The Mindset of Home Buyers Today
The housing crisis is over and home buyers are regaining confidence in the market, whether they are returning or they are first-time home buyers. As a real estate professional, understanding the mindset of today’s home buyer is essential to successfully helping your customers find the home they want.They Want to Buy — Now
New confidence in the housing market, skyrocketing rents and the lowest interest rates on record are increasing the urgency of today’s buyer. They are pre-approved, they work with a Realtor and they’ve done their research on the neighborhood and the type of house they want.
Buyers today are flexible, and they’ll do what it takes to get into the house they want. They are less likely to kill the deal over small flaws and are willing pay a little more to close the deal.
Confidence and flexibility doesn’t mean they don’t know the difference between a bad and good deal. These buyers have been through the housing crisis and seen its effect. Therefore, they may be tougher negotiators.
“The Capitol Hill neighborhood is influenced by its proximity to the Colorado State Capitol, Downtown and its northern boundary, East Colfax Avenue.
Capitol Hill is one of the most cosmopolitan neighborhoods in Denver, well known as a haven for artists and bohemians. There are numerous restaurants, clubs, bars, stores, concert venues, and other cultural amenities in the community. East 13th Avenue is the center of Denver’s punk community with the punk club Bender’s, as well as various stores that cater to punks and hipsters. Colfax Avenue has a reputation for a wild nightlife with two concert venues (The Fillmore and the Ogden), and numerous late-night bars, coffee shops, restaurants, stores and clubs on the street. During the day, lobbyists and politicians from the Colorado State Capitol can be seen making deals in the restaurants and bars of the neighborhood.”
Whether you are a first-time buyer or you’re looking to move up or downsize, buying a home is still a huge decision that can be rife with uncertainty. But if you’re ready to take the plunge, you should move quickly, before circumstances change and the market takes a turn that is less favorable to buyers.
Why is NOW a good time to buy a home? Here are two reasons you should be considering taking the plunge into homeownership:
Interest rates are still very low. Experts predict they won’t stay this way, though. We’ve already seen them start to trend up. If you can get in now before they bounce back any higher, you can keep your monthly payments low and could even hold down the overall cost of your loan over the long haul.
There is a housing surplus so home prices are also low. With all the foreclosures across the country, plus all the people who would need to move anyway, we’ve got a glut of available housing in most neighborhoods throughout America. This has driven prices down — although, just like with the interest rates, prices could start to rise at any time.
While those are the two biggest factors that should influence your decision, there are other considerations. Owning a home can confer some great tax benefits. The write-off for mortgage insurance means a lot to most households, so consider the available deductions for your mortgage interest and your points.*
If you’ve decided it’s time to move into a bigger or smaller home, those reasons probably won’t change much over time. You’ll still want to make a change in six months, but the market may not be as buyer-centric by then.
“The winding streets, mature trees and friendly neighbors makes this one of Denver’s most treasured communities. It was developed in the 1940′s and 50′s. The homes range from the original smaller but unique houses, to multi-million dollar custom built homes. Home prices have been strong in Bonnie Brae, a testament to the desirability of living near the center of a major metropolitan city, with parks, restaurants and shopping all within a few miles.
Bonnie Brae has had an organized neighborhood association for many years. They are a small area (around 700 homes) and we partner with an active Merchants Association, our City Council, and the City of Denver. Bonnie Brae has an annual picnic each year in late summer at Bonnie Brae Park.”
“The neighborhood contains two lakes surrounded by parks, one eponymous (stretching from 46th Avenue to I-70 and Sheridan Boulevard to Tennyson Street) and Rocky Mountain Lake Park (stretching from Lowell Boulevard to Irving Street and 46th Avenue to I-70). Berkeley Park also contains the William Scheitler Recreation Center, run by the CIty and County of Denver and including both indoor and outdoor public pools. Berkeley has experienced rapid growth and rise in property values in the last 20 years and particularly since the closing of Elitch Gardens Amusement Park in October of 1994. Particularly, Tennyson Street has become a commercial and cultural center for Northwest Denver, beginning in the current decade to rival Highland Square in nearby Highland. City Congressman Rick Garcia pushed for the further development of Tennyson Street in the November 2011 election season and succeeded in obtaining the voters’ approval for $2.5 million in public works funding.  Business owners on Tennyson from 48th Avenue to 38th Avenue currently collaborate in an Art Walk held on the first Friday of every month.”
Your home’s financing isn’t final. The decisions you made when you bought your home were based on your financial situation at the time. However, your income, the mortgage market and the real estate market can change. This is why you should always assess the applicability of your mortgage to your current situation and future plans to determine if a refinance is in order. There are a variety of reasons why you might want to refinance:
- Take advantage of a lower interest rate. Rates have been at historic lows, but there is no guarantee how long this will last. If you can get in now before they begin to climb, you can keep your monthly payments low.
- Opt for a fixed rate over an adjustable-rate mortgage. If your current loan is an ARM that will soon adjust upwards, you might prefer the stability offered by a fixed-rate mortgage.
- Access needed cash. Cashing out a certain amount at a mortgage’s much lower rate to pay off a debt — say, a credit card — at a much higher rate often makes solid financial sense.
- Change your loan terms. Opting for a shorter loan term — say, 15 years instead of 30 — will help you pay off your debt sooner and save significant money over the term of the loan. If your income has decreased you may wish to extend the term of the loan.
- Cancel private mortgage insurance. PMI is required of borrowers who put down less than 20 percent on their home. If you’ve been in the home a while, you may have gained enough equity so that you no longer need the PMI.
- Consolidate your first and second mortgages. This could mean significant savings for you over the long haul.
Whatever your reasons for wanting to refinance, there are a number of factors you’ll want to consider. For starters, you want to make sure that your current loan does not have a pre-payment penalty for refinancing.
Another key concern is whether or not the costs of a refinance are recouped by your lower rate. All loans have closing costs associated with them, and you want to make sure that whatever savings your new loan delivers will also be worth the closing costs. Typically, you want to recoup your closing costs within two years.
As you can see, there is a lot to consider, which is why it makes sense to sit down with a home financing expert and review all the key considerations and do all the necessary calculations to ensure you’re making the smartest financial decision you can.
No this is not your local bank….
“The neighborhood gets its name from the mansion of Lawrence C. Phipps (1862-1958) who was a United States Senator who represented Colorado from 1919-1931. Phipps chose “Belcaro” as the name of the mansion, yet today it is more commonly known as the “Phipps Mansion.” Phipps developed much of the neighborhood, and today it is dominated by many large ranch-style houses on large lots and tree-lined streets. A large gated community called the Polo Grounds occupies a section of the northern part of the neighborhood.”
Properly named Adjustable Rate Mortgage.
No this is not the person that makes your bread….
“A portion of the neighborhood’s riverfront was homesteaded by William and Elizabeth Byers in 1859, just north of where James Beckwourth, a former slave, settled the same year. The first subdivision in Baker was platted along Santa Fe Dr. south of W. Sixth Ave. in 1872, and residential development took off in the 1880s. The part of the neighborhood north of Alameda Ave. was annexed into the city of Denver in 1883. The neighborhood includes hundreds of 19th century brick houses and 39 buildings by locally famous architect William Lang. More than 80 percent of the neighborhood was developed by 1900. In the 1970s the City of Denver named the neighborhood after Baker Junior High School (now Denver Center for International Studies) which had been named for turn of the 20th century University of Colorado president James Hutchins Baker, who never lived in the neighborhood.”
Denver Home Market Update
By the numbers, there are 7,706 homes available for sale at December month end, 2,684 homes came
onto the market, 3,090 homes were placed under contract, and 3,400 homes closed in December for a
closed dollar volume of $986 Million.
Monthly Market Recap – December, 2012:
Single Family: Condos:
Active Inventory is 6,366 units at month end Active Inventory is 1,340 units at month end
Sold units is 2,725 Sold units is 675
Average Days on Market is 75 Average Days on Market is 67
Median Sold Price is $255,000 Median Sold Price is $142,000
Average Sold Price is $315,451 Average Sold Price is $186,877
December Year-to-Date Market Recap (2012 versus 2011):
Single Family: Condos:
Active Inventory 6,366 versus 8,854 (↓28%) Active Inventory 1,340 versus 2,139 (↓37%)
Sold Units 37,164 versus 31,437 (↑18%) Sold Units 9,135 versus 7,950 (↑15%)
Median Price $250,000 vs $230,000 (↑9%) Median Price $142,000 vs $124,900 (↑14%)
Average Price $304,178 vs $279,858 (↑9%) Average Price $179,616 vs $159,141(↑13%)
Sales Volume $11.3B versus $8.8B (↑28%) Sales Volume $1.6B versus $1.3B (↑30%)
Days on Market 77 versus 105 (↓27%) Days on Market 77 versus 116 (↓34%)
December activity showed seasonal slowdown from prior months.
Average and Median pricing returned to pre-recession numbers.
Inventory of homes available continued to decline.
Buyer demand continues through the year end and into 2013.
On a Year to Date basis, 2012 was a great year for the Denver market.
Overall, the Denver market has a two month supply of homes available for sale at the current sales
rate. Single Family Residential homes have a 2.06 month supply and Condos have a 1.76 month supply.