up to be a busy year.
Last month proves it. I’ve been happily busy – but never too busy to help you find your next dream home! Start your search on my search homes website.
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Homebuyer Tax Credit Extended
November 5th, 2009 categories: Real Estate News
The “first-time” home buyer tax credit was extended and modified today by Congress.
While there has been much debate here among Denver real estate brokers about the cost of the credit, there is no doubt that this move will help to continue to stimulate the recovering real estate market.
Homebuyers will now have two tax credits available. The original $8,000 for first time buyers – actually for buyers who haven’t owned a home in the previous 3 years. As well as a second credit available to current homeowners of $6,500. To be eligible, buyers must have lived in their current home for 5 out of the past 8 years.
The income limits for eligibility will increase to $125,000 for a single buyer and $225,000 for married couples. The maximum home purchase price will be $800,000.
The newest version was passed out of the House and the Senate today, and the bill sits on President Obama’s desk, waiting for his signature.
While the bill might be waiting overnight – don’t you wait! Get on my home search site and start house hunting. We can find you a terrific home and you’ll get your tax credit as soon as you file!
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