The Rueth Team - Denver's Top Mortgage Company
By Nicole Rueth - November 18, 2020
Last week we talked about defining your retirement income goals using real estate investments and a big picture view of how to achieve it. Now I want to narrow the lens and look step by step on how to start to achieve those goals because everyone wants to live comfortably throughout their retirement.
First ask yourself … are you willing to move? I talk about this step a lot as it’s one of the best tips I can give to those who are staring off in real estate investing. By moving into each property, you can lock in a lower primary home interest rate and won't need to put nearly as much down, because primary homes only require 3% and have access to down payment assistance. If you don’t care to move and you purchase your property as an investment be prepared to put anywhere from 15-25% down depending on the product. But of course you save yourself the hassle of moving. Keep in mind there is no right or wrong answer and The Rueth Team has helped countless people invest, both ways.
Next is figuring out how much you can afford and what type of property you want to purchase.
If you’re currently renting and look at purchasing your first property you can likely afford more than you think! For example, if your rent is at $1,850, the top end of your home search could be around $350,000. And if you’re thinking, “I don’t have $11,000 to spend on a down payment!” It’s ok. Many people utilize CHFA or other down payment assistance programs to help them afford their first property. These systems allow you put 0% down if you qualify on a primary home. This would mean only needing to bring closing costs to the table.
Now let’s jump over to the type of property you want to invest in as there are pro’s and cons to any choice. If you’re looking into living in the property you might want to purchase a single-family home or condo, you can live in the house by yourself for the first year or you can rent out the other rooms creating cash flow right off the bat. And finding roommates isn’t the hassle it used to be. In fact because of online resources, it easier than ever to not only find people, but to help calculate the amount for to charge for each room. For example, when my sons were looking for roommates for their single-family homes, we were able to fill the rooms within 48 hours and they both either live for free or very reduced amounts.
If you don’t want roommates but you want the possibility of decreasing your own living expenses a multi-unit is your answer. Fourplexes, my preference, duplexes and triplexes are a great product, and you don’t need to qualify for the entire monthly mortage amount just using your monthly income. That’s right! You can use 75% of the projected rental amounts as income. Which means if you’re rent is around $1,800 right now you could purchase a fourplex at $750,000 and use the rental income from the other three units to pay off the mortgage. Better yet if you price it correctly the other three units could help cover the cost of the fourth, your, unit. And to sweeten the deal, you only need to place 3.5% down on the entire property going FHA or 0% down if you’re a veteran.
There are a lot of choices when it comes to investing in real estate, and there’s no one size fits all rule. You have to determine what you need from your investments and what you’re willing to do along the way. And if you come across any questions while you’re at, give me a call. Helping our clients build wealth through real estate is one of my favorite ways to provide support.
Nicole Rueth with The Rueth Team. We look forward to serving you.
By Nicole Rueth - November 2, 2020
By Nicole Rueth - October 14, 2020
By Nicole Rueth - October 4, 2020
The 5,301 active listings at September’s month-end represented the lowest amount of active housing inventory available on record for any month of September by 2,215 properties. This translates into the toughest market to buy a home in metro-Denver’s history according to DMAR Market Trends Committee Chair and Metro Denver REALTOR® Andrew Abrams.
In September 2020, there were 3,041 single-family homes available for sale, a decrease from the previous low of 5,693 in September 2017. The median days on market in the entire residential market was six, which was three days lower than the previous record set in September 2015 and 2016. For both single-family and condo homes, there were more closed and pending transactions than ever before reaching 5,850 homes that sold and 6,376 homes in pending status.
Housing inventory can’t keep up with the high level of homebuyer demand. This is further evidenced in that the months of inventory hit an all-time low at 0.91 months, signifying a very strong seller’s market. The previous record low was this past August 2020 at 0.92 months.
Furthermore, the median home price for both single-family and condo homes hit a record-breaking high at $510,000 and $334,752 respectively. The total sales volume of $3.15 billion represents the highest amount for any September on record and the third-highest month of all time.
These records, along with various other contributing factors, set the tone for why metro Denver is increasingly such a competitive market.
According to Abrams, there are several explanations for why the market is so competitive right now; not all of which can be explained by data. He stated, “Home sellers are hesitant to sell as the thought of moving and logistics of that process may feel daunting during a pandemic. The majority of sellers have enough equity to not feel pressured about what will happen with the market if there is a shift in the near future. Homebuyers, on the other hand, may be spending a great deal more time at home and realizing they want more space, while also looking to take advantage of the low interest rates.”
Our monthly report also includes statistics and analyses in its supplemental “Luxury Market Report” (properties sold for $1 million or greater), “Signature Market Report” (properties sold between $750,000 and $999,999), “Premier Market Report” (properties sold between $500,000 and $749,999), and “Classic Market Report” (properties sold between $300,000 and $499,999). In September 2020, 336 homes sold and closed for $1 million or greater, down 10.64 percent month over month and up 80.65 percent year over year. The closed dollar volume in the luxury segment in September was nearly $514.1 million, down 12.66 percent month over month and up 72.43 percent year over year. Year to date, the Luxury Market has 15.1 percent more sales volume than 2019.
“Sellers are falling in love with the Luxury Market in Denver!” said Brigette Modglin, member of the DMAR Market Trends Committee and Metro Denver REALTOR®. “With lower mortgage rates, more people working from home and remote learning for kids, buyers can really live anywhere these days.”
Year over year, 80.65 percent more luxury homes sold in September. According to Modglin, more homebuyers seem to be wanting single-family homes compared to condos in this price segment. Year over year, 87.2 percent more single-family homes closed. The luxury condo market is also still showing signs of strength with 31.82 percent more sold compared to 2019.
“Sellers were having to think fast and figure out their next move because the average days on market for a luxury home was down 39.47 percent year over year at 46 days and down 9.80 percent - five days less - from the previous month,” adds Modglin.
Compared to last year, new listings were up 25.84 percent in the Luxury Market while pending listings were up a whopping 116.15 percent in September. Single-family luxury homes were also hot in September with a 125.3 percent increase in pending sales compared to this time last year. The luxury condo market was just as hot with a 57.69 percent increase in pending sales going under contract from one year ago.
The highest-priced single-family home sold in September was $5.5 million, representing five bedrooms, seven bathrooms and 9,324 above ground square feet in Cherry Hills Village. The highest-priced condo sold was $2.65 million, representing four bedrooms, six bathrooms and 4,870 above ground square feet in Denver. The REALTORS® representing the buyers in both transactions are DMAR members.nsions as homes valued $1M+ experienced 55% more homes sold in July 2020 than July 2019, pushing the average single family detached average above $601,863 – a 10% increase over last year.
By Nicole Rueth - October 1, 2020