How Will The Coronavirus Impact The Housing Market?

Hey Dave….. These are crazy times.  We currently have our home on the market and are wanting to downsize.  We listed our house about 6 weeks ago and the showings started strong and have dwindled to near nothing the past 2 weeks.  What should we do?  Should we keep it on the market?  Are prices going to go up or go down?  I guess, overall, how do you think this Coronavirus will impact the housing market here in Grand Junction. 

Judy, Grand Junction

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Judy,

Wow!  You are right!  These are crazy times and the only sure bet is that nobody knows how this will ultimately play out.  Your current experience mirrors most everybody’s experience over the past 6 weeks and the speed that this has happened is hard to fathom.  Two weeks ago homes were being shown and contracts being presented and as of today, there are very few showings and even fewer contracts.  So take some solace in the fact that you are not alone.   I know that not being the only one is not very comforting, but there is some comfort in the fact that there is little you can do right now to change the number of showings you are getting on your home. 

I would suggest holding the line for now and staying the course.  As far as I am concerned, the data sample we currently have is too small to make important decisions.   The real estate market has slowed over the past few weeks, but prior to Coronavirus our team was already on pace to shatter our best year ever and we were only 2 months in!  Things have changed and I am prayerful they can change fast again!  We need to see how the stimulus package falls out and what support that provides to workers and small business owners.  We need to see how long the shelter in place remains in effect, and if in fact, it ends April 11, how fast does the interest in real estate regain its momentum.  What happens with interest rates? Interest rates are all over the board, up one day, down the next.  There are too many blurry angles to get a real clear picture of what lies ahead, but I am confident in Mesa County’s short and long term future.  I think prices will remain fairly solid as inventory is still low and demand will once again be high after the fog lifts.  Mesa County needs more homes, as I believe demand will grow from this Coronavirus as people realize that living on top of one another in urban settings is not as appealing as it was pre-pandemic.  There are going to be many silver linings to these events, but may not be completely visible yet.  A certain level of faith is the name of the game moving forward.

There are so many variables that are far above my pay grade that I am taking the outlook of controlling the things I can control and letting go of the things I can’t!  Take a deep breath and come to the realization that this is a global issue and the bumpy road ahead will spare very few.  I can remember my mom saying, “we are all in this together” and I would think, yeah we are in this together because you are making me be “all in this together”, but in this case, we really are ALL in this together!  I am prayerful that each and every one of us can put aside our politics, religion, sexual identity, and economic status and band together moving forward.  Maybe a pandemic is what was needed to bring us all back together!   It's hard to see the light when you just enter the tunnel, but as you keep walking the light will appear and hopefully keep getting brighter!  I hope that helps.

Dave Kimbrough

The Kimbrough Team

Should We Test For Radon Before We Purchase Our Home?

Dave,

Our question is not as much a question as it is to get your opinion.  We recently purchased a new home and during our inspection process we asked our agent about getting a Radon Test and she told us there really was not any radon in the valley and we did not need one.  Well we are from the Midwest where there is Radon, so we insisted.  We got a Radon test done and much to ours and our agents surprise there was radon that registered above acceptable levels and thus had a radon remediation system installed prior to closing.  Was this a “one in a million” finding or is Radon something you see in Grand Junction.  Really more curious about your thoughts, than anything.  Thanks for your time.

Ralph & Cheryl, Grand Junction

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Ralph and Cheryl,

Great question.  First, let me say that I am not a Radon expert, but I will say from my experience your finding of Radon was not “one in a million” and the presence of Radon in the Valley is more prevalent than most people realize, but by no means does it exist in unsafe levels in every home tested.  It is my experience that the majority of homes are safe and do not have an elevated radon level and need no remediation done at all, but overall state and local numbers say there is statistically a 50/50 chance a home will have unsafe levels of Radon.   Of course, if you are concerned about Radon, it is still a great idea to have it checked so you can be confident you are not living in an unsafe environment. 

For those who are not familiar with Radon or know what risks it poses, Radon is an odorless, colorless and tasteless gas.  Underground Uranium decays into radium and radium’s decay product is radon that escapes from the ground in the form of gas.  Radon enters a home through the lowest level in the home that is in contact with open ground, which are typically cracks in foundations, cracks in walls, gaps in suspended floors etc.   Once radon has entered into your home it is easily inhaled into the lungs and has been shown to increase the risk of lung cancer.  According to the United States EPA, radon is the second most frequent cause of lung cancer and is completely preventable, if remediated properly.

According to a local Radon expert Cory Lindbo at Western Slope Home Inspectors and Radon Service, radonreserve.com, the good news is a radon problem can be completely and permanently resolved for as little as $1500-$2500 and most mitigation jobs can be completed in as little as 1 day.  A radon test generally takes 2 days, but the home needs to be closed down with as little outside air transfer as possible.  This means that you need to close all windows and doors and keep traffic inside and outside to a minimum during the test period.  This will allow for a proper reading where you do not get a lot of air transfer from outside.  If you cool your home by evaporative cooler a test can be very difficult to do during the summer months.  National Radon month is January, as the winter is the easiest time to do a radon test because most homes have very little air exchange during the winter months. 

Radon is no doubt something to be aware of and in most instances, you should test for it, but feel confident that if there is an unsafe presence of radon in your home there is no need to panic, the fix is not a bank buster and can be solved quickly and professionally.  In this case, the solution to radon is as easy as knowing it is there and hiring a professional to again make your home environment safe. 

Dave Kimbrough

The Kimbrough Team

How Do We Time The Sale Of Our Home?

Dave,

Our plans are to move in August/September to Oklahoma to be near family, as we have two grand children who live there.  I will qualify for retirement late this summer and need to make sure we remain in Grand Junction until that time.  We are aware that interest rates are still very attractive and our local market has been showing strong growth over the past few years. Our home is paid for, but we do not want to move twice in the process, if we can help it.  How is our local real estate market doing overall and when should we start trying to sell as we do not wish to move twice, but want to move before winter hits next fall? Thanks for your insight.

Lew and Martha, Grand Junction

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Lew and Martha,

Great to hear about the prospective move and moving closer to grandchildren, and other family members, is generally a big motivator for people who move after retirement.  Our local real estate market is showing very nice gains and continues to maintain the momentum we have been building over the past several years. 

We have seen significant price increases over the past several years and overall very positive things happening across all price ranges and things moving in a positive direction is a good thing!  As I often say, “stability makes a great friend” and I expect our market to remain robust and stable with our long term outlook very bright.  As always, the overall condition of your home, inside and out, and the price range of your home and how aggressively the home is marketed will help determine how quickly you can expect your home to sell.

As I am often asked to do, looking in my crystal ball can prove dangerous.  Timing the sale of your home is one of the most difficult things to do in today’s real estate market, but the positive momentum we have had does make it easier for sure.  In your case, I would suggest you have your real estate agent come over in late spring/early summer and perform a market analysis to help you evaluate when might be the best time to list your home for sale, based on market activity and the level of quality inventory. (I am assuming, in a world where we should assume nothing, that your home is move in ready) This evaluation, if done in a timely fashion, will also allow you to make any improvements needed prior to listing your home for sale. 

Pricing is always key, but since you own your home free and clear you can price it competitively in the market and improve your chances for a quicker sale.  If timing is more important than money, then all things being equal I would list it for sale no later than June 1.  This would give you time to adjust your price if need be, prior to August, but if you did not have it sold by August would still allow time between August and October, after your retirement, to get it sold before winter sets in.  The market is typically strong into October and some of our best months can be August and September!  Be prepared to listen to the market and make adjustments when needed and you should have a successful transition.  If you do get is sold early in the listing period, then this would also give you the opportunity to negotiate an extended closing date and potentially allow you to sell right around the time you wish to move.  Be prepared to sell a bit early and find a short term place to land while, one of you moves to Montana a bit early.  Several of the hotels offer attractive monthly rates in suites that are quite accommodating and have most of the luxuries you enjoy at home.

Have fun with it, go with the flow and make a plan and stick to it and you will remove much of the anticipated stress that can go hand-in-hand with this type of transition.  I trust you will have a positive experience if you follow these recommendations.  Best of luck in your future endeavors!

Dave Kimbrough

The Kimbrough Team

What's The Return On Investing in Central AC For Our Home?

Hi Dave,

 I have lived in Grand Junction for nine years. A year and a half ago my husband and I bought an older home with a swamp cooler. We love the house but really miss the central AC that we had in our previous home. As summer approaches we are considering installing central AC in our house but are wondering what sort of return on that investment we would see if/when we ever decide to sell this home.

 Thanks!

Jenn L, Grand Junction

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Jenn,

Great question!  It is funny, I grew up in Grand Junction and spent most of my childhood living with a swamp cooler and that was all we knew.  I don’t believe, or at my advancing age am I able to recall if, anyone had refrigerated air.  My how times have changed!

Swamp coolers have many advantages.  They are inexpensive to operate, they will drop the ambient temperature approx. 20 degrees, they add moisture to the dry air here, thus not only cooling, but providing needed moisture to the air in our typically dry climate!  They sound incredible, right?  As Lee Corso of College Gameday says, “not so fast my friend”.  A swamp cooler will do all those things I listed and for all but about 30 days of our summer work incredibly well, however they are typically considered vastly inferior to central air conditioning units.  We find that the vast majority of buyers from out of town have no idea what a swamp cooler is or has any idea how they really work or how to maintain them.  To sum it up, they don’t like and don’t want what they are not familiar or comfortable with.

This is not to say that a home with a swamp cooler is inferior, as my own home has a swamp cooler, but as more and more people move here from areas outside of Grand Junction the swamp cooler is becoming a dinosaur and is almost NEVER preferred by buyers over Central AC.  In fact, most of the time adding AC to an existing house is considered a significant upgrade and can absolutely be a difference-maker, especially to an out of town buyer.  We regularly have requests from buyers to look at ONLY homes that have AC. 

I believe that converting to central AC in your older home will absolutely be seen by future buyers as an upgrade and will prove to not only be a good investment but will lead to a higher sales price and increase the number of potential buyers who will look at your home.  Lastly, adding central AC will prove to be a creature comfort that you and your family will enjoy for many years, so adding it would be something I would encourage.  We don’t always want to do things or add features to our homes simply for a good investment or to get a good return.  Sometimes we should add them to increase our quality of life and overall home enjoyment!  In my mind, loving where you live is the most important factor to weigh!  Put it in and don’t look back, especially when all your friends who live in swamp cooled homes come over and comment on how nice and cool your home is compared to theirs.  That is when it will really feel good! 

Dave Kimbrough

The Kimbrough Team

How Do We Make Sure We Don't Pay More For A House Than It's Worth?

Dave,

We have been looking at homes, but have noticed that many of the homes we are interested in have a tax assessor value that is a good bit lower than the listed for sale price.  Is the tax assessor value what the property is worth or what does it mean exactly?  I'm thinking about making an offer on a property, but now I'm not sure I should make an offer if it is worth so much less than what they are asking for it.  We just don’t want to pay more than it is worth.

Janet,

Grand Junction          

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Janet,

Another great question, and one we have to deal with on a regular basis, especially after new tax evaluations hit your mailbox!  Let’s first look at how the assessed value is determined.  I went to the Mesa County Assessors website (http: //assessor.mesacounty.us) and found the criteria for how the value is established and Colorado law is very specific on how values can be established:

     1. Real property must be revalued every odd numbered year.

     2. The actual value of real property is based on its value as of the appraisal date, which is

         June 30th of the year prior to the reappraisal year.

     3. Residential property may be valued using only the market approach to value. In this

         approach, the value of the subject property is based on an analysis of comparable sales

         to predict the price properties would have sold for on the Appraisal date.

     4. The actual value assigned to residential properties is based on sales that occurred in the        eighteen-month period from January 1, 2017 to June 30, 2018. Those sales indicate the market conditions in various parts of Mesa County, and the market value of specific types of properties.  Note, five years of sales activity are analyzed for those types of properties that are few in number or of an unusual nature.

As you can see from the criteria above, my main take away is that values are established using sales from primarily sales that occurred from January 2017 thru June 30, 2018.  We are in the middle of an eight-year run of property value increases so you can expect property values in the summer of 2020 being higher than the property values used to establish the tax valuation you may have just received in the mail.  I believe it is also fairly safe to assume that property values will continue to move in an upward swing over the next few years, as I am bullish on our local economy and people from outside our area have a high desire to move to the western slope.  Also note, #3 above indicates that these past sales are used to “predict” prices and when you predict, you are less likely to be completely accurate.  Overall, the property tax valuation is a little like throwing darts…..not blindly throwing darts or throwing them in the dark, but safe to assume that more tax valuations will miss the bullseye than will hit it.  Please don’t take offense with my analogy if you are a professional dart thrower….. simply trying to hit the mark! (no pun intended) I just googled professional dart throwers and there is such a thing…. I’m talking to you Michael van Gerwen!

Getting back on track, I regularly tell our customers that the assessed value of a property is more about tax revenue than about actual property valuation.  The County Assessor has a herculean task of trying to establish values that are even “reasonably close” and frankly that office does an amazing job given the enormity of the endeavor.  In 2011 when the housing market was in free fall and assessed values were predicted using sales from the peak years of 2008 and 2009 we saw assessed values that were significantly higher than market value and we had just the opposite problem and the complaints were rolling in daily.  Right now you can be thankful that the value is based on actual values from at least 18 months ago. 

I hope all this makes sense because it is my recommendation to never use the assessed value to establish a market price for a home or any piece of property.  I rarely look at a property’s assessed value for any reason other than to accurately report the taxes due each year.  Stop paying attention to the assessed value as it relates to today’s market value as one has nothing to do with the other.   We are thankfully on the upswing and whenever market values are moving upward our assessed values are likely to be lower because they are established using older sales.  Happy house buying! : )  

Dave Kimbrough

The Kimbrough Team

When is The Right Time to Sell to Make The Most Money?

Dave,

My wife and I have been discussing whether or not we should put our home on the market. We know the average home sale price is high right now. We’d like to take advantage of the rising prices and cash in on the equity we currently have in our home but do you think the prices will continue to rise? If we wait another year could we get $10,000 or even $20,000 more on the sale? How do we know when it’s the right time to sell so we can get the highest value for our home?

Thanks for the advice!

John and Arielle, Grand Junction

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John and Arielle,

Knowing when the right/best time to sell anything is one of the hardest questions in the world to answer, but I will try!  Ultimately, if I could predict the best time for selling anything I would be super wealthy and writing this column from a white sandy beach on a tropical island with a drink in one hand and ……. Sorry, I was getting carried away there, back to reality….. Unfortunately, I am writing this column from my office late on a Wednesday night to the not so relaxing hum of office lights and forced air heat!   All kidding aside, the world is volatile and things can change quickly for the good and for the bad.  Right now, things are quite good.  We are currently in the best real estate market we have seen since 2008 and for that, I am very thankful!   

With that being said, I anticipate the market to continue growing across the board and prices to continue rising. I do believe that we will see some price settling in the next twelve months, but I am still surprised at how little inventory there continues to be, particularly under $400k,  that keeps putting upward pressure on prices.  Also, worth noting is that Grand Junction is now a destination place to live!   What is driving our market is no longer about any one industry, but by being an amazing place to live!  Peeps want to live here!   Somewhere about 2017’ish Grand Junction turned the corner from being a boom and bust cycle town that would ebb and flow with the oil and gas industries to being a place that people all over the country know about and have pegged as a super desirable place to live.  We do have many new subdivisions in process and there are hopes that new construction may help loosen up the supply and slow rising prices, but I am becoming more and more bullish on our real estate market as being on a long haul upswing that will be impacted by outside factors, but not nearly as likely to “bust” as it has before.  Keep in mind that this new construction will not stop rising prices, only potentially slow them a bit if it starts to fill some of the inventory void!  I will reiterate what I wrote about earlier this year, the secret about Grand Junction is out and people are going to continue to seek Grand Junction out!  Why not, it’s an amazing place to live. 

One last tidbit to consider.  If you are selling at the top of the market, then it is highly likely that you are also buying at the top of the market.  Buying and selling in the same market is somewhat relative…. If one house goes up 10% then it is likely the other one has gone up in a similar fashion!  That is not always true, but something to consider, depending on the differences in what you are selling and what you are buying.  I always recommend you try your best to maximize your price, but sometimes the “best” time is the “right” time for you and your family!    I hope that helps….

Dave Kimbrough

The Kimbrough Team

Should I Build A Shop?

Dear Dave,

I have been throwing around the idea of building a shop at my house.  I live on about an acre lot and have a fairly new home, built in 2007.  I have room to build a detached shop and also room to add onto my current 2 car garage.

My question for you is, what do you think would make the most sense when I go to sell the house someday?  Do people appreciate a detached shop or would they like it connected to the house?

Thanks for the help -

Robert, Grand Junction

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Robert,

I believe this is an idea that virtually every man throws around from time to time, where can I build a shop?  Building a shop has almost become part of the American dream.  Right behind the dream of a detached shop is a three car garage or three car garage with large storage shed!  As you wander through life accumulating “things” that you probably no longer need, but can’t force yourself to part with the idea of more and more storage becomes increasingly important.

In my opinion, build a detached shop.  The nice thing about a detached shop, over one that is attached, is that what is in or what is happening at the detached shop is less likely to spill over to the main garage and house.  This is a simple function of being “detached”.   A detached shop can be a man’s private kingdom and it is hard to put a price on that.  The fact that a garage or shop is detached from the rest of the house implies that not everyone is invited, there is limited access.  Having a shop that is detached also gives one the opportunity to separate his or herself from the chaos or activities of the main structure and provide a place of solace and privacy where anything goes and being clean are not words that need to be feared!  Having a place that is a safe haven is valuable and for those who are used to having it, it is VERY valuable.  

Go detached and live longer and more prosperous and when you go to sell, enjoy the rewards of having a detached shop!  I am kidding about the longer and more prosperous part, but the rewards will be no joke!  It will, no doubt, be a big selling feature that will have you seeing more green! ($)

Dave Kimbrough

The Kimbrough Team       

Is A Dog Door A Selling Feature Or Should We Remove Before We Sell?

Dear Dave,

We are getting ready to list our home this spring.  We have been getting it all cleaned up and show ready.  We have a dog door that leads from our laundry room out into the backyard.  Our question for you is this – do we leave it or remove it and repair the hole that is left?  Do people not buy a house because there is a dog door or is it a good selling point? 

Help!  Just not sure what to do about this. 

Thanks -

Barbara – Grand Junction, CO 

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Barbara,

Please call me when you decide to sell!  If you are perseverating about a dog door, your home is going to show wonderfully.  I am confident it will show like a dream.  All kidding aside, don’t even concern yourself with such a small item.  Many will find it a value add and if they don’t, offer to have it removed and covered for the new owner.   Trust me, you are ready for the market.  Sit back, take a deep breath and enjoy a few weeks of calm before you hit the market!  Happy selling.

Dave Kimbrough

The Kimbrough Team