There's a term in residential real estate to describe Buyers who are ready to go: Ready, Willing, and Able. These people have their ducks in a row, are qualified financially (both literally qualified with lender, and figuratively qualified, meaning they have assets and employment to support a purchase without having to do anything else). Their intention is to purchase a property Continue Reading
About Jeff Summerhill
Handcuffed to Your House
June 16, 2023 There's a phenomenon known as "Golden Handcuffs" being mentioned for a large part of the reason why inventory levels in Denver are very very low. The concept is that due to people having low mortgage rates, they will not sell. This is partly true, but there is more nuance to the issue at hand. The fact of the matter is that the vast majority of people with Continue Reading
The Property Ladder is Broken
May 11, 2023 The concept of the property ladder in Real Estate is simple. A buyer starts with a "starter home" at a younger age, then moves up to a bigger house as say, their growing family needs that. There may be another move up into an even larger home as kids age, school choices change, etc. This might be the "forever" home. At some point then, there may be a Continue Reading
The Bull Case For Buying Now
May 3, 2023 Many of my recent posts have been pessimistic in nature about the current state of the local Denver and Colorado Real Estate markets. Prices are declining, and the prices, both in real (accounting for inflation and interest rates) and nominal terms are higher than they have ever been in history. It's been a bit of a falling knife right now with housing. If you Continue Reading
Duration Risk
May 2, 2023 There have been numerous bank failures in the US over the past few months. The main cause for the failures has been deposit flight (customers with deposits pulling their deposits from the bank). A bank does not keep very much money liquid on hand to cover a very large percentage of customers who would like to withdraw all their deposits. When this happens at any sort of scale, the Continue Reading
Marry the House, Date the Rate
April 21, 2023 It's been just over a year since Mortgage rates spiked up significantly, from all-time lows of around 3% to where they currently are in the high 6%'s (average rates always assumes 30 year fixed rate mortgage, excellent credit). As you can imagine, this has been a damper on demand since many people cannot afford to buy now at these rates and prices. The market Continue Reading
Understanding Where Supply Comes From
Sources for New Supply In Real Estate, you will often hear that prices are determined by Supply and Demand. While Supply and Demand is a fundamental tenet of markets, it's important to understand that with the housing market, both the supply side, and the demand side, can be, and are often artificially manipulated, sometimes on purpose, and sometimes inadvertently. There are Continue Reading
Your Mortgage is An Asset
Mark 30, 2023 A typical school of thought in financial planning/management is that any debt is a liability. Your car, your student loans, your credit cards, and your mortgage. Some financial gurus have encouraged people to aggressively pay down or pay off all debts, including the mortgage. Normally this is pretty sound advice, but it's also "one size fits all" advice, and as it Continue Reading
The Market is Anything But Stable Right Now
March 29, 2023 I was recently looking at the latest DMAR (Denver Metro Association of Realtors) Market Trends report (DMAR_MarketTrendsReport_March2023_020323X) for March 2023, which would include data up through the end of February. The interesting thing about data is that its presentation to the public can be spun (or manipulated) by being presented in a certain way, for instance, Continue Reading
Just How Far Will Denver Real Estate Prices Fall?
March 27, 2023 Just How Far Will Denver Real Estate Prices Fall in 2023 and beyond? Well, this is a question that may be on the mind of just about everyone these days. It's clear now that home prices are down from 2022 highs which probably signals the highs of the 2010-2022 twelve-year mega cycle, and there appears to be great turmoil building in the economy, and in the financial system. Continue Reading
Mortgage Application Index Portends Stormy Future
March 8, 2023 Mortgage rates have moved quickly from ~6% to ~7% over the past 30 days: Mortgage Rates Head Back Over 7% After Powell Testimony 30 Yr. Fixed: 7.03% (+0.04% ▲) | 15 Yr. Fixed: 6.48% (+0.03% ▲) | https://t.co/hpyoRNAipg — Mortgage News Daily (@mortgagenewsmnd) March 7, 2023 As would make sense, new mortgage applications are down a staggering 42.3% year over year. Continue Reading
Why Mortgage Rates Likely Will Go Up, Not Down, From Here
February 15, 2023 🚨The average 30-year fixed mortgage rate jumps back to 6.75%. That’s a new high mark for 2023. pic.twitter.com/J9NgjuQ457 — Lance Lambert (@NewsLambert) February 15, 2023 The average rate for a 30 Year Fixed Rate Mortgage (Conforming Amount) is at a high now for 2023 after making a fast move up from near 6% to 6.75% over the past few weeks. After these rates Continue Reading
Denver Real Estate Has Never Been More Expensive
February 15, 2023 Like Ever. Full Stop. Yes, You Heard That Right: Denver Real Estate Has Never Been More Expensive. There are indices used to compare the cost of Real Estate over time in a given city like Denver. The most well-known and respected is the Case Shiller index. Instead of merely looking at averages over time, this index compares sales of the same Continue Reading
Denver Prices Now Down 21% To Date Since May 2022 Peak
February 15, 2023 Denver Median Prices down 21.89% from May 2022 to January 2023 It comes as no surprise to anyone who follows Colorado Real Estate that the frothy prices in Denver, driven skyward by the loosest and cheapest borrowing rates ever (unleashing incredible demand from primary residents, second home owners, and investors alike), would peak and retreat once the Federal Reserve Continue Reading
Blow Off Top
Blow Off Top There is a stock market term referred to as a "Blow Off Top." It is defined by Investopedia as: A blow-off top is a chart pattern that shows a steep and rapid increase in a security’s price and trading volume, followed by a steep and rapid drop in price—usually on significant or high volume as well. The rapid changes indicated by a blow-off top, also called a blow-off Continue Reading
Rising Mortgage Rates Will Deflate the Market
Rising Mortgage Rates Will delate the Market, if rates are allowed to follow their natural trajectory (Up). This is really a fact that is impossible to dispute if you understand macroeconomics, credit, and markets. Let's begin by looking at how mortgage rates come to be at a given moment in time: How are interest rates set and why are they going up? Mortgage Rates Continue Reading
Peak FOMO
We may have reached "Peak FOMO" this month in Denver Real Estate. If you haven't heard the term before, FOMO is the Fear of Missing Out. FOMO is a very real thing, it's a byproduct of the human psyche and the human condition to want to fit in, to want to feel successful, to want to have as much or more than the next person. What I did not realize is that this term is a relatively Continue Reading
Is It a Giant Ponzi Scheme?
You may be familiar with the term Ponzi scheme, which admittedly I wasn't familiar with until the Great Financial Crisis in 2008/2009. A high profile case of Bernie Madoff made headlines for the level of scam and fraud that bilked investors out of millions or billions of dollars. Put simply, a Ponzi scheme is an investment scheme that pays "profits" to "investors" out of funds Continue Reading
Monopoly Money
With everything getting more expensive, it might be time to reintroduce the $500 bill like the original monopoly game. Virtually everything has gotten more expensive over the last 18 months, especially necessities of life and things with intrinsic value like housing or shelter. In Denver in November, according to DMAR, the median home price was $542,000. The Denver Post Continue Reading
Many Buyers Suffer From Buyer’s Remorse
There are a plethora of articles out there in the past few years indicating that a majority of younger buyers polled suffer from buyer's remorse: that is to say, they REGRET their purchases. CNBC: 63% of millennials who bought homes have regrets—usually because they missed this one crucial step At best, a bad decision on a purchase can mean years of living in an abode you do not like, Continue Reading
Where’s the Inventory?
It seems like there's nothing for sale The inventory in the Denver Metro Real Estate market has been so tight, there has been such as shortage of homes for sale it seems, that many are questioning where all the houses are that should be for sale? In fact, in our last blog post, we mentioned that inventory year over year for December is down an incredible 65.9%. It's very Continue Reading
Real Estate Market Out of Gas?
Is the Real Estate market out of gas? Is the party over in 2021? In a recent article from this past week in the Denver Post entitled Metro Denver housing market running out of gas, economists tell agents, the Post quotes several local economists who say that rising sales and double-digit price increases have reached their limits. It goes on to say that the Denver Real Estate market Continue Reading
Denver | Top 10 Housing Market in 2021
In a recent post on this site, I wrote how cities in America are undergoing immense changes in the near and long term. With less emphasis on office work, in-person meetings, etc. migration, population movements, and living arrangements are already adjusting. It's hard to dispute these changes, but there is reason to believe that mid-size or smaller cities, especially if they are less Continue Reading
The Future of Denver and the American City
The American City was doing so well, then Covid happened. With 2020 drawing to a close and Covid-19 still at the forefront of American life, many changes have happened and are still happening quickly in the arrangement of American life, namely how and where people choose to live. The period immediately following the Great Financial Crisis, the entire decade from 2010-2020, was a great Continue Reading
Add Character to Your Abode- Vintage Furniture
Incorporate Vintage or High-Quality Used Pieces A great way to add character to your interior decor in your abode is to sprinkle in some vintage/used furniture. This can work with literally any style. Even if you don't want a full Boho/Flea Market vibe, a piece here or there can really give the space dimension and character. Vintage furniture in general is made much better Continue Reading
