REMODELING ON YOUR MIND? HERE'S WHY BUYING MIGHT BE A BETTER OPTION
Do any of these homeowner scenarios sound like you?
- You’re working at home, and you need a private office.
- The kids are getting bigger and it’s time to give them their own or larger bedrooms.
- Grandma’s moving in, but where do you put her?
- The kitchen is out of date and gets crowded with more than one person at a time.
- Two bathrooms are never enough.
Maybe it’s one or two of these issues. Perhaps it’s all of them. What you need is a bigger house. But what you fear is walking away from that 4 percent mortgage. So, just remodel, right?
Depending on the magnitude of your remodeling needs, there’s a worthy cost-benefit argument for skipping the remodel and buying a home with all the features you need.
Case in point:
You’ve lived in your home long enough to build equity, and you’ve got about $250,000 remaining on that 4 percent mortgage. To fund your remodel, you’re looking at a home equity line of credit (HELOC) of about $150,000, with a going average rate of 8.5 percent. Combining your two loans means you’re paying at a blended rate of nearly 6 percent.
By comparison, the current rate on a 30-year fixed mortgage loan averages about 6.8 percent.
The bottom line is that the cost of borrowing for a home that’s already good to go may not be significantly more than the rate you’ll pay to pull off a major remodel. Add in the challenge of finding the right contractor, plus living with the many months of construction to finish the job, and the decision to buy becomes even easier.
Of course, if you’re already in the neighborhood of your dreams, then remodeling might be the only answer. If not, then the case for buying becomes worthy of consideration.
Struggling with a decision to relocate or remodel? Call me and I can connect you with our Group Mortgage partner to help you evaluate all your options.
SURVEY: ONE-THIRD OF HOMEOWNERS NOT INCLINED TO MOVE
Home is where the heart is. But for how long?
For many of us, it’s till death do us part.
This Old House, a home improvement-focused website, recently surveyed homeowners across the country to find out how long people expect to stay put in their homes. It turns out that more than one-third (37 percent) of homeowners said they don’t plan to move – at all.
The moral of this story: If you’re a would-be homebuyer waiting for a certain home to become available on the market, you might want to consider expanding your search.
Meanwhile, This Old House also looked at U.S. Census data to find where people are staying the longest in one place. On a state-by-state basis, Hawaii tops the list for homeowners who just won’t budge. In all, 36 percent of Hawaii homeowners have lived in their current home for at least 24 years. Next on the list of longest-tenured homeowners are New York, Pennsylvania, and West Virginia – all at approximately 35 percent.
By comparison, Colorado homeowners – and homeowners in many other western states – are more transient. Just 19.8 percent of Colorado homeowners have stayed in their homes for at least 24 years, and 33 percent have lived in their homes for just five years or less. Nevada has the lowest share of long-term owners, at 14.3 percent, followed by Arizona (16.5), Florida (18.7), and Idaho (19.6).
COLORADO HOUSING MARKET GETS EARLY JUMP ON SPRING
Spring and summer months mark the traditional season for home buying and selling to heat up. But the warming trend appeared to start early in Colorado.
Based on data tracked by the Colorado Association of Realtors, February sales activity increased over February 2023 in most key statistical categories. Total listings, total sales, median prices, and the number of homes under contract were all up from last February across the state.
Notably, statewide transactions totaled 6,074, up 6.3 percent, while active listings increased 3.9 percent. The statewide median sale price for all homes (detached and attached) reached $534,648, up 3.8 percent, and homes under contract increased 3.9 percent. Other key categories, such as months of supply, the percentage of list price received by sellers, and the number of new listings, also improved.
Locally, the results for February were mixed, with some communities showing year-over-year gains and others falling off the 2023 pace. For example, Fort Collins reported a 36.1 percent jump in new listings compared to February 2023, while Loveland listings were flat. Homes under contract in Fort Collins increased 23.8 percent but remained essentially steady in Loveland, Windsor, and Greeley.
Median sales prices were up slightly in Fort Collins and Windsor but flat in Loveland and Greeley. Months of supply increased in most price categories around Northern Colorado, except for homes listed between $800,000 and $899,000.
FORT COLLINS MAKES LIST OF AMERICA’S BEST ‘BEER CITIES’
In a town where breweries seem to be as common as coffee shops, it stands to reason that Fort Collins has built a reputation as a haven for beer drinkers.
The readers of USA Today would agree.
In a recent 10Best Readers’ Choice Awards, the national newspaper ranked Fort Collins No. 4 on its list of best beer cities for 2024. No other Colorado cities made the list, which was topped by Grand Rapids, Mich.
In a companion article, USA Today writes of Fort Collins:
“With more than 20 craft breweries, Fort Collins punches well above its weight when it comes to beer. This city of only 168,000 houses the nationally renowned heavyweight New Belgium as well as smaller, award-winning breweries such as Odell, Funkwerks, and Equinox. In fact, Fort Collins produces 70% of Colorado’s craft beer.”
And those statistics don’t include the Anheuser-Busch brewery that regularly ships about 10 million barrels of beer each year.
But there’s much more to the self-titled “The Napa Valley of Beer” than what gets brewed within the Fort Collins city limits. The USA Today article doesn’t mention the other Northern Colorado towns where beer scenes are also hopping, but we see you Berthoud, Greeley, Wellington, and Windsor.
WITH INSURANCE RATES RISING, HOMEOWNERS WOULD BE WISE TO ASSESS THEIR POLICIES
Spring means the onset of severe weather on the Front Range, with the periodic threat of hail or high winds in our area. Such weather risks also remind us of how homeowners’ insurance in the state has become more challenging for both carriers and customers.
In recent years, Colorado insurance providers have suffered significant losses, so it comes as no surprise that several carriers have pulled out of our state. Of those still serving Colorado, homeowners will notice that their deductibles for wind and hail damage have increased significantly. And there’s also the potential threat of wildfire.
With the help of experts at the Collective Insurance Group, a Group Real Estate affiliated business partner, here are some suggested questions to ask your insurance agent:
- Can we review my policy to see if coverage meets my needs?
- How does changing my deductible affect my premium?
- Can you help me find any discounts?
- Are there gaps in my coverage?
- How is replacement cost coverage on my home calculated?
- Do I have enough coverage in case of a catastrophic loss?
- What steps can I take to reduce my premium further?
TRACKING HEAVY WEATHER
Here’s a closer look at how much severe weather impacts our area.
A study from Roof Gnome shows that Colorado’s Front Range and eastern plains are among the most hail-prone regions in the country. In all, 20 of Colorado’s 64 counties were ranked among the 100 most vulnerable counties for hail damage (out of 3,242 U.S. counties).
Four of the counties most at risk of suffering heavy financial losses were Arapahoe (2), Denver (4), Jefferson (9), and Adams (12). Pueblo, El Paso, Yuma, and Larimer counties all made the top 100.
Also, out of 904 U.S. counties that are most susceptible to wind-related damage, Colorado has six in the top 100: Denver (14), Jefferson (42), El Paso (43), Arapahoe (55), Weld (80), and Boulder (100).
Call me and I can connect you with our Group insurance partner to help you evaluate all your options.
In Colorado, insurance premiums have been steadily increasing – up a whopping 49 percent between February 2023 and March 2024. Working with a local, independent insurance advisor can ensure you have coverage tailored to your needs.
Tips to protect yourself and to keep your insurance premiums as low as possible:Maintain a good credit score.
- Maintain a good credit score.
- Bundle your policies.
- Increase your deductibles.
- Install safety features to help lower your premium.
- Avoid making small claims.
- Review your coverage regularly.
- Keep a safe driving record.
For more tips, contact The Collective Insurance Group or stop by The Group at 2803 E. Harmony Road in Fort Collins to schedule a complimentary, no-obligation insurance review.
REAL ESTATE BY NUMBERS
- 35. Number of new homes planned on Erie’s north side that would target specific household income levels. With the help of a $1 million state grant, the two- and three-bedroom homes would be restricted to households with incomes of $146,000 or less.
- $21.5 million. Sale price for the 20,000-square-foot estate home that former Denver Broncos quarterback Russell Wilson owned in Cherry Hills Village. According to the Denver Post, Wilson took a $3.5 million loss on the transaction.
- $59 billion. Total amount that foreign buyers spent on residential property in the United States between April 2021 and March 2022, according to a recent report from the National Association of Realtors. The largest share of investment came from Canadian buyers, representing 11 percent of the dollar volume.
- $13.23 million. Purchase price for a 40,332-square-foot warehouse building at 4076 Salazar Way in Frederick, which is currently home to a Tesla Collision Center. The deal includes 5.07 acres of underlying property, which is on the east side of Interstate 25.
- $586,000. Median price for a detached home sold in Fort Collins during February, down slightly – less than 1 percent – from February of 2023. By comparison, the median price for the Greeley-Evans market reached $422,000 in February, up 2.9 percent from February 2023.
- $9.5 million. Estimated restoration costs for the Windsor Mill facility, located at 301 Main St. in Windsor, which has recently been listed for sale. Built as a grain mill in the 1890s, the 30,000-square-foot facility was redeveloped in 2019 and converted for commercial uses, including a restaurant and wedding venue. The building is currently owned by Blue Ocean Enterprises Inc.
- $295 million. List price for Gordon Pointe, a waterfront estate in Naples, Fla., making it the most expensive house currently on the market in the United States, according to The Wall Street Journal. Located on nine acres, the estate includes a yacht basin and 1,655 feet of water frontage on the Gulf of Mexico.
- $38 million. Total amount that the state of Colorado is lending to eight different businesses for the purpose of building modular homes across the state. One of the goals of the program is stimulate the manufactured home industry in the state. In 2022, 88 percent of manufactured homes sold in Colorado came from outside the state. Due to shipping expenses, such homes are more costly to buy.
- $2,278. Average annual property tax assessment for Colorado homeowners as of 2023, according to financial advice website WalletHub. The national average was $2,869. Colorado ranks No. 3 for the lowest effective property tax rate, 0.49 percent.