The Double Comma Club

I know higher interest rates are stressing affordability and pushing buyers to sit on the fence. But, what if I told you that a higher rate could actually SAVE CLIENTS' MONEY? You'd probably think it's a trick! But it's not, it's perspective.

*CORRECTION... The comparison rate used in my calculation from March of 2021 with the $675,000 loan amount was 4.625% not 4.25%. My apologies for my error; but my position on perspective stands. 

Fed Chair Powell stated the Fed is creating a "bridge period" of "demand exhaustion".   This is being interpreted as the Federal Reserve is killing the housing market.  I get it.  But what I see is first-time home buyers getting the reset, the break they've been needing and asking for.  Plus, with the housing market as strong as it is... it's hard to justify a bust coming. I guess it's all how you look at it.

This is what's been happening with the greed of home sellers, the FHFA, and banks.

• Buyers are struggling more so than ever before.

It's all about perspective. Buyers have to be reminded of the strength in our housing market and that there is still opportunity!

Inventory exceeded demand in June for the first time since the same month in 2020. Spiking 94% year-over-year and 66% month-over-month.  Price reductions, according to Redfin, increased to 40% of homes on the market in Denver.  If the story ended there, it might concern me.  Sellers flooding the market giving homes away at discounted prices. But the story is much different than that.  June ended the first half of a transitional 2022 and it did so with a bang.  Cryptocurrency is down 60%; the stock market had its worst first half of a year since 1970, inflation hit a 41-year high and housing.. well, so far this year, housing is up 16.5%. 2022 year-to-date median price growth is only 1% lower than we experienced during the first half of 2021.

With all this inventory, though, buyers and sellers “feel” like it shifted to a buyers’ market. Get the full story in this episode of The Double Comma Club, "Inventory is double last year, but it is not enough."

There's so much strength and opportunity in our housing market today, but many buyers are still struggling to get in. Home prices are going up, along with rents, and interest rates remain in flux. But, you can't time the market! Purchasing a home is a big commitment, but buyers have to be able to see the long-term benefits that come with home ownership. Three ways YOU can get into the market TODAY are: 1) Down Payment Assistance 2) Gifts 3) Renovation Loans.

If you are looking for a property in Denver Metro to renovate, we have a few for you through our office:

13361 Randolph Pl, Denver, CO 80239

🔥🔥🔥 Rates Down, Inventory Up, Holiday Weekend... GO TIME! The 10-year treasury surprised me this morning.

Listen to this and you will have 5 options of how to take advantage of the sudden drop in interest before the wave goes back up.

Call Nicole Rueth ASAP to take advantage. She's here all day because SHE LOVES these opportunities.

This is a really detailed episode about a new interactive software tool. Nicole explains here. At the end of this post you will have a link for the interactive view of this tool she discusses. Here's a bit of what is covered in this episode.

Interest rates and home prices have gone up. We know that. And not only is it a question of affordability, but now it's also a buyer's discernment on whether or not that home or buying now is the right choice. Sellers are feeling this. They've been on the market for longer than we are used to. We got spoiled over the last couple of years. Sellers did with very quick turn times, very quick to go under contract. And so now, even though we're nowhere near normal with less than a month of inventory, it feels slow. So I wanted to propose a couple of alternatives and actually show the differences between those alternatives and options, both for a seller who's going to market and how do they want to list their home? And as a buyer, how can I strategize the best payment option for me right now? Whether what is more, most important to me?

Is it cash to close? Is it the monthly payment? Is it the adjustment period? And then do I expect in a recessionary period that interest rates will go down because I want to start here before I get into the matrix that I'm showing you. This is a little bit of a different video that we typically send out on Wednesdays, because I want to give you a tool. This tool is clickable. You can actually open it up rummage around and look at the alternatives and request a strategy session so that we can set this up for your listing or for your specific buyer parameters. But I want to talk first just for a second on ARM, because that option is not going to be described here. I'm going to go over going through and buying a home with 10% down, buying a home capitalizing on a two, one buy down capitalizing on maybe a seller credit for a permanent buy down or discount points to pay, to reduce the rate, or should a seller have to reduce their price to get it to move.

But what I don't show is ARMs simply because there are four columns and not five. So there you have it, but I do want to say that arms are going to work very similar. In fact, for the two, one buy down, category, I used the model within this tool for an ARM. So we could switch this based on the kind of ARM that you're looking at, whether it's a five-year, seven-year, 10-year ARM, and then what the parameters are for the movement of that ARM. The one risk that I want to present with ARMs, that the two, one buy down protects you against is what if, what if rates don't go down. The third number on an ARM talks about what is the maximum that ARM can go up. And a lot of times it's got a five in it or a four. So if today's interest rate for you for that ARM is four and a half, and the last number on your ARM parameters is a five. That means that that loan could go up to nine and a half percent. Would that wreck your budget? We're all counting on a recession and on lower interest rates, but do you need a plan B? So let's talk about these four options and consider a two, one, a two, one buy-down option instead of an ARM. They go hand in hand and they can trade out for one another.

Want to access the interactive software? FOLLOW THIS LINK: https://bit.ly/3ucAWLj

Nicole will be narrating it with the same information in this episode, but you'll be able to click some of the items to get more details as you follow along. Any questions, please call her: 303-214-6393

Now I know there have been headlines that the average rent in Denver has gone over $2000. It really just depends on what survey you're looking at. Either way, rents continue to go up. That's not going to slow down. As investors are paying more for their properties, they're going to be renting out for more. And those investors that bought properties 10, 20, 30 years ago are going keep up with the market rent. Ashleigh Gutierrez joins Nicole for this episode.

Ashleigh's rent right now is $1705. And then she pays for a garage space, which is an extra $150. With everything all in, she is paying around $2,000 a month for rent. Here are the numbers for the story in this episode.

• $300,000 asking price.

Listen to this story and a few more in this episode, Buying a  Home Today - Why I Shouldn't Rent.

These three shorts give a quick explanation and ways you can reduce your debt-to-income ratio. This episode covers: What is Debt to Income Ratio?, What are the debts included in your DTI?, and How to Optimize Your DTI.

We hope you find these quick explanations and suggestions helpful.

They go great with the longer episodes here:

You can get an appraisal waiver and you can have an appraisal waiver. I wanna give everyone an appraisal waiver. It just doesn't quite work like that. Of course, there's a lot of talk about getting appraisal waivers, especially in a competitive market like today. So what is an appraisal waiver and what do you get to do once you have one? An appraisal waiver is something that's given by an automated underwriting system by Fannie Mae or Freddie Mac. So that implies that you can only get an appraisal waiver on a conventional loan. And that's true. You can't get an appraisal waiver on a jumbo loan, an FHA loan or a VA loan, but if you are putting 20% down or more on a primary home purchase and you have a good credit profile, there's a possibility that you could get an appraisal waiver. It also is dependent on the property that home needs to be in either Fannie Mae or Freddie Mac database, meaning that maybe the current seller or a previous homeowner of that home had gotten a conventional loan.

So if you're going out and you're purchasing a primary home and you want to know more about how appraisals appraisal waivers work and how you can get one, then you need to give me a call. We'd not only love to go to work for you. We'd love to put you in the most competitive position you can be when putting in your offer.

Strap in, this is a long one! 

Last week the CPI came out not as expected. The percentage doesn't matter as much as the DIRECTION... it went up! This threw the market for a loop. Interest rates did increase and now the headlines are making you believe we are going into depression.

Interest rates increased from 5.5% last Thursday to 6.18% yesterday. As we go into FED week, the market was expecting a 50bp increase. However, with the increase in CPI, the FED may be forced to increase that rate even more. That possibility of change is what makes the market react. The market likes knowing what is going to happen. So when the possibility of change looms, it begins to move.

Bottom line is that rates went up for several reasons, but we remain part of an incredibly strong real estate market.

I want to talk about the interest rates first because they went from 5.5 on Thursday to 6.18% on Monday 5.5% . That is a massive jump. Especially if you are watching my live session. I said, hurry up and get under contract, take advantage of the interest rates that we have today because next week we're going into the fed.

Now, even when interest rates started to go up, a lot of people are asking me how high do you think, they could go? And I was like six and a quarter, right? So we're here. We're at 6.25%. We made it, do we go much higher? I don't know. I don't know because the fed where we're at right now is a little bit unchartered. We've got this quantitative tightening that's happening and how aggressive the fed, uh, goes, is going to push interest rates. But what interest rates are doing right now is squelching demand. It's authentic demand reduction.

Listen to this episode as I also cover the continuing reasons the housing market is so strong. GET IN NOW!