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Loveland, Colorado Market Update

280
Homes
91
Vacant Land
6
Farm & Ranch
2
Income
34
Commercial

Loveland, Berthoud, Colorado Median Selling Price
2015:  $312,472
2014:  $275,000:

2013:  $249,825
2012:  $229,547
2011:  $215,000
2010:  $215,000

stats

Considering a move to Loveland CO or any of these cities?  I can help.  Call Bev or visit www.westrealtynoco.com for more info.

 

Housing’s Hottest Markets: May 2017

Amid scarce supplies and high buyer demand, homes are selling fast across the country. Home prices are rising as well: The nationwide median home list price rose above $250,000 for the first time, realtor.com® reports. The median list price is 10 percent higher than a year ago.

According to the Manager of Economic Research at Realtor.com®, that with a record number of home buyers out there, this is officially the most competitive, fastest-moving spring housing market in decades. The median days on the market for homes on realtor.com® in May is the lowest since the end of the recession, and marks the first time that one in three homes is selling in under 30 days nationally.

The hottest markets nationwide in May continued to be centered in California, with the Bay Area seeing some of the fastest sales in the country and most viewings of listings from visitors on realtor.com®.   Here is Realtor.com’s full ranking of the hottest housing markets for May 2017:

top_20_mrkts_may17

So What is Happening in Northern Colorado?

The real estate market is constantly evolving. What is true one day may not be true the next. For example, this past winter many forecasts for the spring season predicted buyers might be scared off by rising interest rates and a lack of homes for sale.

However, now that spring has arrived, mortgage rates have actually come down a bit and the housing market has been among the strongest sectors of the economy.

Despite higher rates and minimal inventory, the housing market is performing well and trends going forward indicate conditions may become even more favorable. Every potential home seller needs to be informed of these facts.

On the one hand, lower inventory and higher mortgage rates suggest that affordability conditions will make it tougher for buyers looking for a house this year.  On the other, the job market, wages, and economic optimism have all been trending upward recently, which could help offset some of those challenges.  Buyer demand is still strong. In fact, both pending home sales and demand for loans to buy homes have recently shown an upswing.

While home price gains are expected to continue, the size of the increases are not expected to be severe. Therefore, affordability, the first driving force of sales, will remain attractive, and this should encourage those desiring to own a home to swell the ranks of buyers ever further.

The second driver for inventory to make a strong comeback is getting the news of those higher prices out to potential home sellers. The hope is this will cause them to think in terms of “Do I want to stay in the home that I’m in, or now that I have more home equity, do I want to move to a better place perhaps where there’s better schools, closer to where I work, or better amenities?”

Greater home equity will allow many home owners the breathing room they’ve been needing in order to make that decision to move up a much easier choice.

Meanwhile in Northern Colorado, 637 homeowners who made that choice sold and closed a home on average in 69 days this April. Median sale prices are currently at $319,357, evidencing those equity increases from April 2016, when the median sale price was $305,227.  Demand is being driven by first-time home buyers and for those in the market for a new home, home loan rates remain attractive despite recent market volatility.

 

 

Rehab or Rent Out? Real Estate Investment Tips for Beginners

 

With mortgage rates still hovering near historic lows, more people are turning to real estate investments as a way to build and preserve wealth. Whether you start fixing and flipping properties or buying and renting them out for monthly cash flow, either investment style can make your money work harder for you.

 

Before you start investing in real estate, it’s important to line up professionals to help you make offers when you find them. Among your team members, you will want to include:

 

            A savvy, local real estate professional

 

      A mortgage broker or banker to help you get financing

 

      A real estate attorney to write and reviewing contracts

 

      An appraiser who knows the market and will help you get a correct property appraisal

 

      An accountant who is well versed in real estate investments

 

      A good contractor, for rehabbing or repairs

 

 Then, you’ll need to determine your real estate investment style.

 

 Rehab or wholesale properties for short-term ROI

 

The advantage of flipping properties is that you can end up with a good return on investment(ROI) in the short term. For example, you buy a property for $100,000, and invest $50,000 into repairs. Once it’s rehabbed, your property is valued at $200,000, and you sell it for a $50,000 profit.

 

Once you know where to find rehab opportunities, you can easily repeat the process by reinvesting proceeds from a previous flip into the next property. This is where working with savvy real estate professional can help. They can help you find the right fixer-uppers that may be under market value. A Realtor will have access to many properties that may not be publicly available.

 

When you are evaluating a property, you will need to look at the whole picture to ensure it will bring you a profit once you resell it. Beyond the actual purchase price and rehab costs, your budget should include carry mortgage payments, property taxes, utilities, and insurance. If it looks good on paper, you can get your real estate team to help you quickly make the offer.

 

Buy-and-hold rental properties for monthly cash flow

 

If you find the right long-term buy-and-hold rental property, you can earn consistent cash flow each month. However, you’ll need to carefully review the operating expenses on the property and what tenants are willing to pay for the space to know if you’ll make or lose money each month.

 

Does your long-term investment make sense on paper? In other words, you will need to understand if your monthly cash flow will be positive or negative.

 

For example, say your total costs to buy a duplex was $20,000, including down payment and closing costs. You can rent each of the units for $600. Assuming your building is 100% occupied, you’ll make $1200 per month in income. Your expenses include mortgage payments, taxes, insurance, utilities, and management fees, and you want to set aside some cash each month for capital expenditures and routine repairs. You calculate that your expenses add up to $1100 per month. Once you subtract your expenses from your income, you’ll have a positive cash flow of $100 per month.

 

You can also add amenities, such as coin laundry and vending machines, to increase your potential monthly income. If your property has space to add a billboard, you can earn advertising revenue from renting that space, too. And when you decide to sell, your property’s value will likely have increased both from the overall rising property values and by the improvements you made to increase the cash flow.

 

Where should I start investing?

 

Contact us at West Realty by calling 970-631-7111 if you want to learn about investment properties in your local area. We can help you find the right properties that will fit into your budget and your overall goals.

 

 

 

 

 

 

 

Should You Buy a New or Existing Home?

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Maybe your dream home has the intricate details that you usually find only in older construction – wainscoting and crown molding in the interior, the front porch with a swing, an older tree shading the back yard, and the white picket fence.

Or maybe your dream home has all the conveniences of modern living – open floor plan in the living and dining spaces, large windows, connected, “smart” appliances and security systems, and minimalist design elements.

Whether you go for a brand new construction or an existing home, both types of properties have their pros and cons when it comes to purchasing. What type of home is right for you will depend on which factors are most important for your lifestyle.

Build your dream home with new construction

If you’re making a home purchase that’s still in the pre-construction phase, you may be able to customize many of the details. Many home builders will give you the option to add design elements that will give you the exact dream home you desire. If it’s a new subdivision, you may even be able to pick which lot you like best.

Very early in the building process, you may have more room to customize. For example, if the walls aren’t complete, you may be able to add extra outlets in each of the rooms or custom wiring for surround sound in the media room. Perhaps you could move the laundry room to the top floor instead of the basement. You might be able to get a separate mudroom entrance.

Later in the building process, you may be able to add marble countertops, an island, and custom cabinets in the kitchen. Your master bathroom could be upgraded with a steam shower, spa tub, and European fixtures. You will want to check with the builder to understand which features are included, and which ones are extra.

New homes save money with fewer repairs and more efficiency

Once your home is complete, all you’ll need to do is move in. New appliances will be under warranty for a few years if they need repairs, and will likely work well for several years without needing fixes. Often, new construction is under a builder’s warranty, so any repairs needed in the first year should be covered.

New homes often contain energy efficient and green appliances, like high-efficiency stoves, refrigerators, washing machines, heaters, or air conditioning units. These energy-saving appliances, along with good insulation and energy-efficient windows, will help you save money on monthly utility bills.

New homes also often use new building materials that require less maintenance — for example, using composite siding instead of wood, which doesn’t need annual repainting. You won’t need to spend as much to maintain your new home.

If you customized it during pre-construction, you won’t need to spend any money on renovations or upgrades for several more years. You can just enjoy it and not worry about saving for major home repairs.

What you need to do to make a good new home purchase

Before you put in your offer, do some research on the builder. Do they have a good reputation? What else have they built? Did their other new properties have issues such as poor construction or unfinished details?

You like the model home, but will you like where it’s situated? After you look at the home itself, come back to the neighborhood to see what it’s like at different times of the day. Walk around during the day and in the evening, and see how you like the area.

Brand new communities usually attract similar types of buyers—urban professionals, couples, or young families, for example. These will be your neighbors, so you’ll want to make sure that you want to be part of this new, homogeneous community.

You may also need to be flexible with your move-in date. Builders will only be able to let you move in if they can meet their construction schedule. If the wiring is delayed, the walls can’t be finished. And because there are so many construction tasks that are dependent on the completion of prior tasks, schedules tend to slip.

Get more variety and established neighborhoods with an existing home

Existing homes are those that have generally been built and lived in between the 1920’s and 1970’s. With existing homes, you will get more variety in home styles, as different types of construction have gone in and out of style throughout the decades. Within one neighborhood, you may be able to find a mix of different styles like Victorian, modern Tudor cottages, tract style, ranch or split-ranch, or contemporary homes.

Existing homes are situated in established neighborhoods, which may have more amenities nearby that a new home in a brand new subdivision may not have. Your new neighborhood may have restaurants, cafes, and boutiques within walking distance.

You might also have access to more supermarkets, dry cleaners, discount stores, and gas stations nearby. An established neighborhood might have a nice park, running path, or playground for the kids to enjoy. You might also be closer to a library or the post office.

Resale homes can be a less expensive purchase

If you’re considering a resale home, you may be able to get into a beautiful, unique property at a lower purchase price than a new home.

There are many more resale homes available than there are new homes — according to the National Association of Homebuilders, about 10 times as many. With such a large pool to buy from, the market for resale can be more competitive. You may have more room to negotiate the  selling price of the home. With a brand-new construction, you won’t likely be able to have the same kind of negotiating power.

Before putting a home on the market, sellers often make home renovations or remodel parts of their homes to make them more attractive to buyers and to be able to potentially increase the list price. If the resale home has a brand new, modern kitchen, an updated bathroom, or even a new roof or upgraded windows, you could end up getting a home that’s comparable to new construction without having to pay the potential more expensive new-home list price.

Existing homes have already been inspected at least once on the last sale, so you will know about any potential structural problems or repairs that have been made on the home. Knowing the track record on your potential home will help you avoid purchase mistakes—you’re much less likely to end up with a property that has a rotting roof, dangerous electrical wiring, or a crumbling foundation. With a new home, you could end up with incomplete construction or major issues that you didn’t know about because they weren’t yet documented.

What you need to do to make a good resale purchase

Before you go too far down the road to a purchase, you can protect your purchase by first having the home inspected. A good home inspector will document all flaws, no matter how small they appear. If the inspector finds any major problems, like foundation cracks or leaky roofs, you may be able to counter offer and get the seller to either fix it or reduce the selling price.

Even if the inspection doesn’t uncover any major issues, you will need to expect the unexpected. Older homes will eventually need replacement appliances, a new air conditioning unit, or a plumbing repair. As long as you know that before you buy a resale home, you can plan for surprise repairs.

With an older home, you may want to eventually remodel parts of it. Will you be happy living in your house while you’re doing major work on the living room or the kitchen? If you know that it would disrupt your lifestyle too much, you may want to consider whether you really want to buy an older property.

Whether you choose to buy a new home or an existing home, the best way to get started is to call us at 970-631-7111 or visit our website at www.westrealtynoco.com. We will have access to both new properties and resale homes that may fit your goals, and will know which neighborhoods will serve your needs.

 

concrete house, night sceneThe Compound Effect: Building Your Household’s Wealth

 

 Wealth is within reach for many people; however, according to a recent study, 63 percent of Americans said it’s not likely they’ll become rich.1 While younger people are more likely to say they’ll achieve wealth one day, only 34 percent of people aged 30 to 49 and 21 percent of people aged 50 or older say the same. There is no secret to becoming rich: it takes time, sacrifice and good financial sense. Here are a few ways to build your household’s wealth.

 

 Let Compound Interest Work for You

 

Compound interest is your interest earning interest. While the concept may work against you when you take out a loan to buy a car or use your credit card, it works in your favor when you’re saving money. For example, if your savings is growing at a rate of four percent, your investment will double in eight years and quadruple in 16 years. Your money will grow exponentially the longer you save: the more money you’ve saved, the more your money will grow.

 

 Tap into Your Home Appreciation

 

Experts expect home prices to appreciate 3.24 percent and grow by 21.4 percent cumulatively.2  If a homeowner purchases a home this year for $250,000, they could earn more than $40,000 in equity over the next five years. Although the home value of the average American family’s home is $165,000, home values vary by market.3 If you’re curious about the value of your home, give us a call!

 

 Build Equity in Your Home

 

One of the most compelling reasons to own a home is it allows you to build wealth over time. According to one study, the average homeowner has a net worth of $200,000, which is 31 to 46 times the net worth of the average renter.4 Saving for a down payment, especially if you plan to put down more than 20 percent, helps you adopt good financial habits. The more you put down when you buy, the higher your share of equity when you close. Although for the first five to seven years, the majority of your payment will go toward interest, over time more money will be applied to the principal. There are many tools online that calculate your current and future equity in your home, including this one here.

 

 Build equity sooner by choosing a shorter amortization term. While your payment may be higher, you’ll likely qualify for a lower interest rate and will pay less interest over the life of the loan.

Build Equity Faster in Your Home

 

Mortgage Term

30 Years

15 Years

Loan amount

$118,000

$118,00

Months to pay

360

180

Annual percentage rate

4.0%

3.0%

Monthly payment

$563

$815

Total interest

$84,806

$28,680

Interest savings

$56,126

 

Source: Federal Reserve Bank of Dallas, Building Wealth: A Beginner’s Guide to Securing Your Financial Future

 

 Pay Down Your Mortgage…or Not

 

Many homeowners grapple with whether or not to pay down their mortgage. On one hand, if you pay it down, or pay it off early, you’ll save money on interest, which you can use to make other investments. On the other hand, if your goal is to be debt free, it’s better to pay off your higher-interest debt, such as credit card debt, first before paying down your mortgage debt. Additionally, if you’re saving for retirement, putting extra cash toward your retirement accounts will help you build a nice nest egg to enjoy later on.

 

 If you decide to pay off your mortgage sooner, here are a few ways to do so:

 

1. Pay more money at the beginning of your amortization period and apply it to your principal.

 

2. If you receive a tax refund or other windfall, apply it toward your principal.

3. Make one extra payment each year. You’ll save money on interest and pay your loan off sooner.

4. Add an extra $50, or another amount you can afford, to the principal of your payment each month.

5. If you locked into a 30-year fixed loan, refinance to a shorter, 15-year fixed loan. Your payment may be higher, but you’ll pay it off sooner.

 

Your financial advisor can help you decide if paying off or paying down your mortgage is right for your goals.

 

Purchase Investment Property

 

Investment properties provide passive income to your growing financial portfolio. More than 25 percent of Americans say real estate is the best way to invest money you may not need for the next 10 years.5 While many people flip houses to make money—that is, they buy a home at a low price, fix it up and sell it quickly—others purchase multifamily properties to create monthly cash flow to save or to reinvest in other properties.

 

 The longer you own a property, the better investment it becomes as you’ll continue to build equity. While rental costs rise with inflation, your mortgage will remain the same. The best part? Once you pay off the mortgage, your cash flow will increase. Remember to create a budget for maintenance each month, between 10 to 20 percent of the rent you receive, or more if the home is older. This will help you save more money in the long run and allow you to prepare for unexpected repairs.

 

There are tax benefits to owning investment property as well. You may be able to claim deductions for depreciation, as long as it fits within the guidelines; repairs, travel expenses, interest and more. If you’re thinking of purchasing investment property, talk to your tax professional to get the details.

 

 Achieve More Wealth by Creating Financial Goals

 

Setting a goal will help you achieve your desired level of wealth. Once you achieve one goal, reassess and set the bar higher.

 

1. What is your idea of wealth? Your idea of wealth will change as you earn more money. That’s why it’s vital to set goals along the way. What do you want your net worth to be in 5 years, in 10 years and in 20 years?

2. Write down your short-term and long-term goals. Once you have determined your goals, write them down. This is the first step towards getting your desires out of your mind and into motion and it will be easier to refer to them later on.

3. Develop a budget to help you reach these goals. A budget not only helps you understand where your money goes each month, it may also prevent you from overspending. That way you can have more money to save and invest.

 

           

 

Your Budget 

 

Income

 

Earned

   $

Investments

+ $

Total Income

= $

Daily Expenses

       $

Monthly Bills

       $

Total Available for Investment

=

 

 To increase the amount you can invest, make adjustments to your daily spending and monthly bills, if possible. Look for opportunities to save money and transfer that savings into your accounts.

 

It’s never too late to begin building your family’s wealth. Whether you’re interested in buying a first home, upgrading to a larger home or are thinking of renovating, we have you covered. Give us a call at 970-631-7111 or visit our website at www.westrealtynoco.com and we’ll answer all of your real estate questions and offer suggestions to help you increase the value of your home.

 Sources: 1. BankRate.com

 

            2. Pulsenomics, Home Price Expectation Survey Q4 2016

 

            3. Statistic Brain, August 1, 2016

 

            4. National Association of REALTORS, Economists’ Outlook, September 8, 2014

 

            5. The Motley Fool, July 30, 2016

 

 

Selling a Home after Decades of Owning

 

 Being a first-time home seller can be a daunting task particularly if you have lived in your home for at least five years.  But for elderly sellers who have lived in their home for their entire adult life, it can seem impossible.

 

 For older sellers, it is not just emotional resistance they are experiencing.  These first-time sellers are usually not aware how the odds of clearing out personal items improves the odds of a sale.  My advice to these sellers who have never dramatically de-cluttered their home before is  to do it in stages, clearing one room at a time.  When taking their time and doing it in a slower pace, it can ease the mental and emotional pressure involved in getting rid of personal items.  Once the sellers see the results in one room they are encouraged to continue working on the rest of the house. 

 

 At West Realty, we are trained to help sellers in these situations.  If you would like more information or would like to schedule a time for a free consultation, feel free to call Bev at 970-631-7111. 

 

JUST LISTED  this 2 story commercial building located at 217 1st St. in Eaton, CO.  Features a store front on lower level and a rental on upper level with 3 bed, 1 bath, living room and large kitchen$185,000  MLS#815540.  The unit attached at 215 1st St. is also available for business at $125,000 MLS # 809380    Visit 217 N. 1st St. Eaton CO for full details.

217 Store Front

Call Bev at 970-631-7111 for more info or for your personal showing.  Visit http://www.westrealtynoco.com for all up-to-date listings in the area.

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