Jacob Behm Independent Broker Co Equity Homes

10/13/2022

The Fed is Starting to Feel the Pressure



In the last 2 weeks the Fed is being criticized for how quickly and how far they have raised short-term interest rates which has caused the Dollar to escalate in value. The criticism started with famed Wharton Business Professor Jeremy Siegel who said the Fed continues to make the worst decision in the history of the Fed, first by waiting too long to raise rates and then raising rates too far too fast.
Since then the United Nations, “Bond King” Bill Gross, and even the Wall Street Journal have criticized the Fed for raising rates too far too fast. Bill Gross has warned that further tightening could cause a credit crunch with global fallout. England nearly experienced this 2 weeks ago after a decision to lower taxes on high-income earners that would cause the creation of more debt. Behind the scenes I read that England’s pension funds were within a day of becoming insolvent without action by the Bank of England. Sounds like 2008 in America.

Will the Fed listen?

10/04/2022

Why Denver’s Jobs Market is So Strong

We have roughly 830 occupations in metro Denver which makes it distinct from any other metro area. Second, metro Denver is overrepresented in the number of STEM jobs.

Third, Andrew Hudson who runs a popular job list said, “Our industry clusters are so specialized and very technical—information technology, digital communications, aerospace. Denver is a freight train of 21st-century careers that are high paying.”

Today, we have 9 super-clusters according to local economist Patti Silverstein. So, if one or 2 sectors drops we are ok and still can grow.

09/27/2022

Can you trust the feds?
Powell didn’t acknowledge or apologize for his/their errors that caused home prices to soar and for inflation to get out of hand. What he and the Fed don’t understand is that we need millions of more homes built to increase supply dramatically and that’s not going to happen if mortgage rates are over 5%. Thus, raising rates so far so fast is also causing supply of existing homes for sale to drop by 20% so far. Thus, the Fed is causing supply of both new homes and existing homes to drop. Whoops! It must be nice to never have to admit that you are wrong.

09/26/2022

9 Top Bathroom Trends



Here is a great story about the top 9 trends in bathroom design according to Houzz after a survey of more than 2,500 people. The story is linked below..—

1. Transitional style is the #1 choice above modern and contemporary.

2. White walls are the most popular, outpacing gray.

3. Top choices for vanities is white and wood.

4. Undermount sinks are most popular.

5. Showers are upgraded in 84% of all master bath remodels and when homeowners remove the tub they are enlarging the shower 78% of the time.

6. Ceramic and porcelain tile dominate in the bathroom.

7. 58% of new bathtubs are freestanding flat-bottom tubs.

8. Recessed lighting is the most popular choice.

9. 24% of projects included a bidet and 15% had a heated seat.

09/21/2022

09/06/2022

What is the Lock in effect
Drop in New Listings Means

New listings is down 15.4% from last year.

Why is this happening? The Lock-In Effect is kicking in and this will keep people from selling and buying just because they want a nicer better home in a better neighborhood. It’s awful hard to give up your current mortgage rate of 3% to buy a new home with a mortgage rate of 5.50%.

What does this mean for our housing market? First, the number of home sales will drop to probably about 50k this year from 60k last year and the number of sales may drop even more next year. Second, inventory levels will probably drop soon and this will keep months of inventory < 2 I believe and will keep home prices increasing year over year

09/06/2022

Excited to share our new listing of this remodeled aurora ranch

MLS # 5493500 – View this gorgeously remodeled Hoffman heights 3 bedroom 2 bath ranch. When you walk in the front door you will be welcomed by a radiant spacious open concept living area. The kitche...

06/18/2022

6 Reasons Why Home Prices Have Soared &
Will Continue to Rise

First we have a dwindling supply of homes for sale for these reasons—
· It’s estimated that builders and developers are behind by 4 to 6 million housing units across our country. The primary reason is not enough labor to build housing.
· Homeowners have been scared to list their homes for sale as they don’t think they can find another home to buy.
· Aging in Place—now many older homeowners don’t sell their final home until they are over 80. This was 75 in 2010. Thus, there are fewer existing homes for sale.
· The Lock-In Effect—According to Redfin 61% of CO homeowners with a mortgage have a rate < 4%. Since mortgage rates are nearly 6% upgrading to a new home is much more expensive now. Thus, many homeowners will stay put.
· Wall Street has bought thousands of homes across CO as rentals.

Then, we have soaring demand coming for the next 18 years! Why? According to a hospital births chart I have we have on average at least 4 million young adults turning 33 for the next 18 years. And 33 is the average age of the first-time home buyer. But, these young adults also form new households as renters in their 20s and they need housing too.

Unfortunately, I am afraid our nation’s housing supply crisis is only going to get worse which means home prices and rents will continue to increase.

01/11/2022

Beware of New Property Tax Bills

Tax certificates are starting to come in. I received one last Friday on a home about a mile from me in South Jeffco and the property taxes increased by 14% this year from a year ago. Not surprising. Beware these tax increases could kill a deal for borrowers with really tight debt to income ratios.

In response we will be checking County Treasurer’s websites for the correct amount of taxes as our clients write offers on homes.