Ready for blast off?
The Flash Recession caused by the pandemic is coming to an end. A raft of reports this week suggest the vastly improved public health situation and the White House’s $1.9 trillion rescue package are providing a powerful tailwind to the economy. Those planning on buying a home hit the highest consumer confidence since 1967. 350,000 people rejoined the labor force. The Services Purchasing Managers Index registered an all-time high.
Buckle up! Economic growth this year is expected to be the best in nearly four decades.
Are you ready?
No More Masks
Did you hear? Boulder County led the way this week to lifting mask usage while outdoors. Adams, Arapahoe, Douglas, and Jefferson counties soon followed. Denver is staying masked up for another 30 days. See the restrictions and variances by clicking the map below.
1 in 4 US adults are fully vaccinated against Covid-19. 1 in 3 have received at least one dose. All 50 states have committed to opening vaccinations to all Americans 16 and up by April 19th.. Herd immunity here we come! (Note.. there are talks this will become an annual vaccine much like the flu shot.)
Do You Have Clients Waiting for Foreclosures to Hit the Market?
I continue to hear about the wave of foreclosures coming, the risk of the FHA homeowners, the CFPB stepping in with a moratorium and mandatory waiting period. YES.. I get it. We still have 2.57 million homeowners in forbearance, or 4.9% of all mortgagees. Does that sound like a lot? It’s really not. AND.. they are exiting at an accelerated rate. This month the number of active forbearance plans declined by 135,000, the highest since November. Remember.. 37% of all homeowners own their homes free and clear, so those don’t even count in the 4.9%.
Here are some stats you can share with your clients this weekend who are thinking about waiting.
- The Average Equity Gain per Homeowner in the US was $26,300 last year. In Colorado that equity gain was $32,000. That’s just the average. With a 10% appreciation, some saw their home increase in value by $50,000, $100,000, $200,000. It’s simply proof of the power that leverage provides in real estate and why I love helping my clients build their own investment portfolios
- The Average Total Equity per Homeowner in the US was $200,000 last year. And you guessed it.. Colorado came in higher! Whoop whoop! We have an average equity per homeowner of $254,000. What do you think you could do with $254,000??? Buy two more properties as investments and let other people contribute to your retirement (i.e. rental income)? Start a business? Pay off debt? Fund your children’s education? Support your parents? Trade up? Buy a second home? The opportunities are limitless if you have the vision.
- Forbearances are Declining.. but remain high in hard hit states… like Texas, Nevada, Louisiana … NOT Colorado. Colorado is sitting just 3 states from the bottom of the list. And this is a list we want to be at the bottom of.. kind of like the kid in the back of the room. I’m okay with that this time. Denver Metro has 1.4 million households, 37% of them owned free and clear.. less than 4% in forbearance is STRONG.. but it gets better..
- Share of Homeowners with Less than 10% Equity dropped to 4% nationally. Only Louisiana, Illinois and Iowa have a higher than 7% of homes with less than 10% equity. Why does that matter? Because it is estimated it takes about 10% to sell a home the traditional way. So this allows the seller to get out by breaking even…or better! In Colorado, only 2.5% of our homes have less than 10% equity. Sooooo.. if I take the 1.4 million households times 63% who have a loan times 2.5% who have less than 10% equity and assuming only 4% of them entered into forbearance.. that’s 882 homes. Hmmmm… so what are they waiting for?
Colorado is extremely strong in appreciation, equity growth, stability of homeowners, wage growth, job growth, population growth. Foreclosures is not the issue for Colorado. Inventory is! If you are considering buying in Louisiana.. maybe a different story 😉
YIKES! Property Taxes in Denver Went UP by 9.9%
Colorado has the fourth lowest effective property tax rate in the United States only higher than Hawaii, Alabama, and West Virginia. Our state effective rate is .54%. Low! But, our homes appreciated 10%.. so.. our taxes went up as well. This affects your buyers purchasing power and definitely worth a conversation!
Effective Tax Rate by County:
- Arapahoe .68%
- Boulder .61%
- Broomfield .70%
- CO Springs .42%
- Denver .51%
- Douglas .62%
- El Paso .42%
- Jefferson .56%
- Pueblo .49%