Tips on Buying a Home in Denver

Do's and don'ts

  • Don’t discuss your journey specifics on social media. Sellers can see the info and it could be used against you.

  • Don’t take on any new debt before or during your home-buying process.

  • Don’t spend too much time on algorithm-based valuations versus local experts.

  • Don’t be of the mindset that you’ll make the money when you sell. “You make your money in real estate when you buy, not when you sell.” Buy wisely.

  • Do make sure that your most recent taxes are complete or ready to be complete

  • Do begin and get as far through the financing legwork as you can. A buyer who is simply awaiting an appraisal and final verifications will always have a leg up.

  • Do hire a broker who understands the importance of establishing relationships with brokers on your behalf. Do they know how to communicate in many different ways?

  • Do have your general ideas of what you want but let your realtor take you out to other ideas that may also be of interest – especially if you are on the newer side of residency.

  • Do have a list of your must-haves, your negotiables and your non-negotiables. These will change during the process but staying focused, at least at the beginning of your truest desires, is key to the long-term success of the investment.

  • Do be conscientious of your timeframe. If you plan to be in the home short-term, look at how quickly your down payment could be absorbed by a market value decrease. If you put 3.5 percent down, what happens if your market falls 5 percent? Much safer if you plan to be in the home for 10 years instead of two.

Best ways to save money

  • Sweat equity can mean long-term gains. Be conscientious of the timeframe though. We are entering a cooling in the market. Are you looking to make your money in 2, 3, 5 years?

  • Be open to your areas. Really focus on what is important to you today and what could be important to you in 3-5 years. Will you care as much about the walkability and prefer a larger lot? If you’re looking at condos, which amenities are really worth it to you to pay for in your HOA?

  • Choose a lender who is able to present you with multiple options. If you need more cash for rehab, is accepting a higher interest rate in lieu of cash at closing or “closing costs” worth it to you?

  • Look at your lot and it’s zoning. Is it zoned for an ADU? Could you build one and create a secondary source of income on your own home?

How much to put down

  • The first question any buyers should ask themselves is how much do they feel comfortable paying for their mortgage. Start there and not at the house price. Build your comfort zone in pricing around that number so you don’t dangle the carrot in front of your own nose.

  • Do you qualify for VA? Use your benefits!

  • Know that anything less than 20 percent down requires mortgage insurance. That is an add-on to your base mortgage, so weigh the benefits that this added cost would mean to you versus putting more down if you can.


Metro Denver Housing Market Rebounds in October after September Correction

After hitting severe turbulence and taking a dive in September, metro Denver’s housing market stabilized at a lower altitude in October, according to a monthly update Monday from the Denver Metro Association of Realtors.

Buyers purchased 4,181 single-family homes and condos sold last month, a decline of 3.89 percent from the number of sales in September and 15.9 percent below the number of sales a year earlier.

That monthly decline was more in line with usual fall slowing than the alarming 30.5 percent drop in home sales measured between August and September.

The pendulum of market power can shift quickly after long stretches of favoring either buyers or sellers. That was the case in 2008 when the financial crisis put buyers firmly in the driver’s seat and again in 2013, when the oversupply of homes evaporated and sellers took over.

Jill Schafer, the new chairwoman of DMAR’s Market Trends Committee, said in the report that sellers are still in the driver’s seat in metro Denver.

“It appears we still have a ways to go before we get to a buyer’s market. And that’s not just my opinion, that’s the story the statistics tell as well,” Schafer said.

Sellers had 8,539 listings on the market at the end of October, down 3.04 percent from September and up 35.28 percent from a year earlier. The inventory of homes for sale dipped below 4,000 late last year and has more than doubled since. Historically the inventory for metro Denver has averaged around 16,000 homes, so the market remains tight.

But home price gains are slowing in metro Denver and median prices remain below the peaks hit last spring.

The median price of a single-family home sold in October was $435,000, up 1.17 percent from September and 5.45 percent from October 2017. The average price rose 4.9 percent from September to $526,092, and is up 8.43 percent over the year.

The median price for a condo sold was $299,250, down 1.24 percent from September, and up 8.84 percent from October 2017. The average price of a condo sold came in at $341,418, a decline of 2.3 percent monthly and a gain of 3.49 percent year-over-year.

Agents report more sellers are dropping their asking price, more buyers are backing out of contracts and listings are taking longer to sell. New listings took 29 days to sell last month, up from a fast 19 days measured in June.

Higher interest rates this year have boosted borrowing costs and made mortgage payments less affordable than they were last year. And while home price gains are slowing, they haven’t declined in response to a higher cost of money.

“Interest rates are starting to affect affordability,” said Nicole Rueth, a lender with Fairview Mortgage and member of the markets trend committee.

Buyers face the dilemma of buying now to get ahead of future increases in mortgage rates or waiting for home prices to soften and more inventory to hit the market. Reuth said that indecision is contributing to a “stagnant” market.

Concerns are also mounting about whether rising interest rates and global trade disputes could usher in the next recession. Out of the last six recessions, four were accompanied by home price declines, although the 19-percent decline in the last recession was extreme, according to a separate report from Meyers Research.


Cold Feet? Try Before You Buy


Not too long after Tom Porth sold his business this year, he went to Colorado for a ski vacation. He had worked in different capacities for the Village Inn restaurant chain for four decades, ultimately owning nine restaurants, and he was eager for retirement.

After a trip to Steamboat Springs, Colo., Mr. Porth returned to his home in Waterloo, Iowa, intent on buying a mountainside condominium. So he did what anyone would do: He found a realtor in Steamboat who arranged for him to rent a condo in the place he thought he’d like.

“The price was more than what my Iowa blood was used to seeing, but it seemed to be what you’d pay for something of that caliber,” said Mr. Porth, 62.

But on that visit, his agent suggested a newer, amenity-filled development up the hill — One Steamboat Place. It offered select people the opportunity to stay in a condo before buying it. Those condos cost even more, so he picked the least expensive unit. Still, it was double what the other one cost.

In a real estate market that has been strong, fueled by stock market gains and low interest rates, such programs would seem unnecessary. If one person doesn’t want the condo another will. But a combination of changes to the tax code, which limit the deductions for mortgage interest and property taxes, rising interest rates and a general feeling that increases in home prices are set to cool are making some people anxious about the luxury real estate market.

“We’re a long way into the cycle,” said Christopher Mayer, co-director of the Paul Milstein Center for Real Estate at Columbia Business School. “It’s not surprising to see things slow down relative to where they were.” This sense of uncertainty is causing some buyers, particularly at the high end, to be more discerning. Expensive real estate is staying on the market longer.

“In markets where there is plenty of inventory, buyers are not afraid to take their time, do their research and ensure they feel they are making a good decision,” said Stephanie Anton, president of the Luxury Portfolio International, a luxury real estate firm. “People are not going to overpay or make an emotional decision.”

Sensing this, some high-end developers have begun building their marketing plans around a concept meant to get people past that uncertainty: test live in a house or condo before you buy it. And this concept is spreading not just in the second home market but to urban condominium developers.

“If you look at the real estate markets, it’s unbelievable that people tour homes five, six times and make a $10-million investment, but they’ve never stayed there,” said Greg Spencer, the chief executive officer for Timbers Resorts, which developed One Steamboat Place, where Mr. Porth stayed for his tryout. “We say, if we have available inventory, why not give people the opportunity to try it out?”

Dan Scott, president and general manager of The Whitetail Club, a development in McCall, Idaho, said the movement toward “try before you buy” is an outgrowth of the housing crash and recession 10 years ago, which left many buyers skittish about making a big investment too quickly.

“In the old days you did a real estate tour and drove people around for a few hours, but it didn’t give people a sense of what it was like to be there,” Mr. Scott said. “Coming out of the recession, what the buyer wanted has changed.”

Mr. Porth said the tryout got him hooked — and more comfortable with spending a lot more money than he’d planned. “I don’t think I’d do it any other way now,” he said. “I need to spend time in that resort but also that unit. By staying, you can learn to love something; you can also learn something you may not like.”


After staying in the lowest priced condo, which was about $2 million, he realized he didn’t want to buy that one — it overlooked the parking lot, not the slopes. But by that point he’d been taken in by the amenities and location so he asked to try one on the fifth floor — which cost 20 percent more than the already pricey base unit.

In April, he closed. Mr. Porth would not disclose the exact price of his home, but the average cost of a condominium in the development is $3 million to $3.5 million.

In some ways the hook would seem to be the home, but the real selling point is the experience.

Developers can sometimes get away with less than a full home. Clear Creek Tahoe is a mountain community on the Nevada side of Lake Tahoe with golf, water sports, skiing and hiking. It is also right next to California.

The marketing of the development started before the real estate crash and essentially went into hibernation until a new group took over in 2015. With the majority of the infrastructure built — but none of the homes — they needed a way to start selling half-acre to five-acre plots that were priced from $300,000 to $1.7 million.

So they built cottages with the same high-end finishes the eventual homes would have, but designed each one to evoke why people should buy there. One reflected the style of the designers of the golf course, another the boating on Lake Tahoe.

Lori Brooks and her husband, David, who live in San Diego, had been looking for a home around the lake because it ticked many of the boxes they wanted in what would eventually be a retirement home: near a college town and airport, good health care, plenty of outdoor activities.

In the spring, on their second visit to the Tahoe area, they stayed in one of the Clear Creek cottages — no charge — and ended up buying a lot. They’re planning on constructing a 4,500-square-foot home with both mountain and golf course views.

“We walked to our lot every night,” she said. “We envisioned what we were going to do.”

Others at the highest end are selling the escape from an uncertain world. Las Ventanas al Paraiso has been a successful resort in San Jose del Cabo, Mexico, for 20 years. It is now marketing the final 30 homes in the property, which range from $2.7 million to over $7 million.

“The question in the beginning was how do we sell them?” said Frederic Vidal, the managing director of the property who joined four years ago to run the property.

Unlike other program managers, he knew he couldn’t offer a free stay to look at a home. A lot of people knew the resort and he was concerned there would be guests simply looking for a free luxury stay for a few days.

So while he decided to charge for the stay, there was a caveat: the money would be refundable if the guest bought a house. The costs per night are $3,000 to $11,000 depending on the size of the home, and only those who are deemed serious buyers are eligible to stay.

The try before you buy system works with resorts because people are buying experiences as much or more than a place to sleep and eat. But buying your permanent residence is a bit different: it’s a practical purchase.

Letting your children try out bedrooms and play in the yard, while you test out the morning commute and figure out where you’d put the television would yield a lot of valuable information. Chances are, however, there is a family living in the house who would object — or other buyers who would be traipsing through at dinnertime.

A few apartment buildings are trying out a service that allows them to turn units they’re waiting to lease — without flooding the market with too much inventory — into temporary hotel rooms, and it has yielded people interested in living there full time.

Jason Fudin, co-founder and chief executive of WhyHotel, which creates these pop-up hotels, said the setup provides interim cash flow for the developers but also made a new building more attractive for people looking to move in.


“In a 300-unit building everything is designed for full occupancy,” Mr. Fudin said. “When you’re all alone in a big building something is off. It’s not like being in “Home Alone” — you’re in a zombie building.”

At their first project last year, The Bartlett in Arlington, Va., Mr. Fudin found that every 1,000 room stays yielded a tenant for the building, although there are limitations. He said the tryout concept worked better for rental apartments. “A condo is like a car — it has a never-lived-in premium,” he said.

Some experts say the try before you buy concept is perfect for a risky time — it allows potential homeowners the chance to be sure that they’re making the right choice.

While buying a house may be about your personality, Ms. Anton of Luxury Portfolio International said, “It’s also a financial decision.” In uncertain times, it may be best to wade carefully into that kind of big choice.


Top 20 Tech Towns: Denver, Boulder, Colorado Springs

Three Colorado communities made a list of the best 20 areas for tech workers in a new report by a national technology industry association.

CompTIA’s report, released Tuesday, ranks the Denver-Lakewood-Aurora area as eighth-best in the country for tech workers based on salaries, job availability and growth and cost of living. The report, “Top 20 Tech Towns,”lists Boulder as No. 19 and Colorado Springs as No. 20.

Colorado and North Carolina are the only states with three cities on the list. The Charlotte, N.C.-metro area tops the rankings, followed by Raleigh, N.C., at No. 2. The top 20 cities are spread across 14 states.

“The geographic diversity of the index is something we’re very excited to see and demonstrates the positive impact the technology industry is having on regional economies,” Nancy Hammervik, CompTIA’s executive vice president of industry relations, said in a statement.

The inclusion of university communities, like Boulder, shows that an abundance of well-educated talent has helped the cities grow into “full-on innovation hubs,” said Spencer Bone, a director of marketing with CompTIA.

“This shows IT is a lot more than just coding. Everywhere you look now tech jobs are popping up,” Bone said.

The report, the first of what the association plans to be an annual release, comes as the technology industry is experiencing significant growth. The industry expanded by nearly 200,000 jobs in 2017 to an estimated 11.5 million workers, according to the association. Additionally, at $1.6 trillion, the tech sector is one of the largest components in the nation’s economy and is a top-five economic contributor in 22 states.

“The idea behind the report is that there are different rankings of different tech towns, but we thought we would bring in a more well-rounded picture. We decided to bring in other factors,” including projected job growth, Spencer said.

Making the Top 10 list speaks to the focus the past several years in Denver on helping entrepreneurs get started, scale up and grow, said Deborah Cameron, chief business development officer with the Denver Office of Economic Development.

“It also reflects our intentional approach of really cultivating and nurturing the sector,” Cameron said.

The inclusion of Colorado Springs on the Top 20 list wasn’t a surprise, said Tammy Fields, chief economic development officer for the Colorado Springs Chamber and Economic Development Corp.

“The IT sector has definitely seen growth over the last 10 years, from software to data centers to cyber-security operations and everything in between,” Fields said.

The educated workforce and sophisticated information networks associated with the strong military presence in Colorado Springs have helped expand the industry, Fields added. “And we have amazing outdoor recreation with extreme ease of access that’s attractive to workers who can work anywhere they want.”

The report includes profiles of the ranked cities’ tech community. Below are some of the highlights for the three Colorado communities and comments from the report:

The Denver-Aurora-Lakewood area — Employers posted 50,897 IT jobs between August 2017 and July 2018; the number of jobs is expected to grow another 11 percent the next five years; and the median salary is $90,958.

“Colorado has one of the nation’s lowest unemployment rates, especially in IT, which has resulted in huge shortages for in-demand roles like IT engineers and software developers.”

Boulder — Employers posted 5,821 IT jobs between August 2017 and July 2018; the number of jobs is expected to grow 5 percent the next five years; and the median salary is $88,899.

“There is a high concentration of employment here in several industry clusters, including aerospace, bioscience and information technology.”

Colorado Springs — Employers posted 8,356 IT jobs between August 2017 and July 2018; the number of jobs is expected to grow by 5 percent in the next five years; and the median salary is $90,438.

“With a median tech talent salary of $90,438 a year, Colorado Springs IT pros are making similar salaries to those in other Colorado cities on our list, but the cost of living is lower than both Boulder and Denver.”

The report notes the cost of living in the Colorado communities ranges from 7 percent to about 15 percent higher the national average, but points to amenities and outdoor lifestyle that have made the state among the fastest-growing.

CompTIA compiled job posting data over a 12-month period focusing on 20 metropolitan areas with populations greater than 250,000, where demand for tech workers is greatest. CompTIA then ranked the cities based on cost of living, number of open tech positions, and projected job growth over the next 12 months and the next five years.


September's Home Sales Slump

Home sales aren’t just slumping big in metro Denver, they are dropping across much of Colorado and in what were some of the hottest markets in the country.

Existing home sales in the United States fell 3.4 percent in August from September to a seasonally adjusted annual rate of 5.15 million. Year-over-year, they are down 4.1 percent, according to an update Friday from the National Association of Realtors.

“A decade’s high mortgage rates are preventing consumers from making quick decisions on home purchases,” Lawrence Yun, chief economist, said in the report.

Those national declines look tame compared to what is going on in states like Colorado, Washington and California. Real estate brokerage Redfin, in a different report, estimates that sales in 50 of the 71 largest metros it tracks are now falling.

“Last year and earlier this year, Seattle, San Jose and Denver were the hottest markets with homes selling in days, not weeks. These metros have now been replaced by Grand Rapids (Mich.), Omaha, Neb., and Indianapolis as the fastest markets in the country,” noted Daryl Fairweather, Redfin’s chief economist.

Last week, the Colorado Association of Realtors reported that the number of single-family home listings sold in Colorado dropped 14.6 percent in September compared to the same month a year earlier. Sales of townhouses and condos dropped 15.2 percent.

Metro Denver definitely skews the numbers. Year-over-year single-family home sales in September were down 15.8 percent in Adams County, 17.8 percent in Arapahoe County, 10.3 percent in Boulder County, 11.9 percent in Denver, 16.4 percent in Douglas County and 25.6 percent in Jefferson County, according to the CAR report.

But the state’s other metro areas weren’t immune. Single-family home sales fell 26.7 percent in Pueblo County, 17.2 percent in El Paso County and 18.8 percent in Mesa County. Fort Collins and Greeley held up better, with a smaller 4.4-percent drop in Larimer County and 7-percent drop in Weld County.

“Sold listings –- down. New listings –- down. Affordability –- down. Inventory supply –- down. Days on market -– down. Interest rates –- up. Median price –- up and down,” said Chris Hardy, a Fort Collins area Realtor, in comments accompanying last week’s report of his home turf.

Even the mountain counties are getting caught in the down draft. Home sales fell in Summit, Grand, Routt, Gunnison and San Miguel counties. The picture was more mixed picture in Eagle, Pitkin and La Plata counties. Garfield County, home to Glenwood Springs, represented a rare pocket of strength, with home and condo sales both up more than 5 percent last month.

Source here

Mortgage Rates are Rising...Here are a few tips for getting the best rate possible


Mortgage rates have escalated recently. The 30-year fixed-rate average, the most popular mortgage product on the market, is nearing 5 percent, according to the latest Freddie Mac data. The last time the 30-year fixed was that high was 2011.

Indications are that they will continue to move higher, leaving many homeowners and buyers wondering what rising rates mean for them. I spoke to Craig Strent, CEO of Rockville-based Apex Home Loans, to ask him for some practical advice for anyone considering buying a home or refinancing a mortgage. Our conversation has been edited for clarity and length.

Q: Mortgage rates are higher than they’ve been in seven years. Did I miss my chance to get a low rate?

Strent: No. Rates are not at historic lows anymore, but they’re still historically low in general. And if you’ve been in your home for a while, you might still be overpaying. When people talk about quote-unquote rates they’re referring to the 30-year fixed, which is essentially the most expensive mortgage you can get. You may not need a 30-year fixed.

[Mortgage rates soar to seven-year highs]

Rates in general are up, but maybe your rates wouldn't be up. For example, maybe you bought your first home five or six years ago and your family is now expanding and you're thinking about moving in the next three to five years. Well maybe it's time to come out of that 30-year fixed and go into something like a 5/1 [adjustable rate mortgage].

People talk about this word “rates.” But rates typically means the 30-year fixed. Historically the 30-year fixed has been 7, 8, 9 percent depending on the year. Just remember 6 percent was a gift in ’06, 7 percent was awesome in the ‘90s and 9 percent was unimaginably good in the ‘80s. Don’t forget 5 [percent] is not 5 [percent]. The rate is not the rate because you’re deducting the interest. So the actual cost is lower.

Q: Why are mortgage rates rising?

Strent: I’m not an economist but basically the recent jump in rates is because of low unemployment, which is indicative of a strong job market, which is indicative of a strong economy. A strong economy generally results in higher rates. What I often say to people is mortgage rates like small doses of bad economic news. When we get small doses of bad economic news, rates go down. When the economy is roaring, money often comes out of bonds into stocks and rates move in the opposite direction. Last week was a little messy because of the jobs report, the lowest unemployment in 49 years, and rates really did bounce up. It doesn’t always move in lockstep but generally speaking a strong economy means rates will be rising.

Q: This is an unfair question because I’m asking you to look into a crystal ball and tell me how high the rates are going to go.

Strent: If I knew that. . . . The last time we saw short-term rates rise over a few years, long-term rates [mortgage rates] actually stayed stable. The truth is I’m not going to even try to answer how they’re going to go other than to say macroeconomically as the economy does better, rates tend to rise.

Q: All these people have been sitting on the sidelines trying to time their refinance. Did they miss their chance?

Strent: Ok, so . . .

Q: You may have already answered this question in your first response.

Strent: I did. I don’t think you missed your chance to refinance. If you’ve been in your home for a while and you have not refinanced yet, you could probably still save money by doing so, depending on what your plans for the house are.

Q: How can I get the best interest rate for my mortgage?

Strent: The first thing I would say to people is that we make our mortgage payments in dollars, not in rates. The question you want to be asking yourself is how can I get the lowest cost for the time in which I’m going to live in the house. A lot of first-time buyers live in the house five to seven years and they take 30-year fixed-rate mortgages. So by definition they’re overpaying because you’re taking a 30-year fixed and that’s the most expensive mortgage. You’re paying a premium. If you’re only using the money for five, seven, eight, nine years, then you just overpaid. You paid for 20 years of fixed-rate protection that you didn’t need, and nobody likes to overpay for anything, particularly a mortgage.

I would reposition it to say the lowest cost versus the lowest rate, and then align your mortgage not with the time in which you're going to live in the house but with the time in which you're going to need the mortgage. If you're paying [private mortgage insurance] or you're going to take two loans, you may wind up refinancing when you have some appreciation. Match the mortgage type up for the period in which you need the mortgage.

You should tell your readers that right now there are a lot of options. There's five, seven, 10 and 15 ARMs. The 15-year ARM is becoming more and more popular. It is not the 15-year fixed. But [an adjustable rate] mortgage has a rate that cannot change for five, seven, 10 or 15 years. Most 30-year fixed-rate mortgages do not even make it to year 15. A 15/1 ARM, which is a 30-year mortgage with a fixed rate for the first 15 years, with no balloon but it can change after 15 years. Those are typically priced about a quarter-percent better than a 30-year and they're worth looking at.

Q: A lot of home buyers are scared of ARMs because of what happened during the housing crisis. How are ARMs today different than the ones back then?

Strent: I love this question. The people who got in trouble with ARMs, for the most part, had interest-only ARMs. They weren’t paying any principal. They didn’t have equity. They put zero to very little down and then their home value went the other way. That option no longer exists. You can’t even get in trouble that way if you wanted to. Now, can you get in trouble on an ARM? Sure, you could. But generally speaking people who can get the best types of ARMs generally have some equity in their home. Now the only thing that can be dangerous about an ARM is the rate adjusting to payments you cannot afford. But that should be moot. Because if you said I’m going to live in this house seven years and then I’m moving, I would say let’s get you a 7/1 ARM or even a 10/1 ARM. The rate should be fixed for the entire period of time you live there and you should be done with the mortgage before you even have the adjustment. If you’re worried about ARMs, opt for an ARM where the rate is fixed for a period of time that is longer than you believe you’ll live in the home.

Q: Do I need a really good credit score to get a good rate?

Strent: This is one of the biggest myths. You don’t need a great score to qualify for a mortgage these days. But the better the score, the better the rate.

If I can digress a little, one of the things I wanted to go into is what I think is the biggest myth out there right now, that you need a big down payment. Well, it’s just not true. D.C. Open Doors is a zero-down program. You’ve got FHA at 3½ percent down, and Fannie Mae and Freddie Mac conventional are 3 percent down now. VA is zero down. There are so many programs out there that require very little money down and a lot of these can be done with some damaged credit.

[More veterans and military members are putting VA loans into service to buy homes]

Q: How many first-time buyers put down 20 percent?

Strent: It’s rare. It’s more like 3 to 10 [percent] down. And what people also need to know is that PMI, private mortgage insurance, has become much more affordable in recent years. [If you put] less than 20 percent down, you have to deal with [PMI] in some way, meaning you either have to take two mortgages or pay a higher rate or pay PMI. But what I would say to your readers is the monthly carrying cost of PMI has decreased. If you’re buying with less than 20 percent down, from a financing standpoint, it’s not as expensive as it used to be. There’s a lot of creative ways to pay PMI these days. It used to be you just paid it monthly. Now you can opt for a higher rate. You can finance it on top of the loan. You could buy it out in a lump sum. You could split the premium. You could pay part of it upfront and in a reduced monthly amount. They’ve gotten really creative with PMI.

Credit guidelines have loosened to allow people to get into homes for the first time with smaller down payments, and a little more flexible credit guidelines are currently in existence. Where there is not much change and where it is still pretty tight — and it should be — is debt-to-income ratio, which I would translate as your ability to repay. So, if you’re not putting a lot down and your credit’s good but not excellent and if you can demonstrate your ability to repay, you can get a loan.

Q: Will higher mortgage rates help bring down housing prices?

Strent: So there are two parts to this. In the short term, it might actually push them higher because those people that have been waiting to buy or been shopping for a while they may feel some pressure to get in before rates go up further. And then you have sort of an influx of offers that could, short term, push values up especially going into the fourth quarter where there’s less inventory that could exacerbate it even more.

Longer term, I don't think it's going to have that much pressure in terms of bringing down home prices because we're already short on inventory in general in our region. So I don't really think it's going to have that much of an impact.

Rates are only one factor in the decision to buy. Buying because rates are here or there is not the right [decision] if your plans are longer term, meaning you’re going to live there at least five years or more. The proper way to make a buying decision is to do a detailed rent-versus-own analysis and see what the cost of renting for you is over time versus the cost of homeownership. Every single one of your readers who is thinking about buying should have a rent-versus-own analysis specific to them, their income, their tax bracket, their plan, because there’s no broad answer for everybody.


Ways to Invest in Real Estate: Buying vs Not Buying Property


Investments are inherently risky - real estate in particular. The subprime mortgage crisis was barely a decade ago and it played a large role in a devastating recession.

Is real estate a good investment today? As with any potential investment, doing thorough research and examining all your options is crucial. One of the causes of the subprime mortgage crisis was predatory loan companies taking advantage of vulnerable homebuyers. 

Understand the risks and avoid working with lenders and companies that use questionable practices. Investing in real estate isn't for everyone. If you're willing to dip your toes in the water, your first step is to weigh whether you want to invest by buying property, or without buying property.

7 Ways to Invest in Real Estate by Buying Property

For many of the methods of investing in real estate, you'll need to have money saved. That's especially true if you are going to buy actual property.

If you have that money ready, buying property is the most direct and hands-on way to invest in real estate. But  purchasing a house involves quite a bit more than simply holding onto it.

Here are seven ways to invest in real estate that involve a purchase of actual property.

1. Buy and Fix Up a Home

Flipping a house like you're on HGTV is as hands-on as you can get for an investment. You buy the property, you put funds into fixing it up, and sell it for a profit.

Ideally, anyway. Fixing a home requires funds beyond the initial investment, and more time than you might have. It's a process, and one that requires a solid knowledge of real estate and home improvement. Even  profitable flips can seem like money losers for a long time. Patience is crucial if you're going to commit to a fixer-upper.

2. Rent-to-Own a Home

Rent-to-own is a tactic where you sign a contract to rent a home for a predetermined period of time with the option to purchase the home once that time expires. Often, that option is a requirement, a promise that you will be buying the home.

A percentage of your monthly rent payments go toward the down payment on a mortgage when the purchase becomes official.

Rent-to-own agreements come with risks, but they're good for people who cannot currently commit to buying a home. This gives people with other loans (credit card debt, hospital bills, etc.) time to pay those off without the added financial burden of a monthly mortgage. Comb through the rent-to-own contract carefully to make sure the details are in your favor, and it has the potential to help you ease your way into an investment.

3. Buy Rental Property

This can mean a few different things. In theory, if you have the money you could purchase an entire rental property and rent out any room or apartment to tenants. Keep your expenses low so you can keep rent affordable to entice prospective tenants.

You also could purchase property that you live in, while renting out other rooms in the property. Either way, you're the landlord. Be a good one, and you'll be in a much better position to succeed on this investment. Keep the property in great condition, be readily available to your tenants when needed, and if necessary hire someone who can help with repairs.

4. Purchase Vacation Property

Vacation property means renting out to tenants for shorter periods. Maintain a good house in the right area, and you may be able to make the same money off a few vacation tenants that you might make from a year-round tenant elsewhere.

Vacation rentals, because they are so often in a desirable area, can be expensive both to buy and maintain. Who wants to rent out a pigsty for their vacation? Weigh the pros and cons carefully. If you do it right - research carefully and consult with good Realtors - a beach rental can be lucrative come summer.

5. Use Lodging Apps Like Airbnb

Airbnb has become a popular way for some property owners to supplement their income. Why not incorporate it into your own investment?

How Airbnb works: Register your house on the app, specify the type of lodging you're offering (you can offer a room or the entire property), how many people it can accommodate and its availability. You also get to approve the guests staying at your property.

Airbnb can be a good choice in certain areas. Desirable vacation destination? Close to a music festival? Nice apartment in a popular city? You may be able to make a decent profit using Airbnb. If it's a property you own but don't reside in, the added availability can help out a lot. 

6. Purchase Commercial, Non-Residential Property

Commercial property - retail buildings or office buildings -  is an intriguing option for those who want to invest in real estate beyond just residential property. It's costlier, and you may want to look for partners in this investment.

As owner or part-owner of the property you can rent it out to businesses in need of space. It is high-risk, high-reward real-estate investing. Income made from renting space to businesses is generally higher than that from residents, and often the contracts to lease commercial buildings are longer than residential ones.

7. Buy Your House... That's It

Yes, if you bought a house and now live in it, congrats. You're a real-estate investor!

Rather than buying a house specifically to flip it, buying and holding can sometimes be incidental to why you actually bought the house: to live there. But consistently paying your mortgage and doing general upkeep for the house to make improvements can up the value of your home should you one day look for a new place to live. Treat your house like a long-term investment, and it could pay off down the line.

10 Ways to Invest in Real Estate Without Buying Property

If buying property is too expensive of an investment for you, it's not only way you can add real estate to your investment portfolio. There are plenty of ways to have a stake in the real-estate game.

Here are 10 ways you can invest in real estate without actually having to buy any property.

1. Invest in Real Estate Investment Trusts (REITs)

A REIT, or real estate investment trust, is a company that either owns or finances real estate that produces income. REITs invest the majority of their money into real estate, and it's how they make the majority of their income.

There are REITs that focus on both residential and commercial property. Most REITs are equity REITs, but some trade in mortgages instead of actual properties. Perhaps most important for you, the investor, is that at least 90% of the taxable income it pays is via dividends to the shareholders. So researching thriving REITs and purchasing shares in them has potential as a profitable investment.

2. Invest in Real Estate Mutual Funds

Real estate mutual funds differ somewhat from REITs. Whereas a REIT is an actual company, mutual funds are simply investments pooled together and overseen by an investment manager.

A mutual fund allows investors to have diversified their portfolio both in terms of having a mutual fund and having real estate. Like with other sorts of mutual funds, you can choose ones that are growth-oriented or income-oriented. As a diversified asset, they are designed with the intention of mitigating risk, but they are still vulnerable to the risks inherent in real estate. If a real estate-related risk negatively affects one of the investments in the fund, it's likely to impact a lot of others too.

3. Invest in Real Estate ETFs

In addition to REITs, there are REIT ETFs, or exchange-traded funds. REITs invest in real estate; REIT ETFs invest in REITs.

For example, the Vanguard Real Estate ETF (VNQ) includes some of the most notable REITs within its fund, like Simon Property Group (SPG) and Prologis (PLD) . It could be less risky than investing directly in a REIT, and certainly less risky than actually buying property, but you'll also be getting less of a return back. Still, if risk is one of your biggest concerns when mulling a real estate investment, a REIT ETF is something that should be considered.

4. Wholesaling Houses

Wholesaling real estate is a little similar to flipping homes, but you don't own the home and you don't have to front any maintenance cost.

Wholesaling a house means contracting someone who is looking to sell their house, and quickly taking that contract and selling it to a prospective buyer for a profit, which the wholesaler keeps. No fixing up involved.

If you can actually successfully do this, great! There's much less risk as you're not putting your own money into the operation. The difficult part of doing this is actually finding a house that has been undervalued on the market that you can manage to sell for a profit.

5. Use an Online Real Estate Investment Platform

Much like with other sorts of stocks, there are online platforms that help you make real estate investments as well. Often, these investments you make are part of crowd funding, a way for others to be able to buy property without requiring venture capital. Popular online real estate investment platforms include Fundrise and RealtyShares.

This option tends to be more for those with money to spare, considering the costs necessary to purchase large property.

6. Real Estate Partnerships

Some real estate investments require an exorbitant amount of money. Not everyone can foot that. If you're not the only one involved in the investment, however, it could become more manageable.

Partnerships are a common way to invest in real estate, with each person taking over different responsibilities. Often, this can be used as a way to purchase property at a lower price. You can set the terms - such as simply paying the mortgage, or perhaps handling the down payment for the property. Depending on the terms of your partnership, you may be investing in real estate without doing too much hands-on work of owning property.

7. Invest in Real Estate Service Companies

There are plenty of companies that work primarily in the world of real estate that you can invest in.

Look beyond REITs for your real estate companies. For example, RE/MAX is a company that sells homes via real estate agents. Companies involved in real estate that don't involve actually buying property can be a way to not only diversify your portfolio, but get a good sense of the current real estate market.

8. Invest in Home Construction Companies

Another real estate-related investment that could be worth your time are companies that are involved in the construction of homes.

There are plenty of home building companies whose stock trades on the NYSE every day, such as Lennar (LEN) and D.R. Horton (DHI) . It's an intriguing investment option for those who believe that the construction of homes is something that will continue to increase, because if that's true, business should continue to boom.

9. Become a Real Estate Appraiser

Have you considered employment within the real estate industry? It can not only be an investment of sorts, but prepare you for how the market is doing and when the time is right to make good investments.

One job within the industry to consider is a real estate appraiser. An appraiser can specialize in either residential or commercial real estate, and determine the value of a property. They take specifics about both the property and its nearby surroundings into account to do this. According to the U.S. Bureau of Labor Statistics (BLS), the median salary for a real estate appraiser or assessor in May of 2017 was $54,010. Those with the highest salaries, however, could make over $101,000 a year.

10. Start a Brokerage or Become a Real Estate Agent

You could also get into the game of selling real estate. Real estate agents require some education and training before they can actually get out there and flip houses, but successful real estate agents can take home nice commissions on the properties they sell.

Agents generally work for real estate brokers, and if you'd rather be at the top than out there selling the homes, perhaps consider opening a brokerage and hiring agents. Brokerages get a large part of the commission that the agents make, so having successful agents can bring in a lot of money.

But starting a brokerage isn't simple, and it's incredibly expensive. You need extensive training and licenses to open and maintain one. If you're a successful agent looking for the next step in their real estate career, it could be a great idea. But if you don't have that level of success, knowledge or funding, you may want to start with becoming an agent.

5 Creative Ways to Use a Home Equity Line of Credit (HELOC)


A home is the largest asset for most Americans. Not only is it where you live and make memories, tapping into a home’s equity — the difference between what you could sell your house for and the amount you owe on the house — may provide the funds to cover large expenses with reasonable terms.

Here, we explore five less common uses for home equity lines of credit, or HELOC, as well as some things to look out for.

Home equity loan vs. home equity line of credit

Before discussing ways to use your home equity, let’s compare home equity loans with home equity lines of credit.

Both are loans secured with the equity in your home. A home-equity loan is disbursed all at once in a lump sum at a fixed interest rate for a fixed amount of time, usually 10 years or longer.

By contrast, a home equity line of credit is more like a credit card. While you can draw the entire line of credit all at once, you typically make partial intermittent draws. The interest rate is variable, and you are only charged interest on the amount of the credit line that is outstanding. You have the ability to pay the line of credit down and then use it again without reapplying, just as you do with a credit card.

HELOCs are a good choice for short-term projects and those requiring intermittent influxes of cash. Home equity loans and HELOCs should be used with caution since defaulting could cause you to lose your home.

1. Down payment on a second home

If you plan to purchase a new home but need the proceeds from the sale of your current home to make a down payment on the new home, then a HELOC may be a good alternative.

Taking out the HELOC on your current home would allow you to remain in your home until it sells. Be sure to secure the HELOC on your current home before placing it on the market, since lenders will not allow you to place the HELOC on your home after it is listed.

This alternative is especially attractive in a buyer’s market when selling times are protracted.

2. In lieu of a construction loan

If you’re planning to build a new home while continuing to live in your current home, a HELOC can be an attractive alternative to a construction loan.

Construction loans typically demand higher interest rates than home equity loans and are more difficult to qualify for. In addition, a HELOC offers you the advantage of only borrowing what you need as construction proceeds.

Note that if you take out a construction loan instead, the lender will require routine inspections to ensure construction is proceeding as planned.

3. Fund long-term care for an elderly family member

The average cost for long-term care in the U.S. in 2016 was $225 a day for a semiprivate room in a nursing home. If your loved one requires long-term care but neither of you has the funds set aside to pay for it, consider a HELOC.

Using a line of credit gives you the flexibility to draw only what you need and is well-suited to pay for long-term care costs since you don’t know how long you will need the funds or how much you will need.

4. Fund a business startup

Coming up with the funds to start a business can be challenging. Using a HELOC allows you to draw only what you need at a favorable interest rate.

It is also easier to qualify for a HELOC than for other business loan startup options, such as a Small Business Administration loan.

Should you choose to use a HELOC to start your business, secure it while you still have income from another source. You may even want to line up a HELOC as backup when you first launch your business, even if you don’t currently need the funds.

5. Pay for education

If you don’t have sufficient funds set aside to pay for a loved one’s college education, consider using a HELOC to fund this expense as well.

As in the previous examples, using a HELOC allows you to draw only what you need, and HELOC rates are often more favorable than the rates for a Parent PLUS loan. According to Sallie Mae, Parent PLUS loan rates range between 5.62 percent and 12.87 percent. According to Bankrate, the national average HELOC rate on Sept. 26 was 5.47 percent.

Keep in mind that federal student loans can be deferred and also offer other protections that are not available to HELOC borrowers.

HELOCs and the Tax Cuts and Jobs Act of 2017

If you’re interested in accessing your home equity for any of these uses, note that HELOCs lost some of their tax benefits starting in the 2018 tax year.

Specifically, the Tax Cuts and Jobs Act of 2017 suspended the deduction of interest paid on home equity loans and lines of credit from 2018 through 2026, unless the loan is used to “buy, build or substantially improve the taxpayer’s home that secures the loan.”

The new tax law also reduced the deductibility of home mortgage interest from $1 million for married filing jointly taxpayers to $750,000.

All this means that if you utilize a HELOC for any of the purposes mentioned above, you will not be allowed to take a tax deduction for the interest you pay on the line of credit.

That said, HELOCs remain useful for those with substantial home equity who need funds either for a limited period of time or at an interest rate that falls below other sources available to them.


Best Bang for your Buck Remodeling Projects in Colorado


It’s a good time to own Home Depot stock. Or a hardware store. Or a contracting business.

America is in the middle of a home renovation bonanza, according to research from Golden-based HomeAdvisor.

The average homeowner invested $6,649 in home improvements between March 2017 and March 2018, according to HomeAdvisor’s True Cost survey. That’s up $1,492 over 2017, itself a year in which HomeAdvisor’s annual survey tracked an $1,850 jump in consumer spending on home improvements.

The craze is multi-generational. Millennials completed more projects than any other age group, even if they spent 32 percent less on average compared to their baby boomer counterparts. Roughly eight out of every 10 millennial homeowners surveyed said they plan to spend more money on home improvements in 2018-2019 than they did in 2017-2018.

Driving the movement to stay put and fix up rather than move out are some issues Colorado home seekers know all too well at this point: A lack of homes for sale (though a recent survey shows inventory growing in the Denver metro area) and correspondingly high costs of available homes, observers say.

“Mobility rates are ticking down and I think there are a variety of factors to that,” HomeAdvisor home expert Dan DiClerico said. “With the combination of home prices and interest rates ticking up, it just doesn’t make sense for people to move at this particular moment.”


It’s a good time to own Home Depot stock. Or a hardware store. Or a contracting business.

America is in the middle of a home renovation bonanza, according to research from Golden-based HomeAdvisor.

The average homeowner invested $6,649 in home improvements between March 2017 and March 2018, according to HomeAdvisor’s True Cost survey. That’s up $1,492 over 2017, itself a year in which HomeAdvisor’s annual survey tracked an $1,850 jump in consumer spending on home improvements.

The craze is multi-generational. Millennials completed more projects than any other age group, even if they spent 32 percent less on average compared to their baby boomer counterparts. Roughly eight out of every 10 millennial homeowners surveyed said they plan to spend more money on home improvements in 2018-2019 than they did in 2017-2018.

Driving the movement to stay put and fix up rather than move out are some issues Colorado home seekers know all too well at this point: A lack of homes for sale (though a recent survey shows inventory growing in the Denver metro area) and correspondingly high costs of available homes, observers say.

“Mobility rates are ticking down and I think there are a variety of factors to that,” HomeAdvisor home expert Dan DiClerico said. “With the combination of home prices and interest rates ticking up, it just doesn’t make sense for people to move at this particular moment.”


Of the more than 1,000 homeowners who talked to HomeAdvisor this spring, 84 percent had no plans to move in the next 12 months. That comes despite half of all millennials saying that want to move to bigger or nicer homes.

“Now it’s millennials just as much as older Americans that are having to stay put,” DiClerico said. “That’s a function of inventory in many parts of the country; not being able to trade up because the homes just aren’t out there.”

With dozens of possible projects in every home, DiClerico has some recommendation on how homeowners can best invest their hard-earned dough to bump up their home’s value should the time to sell come.

The best place to start is the kitchen. Although the 2017-2018 survey found the average kitchen remodel cost $22,145, even a much cheaper update could significantly boost a home’s value. New appliances, counter tops and flooring can be had for a combined $4,000, DiClerico said, and raise a home’s value by thousands of dollars.

“A smart, cosmetic kitchen renovation makeover like that could raise a home’s value 5 percent,” he said.

For a $367,000 home, the median value in Colorado according to Zillow, that could mean an extra $18,000 and change.

Once the new fridge is humming and new kitchen counter tops have been buffed to a glossy shine, the next best way to boost a home’s value is by turning unfinished space into livable space. While he puts the average cost of finishing a basement at around $7,500, again DiClerico says a more thrifty remodeling project can have a significant impact on value. Start with upgrading the lighting if the basement is in decent shape already, DiClerico said.

“Depending on the current condition of the space, if it doesn’t need to be fully redone, you could be in and out for a couple of thousand dollars,” DiClerico said.

When it comes to what sells a house, if it’s not the kitchen, it’s the bathrooms. It’s another area where the average renovation can be pricey — $9,742, according to the True Cost report — but a budget project can have an impact. Investing $2,500 in re-lining a shower or tub, updating the faucet and sink and installing new tile could provide a 2- to 3-percent boost in total home value, DiClerico said.

When it comes to doing something on the cheap or going whole hog, there is a judgement call to be made. DiClerico noted that a high-dollar kitchen renovation largely becomes sunk cost. Homeowners who invest $25,000 in their kitchens will not get all that money back at sale time, but if they’re in a home they love and plan to stay in long term, the focus shifts to the enjoyment they get out of the finished product.

At a time when home supply is lagging thousands of units short of demand in metro Denver, the home improvement industry isn’t just staying busy, it’s going bigger.

“One big trend we are seeing is the whole-house remodel,” said Patrick Condon, founder and president of the Finished Basement Company. “The family is moving out of the house, and we’re getting in and out of it and really giving them the home of their dreams.”

The Finished Basement Company handled design and project management services for more than 100 complex renovation projects in the Denver area last year, Condon said. For many people it comes down to loving the area where they live. He put the average cost of a whole-home overhaul between $150,000 to $250,000. Moving into a new home can cost upwards of $50,000 on its own, he added.

“You can change your house but you can’t change your neighborhood,” he said. “There are financial factors that come into it, but you can absolutely make any home your dream home.”

In Jefferson County, homeowner Kim McGrigg is now enjoying the home she bought last summer but could not live in it for the first six months she owned it. McGrigg and her husband bought a home in Genesee for $665,000 knowing it wasn’t exactly what they were after. They worked with the Finished Basement Company and invested $300,0000 in the property, living in an apartment in the meantime. The work included taking the kitchen down to the studs, splitting one large bathroom into two and lots of cosmetic updates.

“This was an opportunity for us to say, ‘We’re going to make this our house because we plan to live here for a long time,’ ” McGrigg said.

She has some advice for homeowners considering a project of this scale: Be patient.

“It’s hard to wait,” she said. “I was so excited about it, and it ended up being totally worth it.”