Is the Condominium Lifestyle Right for You?

Image Source:  Grand Warszawski via Shutterstock

Condominium homes are a great, low-maintenance choice for a primary residence, second home, or investment property. This alternative to the traditional single-family home has unique issues to consider before buying, as well as unique benefits.

Increasingly, condos are not just for first-time homebuyers looking for a less expensive entry into the housing market. Empty-nesters and retirees are happy to give up mowing the lawn and painting the house. Busy professionals can experience luxury living knowing their home is safe and well-maintained while they are away on business.

If you are considering buying a condominium for a home, here are a few things you should know:

 

Condominium basics:

With condominiums, you own everything in your unit on your side of the walls. Individual owners hold title to the condominium unit only, not the land beneath the unit. All owners share title to the common areas: the grounds, lobby, halls, parking areas and other amenities. A homeowners’ association (HOA) usually manages the complex and collects a monthly fee from all condominium owners to pay for the operation and maintenance of the property. These fees may include such items as insurance, landscape, and grounds up-keep, pool maintenance, security, and administrative costs.

The owners of the units in a condominium are all automatic members of the condo association. The association is run by a volunteer Board of Directors, who manage the operations and upkeep of the property. A professional management company may also be involved in assisting the board in their decisions. The condo association also administers rules and regulations designed to ensure safety and maintain the value of your investment. Examples include whether or not pets are allowed and the hours of use for condominium facilities, such as pools and work-out rooms. Should a major expense occur, all owners are responsible for paying their fair share of the expense.

The pros and cons of condominium living:

The condominium lifestyle has many benefits, but condominium ownership isn’t for everyone. Whether living in a condominium works for you depends on your current and planned future lifestyle. By necessity, condominium associations have a number of standardized rules. You need to decide whether these regulations work for you or not. Here are some points to keep in mind if you’re considering condominium living.

Convenience: People who love living in condominiums always cite the convenience factor. It’s nice to have someone else take care of landscaping, upkeep, and security. Condominium homes are often located in urban areas where restaurants, groceries, and entertainment are just a short walk away.

Luxury amenities: May condominiums offer an array of amenities that most homeowners couldn’t afford on their own, such as fitness centers, clubhouses, wine cellars, roof-top decks, and swimming pools. Lobbies of upscale condominiums can rival those of four-star hotels, making a great impression on residents.

Privacy: Since you share common walls and floors with other condominium owners, there is less privacy than what you’d expect in a single-family home. While condominiums are built with noise abatement features, you may still occasionally hear your neighbors.

Space: Except for very high-end units, condominiums are generally smaller than single-family homes. That means less storage space and often, smaller rooms. The patios and balconies of individual units are usually much smaller as well.

Autonomy: As a condominium owner, you are required to follow the laws of the associations. That means giving up a certain amount of control and getting involved in the group decision-making process. HOA bylaws vary greatly from property to property, and some people may find certain rules too restrictive.

 

Things to consider when you decide to buy:

Condominium homes vary from intimate studios to eclectic lofts and luxury penthouses. The right condominium is the one that best fits your lifestyle. Here are a few questions to ask to determine which condominium is right for you.

How will you use it? 

Will your condominium be your primary residence? A second home? An investment property? While a studio may be too small for a primary residence, it might be a perfect getaway. Also, consider how your lifestyle may change over the next five to seven years. If you are close to retirement, you may want to have the option of turning a vacation condominium into your permanent home.

What amenities are most important to you?

Amenities vary location to location. Decide what you want, and you can be assured of finding it. Most urban and resort condominiums have an enticing array of extras, from spas to movie screening rooms to tennis courts.

What are your specific needs?

Do you have a pet? Some associations don’t allow them; others have limitations on their size. Most buildings will have a rental cap, so be sure to know what that cap is if you’re buying as an investment. Parking can also be a major issue, especially in dense, urban areas. How many spaces do you get per unit? Do you pay extra if you have more vehicles?

Cost: Condominium homes typically cost less than houses, so they’re a great choice for first-time buyers. However, because condominiums are concentrated in more expensive locations, and sizes are generally smaller than a comparable single-family home, the price per square foot for a condominium is usually higher.

 

Finally, once you’ve found a property you like, examine the association’s declaration, rules, and bylaws to make sure they fit your needs. The association will provide you with an outline of their monthly fees and exactly what they cover so you can accurately budget your expenses.

Ask to review the association board’s meeting minutes from the past year to get an idea of any issues the association is working on. An analysis of sales demand and property appreciation compared to like units may help ensure that you make the best possible investment.

Posted on November 15, 2019 at 10:54 pm
Windermere Windsor | Category: Blog, For Buyers | Tagged , , , ,

5 Deal Breakers That Can Blindside Home Buyers

 

Purchasing a home can be a complex endeavor for even the most well-prepared home buyer.  You’ve diligently saved for your down payment, followed the market, researched agents and now you are ready to make an offer on your dream home.  Don’t let these 5 “Deal Breakers” come between you and your new home.

 

    1. Big Purchases on Credit. It is tempting to buy the furniture for your new home or a new car for the garage before the sale closes. Take care if you are making these purchases on credit. Large purchases on credit can have a major impact on your credit profile which effects your mortgage application. It’s a better plan to wait until after closing or pay cash for these transactions or you may be putting that furniture in a different living room than you originally picked them out for.

 

    1. Overpaying. Before your bank will approve your mortgage they will appraise the home you are purchasing.  If they feel you are overpaying they are likely to decline your mortgage application. If you find yourself in this situation consult with your agent on renegotiating your offer to be more in line with the bank’s appraised value.

 

    1. Purchasing too close to Foreclosure. If you are making an offer on a house which is facing foreclosure be sure to have a closing date set before the foreclosure date. Have your agent work with the lender to structure closing before the house goes back to the bank and into foreclosure.

 

    1. IRS liens. You’ve heard the old saying “Death and Taxes”.  Back taxes and liens can derail your attempts to get financing for a mortgage so be sure to have your books in order before filing your loan application.

 

    1. Comprehensive Loss Underwriting Exchange (CLUE). CLUE is a database of insurance claims for both people and property.  Your home insurance rates are determined by the information about you and the property you plan to purchase which is contained in this report. Past claims for water damage, falling trees and even dog bites from present and past owners can multiply your insurance rates. Consult your agent about the CLUE report for your future home as soon as possible once your home purchase offer is accepted.

 

    When purchasing a home there will be challenges which you can plan for and the unexpected hurdles.  By educating yourself as a consumer and choosing a well trained real estate agent you can avoid many of the pitfalls of 21st century home ownership.

     

    What about you? Tell us if you have had any “deal breaker” experiences.

    Posted on October 4, 2019 at 12:00 pm
    Windermere Windsor | Category: Blog, For Buyers | Tagged , , , , , ,

    The Impact of Staging Your Home

    For more than 20 years, the benefits of staging a home have been well documented. Numerous studies show that staging helps sell a home faster and for a higher price. According to the National Association of REALTORS®, 88 percent of home buyers start their search online, forming impressions within three seconds of viewing a listing. When a home is well staged, it photographs well and makes the kind of the first impression that encourages buyers to take the next step.

    Studies also indicate that buyers decide if they’re interested within the first 30 seconds of entering a home. Not only does home staging help to remove potential red flags that can turn buyers off, but it also helps them begin to imagine living there. Homes that are professionally staged look more “move-in ready” and that makes them far more appealing to potential buyers.

    According to the Village Voice, staged homes sell in one-third less time than non-staged homes. Staged homes can also command higher prices than non-staged homes. Data compiled by the U.S. Department of Housing and Urban Development indicate that staged homes sell for approximately 17 percent more than non-staged homes.

    A measurable difference in time and money

    In a study conducted by the Real Estate Staging Association in 2007, a group of vacant homes that had remained unsold for an average of 131 days were taken off the market, staged, and relisted. The newly staged properties sold, on average, in just 42 days, – which is approximately 68 percent less time on the market.

    The study was repeated in 2011, in a more challenging market, and the numbers were even more dramatic. Vacant homes that were previously on the market for an average of 156 days as unstaged properties, when listed again as staged properties, sold after an average of 42 days—an average of 73 percent less time on the market.

    Small investments, big potential returns

    Staging is a powerful advantage when selling your home, but that’s not the only reason to do it. Staging uncovers problems that need to be addressed, repairs that need to be made, and upgrades that should be undertaken. For a relatively small investment of time and money, you can reap big returns. Staged properties are more inviting, and that inspires the kind of peace-of-mind that gets buyers to sign on the dotted line. In the age of social media, a well-staged home is a home that stands out, gets shared, and sticks in people’s minds.

    What’s more, the investment in staging can bring a higher price. According to the National Association of REALTORS, the average staging investment is between one percent and three percent of the home’s asking price, and typically generates a return of eight to ten percent.

    In short, less time on the market and higher selling prices make the small cost of staging your home a wise investment.

    Interested in learning more? Contact your real estate agent for information about the value of staging and referrals for professional home stagers.

    Posted on September 30, 2019 at 4:54 pm
    Windermere Windsor | Category: Buyers & Sellers, For Buyers, For Sellers | Tagged , , , ,

    Benefits, Risks and Things to Consider Before You Add an Accessory Dwelling Unit to Your Home

     

    Have you ever rented the unit in someone’s basement? Maybe your spouse’s mother moved into your “Mother-In-Law Unit” above your garage? Or have you ever travelled and stayed in a pool house for your stay? Commonly referred to as “Mother-In-Law” units, homeowners use these as a way to fill the space in their home and gain residual income, either from vacationers or long-term tenants.

    The official terms for these units are Additional Dwelling Units (ADU) or Detached Additional Dwelling Units (DADU’s), and are defined as extra spaces in homes and on properties where someone can live completely independent of the main house.

    These units can be almost anywhere on the property, but they are usually located in the basement, in the backyard, or above the garage. They have their own bathroom and kitchen facilities, and sometimes they share laundry with the main house.

    Thinking of adding a unit to your home? Here are some benefits and risks, as well as important aspects to consider before you build:

     

    Benefits

    Homeowners can maximize their investment by renting out the extra space to long-term tenants for short-term vacationers. These tenants can help pay off debt or create an extra stream of income to pay for other needs or wants.

    Depending on several factors, including the size of the unit, the market in the area, and other factors, each homeowner should decide which option they are more comfortable with. These decisions should be made before they list the unit for rent to best market to the right audience.

     

    Risks

    An obvious risk is that when you open your space to a stranger, there’s a possibility that things might end poorly. Either the tenants could turn out to be untrustworthy, or unreliable, leading to a financial burden.

    To minimize the risks, it’s a good idea to use an application process to check backgrounds and employment history as a tool to get to know the potential tenant. Make sure to adhere to the National Fair Housing Laws and your local regulations.

     

    Things to Consider:

    • What are the shared spaces?
      • Would you be comfortable sharing those spaces, and potentially appliances, with a new person each weekend, or would you rather get to know the long-term tenant who would use those on a consistent basis?
      • Rooms like the kitchen can be great for those who want to get more interaction from their vacation renters. However, sharing one bathroom between the homeowners and the visitors can be uncomfortable and risky.
      • Would you be okay with a long-term renter using your laundry facilities? What kind of access would they need to the house in order to use those machines?

     

    • What is the size of the ADU/DADU?
      • Is it truly a space where someone could live, or would it be too tight to fit all the necessary appliances?
      • Does the unit adhere to your local housing codes as a livable space?

     

    • How close are the units and what noise level are you comfortable with?
      • As a long-term landlord, tenants have the right to quiet enjoyment without the landlord barging into their space or controlling their activities. If the unit is in the basement and the tenant has friends or family over, that noise could permeate into your unit in the late hours of the night. A way to prevent this is to be sure to layout quiet hours and expectations before they sign the lease or make an agreement so that you and the tenant are on the same page.
      • The same goes for the rules in the vacation rental listing. Managing expectations is the first way to create a relationship with the tenants, even those there for the weekend.

     

    • What improvements are required to make the unit livable?
      • Do you need to add a kitchen or a bathroom? What are the costs associated with those improvements and would the market-rate rental prices make up for those improvements? You might not get your money back within the year, but if you’re dedicated to making the space worth it to rent it out over the next few years, these improvements, and financial obligations are necessary.
      • If these initial investments aren’t viable for your situation, it might be a good idea to look at other options to earn rent from your home, including adding roommates with whom you’re willing to share all the common spaces.

     

    Whatever you decide, it’s important to be familiar with the rental market and regulations in both your local region and your neighborhood.

     

    Do you have an ADU or DADU on your property? How do you use it? Let us know in the comments.

    Posted on September 24, 2019 at 8:35 pm
    Windermere Windsor | Category: For Buyers, For Sellers | Tagged , , , , , , , , , , , ,

    What to Consider Before You Build

    If you’re short on space but don’t want to move, a home addition is an attractive way to solve your woes and turn your current home into your dream home.

    Whether you’re adding a whole new room or a more modest addition, it can turn into a major construction project; with architects and contractors to manage, construction workers traipsing through your home, hammers pounding, and sawdust everywhere. Although new additions can be a great investment, the cost per-square-foot is typically more than building a new home, and much more than buying a larger existing home.

    Before you make the leap, consider the following:

     

    Define your needs

    To determine if an addition makes sense for your situation, start by defining exactly what it is you want and need. By focusing on core needs, you won’t get carried away with a wish list that can push the project out of reach financially.

    If it’s a matter of needing more space, be specific. For example, instead of just jotting down “more kitchen space,” figure out just how much more space is going to make the difference, e.g., “150 square feet of floor space and six additional feet of counter space.”

    If the addition will be for aging parents, consult with their doctors or an age-in-place expert to define exactly what they’ll require for living conditions, both now and over the next five to ten years.

     

    Types of Additions

    Bump-out Addition

    “Bumping out” one or more walls to make a first-floor room slightly larger is something most homeowners think about at one time or another. However, when you consider the work required, and the limited amount of space created, it often ends up to be one of your more expensive approaches.

    First Floor Addition

    Adding a whole new room (or rooms) to the first floor of your home is one of the most common ways to add space to a home. You can easily create a new family room, apartment or sunroom. But this approach can also take away yard space.

    Dormer Addition

    For homes with steep rooflines, adding an upper floor dormer may be all that’s needed to transform an awkward space with limited headroom. The cost is affordable and, when done well, a dormer can also improve the curb-appeal of your house.

    Second-Story Addition

    For homes without an upper floor, adding a second story can double the size of the house without reducing surrounding yard space. But be cautious not to ruin the value of homes next to you when you do this, the second story might not be worth the drama on your block.

    Garage Addition

    Building above the garage is ideal for a space that requires more privacy, such as a rentable apartment, a teen’s bedroom, guest bedroom, guest quarters, or a family bonus room.

     

     

    Permits required

    You’ll need a building permit to construct an addition—which will require professional blueprints. Your local building department will not only want to make sure that the addition adheres to the latest building codes, but also ensure it isn’t too tall for the neighborhood or positioned too close to the property line. Some building departments will also want to ask your neighbors for their input before giving you the go-ahead.

     

    Requirements for a legal apartment

    While the idea of having a renter that provides an additional stream of revenue may be enticing, the realities of building and renting a legal add-on apartment can be sobering. Among the things you’ll need to consider:

    • Special permitting—Some communities don’t like the idea of “mother-in-law” units and therefore have regulations against it, or zone-approval requirements.
    • Separate utilities—In many cities, you can’t charge a tenant for heat, electricity, and water unless utilities are separated from the rest of the house (and separately controlled by the tenant).
    • ADU Requirements—When building an “accessory dwelling unit” (the formal name for a second dwelling located on a property where a primary residence already exists), building codes often contain special requirements regarding emergency exists, windows, ceiling height, off-street parking spaces, the location of main entrances, the number of bedrooms, and more.

    In addition, renters have special rights while landlords have added responsibilities. You’ll need to learn those rights and responsibilities and be prepared to adhere to them. Be sure to talk to your Windermere Real Estate Agent or a local Property Manager about municipal, state, and federal laws.

     

    Average costs

    The cost to construct an addition depends on a wide variety of factors, such as the quality of materials used, the laborers doing the work, the type of addition and its size, the age of your house and its current condition. For ballpark purposes, however, you can figure on spending about $200 per square foot if your home is in a more expensive real estate area, or about $100 per food in a lower-priced market.

    You might be wondering how much of that money might the project return if you were to sell the home a couple years later? The answer to that question depends on the above details; but the average “recoup” rate for a family-room addition is typically more than 80 percent.

     

    The Bottom Line

    While you should certainly research the existing-home marketplace before hiring an architect to map out the plans, building an addition onto your current home can be a great way to expand your living quarters, customize your home, and remain in the same neighborhood.

    Posted on July 12, 2019 at 12:00 pm
    Windermere Windsor | Category: For Buyers, Home Owners, Housing Trends | Tagged , , , , , , , ,

    Refresh Your Home

     

    The craving to move happens to every homeowner as they start to feel bogged down, or like they need a restart. That sense of newness doesn’t have to be dramatic, however. The great part about having a home of your own is you can make improvements and give your home a chance to evolve over time. You just need to help your home live up to its potential!  These are seven of our favorite improvements to help you make the most of your home.

     

    1. Find Your Home’s Purpose

    Each home is as unique as its owners, so in order to fully utilize your home, consider how you view your home’s purpose. Some people like to entertain, others find it a calm space in the frenzy of daily life; some nurture their families and others nurture their creativity. Your home’s purpose can be any combination of these and more, but it helps to consider the function of your space in order to ultimately find its purpose. Knowing your home’s purpose will help guide you as you move room to room while you refresh the space.

     

    2. Assemble a List

     

    Create a list of haves/needs/wants. Answer questions like: what is it about the space that isn’t working; how could it work better to fulfill the purpose; where could I move some of my items to make them feel new again?

     

    3. Make an “Inspiration Board”

     

    An “inspiration board” is a great way to visualize your home’s decor. You can create a board online with a tool like Pinterest to organize ideas you love, you can also use the ‘Save’ feature on Instagram, or the old-fashioned way with a cork board and magazines. Doing this will allow you to see all the elements you like in one place so that you can then tie it all together into a room you love.

     

    Photo Credit: @Krista4Coral on Instagram

    4. Choose a New Palate

    Renew the lighting and color by shaking up your color palate. It’s easy to fall into the white/beige standby to keep our rooms neutral, but sometimes a color that provides a contrast to your décor will make the room pop. Add a new color to the palate, refresh a wall with an accent color that you already feature in your decor, or overhaul your curtains and throws with a brand new hue.
    What about the Pantone color of the year? See our blog on how to incorporate Living Coral into your home.

     

    5. Rearrange

    Moving furniture around is another easy way to reinvent your space. Try placing your sofa on an angle to open up your entertaining room or move your lamps to improve lighting. You can also think about moving a piece of furniture into a room to give it new life, like using a unique dresser for a credenza or a chair as a side table.

     

    Photo Credit: HouseBeautiful

     

    6. Create a Collection

    If you have items that you like to collect, think about how to transform that collection into something you can display. If you don’t already have a collection of loved objects think about what this collection would be for you. You can center a room design around your travel souvenirs, old camera collection, figurines, unique plates, or familial objects. Adding to this collection over time can be a great way to keep your spaces new while maintaining a personal feel to your decor.

     

    7. Find Design Motivation

    Home design evolves over time and can be sustained by finding items that inspire you. Read magazines and books that inspire your interests in architecture, design, art, etc. Or find stores and flea markets that sell pieces that influence your aesthetic. Another way to get in-tune and keep your aesthetic with you is to bring a camera with you when you’re doing your favorite activities and bring back memories or inspirations.

     

    Important Note: Have fun with it! Homes and aesthetics evolve over time, add and subtract as you go, and don’t stress if the room doesn’t feel finished. You’ll get there eventually.

    Posted on June 21, 2019 at 2:00 pm
    Windermere Windsor | Category: Blog, For Buyers, For Sellers, Housing Trends | Tagged , , , ,

    Find a New Home in Four Steps

    Posted in Buying by Kenady Swan 

     

    Whether you’re a first-time homebuyer or a current owner looking for a bigger home, the ideas below will help you better navigate that all-important first step: Finding a property that you like (and can afford).

     

    The search for a new home always starts out with a lot of excitement. But if you haven’t prepared, frustration can soon set in, especially in a competitive real estate market. The biggest mistake is jumping into a search unfocused, just hoping to “see what’s available.” Instead, we recommend you first take some time to work through the four steps below.

     

    Step 1: Talk to your agent

    Even if you’re just thinking about buying or selling a house, start by consulting your real estate agent. An agent can give you an up-to-the-minute summary of the current real estate market, as well as mortgage industry trends. They can also put you in touch with all the best resources and educate you about next steps, plus much more. If you are interested in finding an experienced agent in your in your area, we can connect you

    here.

     

     

    Step 2: Decide how much home you can afford

    It may sound like a drag to start your home search with a boring financial review, but when all is said and done, you’ll be glad you did. With so few homes on the market now in many areas, and so many people competing to buy what is available, it’s far more efficient to focus your search on only the properties you can afford. A meeting or two with a reputable mortgage agent should tell you everything you need to know.

     

    Step 3: Envision your future

    Typically, it takes at least five years for a home purchase to start paying off financially, which means, the better your new home suits you, the longer you’ll most likely remain living there.

    Will you be having children in the next five or six years? Where do you see your career heading? Are you interested in working from home, or making extra money by renting a portion of your home to others? Do you anticipate a relative coming to live with you? Share this information with your real estate agent, who can then help you evaluate school districts, work commutes, rental opportunities, and more as you search for homes together.

     

    Step 4: Document your ideal home

    When it comes to this step, be realistic. It’s easy to get carried away dreaming about all the home features you want. Try listing everything on a piece of paper, then choose the five “must-haves,” and the five “really-wants.”

    For more tips, as well as advice geared specifically to your situation, connect with an experienced Windermere Real Estate agent by clicking here.

    Posted on May 15, 2019 at 4:00 pm
    Windermere Windsor | Category: Blog, First Time Home Buyer, For Buyers | Tagged , , ,

    Are You Better Off Paying Your Mortgage Earlier or Investing Your Money?

    Posted in BuyingSelling, and Living by Guest Author 

    Photo Credit: Rawpixel via Unsplash

    Few topics cause more division among economists than the age-old debate of whether you’re better off paying off your mortgage earlier, or investing that money instead. And there’s a good reason why that debate continues; both sides make compelling arguments.

    For many people, their mortgage is the largest expense they will ever incur in their lives. So if given the chance, it only makes logical sense you would want to pay it off as quickly as possible. On the other hand, a mortgage is also the cheapest money you will ever borrow, and it’s generally considered good debt. Any extra money you obtain could be definitely be put to good use elsewhere.

    The reality is, however, a little less cut and clear. For some homeowners, paying off their mortgage earlier is the right answer. While for others, it would be far more advantageous to invest their money.

    Advantages of paying off your mortgage earlier

    • You’ll pay less interest: Each time you make a mortgage payment, a portion is dedicated towards interest, and another towards principal (we’ll ignore other costs for now). Interest is calculated monthly by taking your remaining balance, the length of your amortization period, and the interest rate agreed upon with your lending institution.

    If you have a $300,000 mortgage, at a 4% fixed rate over 30 years, your monthly payment would be around $1,432.25. By the time you finish paying off your mortgage, you would have paid a total of $515,609, of which $215,609 were interest.

    If you wanted to lower the total amount you pay on interest, you don’t need to make a large lump sum to make a difference. If you were to increase your monthly mortgage payment to $1,632.25 (a $200 a month increase), you would be saving $50,298 in interest, and you’ll pay off your mortgage 6 years and 3 months earlier.

    Though this is an oversimplified example, it shows how even a small increase in monthly payments makes a big difference in the long run.

    • Every additional dollar towards your principal has a guaranteed return on investment: Every additional payment you make towards your mortgage has a direct effect in lowering the amount you pay in interest. In fact, each additional payment is, in fact, an investment. And unlike stocks, bonds, and other investment vehicles, you are guaranteed to have a return on your investment.
    • Enforced discipline: It takes real commitment to invest your money wisely each month instead of spending it elsewhere.

     

    Your monthly mortgage payments are a form of enforced discipline since you know you can’t afford to miss them. It’s far easier to set a higher monthly payment towards your mortgage and stick to it than making regular investments on your own.

    Besides, once your home is completely paid off, you can dedicate a larger portion of your income towards investments, your children or grandchildren’s education, or simply cut down on your working hours.

     

    Advantages of investing your money

    • A greater return on your investment: The biggest reason why you should invest your money instead comes down to a simple, green truth: there’s more money to be made in investments.

    Suppose that instead of dedicating an additional $200 towards your monthly mortgage payment, you decide to invest it in a conservative index fund which tracks S&P 500’s index. You start your investment today with $200 and add an additional $200 each month for the next 30 years. By the end of the term, if the index fund had a modest yield of 5% per year, you will have earned $91,739 in interest, and the total value of your investment would be $163,939.

    If you think that 5% per year is a little too optimistic, all we have to do is see the S&P 500 performance between December 2002 and December 2012, which averaged an annual yield of 7.10%.

    • A greater level of diversification: Real estate has historically been one of the safest vehicles of investment available, but it’s still subject to market forces and changes in government policies. The forces that affect the stock and bonds markets are not always the same that affect real estate, because the former are subject to their issuer’s economic performance, while property values could change due to local events.

    By putting your extra money towards investments, you are diversifying your investment portfolio and spreading out your risk. If you are relying exclusively on the value of your home, you are in essence putting all your eggs in one basket.

    • Greater liquidity: Homes are a great investment, but it takes time to sell a home even in the best of circumstances. So if you need emergency funds now, it’s a lot easier to sell stocks and bonds than a home.

     

    Misael Lizarraga is a real estate writer with a passion for teaching real estate concepts to first time buyers and investors. He runs realestatecontentguy.com and is a contributing writer for several leading real estate blogs in North America.

    Posted on April 18, 2019 at 12:45 pm
    Windermere Windsor | Category: Blog, For Buyers | Tagged ,

    Party Like It’s 2018!

     

    Just a few months ago most people thought mortgage rates were heading to 5% and now they are back to where they were a year ago.

     

    You probably saw this week’s news from the Federal Reserve declaring that they would not raise their Federal Funds rate for the rest of 2019

     

    (just three months after saying they would raise rates at least twice this year).

     

    While this is big news, even bigger news for mortgage rates is that the 10-year Treasury yield just hit its lowest point since January 2018. One thing we’ve learned from our Chief Economist Matthew Gardner is that mortgage rates follow the 10-year treasury (not necessarily the Fed Funds rate).

     

    Last Spring it looked like mortgage rates had bottomed out and they steadily climbed through the Summer and Fall of 2018. It looked certain that they would hit 5% around January.

     

    Instead they started dropping. Now with the 10-year Treasury at a 15-month low, they just dropped a little more and they are back to where they were a year ago.

     

    Great news for buyers! Party like it’s 2018!

    Posted on March 22, 2019 at 6:41 pm
    Windermere Windsor | Category: Blog, For Buyers, Fun Facts | Tagged , , , , , , , , , ,

    The Whole Story

    Metro Denver has 2.1 months of inventory on the market. This means that, at the current pace of sales, it would take just over 2 months to sell every single-family home currently listed for sale.

    But that’s not the whole story because inventory levels vary drastically depending upon the price of the home.

    When we take a closer look at months of inventory broken down by price range this is what we see:

    • Under $400,000 = 0.9 months
    • $400,000 to $500,000 = 1.8 months
    • $500,000 to $750,000 = 3.1 months
    • $750,000 to $1,000,000 = 4.2 months
    • Over $1,000,000 = 7.7 months

    These numbers represent great news for move-up buyers because they can sell in a strong market and potentially move up to a market that is market that is not as strong.

     

                  Below is a short video with a recap of our annual Market Forecast presentation!

    Posted on February 15, 2019 at 8:26 pm
    Windermere Windsor | Category: For Buyers, Fun Facts, Market News | Tagged , , , , , ,