Insights on Summit County Real Estate

March 14, 2019

Enjoy Spring Time in Breckenridge

Breckenridge Spring Fever is back!  Spring in Breckenridge is widely known for having the best snow in Colorado, along with sunny bluebird days, special events, and great deals for guests from around the world. There’s no better way to send off the season than with Breckenridge’s Spring Fever.

St. Patrick's Day Celebrations!
St. Patty’s Day is on a Sunday this year which means there will be St. Patrick’s Day celebrations all weekend long!  Plan to wear green on the mountain and keep an eye out for food and drink specials around town.  Looking to burn a few calories before indulging in some green beer? Don’t miss the St. Patrick’s Day 5K.

Breckenridge Brewery
 is bringing Ireland to Colorado by giving a local restaurant an Irish makeover and turning it into North America’s “highest Irish Pub” at a whopping 10,010 feet above sea level. Sevens, the on-mountain restaurant at Breckenridge Ski Resort will be renamed O’Sevens for the month of March in honor of St. Patty’s Day, and will be hosting a variety of Irish festivities. They are also hiding gold cans in their new 12 packs of Nitro Irish Stout from now to St. Patty’s Day and anyone who “strikes gold” can enter to win a trip to Ireland!

Breckenridge Spring Beer Festival - April 6

The Breckenridge Spring Beer Festival is one of the coolest events of the spring in the Colorado Rockies!  Featuring brews, views and free live music, the Breckenridge Spring Beer Festival is an event you don’t want to miss. DON’T FORGET YOUR CRAZY COSTUME FOR THE BRECK BEER FEST!

Imperial Challenge - April 13
T
he 2019 Imperial Challenge… the most unique pseudo-triathlon anywhere enters its 28th year! Ride your bike 6 miles from the Breckenridge Rec Center to the base of Peak 7 at the Breckenridge Ski Resort. Ascend on your choice of gear to either the top of the T-bar (Sport Course 2500’) or to the top of Peak 8 (Expert Course 3000’).

Easter Celebration - April 21
Get ready for an egg-celent day in Breckenridge! For one day this season, there’ll be bunny on the slopes! Join us in Breckenridge for a Sunrise Easter service at Tenmile Station and other Easter festivities around town. Easter is one of the spring events in Breckenridge that is perfect for the whole family to enjoy.

Breck Plunge - April 21 (although can be moved to closing day!)
The Breck Plunge pond skim event will help kick off the Resort’s extended 2018-19 season with a splash, April 21st, 2019. Join the fun at the base of Peak 8 with live music, food, drinks and great people!

 

March 11, 2019

Why an Economic Slowdown Will NOT Crush Real Estate this Time

Why an Economic Slowdown Will NOT Crush Real Estate this Time | MyKCM

Last week, the National Association for Business Economics released their February 2019 Economic Policy Survey. The survey revealed that a majority of the panel believe an economic slowdown is in the near future:

“While only 10% of panelists expect a recession in 2019, 42% say a recession will happen in 2020, and 25% expect one in 2021.”

Their findings coincide with three previous surveys calling for a slowdown sometime in the next two years:

  1. The Pulsenomics Survey of Market Analysts
  2. The Wall Street Journal Survey of Economists
  3. The Duke University Survey of American CFOs

That raises the question: Will the real estate market be impacted like it was during the last recession?

A recession does not equal a housing crisis. According to the dictionary definition, a recession is:

“A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.”

During the last recession, prices fell dramatically because the housing collapse caused the recession. However, if we look at the previous four recessions, we can see that home values weren’t negatively impacted:

  • January 1980 to July 1980: Home values rose 4.5%
  • July 1981 to November 1982: Home values rose 1.9%
  • July 1990 to March 1991: Home values fell less than 1%
  • March 2001 to November 2001: Home values rose 4.8%

Most experts agree with Ralph McLaughlin, CoreLogic’s Deputy Chief Economist, who recently explained:

“There’s no reason to panic right now, even if we may be headed for a recession. We’re seeing a cooling of the housing market, but nothing that indicates a crash.”

The housing market is just “normalizing”. Inventory is starting to increase and home prices are finally stabilizing. This is a good thing for both buyers and sellers as we move forward.

Bottom Line

If there is an economic slowdown in our near future, there is no need for fear to set in. As renowned financial analyst, Morgan Housel, recently tweeted:

“An interesting thing is the widespread assumption that the next recession will be as bad as 2008. Natural to think that way, but, statistically, highly unlikely. Could be over before you realized it began.”

March 7, 2019

Thinking of Entering the Housing Market this Spring?

March 4, 2019

March 2019 Summit County Real Estate Market Update

Just like our clocks this past weekend, in the majority of the country, the housing market will soon “spring forward!” Similar to tension in a spring, the lack of inventory available for sale has been holding back the market.

Many potential sellers believe that waiting until Spring is in their best interest. Traditionally, they would have been right. Buyer demand has seasonality to it. Usually, this falls off in the winter months, especially in areas impacted by arctic conditions (like Summit County).

That hasn’t happened this year.

Demand for housing has remained strong as mortgage rates have remained near historic lows. Even with an increase in rates forecasted for 2019, buyers are increasingly jumping off the fence and into the market to secure a lower rate.

  • New Listings were up 23.1 percent for single family homes and 19.8 percent for townhouse-condo properties.
  • Pending Sales landed at 92 for single family homes and 162 for townhouse-condo properties.
  • The Median Sales Price was up 7.8 percent to $792,500 for single family homes but decreased 31.2 percent to $426,000 for townhouse-condo properties.
  • Days on Market decreased 15.2 percent to 95 days for single family homes but increased 26.2 percent to 82 days for townhouse-condo properties.

It is worth noting that some softening of sales was anticipated, as was a positive sales bounce during January 2019 after a slow end to 2018. Weather-related events have hampered some of the necessary machinations of making home sales during February 2019, yet buyers have shown determination toward achieving their home ownership goals.

Jan. 18, 2019

Next Recession in 2020? What Will Be the Impact?

Next Recession in 2020? What Will Be the Impact? | MyKCM

Economists and analysts know that the country has experienced economic growth for almost a decade. They also know that a recession can’t be too far off. A recent report by Zillow Research shed light on a survey conducted by Pulsenomics in which they asked economists, investment strategists and market analysts how they felt about the current housing market. That report revealed the possible timing of the next recession:

Experts largely expect the next recession to begin in 2020.”

That timing concurs with a recent survey of economists by the Wall Street Journal:

“The economic expansion that began in mid-2009 and already ranks as the second-longest in American history most likely will end in 2020 as the Federal Reserve raises interest rates to cool off an overheating economy, according to forecasters surveyed.”

Here is a graph comparing the opinions of those surveyed by both the Wall Street Journal and Pulsenomics:

Next Recession in 2020? What Will Be the Impact? | MyKCM

Recession DOES NOT Equal Housing Crisis

According to the Merriam-Webster Dictionary, a recession is defined as follows:

“A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.”

A recession means the economy has slowed down markedly. It does not mean we are experiencing another housing crisis. Obviously, the housing crash of 2008 caused the last recession. However, during the previous five recessions home values appreciated.

Next Recession in 2020? What Will Be the Impact? | MyKCM

According to the experts surveyed by Pulsenomics, the top three probable triggers for the next recession are:

  • Monetary policy
  • Trade policy
  • A stock market correction

A housing market correction was ranked ninth in probability. Those same experts also projected that home values would continue to appreciate in 2019, 2020, 2021 and 2022.  

Others agree that housing will not be impacted like it was a decade ago.

Mark Fleming, First American’s Chief Economistexplained:

“If a recession is to occur, it is unlikely to be caused by housing-related activity, and therefore the housing sector should be one of the leading sources to come out of the recession.”

And U.S. News and World Report agreed:

“Fortunately – and hopefully – the history of recessions and current issues that could harm the economy don’t lead many to believe the housing market crash will repeat itself in an upcoming decline.”

Bottom Line

A recession is probably less than two years away. A housing crisis is not.

Jan. 16, 2019

The #1 Reason to Not Wait Until Spring to Sell Your House

Many sellers believe that spring is the best time to place their homes on the market because buyer demand traditionally increases at that time of year, but what they don’t realize is that if every homeowner believes the same thing, then that is when they will have the most competition!

The #1 Reason to List Your Home in the Winter Months is Less Competition!

Housing supply traditionally shrinks at this time of year, so the choices buyers have will be limited. The chart below was created using the months’ supply of listings from the Summit Association of Realtors

 

As you can see, the ‘sweet spot’ to list your home for the most exposure naturally occurs in the late fall and winter months (November – February). 

Temperatures aren’t the only thing that heats up in the spring – so do listings!

Added Bonus: Only Serious Buyers Are Out in the Winter

At this time of year, only those purchasers who are serious about buying a home will be in the marketplace. You and your family will not be bothered and inconvenienced by mere ‘lookers.’ The lookers are at the mall or online doing their holiday shopping.

Bottom Line

If you have been debating whether or not to sell your home and are curious about market conditions in your area, let’s get together to help you decide the best time to list your house for sale.

Jan. 16, 2019

What Does the Future Hold for Home Prices?

Home prices are on the top of everyone’s minds. Can they maintain their current pace of appreciation? Will rising mortgage rates negatively impact home values? Will the next economic slowdown cause prices to crash?

Let’s try to answer these questions based on what has happened in the past as well as what we know about the current real estate market.

The Impact of Rising Interest Rates

We explained earlier this year that rising mortgage rates have not negatively impacted home prices in the past and probably wouldn’t this time either. Freddie Mac’s comments were very direct:

“In the current housing market, the driving force behind the increase in prices is a low supply of both new and existing homes combined with historically low rates. As mortgage rates increase, the demand for home purchases will likely remain strong relative to the constrained supply and continue to put upward pressure on home prices.”

They were correct. So far this year, home values have continued to appreciate above normal historic percentages and it appears the gradual increase in rates has had little impact on prices.

The Impact of an Economic Slowdown

Many people fear that when the economy turns, we may see the same depreciation in home values as we did a decade ago.

However, we recently reported that the same group of economists, real estate experts, and investment & market strategists who predicted the next recession will occur in the next 18-24 months have also projected that house prices will continue to appreciate for the next five years, albeit at smaller percentages.

It Comes Down to Supply and Demand

As always, home prices will be determined by the demand to purchase compared to the
available inventory of homes for sale. For the last six years, demand has far exceeded the available supply which has resulted in the average annual appreciation to top 6% since 2012.

That is far greater than the historic norm of 3.6% annual appreciation that we saw prior to the housing boom.

There are currently small signs that housing inventory is slowly beginning to increase. Months supply of homes for sale increased as compared to last year over the last 5 months after 36 consecutive months of decreasing inventory. New construction data has also shown positive signs that inventory will be increasing.

As inventory begins to meet demand, we will see appreciation return to more normal levels.
We are already seeing projections coming in lower than the 6.6% annual average we have
seen more recently.

CoreLogic is predicting that home values will appreciate by 4.7% over the next twelve months.

Bottom Line

Mark Fleming, Chief Economist at First American, explained it best:

“We’re seeing the first indications that price appreciation may be slowing, but the underlying fundamental housing market conditions support a natural moderation
of house prices rather than a sharp decline.”

Jan. 14, 2019

Is the Recent Dip in Interest Rates Here to Stay?

Is the Recent Dip in Interest Rates Here to Stay? | MyKCM

Interest rates for a 30-year fixed rate mortgage climbed consistently throughout 2018 until the middle of November. After that point, rates returned to levels that we saw in August to close out the year at 4.55%, according to Freddie Mac’s Primary Mortgage Market Survey.

After the first week of 2019, rates have continued their downward trend. As Freddie Mac’s Chief Economist Sam Khater notes, this is great news for homebuyers. He states,

“Mortgage rates declined to start the new year with the 30-year fixed-rate mortgage dipping to 4.51 percent. Low mortgage rates combined with decelerating home price growth should get prospective homebuyers excited to buy.”

In some areas of the country, the combination of rising interest rates and rising home prices had made some first-time buyers push pause on their home searches. But with more inventory coming to market, continued price growth, and interest rates slowing, this is a great time to get back in the market!

Will This Trend Continue?

According to the latest forecasts from Fannie Maethe Mortgage Bankers Associationand the National Association of Realtors, mortgage rates will increase over the course of 2019, but not at the same pace they did in 2018. You can see the forecasts broken down by quarter below.

Is the Recent Dip in Interest Rates Here to Stay? | MyKCM

Bottom Line

Even a small increase (or decrease) in interest rates can impact your monthly housing cost. If buying a home in 2019 is on your short list of goals to achieve, let’s get together to find out if you are able to today.

Jan. 8, 2019

January is Radon Awareness Month

Thanks to our Friends at Pillar to Post Home Inspections for this great information:

JANUARY IS RADON AWARENESS MONTH

WHAT YOU NEED TO KNOW

 Any home can have a radon problem – old or new homes, well-sealed or drafty homes, homes with or without basements. The EPA estimates that nearly 1 out of every 15 homes in the U.S. have elevated radon levels. Prolonged exposure to unsafe levels of radon can increase the risk of lung cancer; in fact, radon is the second leading cause of lung cancer after smoking. Lung cancer caused by avoidable radon exposure is preventable, but only if radon issues are detected and mitigated prior to prolonged exposure in homes and buildings. There is real risk in not knowing if a home has a high level of radon.

WHAT IS RADON?

Radon is a naturally occurring odorless, colorless, radioactive gas formed by the ongoing decay of uranium in soil, rocks, sediments, and even well or ground water. While radon that escapes into the atmosphere is not harmful, dangerously high concentrations can build up indoors, exposing occupants to possible health risks. 

HOW DOES RADON GET INTO A HOME?

Radon can migrate into the home in several ways. Openings or cracks in basement walls, foundations or floors are common avenues. Sumps, basement drains, and spaces between gas or water fittings can also allow radon into the structure. Other entry points can include gaps in suspended floors and cavities within walls.

HOW CAN I MAKE SURE MY FAMILY ISN'T AT RISK?

We encourage homeowners to add radon testing to the home inspection process. Your Pillar To Post Home Inspector will set up the monitoring equipment in the home and report on the results. If an elevated level of radon is detected, steps can be taken to reduce the concentration to or below acceptable levels inside virtually any home. This can include a relatively simple setup such as a collection system with a radon vent pipe, which prevents radon from entering the home in the first place. Professional mitigation services can provide solutions for a home’s specific conditions.

HOW CAN I TEST MY HOME NOW FOR RADON?

The High Country Conservation Center provides free radon test kits to local participants in our energy efficiency programs. Additionally, we can recommend contractors to perform the recommended mitigation work for your home. If you’ve yet to test your Summit County residence for radon, now is the time to pick up a free test kit and take action on radon. If your concerned about the radon levels in your home, give us a call to see how we can not only help improve the indoor air quality in your home, but make your home more energy efficient as well.

 

Dec. 17, 2018

How to Apply Tax Changes to Your 2018 Returns as a Homeowner or Renter

If you're a planner like me, it's time to start getting your affairs in order in time for tax season. You don't want to miss out on something that needs to be complete by December 31st to get that tax credit! The holidays are a great time to relax, and focus on what's coming in 2019!

The IRS plans to release rules by December on how to apply the tax law changes. To help you, the National Association of REALTORS® has released a series of videos on what you need to know.

The videos aren’t a replacement for talking with your accountant or tax adviser. But you can learn about the parts of the law that apply to you as a homeowner or renter.