Seven Trends: Defining the Luxury Home of Today

The State of Luxury Real Estate 2022 (SOLRE) research spans 20 countries and 4,673 interviews among high-income (top 5%) and high-net-worth individuals (USD $1 million or more). it fields data collection in the fourth quarter each year and focuses on luxury home (USD $1 million or more) buyer’s wants and needs, preferences and lifestyle.

 

The Luxury Home of Today reports the heart of the luxury market to describe and detail what consumers deem to be essential features of the home and life.

 

  1. Security and self-sufficiency are top priorities in the next luxury home.
  2. Sustainability is a key differentiator in luxury homes. Basic features such as energy efficiency will suffice for now, but more fundamental expressions will be needed in the future including design elements and building materials.
  3. At-home entertaining is coming back – formal living and dining rooms, a chef’s kitchen with dual luxury brand appliances, a dedicated wet-bar and an outdoor kitchen all top the list.
  4. Indoor styling is moving outside. In addition to the outdoor kitchen, buyers want a pool area with lounge seating, fire features, smart technology and wireless Internet.
  5. The Great Outdoors calls as buyers seek grassy yards and areas for gardening. Whether flowers, edibles or the stones found in a tranquility garden, buyers love bucolic scenes.
  6. Lifestyles are dominated by a pulsation of active and idle time. Buyers love reading, learning new skills and contemplative time in relative quiet and solitude. When that is over, they love being active, spending time with family, exercising or training and using the latest in at-home technology to recover more quickly.

 

Read the full publication here.


 

Boulder Lands In The Top 5 Of Best Places To Live In America By U.S. News & World Report

Credit: Katy Marquardt & USNews.com and CBS4 Denver

The 2022 rankings identified places in America that have the best “combination of jobs, desirability, cost of living, quality of life.” And it apparently helps to be tucked up next to beautiful Rocky Mountains.

For Boulder — No. 4 — the U.S. News writers described the city as “a looker” whose backdrop is “the snow-capped Indian Peaks.”

Boulder gets high marks for incredible fitness and wellness options and a special nod is given to the rock climbing scene there. In fact, the publication chose to feature the city’s popular Flatirons in its tweet announcing the new rankings.


What’s it like to live in Boulder, CO?

Snug against the foothills where the Great Plains give rise to the Rocky Mountains, Boulder is nothing if not a looker. This city reveals its spectacle at the crest of a hill on U.S. Route 36 from Denver with its iconic sandstone slabs rising from the mountains, prefaced by pine-clad mesas and cradled within the backdrop of the snow-capped Indian Peaks.

For residents seeking wellness, Boulder has opportunities from forest bathing and free meditation sessions to an abundance of marijuana dispensaries, spas and alternative health care studios. The full spectrum of yoga disciplines is represented here, as well as a plethora of fitness options to ignite your curiosity, including parkour, aerial dance and “Animal Flow” ground-based movement classes. People looking to bring balance to their work life can find job perks that include participation in the city’s annual Tube to Work Day. Had it with the 9 to 5? Make like Boulder’s dirt bag climbers and live in a van, work odd jobs and become a fixture at the area’s legendary crags.

This blissed-out enclave attracts young professionals, families, academics, scientists, transplants from both coasts, old guards who insist it was way cooler in the 1970s and, above all, lovers of outdoor recreation. Trail runners, hikers, climbers, cyclists and more move here to live in this perpetual playground, where the answer to “What do you do?” is often one’s activity of choice, not occupation.

See all the best places to live in  Colorado.


 

Using Your Tax Refund to Achieve Your Homeownership Goals This Year

from KEEPING CURRENT MATTERS

If you’re buying or selling a home this year, you’re likely saving up for a variety of  expenses. For buyers, that might include things like your  down payment  and closing costs. And for sellers, you’re probably working on a bit of spring cleaning and maintenance to spruce up your house before you list it.

Either way, any money you get back from your taxes can help you achieve your goals. Using a tax refund is a common tactic for buyers and sellers. SmartAsset  estimates  the average American will receive a $2,897 tax refund this year. The map below provides a more detailed estimate by state:

Using Your Tax Refund To Achieve Your Homeownership Goals This Year | Keeping Current Matters

If you’re getting a refund this year, here are a few tips to help with your home purchase or sale this season.

 

How Buyers Can Use Their Tax Refund

According to  American Financing, there are multiple ways your refund check can help you as a  homebuyer. A few include:

  • Growing your down payment fund – If you haven’t started saving for your  down payment, let your tax refund kick off the process. And if you have a fund already, the money you get back could put you closer to your  goal.
  • Paying for your home inspection – Your home inspection can save you a lot of headaches down the road by helping you determine the condition of the house. As a buyer, you’ll typically be responsible for paying for your  inspection, and it’s definitely worth the investment.
  • Saving for closing costs –  Closing costs are additional expenses you’ll need to pay once it’s time to close. They  average  anywhere between 2-5% of the purchase price of your home.

This list is a great start, but it isn’t exhaustive of all the costs you may encounter as you set out on your  homebuying journey. The best way to prepare is to work with a trusted real estate professional to make sure you understand what’s to come in the process.

 

How Sellers Can Use Their Tax Refund

If you own a home and are planning to  sell this spring, your tax refund can help you make sure your home is  ready to list. Here are a few ways current homeowners can put their tax refund to good use:

  • Making small upgrades –  NerdWallet provides a list of great ways to use your tax refund, including tackling small projects or boosting your curb appeal to help your home stand out.
  • Making repairs – If there’s anything in your house that needs to be fixed,  American Financing  notes that completing repairs is another great use of that money.
  • Buying your next home – Whether you’re selling to  move up  or downsize, you can use your tax refund to help pay for any costs on the purchase of your next home.

Of course, it’s important to talk with your trusted real estate advisor before taking on any projects. They’ll make sure you can focus on areas that’ll help you receive the best possible price when you sell.

 

Bottom Line

Funding your home purchase or sale can feel like a daunting task, but it doesn’t have to be. Your tax refund can help you reach your goals. Connect with a local real estate advisor today to discuss how you can start on your journey.


 

PANEL: Political and Economic Reactions to Russia’s Invasion of Ukraine

By Lisa Klein, Luxury Portfolio International

 

Russia’s invasion of Ukraine has been devastating for the European nation and its consequences are being felt the world over.

A group of panelists discussed the potential impacts of the ongoing crisis on the world economy, luxury market and beyond during a Luxury Daily webcast earlier this month.

“Russia as a nation is quite integrated with the rest of the world,” said Astrid Wendlandt, founder and editor of luxury news site  Miss Tweed  and author of How Luxury Conquered the World. “The prospect of the Iron Curtain falling again is beyond words.”

The webinar was hosted by Mickey Alam Khan, editor in chief of Luxury Daily.

 

Political Turmoil

Countries across the globe have responded to Russia’s actions with a flurry of  sanctions  against it and its ally, Belarus.

“The sanctions that have been imposed have probably been the most significant in history,” said Robert M. Appleton, a partner at New York-based legal firm  Olshan Frome Wolosky LLP.  “The most important one has been the SWIFT sanction banning Russia from the SWIFT system.”

SWIFT is a global organization that sends secure financial transmissions. All global economies belong to and use the system, with the U.S. dollar as the reserve currency.

With Russia and its citizens effectively cut off from any cross-border financial activity, the country’s economy has shut down.

In addition, a wave of companies has also cut Russia off, with many shutting down their stores and restaurants there.

“I’ve been surprised to see that there are the official sanctions, and then there’s what the rest of the world is doing on top of that,” said Marci Rossell, chief economist for Leading Real Estate Companies of the World®.

“You have brands saying, ‘We don’t want anything to do with Russia, sanctions or no sanctions,’” she said. “And that’s a really different story for the world than anything we’ve seen before.”

While Russia, and its civilians in particular, will likely not be permanently shunned from the rest of the world, the sanctions and other actions against it may have a ripple effect on certain aspects of geopolitics.

“Long term, my sense is that this is going to spur real innovation with currency and cross-border financing,” Mr. Appleton said. “Looking at unintended consequences, I think the biggest risk and the biggest potential here is the Chinese.”

For years, China has been looking to get away from the SWIFT system and the U.S. dollar as reserve currency, as that leaves it vulnerable to global sanctions itself. It is closely watching the Russian situation unfold, potentially giving an extra push to make an exit.

Economic Reaction

The sanctions have hit the world economy as well – Russia is second only to Saudi Arabia in oil exports – with  oil  prices crossing $100 per barrel. Global inflation could reach 6 percent in the next few months, impacting the stock market, assets and discretionary spending.

“Everything is impacted by higher prices of oil and gas,” said Marie Driscoll, managing director for luxury and retail at data and advisory firm  Coresight Research.

“We came into this year, before we were concerned about Ukraine, worried about inflation,” she said. “Prices are being raised across the board, and now you have this whammo effect of $100-a-barrel oil, and then the impact on our collective psyche.”

While higher costs affect lower income and “aspirational buyers” more than the affluent, it does at least cause some short-term concerns for the well-to-do.

“The bigger risk is that global luxury consumer really depends on a stable global economic market,” said Omar Saad, senior managing director and head of soft lines for the luxury and department stores team at  Evercore ISI,  a research and advisory firm. “Wealthy people want stability as much as anything.”

In the near-term, even luxury brands will take a hit, as consumers are less likely to buy when they feel uncomfortable – something magnified at the beginnings of the COVID-19 pandemic.

“I think the growth that we predicted coming into the year will be muted,” Ms. Driscoll said. “What we thought 2022 was going to be – getting COVID behind us, returning to travel, international growth, and spending – all that may be truncated.”

Luxury Consumers

Numerous luxury brands have joined the retail and hospitality throngs and  closed  up shop in Russia for the time being, a move heralded by many global consumers.

“Companies as diverse as T.J. Maxx to Gucci are standing in solidarity with the Ukrainians,” Ms. Driscoll said. “I think luxury brands have responded as they should. These are brands that we personify, we have relationships with them.”

One consumer, however, has maybe been left out of the discussion – the Russian buyer, who in luxury spends on real estate, yachts, jewelry, spirits and other goods.

“There’s a lot of anti-Russian sentiment around the world,” Ms. Wendlant said. “And that’s very interesting because for a lot of luxury brands Russians were some of the best, most favorite customers. I mean, these are people who love to spend millions. The Russians love to show off, they love to buy, they love luxury goods.”

The panelists agreed that the average Russian citizen seems to be against the invasion and is unfortunately facing penalties meant for their leaders.

“There is a lot of repression right now, and the Russian people are thinking, ‘When will we just be allowed to live?” Ms. Wendlandt, who has covered the country extensively as a journalist, said. “They want to live normal lives.”

IN THE LONG TERM, the luxury market should come through fairly unscathed.

“I think still there’s too many degrees of separation to have any meaningful impact,” Mr. Saad said. “I tend to take a skeptical view that this is really going to change anything for the luxury consumer other than a temporary blip.

“Luxury real estate is one of the safer long-term bets, as is luxury in general,” he said. “You know, our entire society is designed to create wealth, war or no war.”


 

Why Right Now Is a Once-in-a-Lifetime Opportunity for Sellers

If you’re thinking about selling your house in 2022, you truly have a once-in-a-lifetime opportunity at your fingertips. When selling anything, you always hope for  strong demand  for the item coupled with a  limited supply. That  maximizes your leverage  when you’re negotiating the sale. Home sellers are in that exact situation right now. Here’s why.

Demand Is Very Strong

According to the latest  Existing Home Sales Report  from the National Association of Realtors (NAR), 6.18 million homes were sold in 2021. This was the largest number of home sales in 15 years. Lawrence Yun, Chief Economist for NAR, explains:

“Sales for the entire year finished strong, reaching the highest annual level since 2006. . . . With mortgage rates expected to rise in 2022, it’s likely that a portion of December buyers were intent on avoiding the inevitable rate increases.”

Demand isn’t expected to weaken this year, either. In addition, the  Mortgage Finance Forecast, published last week by the Mortgage Bankers’ Association (MBA), calls for existing-home sales to reach 6.4 million homes this year.

Supply Is Very Limited

The same sales report from NAR also reveals the months’ supply of inventory just hit the lowest number of the century. It notes:

“Total housing inventory at the end of December amounted to 910,000 units, down 18% from November and down 14.2% from one year ago (1.06 million). Unsold inventory sits at a 1.8-month supply at the present sales pace, down from 2.1 months in November and from 1.9 months in December 2020.”

The reality is, inventory decreases every year in December. That’s just how the typical seasonal trend goes in real estate. However, the following graph emphasizes how this December was lower than any other December going all the way back to 1999.

Right Now, Sellers Have Maximum Leverage

As mentioned above, when there’s strong demand for an item and a limited supply of it available, the seller has maximum  leverage  in the negotiation. In the case of homeowners who are thinking about selling, there may never be a better time than right now. While demand is this high and  inventory  is this low, you’ll have leverage in all aspects of the sale of your house.

Today’s buyers know they need to be  flexible negotiators  that make very  competitive offers, so here are a few areas that could tip in your favor when your house goes on the market:

  • Competitive sales price
  • Flexible closing date
  • Potential for a leaseback to allow you more time to find a home
  • Minimal offer contingencies

Bottom Line

If you’re thinking of selling your house this year, now is the optimal time to list it. Contact us at info@coloradolandmark.com to learn more about putting your house on the market today.

2022 Economy Will Continue Recovery, but Issues Remain

By LISA KLEIN

The pandemic caused a very short economic downturn unlike any other, and while the globe bounced back quickly, the manufacturing and service sectors lag behind.

Affluent individuals generally benefitted from the COVID-19 economy but are also feeling the fallout in terms of what they are able to buy and do, which is a trend that is expected to continue into 2022.

“No matter how much money they had, they couldn’t spend money on the kind of high-touch, close-contact services that many of them were accustomed to, that had sort of been built into their lives,” said Marci Rossell, chief economist for Leading Real Estate Companies of the World,®  during Luxury Portfolio International’s 2021 Affluence Forum.

 

Highs and Lows

In the spring of 2020, entire countries closed down and were forced to continue to restrict their restaurant, travel and hospitality sectors. Manufacturing and shipping, too, had to hold back thanks to COVID-19, and mass layoffs were seen across numerous industries.

Naturally, the global economy was not immune either, but the downturn it saw was different than a usual recession.

“What made it different than other downturns is that it came from outside the economy and moved in rather than inside the economy and moved out,” Ms. Rossell said.

The recessions of the 1970s started within the oil industry, and in 2008 it all started in the housing sector before spilling out into other areas of the economy.

With the coronavirus pandemic, things crashed all at once due to a non-economic factor.

Also, in normal circumstances, an economic downturn typically leads to declines in personal wealth.

“This time around, the value of folks’ portfolios and their homes might have dipped dramatically in a three-month period of time, but boy, everything just snapped back so very quickly,” Ms. Rossell said.

After the initial shock of the pandemic, the value of stocks, bonds and real estate – the main vessels for personal wealth – actually increased dramatically.

According to Ms. Rossell the stock market alone is up 30 percent worldwide, and from pre-pandemic levels to boot.

“Wealth increased almost $28 trillion globally last year,” she said.

“To put that into perspective, the U.S. economy is a $22 trillion economy,” she said. “So in terms of wealth, it was almost as if you added to the globe an entire U.S. economy, plus some.”

Supply & Demand

Fast gains in wealth ushered in big increases in demand throughout the past year, with pandemic-affected industries struggling to keep up.

“2021 was a year where the global economy really snapped back in terms of economic activity, and growth picked up,” Ms. Rossell said. “Many sectors sort of exploded in terms of how quickly they recovered.”

Somehow, though, despite the initial pandemic unemployment rate, there is a shortage now in the labor pool for many sectors, caused by the unusual nature of the 2020 downturn.

While any economic downturn will lead to job losses, normally that happens over a long period of time. In 2020, people were instantly severed from their employer and often the place they lived as a result.

“Once you cut that for them, they’re not going back to the same job, they’re not going back to the same town, they’re not going back to the same way that they lived before,” Ms. Rossell said. “And so this is causing real friction in labor markets today.”

In addition, Gen Z is much smaller that the millennial generation, and every year there are 400,000 fewer 18-year-olds entering the labor pool in the United States alone.

High demand plus a workforce shortage have led to sticker shock for many, with goods and services price hikes, real estate prices that went through the roof and a whopping 5 percent inflation.

“Those inflation numbers are something we haven’t seen in decades,” Ms. Rossell said. “And it’s making folks worry: is the stock market going to crash, is there a housing bubble?”

 

2022 Forecast

The economist does not believe 2022 will see any burst bubbles, especially when it comes to the housing market.

Throughout the pandemic, people purchased larger and larger homes because they needed the space for working, schooling and entertaining. But pandemic or not, millennials have been buying those homes anyways, as they are moving on into a new family-oriented phase of life.

Plus, homebuyers can afford what they are purchasing this time around, many making cash offers for property recently.

There will, however, be some things that money just cannot buy again yet.

“Factories worldwide are churning out goods trying to get them to clients,” Ms. Rossell said. “But you don’t have truck drivers, you don’t have dock staff, to get them from the ships to our homes, our stores, all those things because of the labor market issues.”

Labor shortages in the travel, leisure and entertainment industries have also soured the experience, especially in the luxury market where consumers are used to a certain quality of service.

“If you’re a high-net-worth person who has plenty of income, plenty of wealth – it’s piling up in your stock portfolio, it’s piling up in the value of your home,” Ms. Rossell said. “You want to spend money on things and in some instances you can’t.”

While she advised that these issues are only temporary, that may not be enough for some.

“I think 2022 could be sort of a year of frustration,” Ms. Rossell said.


 

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.

 

Property Value Assessments & Appeals 2021

The Boulder County Assessor’s Office has completed its biennial reappraisal of all property in Boulder County. Notices of valuation are mailed to property owners on Saturday, May 1. If you are a homeowner, you should have received yours by now, and it has most certainly gone up in value!

This is based on the upward trend the real estate market has been experiencing, more than usual, for the past two years. However, this does not mean you shouldn’t appeal. Appeals are due by June 1st this year, and can be submitted online, mailed electronically or physically, or faxed.

Every odd year, county assessors in Colorado are required to reassess properties within their jurisdiction and determine the market value for each property as of June 30 of the prior year.  Therefore, this year’s reappraisal cycle is based on market values as of June 30, 2020. 

In Boulder County, there has been a positive change in values for residential properties overall. The median percent increases for residential type properties in this appraisal period is 11%.

For 2021 Reappraisal of Single Family Residences, click Here.

For Boulder County Residential Values, click Here.

If you wish to appeal the determined market value of your home or commercial property, Appeal Your Property Value Here.

Whether you need help researching home value within the above time period, or are wishing to deepen your understanding of how and why this process occurs, please reach out to us via phone at 303-443-3377 or email. We are here to offer you, our neighbors, with any assistance you may need!


 

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.


 

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