Just Released: International Luxury Buyer Trends and Demand

The past year has shown us that real estate is a timeless investment that can endure and even thrive in challenging economic conditions.

Accordingly, Luxury Portfolio International® has released its latest report,  International Luxury Buyer Trends and Demand, which follows on our State of Luxury Real Estate 2021 report released in January.

Taking from the trends we identified in our initial State of Luxury Real Estate report, we find the international buyer is highly mobile, motivated by feelings of self-reliance, and after many months of time at home, is looking to add excitement and fun in his or her daily life.

Findings include:

  • Investment properties and holiday residences are of top interest
  • Proximity to nature is prioritized over proximity to the city
  • Newer builds are preferred, namely those constructed during the last five years
  • A list of top global property destinations for luxury buyers
  • The primary reasons for international purchases

From a regional standpoint the U.S./Americas & Caribbean account for 37% of the interest from international luxury buyers, followed by Europe and the Middle East at 29%, and Asia at 18%. Narrowing location further, Hawaii is garnering the most attention – a noteworthy one in five (20%) international buyers have expressed interest.

Mickey Alam Khan, President of Luxury Portfolio International commented, “Hawaii tops the list for international property buyers, and if you’ve visited the Aloha State it’s easy to understand why. The islands boast pristine beaches, lush tropical greenery and incredible year-round temperatures.  Our report shows affluent buyers are interested in regions which provide for their needs—great entertainment as well as investment opportunity and lifestyle enrichment.”

 

Take a deep dive into the mind of the affluent. Download  International Luxury Buyer Trends and Demand.

 

Spring Maintenance Checklist

Spring is the perfect opportunity for homeowners to prepare their property for the months to come. Here are tips from Pillar to Post Home Inspectors to get started:

  • Check siding for cracks, peeling or chipped paint, and general wear and tear. Have damaged areas repaired and repainted as needed for lasting protection.
  • Clean gutters and downspouts of debris that collected over the winter.
  • Check patios and walkways for cracks and any loose bricks or pavers. These are a tripping hazard that needs to be corrected promptly.
  • Clean window screens and repair any holes or tears, or replace the screen material.
  • Check around for damaged tree limbs and branches. If a large tree appears to be damaged, be safe and call a professional to address any issues.
  • Inspect the irrigation system for broken sprinkler heads and emitters. Also check for overspray and adjust the system to prevent water waste.

 

Happy Spring Everyone!

 

3 Reasons We’re Definitely Not in a Housing Bubble

from Keeping Current Matters

Home values appreciated by about ten percent in 2020, and they’re forecast to appreciate by about five percent this year. This has some voicing concern that we may be in another housing bubble like the one we experienced a little over a decade ago. Here are three reasons why this market is totally different.

 

1. This time, housing supply is extremely limited

The price of any market item is determined by supply and demand. If supply is high and demand is low, prices normally decrease. If supply is low and demand is high, prices naturally increase.

In real estate, supply and demand are measured in “months’ supply of inventory,” which is based on the number of current homes for sale compared to the number of buyers in the market. The normal months’ supply of inventory for the market is about 6 months. Anything above that defines a buyers’ market, indicating prices will soften. Anything below that defines a  sellers’ market  in which prices normally appreciate.

Between 2006 and 2008, the months’ supply of inventory increased from just over 5 months to 11 months. The months’ supply was over 7 months in twenty-seven of those thirty-six months, yet home values continued to rise.

Months’ inventory has been under 5 months for the last 3 years, under 4 for thirteen of the last fourteen months, under 3 for the last six months, and currently stands at  1.9 months  – a historic low.

Remember, if supply is low and demand is high, prices naturally increase.

 

2. This time, housing demand is real

During the housing boom in the mid-2000s, there was what Robert Schiller, a fellow at the Yale School of Management’s International Center for Finance, called “irrational exuberance.” The  definition  of the term is, “unfounded market optimism that lacks a real foundation of fundamental valuation, but instead rests on psychological factors.” Without considering historic market trends, people got caught up in the frenzy and bought houses based on an unrealistic belief that housing values would continue to escalate.

The mortgage industry fed into this craziness by making mortgage money available to just about anyone, as shown in the  Mortgage Credit Availability Index  (MCAI) published by the Mortgage Bankers Association. The higher the index, the easier it is to get a mortgage; the lower the index, the more difficult it is to obtain one. Prior to the housing boom, the index stood just below 400. In 2006, the index hit an all-time high of over 868. Again, just about anyone could get a mortgage. Today, the index stands at 122.5, which is well below even the pre-boom level.

In the current real estate market, demand is real, not fabricated. Millennials, the largest generation in the country, have come of age to marry and have children, which are two major drivers for homeownership. The health crisis is also challenging every household to redefine the meaning of “home” and to re-evaluate whether their current home meets that new definition. This desire to own, coupled with historically low mortgage rates, makes purchasing a home today a strong, sound financial decision. Therefore, today’s demand is very real.

Remember, if supply is low and demand is high, prices naturally increase.

 

3. This time, households have plenty of equity

Again, during the housing boom, it wasn’t just purchasers who got caught up in the frenzy. Existing homeowners started using their homes like ATM machines. There was a wave of cash-out refinances, which enabled homeowners to leverage the equity in their homes. From 2005 through 2007, Americans pulled out  $824 billion dollars  in equity. That left many homeowners with little or no equity in their homes at a critical time. As prices began to drop, some homeowners found themselves in a negative equity situation where the mortgage was higher than the value of their home. Many defaulted on their payments, which led to an avalanche of foreclosures.

Today, the banks and the American people have shown they learned a valuable lesson from the housing crisis a little over a decade ago. Cash-out refinance volume over the last three years was less than a third of what it was compared to the 3 years leading up to the crash.

This conservative approach has created levels of equity never seen before. According to Census Bureau  data,  over 38% of owner-occupied housing units are owned ‘free and clear’ (without any mortgage). Also, ATTOM Data Solutions just released their fourth quarter  2020 U.S. Home Equity Report,  which revealed:

“17.8 million residential properties in the United States were considered equity-rich, meaning that the combined estimated amount of loans secured by those properties was 50 percent or less of their estimated market value…The count of equity-rich properties in the fourth quarter of 2020 represented 30.2 percent, or about one in three, of the 59 million mortgaged homes in the United States.”

If we combine the 38% of homes that are owned free and clear with the 18.7% of all homes that have at least 50% equity (30.2% of the remaining 62% with a mortgage), we realize that 56.7% of all homes in this country have a minimum of 50% equity. That’s significantly better than the equity situation in 2008.

 

BOTTOM LINE

This time, housing supply is at a historic low. Demand is real and rightly motivated. Even if there were to be a drop in prices, homeowners have enough equity to be able to weather a dip in home values. This is nothing like 2008. In fact, it’s the exact opposite.


 

Things You Need To Know About Dogs and Home Insurance

Brought to you by Bennett & Porter Wealth Management + Insurance


It’s official: The United States is a country of dog lovers.

According to the American Pet Products Association’s (APPA) 2019-2020 National Pet Owners Survey, nearly 64 million households have dogs for pets, with cats a distant second at 42.7 million.

The popularity of dogs is hardly surprising. After all, they do have many positive effects on their owner’s lives, from the active lifestyle they bring about to the way they relieve stress and anxiety in people.

Still, one can’t help but wonder about the rates dog owners are paying for their home insurance policy—if they even have one. Yes, the dogs you have at home will factor into your home insurance rates.

If you’re planning on getting protection for your home and you own a dog or two or more, here are some things you need to know about dogs and homeowners insurance.

 

Dog Breeds Matter To Insurers

A standard home insurance policy provides you liability coverage. If a visitor suffers an injury while within your property–like getting bitten by your dog–your home insurance policy’s liability coverage will pay for that person’s hospital and medical bills.

Since dogs are generally perceived to present such a risk, it’s perfectly normal for insurance companies to be worried about your four-legged companions. That concern prompts them to take measures designed to protect their interests.

Some insurance providers charge higher premiums for dogs with a genetic predisposition for aggressiveness. Others simply deny home insurance coverage altogether to households with aggressive dogs.

In short, the breed of your dog will dictate your home insurance rates, that is, if your insurer would even consider providing you coverage.

 

Restricted Breeds

Some dog breeds are more aggressive than others. As far as most insurance companies are concerned, the following breeds are on the restricted list:

  • Akita
  • Alaskan Malamute
  • Chow Chow
  • Doberman Pinscher
  • German Shepherd
  • Great Dane
  • Mastiff
  • Pit Bull Terrier
  • Rottweiler
  • Siberian Husky
  • Wolf Hybrid

As restricted breeds, these dogs will either drive up your home insurance rates or get your application for coverage denied.

 

Preventing Dog Bites

Let’s assume that you were fortunate enough to get home insurance coverage regardless of the breed of your dog, and at a reasonable rate at that.

As much as possible, you should take steps that will help you avoid dog bite incidents in the future. While your home insurance coverage will pay for the bite victim’s medical expenses, the subsequent liability claim could cause your insurance premiums to skyrocket.

Worse, liability claims triggered by dog bites could also force your insurance company to deny you coverage moving forward.

To prevent that from happening, you should take precautions to reduce or eliminate the possibility of dog bite incidents, like:

  • Spaying or neutering your dog to reduce aggressiveness
  • Keeping your dog on a leash, especially when you have guests
  • Not letting random strangers on the street come up and pet your dog
  • Respecting your dog’s space, especially when eating
  • Socializing your dog
  • Signing up for dog obedience school

 

There Are Dog-Friendly Insurance Companies

Fortunately for many dog owners, there are insurers that don’t discriminate against dog breeds. These companies—some of them among the biggest ones in the industry—will consider providing coverage for any breed after taking into account the specific dog’s history and behavior.

It is also not unheard of for insurance companies to ask for a meet and greet with the dogs themselves for assessment.

To find out if the home insurance provider you’re eyeing is dog-friendly, talk to a representative or agent, and be as honest as possible about the dogs you own.

 

Market Updates & Listing Outreach from CLR Agent Phil Booth

We are in a VERY UNIQUE WINDOW right now, which reinforces that there may not be a better time to sell than the second quarter of 2021!

We are currently in an extremely strong sellers market.  There is very little housing inventory (low supply) and an abundance of buyers (high demand).   This situation is a direct reflection of concerns around COVID and super low mortgage interest rates.  These factors are colliding to create a ‘perfect storm’ for sellers.

To explain concisely, there are two forces at play:

1. SUPPLY (SELLERS) – There are many would be sellers who have chosen to hold tight over the past year and not sell because of COVID.  They simply do not want to open their homes up to buyers!  As such, we have had and continue to have historically low inventory.

2. DEMAND (BUYERS) – There is super high buyer demand based on COVID… there is a dramatic influx of people moving from denser population centers to the area, there are many people who, having spent more time than ever at home over the past 12 months, have realized that their current home does not meet their needs  Couple these factors with the fact that money is ‘cheap’ at present… people looking to capitalize on historically low interest rates.

THE RESULT.  When properties come onto the market that are well prepared, well presented, and well priced, we are seeing extremely high showing demand and multiple offers, at well above asking price.   This phenomenon is causing rapid appreciation.  In the last 12 months in Boulder County we have seen appreciation of up to 20% for single family homes and 10% for attached dwellings.  And, this pattern is continuing stronger than ever here in 2021, with 2% appreciation per month in certain areas and price points!

However, this supply and demand imbalance is likely to balance out in the second half of 2021. WHY?

1. SUPPLY – As we see higher vaccination rates (hopefully by mid summer) home owners will feel less wary about COVID and will feel more comfortable about selling, and will be HIGHLY motivated to realize the rapid appreciation they have seen in their homes.

2. DEMAND – We are likely to see interest rates creep up, which will cause buyer demand to wane somewhat.

It is still promise to remain a Sellers’ market, but not to the degree of imbalance we are seeing at present.

Hence, the second quarter of 2021 is a fantastic opportunity to sell and realize the benefits of  THE PERFECT STORM!

Phil Booth

REALTOR®

303-817-8307

Phil@ColoradoLandmark.com

 

Spring 2021 Buyer, Seller + Millennial Guides Are Now Online

Great news! Spring 2021 Buyer & Seller Guides are now available! Both Guides speak of present, crucial information about today’s housing market in an easy-to-understand way.


Seller Guide

Selling your house when the fewest number of homes are available to buy is what puts you in the driver’s seat. With today’s high buyer traffic and low inventory of houses for sale, this power combination makes now the optimal time to sell, if you’re ready. Whether you want to move-up or downsize, here’s the breakdown on supply and demand and why this imbalance in the current housing market positions this season as the optimal time to make your next move.

 

Buyer Guide 

The housing market recovery has been nothing short of remarkable. Many experts agree the turnaround from the nation’s economic pause last year is playing out extremely well for real estate, so it’s an ideal time to buy a home for those who are ready to make a purchase. Here’s a dive into some of the biggest wins for homebuyers this spring.

 

Millennials Guide

If you are one of the millions of millennials who has seen their peers begin to buy homes recently and are wondering what it would take for you to do the same… you’ve found the right eGuide!

There are many stereotypes and myths about the millennial generation as a whole, AND about what it takes to buy a home in today’s market. These myths have prevented many millennials from even considering homeownership as an option for them and their families.

The goal of this eGuide is to provide you with the information you will need to make the best decision for you and your family in regards to homeownership. We will break down the myths and stereotypes that have long been believed to be true, as well as shed light on the opportunity you have to build wealth using your monthly housing cost.


 

The Spring 2021 Luxury Portfolio Magazine is Now Available

NEW LUXURY PORTFOLIO MAGAZINE: NATURE AND HOME DESIGN

Just released, LPI’s Spring edition of Luxury Portfolio magazine explores biophilia, or the desire to be near nature, and how it relates to home design. The issue also notably features second home market trends, sustainable luxury brands, celebrity homes, and more.


NATURE AND HOME: BIOPHILIA IN DESIGN

Biophilia has been steadily trending in home design for years, and it’s only been exasperated with greater time at home and the need for a tranquil and healing space. In our exclusive four-page spread “Nature and Home: Biophilia in Design,” we explore the definition and its incorporations by exceptional designers and architects. The piece offers everything from eco-friendly design tips to a Disappearing Pool (yes!).

The nature theme is found throughout the issue, also showcasing outdoor furnishings, our favorite houseplants, and tips for exterior living.

 

A LOOK AT ETHICAL LUXURY

In our latest edition of recurring article “Jet Set,” we looked at four ethical luxury brands from around the world, including recognizable names Stella McCartney and Bobbi Brown, as well as beautifully crafted sustainable jewelry and clothes made from seaweed.

Additionally, LPI conducted a Q&A with the Chief Sustainability Officer of Tiffany & Co., Anisa Kamadoli Costa, to gain insight into how Tiffany has been influential in promoting ethical practices among luxury brands.

 

BREAKING TRADITION: THE SECOND HOME MARKET

Second home markets have shattered expectations in 2020. To gain insight into various markets, we interviewed experts from Brown Harris Stevens – The Hamptons; Chase International; John R. Wood Properties; Turks and Caicos Property; VALLAT; and The Whistler Real Estate Co. Ltd. The article explores how the markets are performing and the most popular amenities within the respective regions.

 

NOTABLE OWNERS

Every issue, we make a point to showcase celebrity homes. The most recent lineup includes athlete Derek Jeter and popular musical artists, like John Lennon, Katy Perry, and Sonny Bono.

 

BONUS: EXTENDED INTERVIEWS

In the coming weeks, be sure to keep up with our blog. Every week for six weeks, LPI will share extended interviews from the issue. Including designer insight on biophilia, a look at various second home markets, and an extended interview with Tiffany & Co.

 

Read the  digital edition, request your  print copy, or view our  press release for additional details.

 


 

Updates on Loan Limit Increase from Elevations & Melissa Cotton

The Federal Housing Finance Agency (FHFA) has raised the baseline conforming loan limit for 2021, and we’re here to help you understand what this means. Laws restrict Fannie Mae and Freddie Mac to purchasing single-family mortgages with origination balances that are below a certain amount — this amount is known as the “conforming loan limit.*”

The conforming loan limit was increased nationwide effective January 1, 2021.  Read on for the reason behind this limit change, what these limits are in the Colorado counties we serve, and what the increase means for homebuyers.

 

Why has the limit been raised?

The limit increase is a response to significant gains in home values that occurred during 2020. According to FHFA’s seasonally adjusted, expanded-data HPI, house prices increased 7.42%, on average, between the third quarters of 2019 and 2020.** As home prices rise, the maximum loan limit needs to rise so homebuyers can borrow enough to cover the cost of their new home purchase. Raising the conforming loan limits for mortgages purchased by Fannie Mae and Freddie Mac reflects the continuing recovery of the U.S. housing market. In most counties across the country, the 2021 maximum conforming loan limit for a single-family home is $548,250. That’s an increase of $37,850 from the 2020 baseline limit of $510,400.

 

What does this mean in high-cost areas?

High-cost areas are counties in which 115% of the local median home value exceeds the baseline conforming loan limit. In Colorado, that includes Boulder, Denver, Broomfield, Jefferson, Arapahoe, Douglas and Adams counties. In these areas, the loan limit is established as a multiple of the area median home value, while a “ceiling” of that limit is set at 150% of the baseline loan limit.  Read on to see the limits in the Colorado counties we serve.

 

What does this mean for borrowers?

Higher conforming loan limits are an “added value” to the homebuyer. It allows you to purchase a higher-priced home but keep your loan amount in a conforming loan limit that provides greater flexibility with underwriting guidelines and programs.

Below you’ll find a snapshot for the high balance conforming limit for one-unit properties in select counties.

 

What the new limits are in the Colorado counties we serve:

Conforming New Limit One-Unit Property
All Counties (includes Larimer & Weld County) $548,250
Conforming – High Balance Limit One-Unit Property
Boulder County $654,350
Denver, Broomfield, Jefferson, Arapahoe, Douglas, & Adams County $596,850

5 Home Must-Haves According to Millennial Buyers

Millennials are becoming leading influencers in the luxury real estate market and, with that, comes along a new list of desired amenities and design elements such as minimalism, smart technology, wellness, entertainment, and more. The below list of homes, of which can all be seen on Luxury Portfolio International‘s website, showcases such trends and is worthy of Millennial swooning.


WELLNESS AMENITIES

Crete, Greece | Price Upon Request

Wellness is of vital importance to Millennials. Stay active within multiple calming spaces throughout this property – for instance, walking the private sandy beach or the garden with shady paths complete with Mediterranean flowers and centuries-old trees. A dip in the infinity pool is yet another activity, serving both as a place to get fit, as well as to unwind.

 

SMART HOUSE

Malibu, California, USA | US $6,885,000

The smart house is growing in popularity, allowing Millennials to customize and automate much of their living environment. This newly built, Malibu home is fully automated and 100% off-grid through solar energy. The Ring security system is another highly desired smart home benefit this abode has to offer. Along with the smart house amenities, this home is beautifully designed with 17-foot ceilings and walls of glass overlooking mountain and ocean views.

 

MINIMALISM

Chicago, Illinois, USA | US $6,750,000

Millennials always seek ways of simplifying their busy lifestyles, which has resulted in the rise in minimalism in design. But keeping it simple doesn’t have to be boring. This award-winning Chicago penthouse showcases remarkable, 12-foot ceilings with dramatic arched windows and doors. The open floorplan prioritizes sleek design, but in a truly mesmerizing fashion.

 

AMAZING KITCHENS

Bainbridge Island, Washington, USA | US $3,585,000

Millennials consider kitchens to be among one of the most important rooms within the home and enjoy experimenting with different cuisines. What better space to cook than this sleek and contemporary kitchen? Offering an oversized refrigerator, two large sinks, and abundant storage space, this kitchen opens to other stunning living areas. Cooking can also be taken outside on an expansive wood deck, complete with a built-in grill, plus a gas fireplace, saltwater pool, and views of Puget Sound, Mt. Rainier, and Seattle.

 

NATURAL ELEMENTS

Fort Collins, Colorado, USA | US $2,350,000

Nature-related design is expected to be huge among Millennials in the coming years. This Colorado home, built by the award-winning Brannen Homes, offers a stunning and intimate backyard with beautifully styled outdoor living and dining spaces. The surrounding, lush vegetation provide an additional nature connection, while nearby parks and walking paths allow residents to explore nature within their residence and beyond.


For more home inspiration, check out Luxury Portfolio International’s list of  favorite  work-from-home amenities.

 

Service Line Coverage from State Farm

 

 

 

 

Do you know that municipalities and utility companies are typically not responsible for the water, sewer, electric, gas and other service lines on your premises? Any repairs are most likely at your expense.

State Farm® Service Line Coverage may be added to your Homeowners Policy for a low annual cost with a $500 deductible and a $10,000 limit per occurrence to provide coverage for loss or damage to service lines. In some states, coverage includes a limitation of $2,500 on service lines 50 years old or older at the time of loss. Ask your agent about what’s covered in your state.

 

What does this coverage include?

This is not warranty coverage. Under the Service Line Coverage, a covered service line refers to “exterior underground piping and wiring,” including permanent connections, valves or attached devices providing the following services to your home:

1. Communications
2. Compressed air
3. Drainage
4. Electrical power
5. Heating, including geothermal, natural gas, propane and steam
6. Waste disposal
7. Water

A service line failure is defined as a leak, break, tear, rupture, collapse, or electrical arcing of a covered service line not otherwise excluded. A service line failure may be caused by, but is not limited to, the following:

  • Wear and tear, marring, deterioration or hidden decay
  • Rust or other corrosion
  • Mechanical breakdown, latent defect inherent vice
  • Weight of vehicles, equipment, animals or people
  • Vermin, insects, rodents or other animals
  • Artificially generated electrical current
  • Freezing or frost heave
  • External force from a shovel, backhoe or other forms of excavation
  • Tree or other root invasions

Blockage or low pressure of a covered service line when there is no physical damage is not a covered service line failure.

 

Here’s a coverage example:

Say, for instance, your sewer line cracks as a result of tree root invasion and the covered repair costs total $10,000. With Service Line Coverage, your responsibility for the loss is your $500 deductible. Payment for the loss would be the remaining $9,500. Payment for the loss would be $2,500 if your state has a sublimit and the damaged sewer line was 50 years old or older.

 

Covered service lines also include:

• Excavation costs – We may pay the necessary and reasonable excavation costs that are required to repair or replace your covered service line.
• Expediting costs – We may pay reasonable extra costs to make temporary repairs and expedite permanent repairs or permanent replacement.
• Loss of use – We may cover additional living expenses and fair rental value due to a covered loss.
• Outdoor property – We may pay for your outdoor property, such as trees, shrubs, plants, lawns, walkways or driveways that are damaged as a result of a service line failure or are damaged during the excavation of the covered service line.

 

Choosing the right supplemental coverage is important. Your State Farm agent is here to help guide your decision.

 

Call us 24 hours a day!

Jeannie Hulse Ins Fncl Svc Inc
Jeannie Hulse, Agent

303-828-4002

525 Briggs Street, PO Box 1005
Erie, CO 80516-1005