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Tag: buying a home

Hot market spurs home sales on the Plains…and 100-mile commutes

As home prices spiraled ever upward in Denver and every other city on the Front Range, many homebuyers looked east. They found bang for their buck along with elbow room to spare in communities like Bennett, Limon and Fort Morgan.

Like the rest of the state, home prices are up across the board on Colorado’s Eastern Plains. Most markets within 50 miles of the Front Range are seeing double-digit price increases in 2021, while those more than 50 miles away are more often seeing single-digit year-over-year growth.

“It’s been crazy,” says Timothy Andersen, broker-owner at Gordon Real Estate Group in Limon, 90 miles southeast of Denver via I-70. “We’re seeing it not only in Limon, but we’re also seeing it in Fort Morgan, Wiggins, as far northeast as Sterling. It’s a 100- to 150-mile radius from Denver, mainly to the east and northeast.” 

Sterling, for the record, is 126 miles northeast of Denver, meaning commuters would spend about four hours driving to and from work. 

Commuters started regularly buying homes in Limon and vicinity in 2016, and the trend gained serious steam during the pandemic, says Jana Ewing, associate broker at Gordon Real Estate Group. “The last five years have been where we actually saw the change where the Front Range market is coming out here and commuting,” says Ewing, noting that it’s gone from one or two sales to commuters a year to nearly half of the market for Gordon. 

Out-of-towners bidding up prices has made housing less affordable for long-term residents. “You hate it for your local people, but they can’t compete,” Ewing says. “A lot of motels here are doing rentals, because there’s literally no long-term rentals available for people.”

And there’s little in the way of new development. “That’s a problem right now,” Andersen says. “We have the water, we have the land, but we don’t have a builder that’s willing to come out this far.”

In Deer Trail, 57 miles east of Denver, Bijou Creek is one of a few new residential developments on the Eastern Plains, with more than 100 new units built since 2018, but it has yet to spark a broader trend of new development.

Roger Shults, owner of My Colorado Broker in Ramah, about 80 miles southeast of Denver, says his 12 years of selling real estate southeast of Denver have been marked by constant change. 

“Since COVID, there’s been more demand for properties in rural areas,” Shults says. “It’s driven our prices up a lot more than normal.”

And about 80% of his buyers are commuting to the Front Range. “I’ve sold homes as far east as Hugo” – a town of about 700 residents 100 miles southeast of Denver – “with people that commute into Denver every single day,” Shults says.

Shults says he has averaged about 35 to 40 home sales a year during his tenure in the area, and 2020 and 2021 are no different. “Those who commute to Denver, they try not to go east of Elizabeth, but in the last year or so, I’ve had a lot more interest going into Kiowa, Agate, Deer Trail, Simla, Matheson, Limon and Hugo.”

There’s also been interest from commuters in Akron, about 120 miles northeast of Denver. “I didn’t know buyers in Denver even knew that Akron, Colorado, existed – and most of them didn’t,” Shults says.

With the wider net being cast by homebuyers willing to commute 100 miles or more to the Front Range, he’s also putting more clicks on his own car’s odometer driving to showings in places like Hugo and Akron. Shults expects to easily top 20,000 miles in 2021, compared to 14,000 in a typical year.

The Numbers (through July 2021)

Typical home values in Colorado

Statewide: $490,944, up 16.7% over 2020

Denver: $543,544, up 13.3%

Colorado Springs: $409,770, up 25.1%

On the Eastern Plains 

Limon: $183,622, up 9.9% over 2020 (population 2010: 1,880; 2019: 1,952)

Fort Morgan: $252,960 up 8.2% (11,315; 11,463)

Sterling: $188,007, up 7.9% (14,777; 14,495)

Deer Trail: $382,141, up 17.2% (546; 800)

Bennett: $363,889, up 13.7% (2,308; 2,798)

Wiggins: $326,936, up 11.2% (893; 1,163)

Kiowa: $573,341, up 13.0% (723; 761)

Lamar: $102,642, up 7.0% (7,804; 7,655)

Akron: $148,873, up 7.1% (1,702; 1,723)

Data sources: Zillow; U.S. census

What to consider (financially) before making the leap from renter to homeowner

This year has become a time for many to take stock–including when it comes to finances.

While some are reprioritizing savings goals or discovering new ways to grow their business, others are considering making the leap from renter to homeowner, likely due to the significant drop in mortgage rates over the past few months.

If you’re among those considering whether home buying is right for you, before picking up the phone to call your local realtor, first consider these three questions to ensure now is the right time for you (and your wallet) to take the plunge.

How stable are your finances?

Next to retirement planning, purchasing a home may be one of the largest financial investments you’ll ever make. Before jumping to take advantage of low rates, first examine how stable your finances are before adding on the responsibility of owning a home.

Is your industry or position prone to change based on economic conditions? Given challenges caused by the current health crisis, if the answer to this question is yes, it may be better to hold off for the time being. You’ll also want to take a look at your other financial goals and responsibilities, including your emergency fund, and general cash flow and savings.

With the unknowns associated with the pandemic, having an emergency fund – money set aside for the unexpected, such as a possible job loss or unforeseen event – is more important than ever. While the ideal number can fluctuate depending on your lifestyle, a good rule of thumb is setting aside three to six months’ worth of expenses, or even between nine to 12 months if these savings will extend to other members of your family. Having this built up prior to purchasing a home can help to provide a cushion in the event of any unanticipated financial changes.

Does your budget have room for a mortgage?

It’s important to remember that budgeting for a home goes beyond simply your monthly mortgage payment. You’ll likely be responsible for items that, as a renter, you didn’t need to build into your budget. And, if your wallet already feels tight, waiting could be the right decision.

A few of these costs to keep in mind include:

  • Home inspections: Inspections are sometimes required and can range from $200 to $700.
  • Property taxes: Depending on where you live, property taxes can widely vary. According to WalletHub, the average household spends around $2,279 per year.
  • Repairs: Although homeowner’s insurance covers some possible damages, there’s often no way to anticipate events like your air conditioner going out or water heater breaking. It’s a good idea to set aside an annual budget of around one percent the value of your home to take care of these ongoing maintenance needs however, bigger repairs such as a furnace or water heater could cost up to $5,000 to repair or replace.

Another important budget consideration? Making sure you’re committing to a housing payment you’re able to afford. Many people get pre-approved for a higher mortgage than is comfortable within their current budget, and sitting down with a mortgage calculator and a qualified mortgage

lender can help you to better understand what price limitations are best for you and your budget. By working with a trusted mortgage lender alongside a financial advisor, you may find that you qualify for special programs such as down payment assistance and better understand what type of mortgage is best suited for your situation.

What is your reason for buying?

While there is no harm in browsing, you’ll want one of the biggest purchases of your life to be backed with plenty of thought and rationale. I recommend meeting with your financial advisor, a trusted mortgage lender, and real estate agent to aid in this process. Ultimately, you’ll want to ensure that this decision aligns with your other short- and long-term goals, both personally and financially.

With the uncertainty this year has brought, it’s more important than ever to have support in navigating important financial decisions. Whether you’re an empty nester looking to downsize, or a growing family in need of an upgrade, a financial advisor can support you in determining whether purchasing a home is right for you, and the steps to make that dream a reality.

Trish Goska is a financial advisor with Northwestern Mutual. Trish can be reached at 303-300-5577 or [email protected]. Website: http://patriciagoska.nm.com/