5 Tips for Millennials Buying a Home

When it comes to homeownership, millennials are no different than other generations. Many would love to buy a home, according to findings by SmartAsset. To achieve that dream, one of the looming issues that they must overcome is saving for a down payment. This can be especially challenging in the Boulder-Denver metro area where rents are high. Also, millennials often have student loan payments contend with, which impacts savings.

Although mortgage interest rates are increasing, they are still relatively historically low, and they are empowering millennials to invest in property. To buy a home, millennials need to plan how to overcome obstacles. Here are five tips on how to get organized and make a plan that will succeed, reported by SmartAsset.

Do the Math

Know the 28/36 rule. Mortgage lenders typically require that your mortgage payment, property taxes, and insurance total no more than 28 percent of your monthly gross income. Then, your mortgage payment and your total debt payments, including college loans and credit card debt should not be more than 36 percent of your gross income. Get out your spreadsheet and calculate what this means for you. Knowing your spending limits helps target your search for the right home.

Get Your Documents Together

Getting a loan and closing on a home requires certain documents. Go ahead and pull everything you need together and put it in a file. Usually for a home purchase you need your government issued ID, most up-to-date credit report, a verification form from your employer, W-2 forms, federal tax returns, and bank and asset statements.

Get Your Down Payment Together

Plan to pay the biggest down payment you can afford. The down payment amount determines the length of your mortgage and its monthly rate. Typically, the down payment is between three to 20 percent. The bigger your down payment, the lower your loan amount will be. Increasing your down payment has benefits: a higher down payment makes it possible to get a lower loan at a lower interest rate. Putting more money down usually gives you the ability to borrow more.

Consider Taxes, Property Insurance, Closing Costs and Other Expenses

These necessary expenses factor into the price of the home you can afford. Be sure to calculate home insurance and property tax rates in Colorado and in the county you are exploring. Closing costs include loan origination, underwriting, appraisal, title insurance, wire and courier, and other fees.

Study the Area

Discover which neighborhood is best for you. Study the value of surrounding properties. This will help you know if the home you want is comparably priced to other homes in the area. Working with a knowledgeable Realtor provides insight and perspective on neighborhoods and home values. Be sure to find a Realtor who can help you navigate the search for a home and purchasing process.

To read the full article, visit https://smartasset.com/mortgage/millennial-home-buying-guide.

To find a home and realtor for you, visit http://www.boulderco.com.

 

Originally posted by RE/MAX of Boulder on Friday, July 6th, 2018 at 10:11am.

Posted on August 16, 2018 at 7:32 pm
Jay Kalinski | Category: Articles, RE/MAX of Boulder | Tagged , , , , , , , , , , , ,

Where will Boulder’s workforce of the future live?

The Boulder Economic Summit was held on May 22 and the focus was on the workforce of the future. The Boulder Economic Council rightly identified this as a key to Boulder County’s continued vitality and prosperity.  There were vibrant discussions about the growing importance of skills to both employers and employees, shifting employment patterns, how businesses can embrace Millennials, and more.

From a real estate perspective, the most thought provoking session was the roundtable discussion on “Addressing Housing and Transportation,” in which participants were asked to discuss what their businesses are experiencing in terms of housing and mobility needs, what they are doing to address them, and what possible solutions they see.  From this discussion, it became evident that the majority of many businesses’ employees live outside the city, that many of those employees would like to live in Boulder, and that there are myriad housing and transportation challenges facing businesses and employees.

Many of the proposed solutions will sound familiar: some additional housing, including ADUs (“granny flats”) throughout the city and multi-family housing in the light industrial areas along the east Arapahoe corridor; adding additional lanes to some of the major arteries to/from Boulder, especially along Arapahoe/Highway 7 and the Diagonal; more and “better placed” park-n-ride lots; more parking spaces throughout the city; more and better alternative transportation options, and possibly some shared shuttle services among Boulder businesses. 

Many participants expressed the opinion that they believe some of these solutions are viable, but they acknowledged that most of them would require the willingness and coordination of city and county governments.  The scope of these issues is supported by the estimated 50,000 — 60,000 people who commute into Boulder for work each day, half of whom purportedly want to live in the city, and the fact that currently there are no single family homes in Boulder on the market for less than $575,000 (and that only gets you 966 square feet).

The bottom line takeaway from this discussion was that if Boulder cannot find better ways to address its housing and transportation issues, it risks losing its economic vigor as more and more businesses will choose to relocate to more hospitable areas.  More than one employer at the roundtable lamented that if they cannot solve some of these issues, they will likely have to move their business elsewhere. 

Let’s face it, Boulder does not make it easy on businesses or their employees. Among other things, businesses in Boulder have to contend with sky-high affordable housing linkage fees on commercial development (which will ultimately be borne by tenants and consumers), complex and changing zoning and use regulations, rapidly growing commercial property taxes, and a dearth of parking spaces.  Employees face a severe lack of affordable housing to purchase, expensive rent or long — and increasingly frustrating — commutes, and difficulty finding parking (and not enough public and alternative transportation options).

There is always room for hope in Boulder, one of the brainiest (and best) cities in America, and an excellent example is the city council’s recent openness to allowing additional ADUs.  It’s not a panacea, but it’s a start.

Envisioning our workforce of the future is a great and useful undertaking, but if Boulder cannot (or will not) address its mounting housing and transportation issues, the workforce of the future will be happily employed… elsewhere.

 

Jay Kalinski is broker/owner of Re/Max of Boulder.

Originally posted by BizWest on Wednesday, June 1st, 2018. Original found here.

Posted on June 2, 2018 at 9:05 am
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The one statistic every renter needs to see

By Jay Kalinski — 

That’s right, based on the latest available data from the Federal Reserve Survey of Consumer Finances, the average net worth of a homeowner is $231,000, a whopping 44 times greater than the average renter’s $5,200 net worth.  What makes the situation more dire is the fact that the gap is widening.  From 2013 to 2016, the average net worth of homeowners increased 15 percent while the average net worth of renters decreased by 5 percent. The situation for renters is bad and getting worse.

More than any other factor I could identify, homeownership best explains the gap between the haves and have nots. People seem to understand this fact, as a Gallup poll showed that Americans chose real estate as the best long-term investment for the fourth year in a row. So, why aren’t more renters buying homes?

Desire?

It could be that renters do not want to own homes. Anecdotally, we hear stories about how Millennials prefer to rent to give them a more flexible lifestyle, but the research tells a different story. In fact, Millennials represent the largest share of homebuyers today and only 7 percent of respondents to an NAR survey said that they did not want the responsibility of owning. More generally, 82 percent of renters expressed a desire in the fourth quarter of 2017 to be homeowners and about the same percentage said that homeownership is part of the American Dream.

What is driving this desire for renters to become owners? According to a recent survey, the main reasons renters would want to buy a home are: a change in lifestyle such as getting married, starting a family or retiring; an improved financial situation; and a desire to settle down in one location.

Renters seem to know that owning a home is a great investment, and they overwhelmingly express a desire to do so, and yet something is preventing many of them:

Ability

Based on a recent NAR survey, it appears that ability (perceived or actual) is the biggest obstacle to homeownership. In fact, 66 percent of renters reported that it would be somewhat or very difficult to save for a downpayment on a home. Only 16 percent said that it would not be difficult at all. Of those who said saving for a downpayment was difficult, 49 percent identified student loans, 42 percent cited credit card debt, and 37 percent cited car loans.

The above, however, only focuses on one aspect of home affordability. Another side is home price appreciation.  That is, if homes were more affordable, it would be easier to save for a downpayment.  Unfortunately for local renters, Boulder County has appreciated more since 1991 than any other area in the country — more than 380 percent! The average single family Boulder County home topped $708,000 in February 2018, which is almost 20 percent higher than two years ago.

In addition, interest rates are on the rise in 2018, and we’ve already covered how a 1 percent increase in interest rates can reduce your purchasing power by 10 percent.

Takeaways

There are two takeaways from this. First, for renters, you may be familiar with the adage “The best time to buy a home was 30 years ago. The second best time is now.” That is true now more than ever. If you have been considering making the jump to homeownership, now is the time. At this point, each day delayed likely equals less home for the money.

Second, for local government officials, if you truly support the idea of affordable (market rate) workforce housing, you have the power to encourage it. Without you, the affordability situation will only continue to deteriorate.

Jay Kalinski is broker/owner of Re/Max of Boulder.

 

Posted on April 10, 2018 at 7:51 pm
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Top Five Reasons to Sell Your Home Early in 2018

If you’re planning to sell your home this year, timing can make a big difference in your home’s final selling price.

Even though statistics show Boulder County’s real estate market remains among the hottest in the country, Realtor.com reports that your “window of opportunity may be rapidly narrowing.”

“We’ve seen two or three years of what could be considered unsustainable levels of price appreciation,” says Javier Vivas, director of economic research for realtor.com®.

The key word there is “unsustainable.” Changes on the near horizon suggest you should get going and be among the first to sell your home in 2018. Here are the top five reasons:

1. Interest rates remain historically low

While interest rates have already increased from the recent lows, today’s 30-year mortgage rates at just above 4 percent still draw buyers into the market.

But experts predict rates will rise to a less enticing five percent before the end of the year. With rate hikes expected to continue, you should list your home earlier in the year. You will not only sell your home more quickly, if you’re buying another home, you’ll benefit from the lower rates.

2. Inventory is tight and demand high

In the red-hot housing market of Boulder County, buyers far outnumber available homes for sale. Tight inventory is a trend that extends across the nation. And the housing shortage will likely get worse before it gets better: Realtor.com predicts inventory will see a decline of 4 percent year-over-year by March.

Inventory shortages result in quick sales, bidding wars, and pro-seller terms. This can be especially true in areas like Boulder County, where a prolonged shortage has persisted for years.

Cash buyers are also a factor, making up 22 percent of all home sales nationwide in November 2017, according to the National Association of Realtors®.

3. Home prices are still increasing

While home price increases in the Boulder area have moderated recently, prices are still rising. But with interest rates increasing, slowing price appreciation is expected to continue. By listing your home sooner rather than later, you’ll avoid the cooling trend.

4. Buyers are better off financially

“Incomes are growing and people are finding better and more stable jobs,” Vivas says. High consumer confidence, low unemployment, and stock market surges make buyers feel good about their financial outlook.

In fact, the Fed projects an unemployment rate of below 4 percent for the first time since the 1960s, reports Realtor.com.

All of this fuels home sales, which grew 5.6 percent nationally in November 2017, reaching its strongest pace in nearly 11 years.

5. Millennials want to buy

More and more millennials are entering their 30s, a time in which taking the homeownership plunge becomes increasingly desirable. Realtor.com data suggest that this demographic group could account for 43 percent of home buyers taking out a mortgage in 2018, equating a 3 percent year-over-year increase.

In a complex real estate market, local real estate knowledge helps you time the sale of your home to your best advantage. So, if you’re considering selling, consult with a Realtor soon.

You can read more at https://www.realtor.com/advice/sell/reasons-to-sell-your-home-in-2018/

 

Posted by Tom Kalinski Founder RE/MAX of Boulder on Friday, January 26th, 2018 at 11:15am.
Posted on January 30, 2018 at 8:45 pm
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