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Today’s Real Estate Market – I know. I wonder. I’m boggled!

The Rueth Team DMAR January 2021 - Denver Market Report

There are things I know, things I wonder about, and things that boggle my mind.  Here are a few… I knew demand was about to explode before 2020 began. Demographics told us that.  8.8 to 9.2 million first-time home buyers were coming and they wanted a piece of the American Dream. With the largest age cohort numbering over 23 million, Americans aged 25 to 29 are looking to start families and buy homes.  And once someone has a child they are twice as likely to purchase a home. 

I knew that a recession was coming, or at least I was pretty certain. America was on a Recession Watch at the end of 2019 and beginning of 2020 tracking slowing manufacturing, shipping, business spending, and job creation as well as declining consumer confidence, talks of trade wars, and political unrest. The two and ten-year yields had also inverted pointing to a longer-term financial instability.

Housing inventory was low coming into 2020, down 10 percent year over year with active listings a paltry 5,025 homes for sale. Yet, buyers were not budging.  Forty-five percent of sellers at the start of 2020 had to reduce their price to get their home sold even though we only had 1.13 months of inventory.  Consumer spending similarly was the very thing that was keeping our economy afloat. Since spending is 70% of the GDP, consumers were determined to not allow the U.S. to go into a recession.

Then, spending stopped because jobs stopped. COVID-19 shut the economy down, and to no one’s surprise the recession began, but then it ended just a few months later. There was political and social unrest, and lives changed forever. The mortgage market was a mess and public enemy #1 Mark Calabria, the head of the Federal Housing Finance Agency, became a target.  But here’s what boggles my mind, consumers wanted to spend. But they couldn’t, not on hotels and airfare, nor concerts and restaurants but they could on homes, cars, and oh yea, on stocks. 

Housing remained resilient as we quickly defined “essential” and adapted to a work from home economy. Houses became bigger, more suburban, with 2 offices, and a place to work, play, workout, educate and relax. They became everything and everywhere to all of us. Coloradans who had jobs, saw weekly wages increase 8.7 percent. Counties like Denver saw the juxtaposition of 11 percent unemployment and 11 percent weekly wage increase in the same period.

Meanwhile, the Federal Reserve continued to support the markets, dropping the fed rate to zero, and injecting trillions through the purchase of mortgage-backed securities and treasuries. As long as they continue, we will continue to see mortgage rates low and equities high. 

So I wonder, will the economy sustain while we distribute enough vaccines to realize herd immunity?  Will the stimulus package keep small businesses afloat or add to the equity market gains?  The Fed predicts unemployment at 5 percent, spending to increase 3.7 percent, and GDP rising to 4.2 percent in 2021. This is good! So, will they be able to justify a zero fed rate and quantitative easing until 2023?  And if they can’t, will rates start to go up?  By how much? I also wonder once people go back to work, ballgames, concerts and travel; will they find things to buy other than houses?  Easing demand slightly and putting us back towards seasonal normals.

January’s DMAR Market Trends report is anything but normal. With 0.4 months of inventory, the visual of our trending closed homes to active inventory tells the story we are all feeling… there are not enough sellers to satisfy the spending hunger of the demographic swell. Year to date, we’ve sold 6.95 percent more homes than last year for a total volume of 15.44 percent more, yet 1.79 percent fewer homes came on the market. Active listings hit an all-time low of 2,541 homes for sale, which’s down 49.55 percent from last year. Consider that there are 1.2 million households in DMARs 11 county area (per the census bureau). 0.2 percent of available homes are for sale. At the last census, Colorado’s 2020 population growth was 2.63 percent year over year. Where are they all living?

What boggles my mind is how our average and median prices did not move this month. We are all hearing of 5, 10, 42 offers per home with appraisal gaps and inspection waivers. Realtor friends are stumped at how to even price a listing in today’s market. Per the report, single-family homes sold at 100.11 percent close to list. Yet, our prices stalled at 7.14 percent for our median close price growth and 7.94 percent for our average. Our market feels on fire, yet this is only 1 percent higher than the historical average.

There is no doubt in my mind this year will be another incredibly strong year for housing. Low rates, favorable demographics, rising wages, and the wealth effect created by a staggeringly out of control stock market will be the story of 2021. With interest rates hitting record lows 16 times in 2020, buyers and investors alike are taking advantage of increased purchasing power and are willing to pay what a seller asks to get their own piece of real estate!


Ivy Zelman’s Insights at the Fairway Economic and Housing Summit

Fairway Economic and Housing Summit - Ivy Zelman

This is only one session from the outstanding series of presentations during the Fairway Economic and Housing Summit on December 17. The full event featured presentations by the following. You can watch the replays on YouTube here:

Barry & Dan Habib
Dave Stevens 
Ivy Zelman
Chris Whalen
Rob Chrisman
Mike Fratantoni

Moderated by Nicole Rueth, Sarah Middleton, and Peter Beanland.

Follow along with this presentation from Ivy Zelman. (PDF)

About Our Featured Presenter:

As CEO of Zelman & Associates, Ivy Zelman leads the preeminent boutique research and investment firm dedicated exclusively to the housing industry. Founded in October 2007, the firm is known as a thought leader across all facets of the housing spectrum. Ivy’s concept for Zelman & Associates remains strongly rooted in the ability to perform thematic research overlaid with proprietary surveys to produce unparalleled differentiated research. Ivy is frequently quoted in The Wall Street Journal and appears occasionally as a guest on CNBC. For the past 22 years, Institutional Investor has recognized Ivy for her industry-leading analysis. Most notably, Institutional Investor’s All-America Research Team rankings placed Ivy and her team with eleven 1st place rankings. Ivy reinforced her dominant reputation in the industry by calling the top of the real estate market in 2005... and the bottom of the housing market in January 2012. Ivy received a Bachelor of Science from George Mason University.


The Rueth Team of Fairway Independent Mortgage Corporation
750 W Hampden Avenue, Suite 500
Englewood, CO 80110 303-214-6393

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December 2020 Real Estate Tips Round Up

Real Estate Tips from Nicole Rueth - December 2020

Three tips here: Good Buy or Goodbye, Making Money in Your Sleep, and Interest Rates Aren't Why It's Time To Buy - Building Equity Is.

When someone asks, “Is this property a good buy?” Or  “Should I be saying goodbye and invest elsewhere?”  It’s not as easy as giving a quick yes or no. Most of the time there's not a straightforward answer because each person is starting from a different place have different long term or short term goals. So what is a great property for one isn't necessarily the best for someone else.

The single most considered factor of any investment is Cash Flow.  I am often asked, “What is a good cash flow?”. My answer is always the same...Positive. How much cash-flow is needed is subjective. Maybe you’re living in the property and house hacking so you don’t have to pay rent, or it could be a multi-unit that is cash-flowing so well it will pay itself off in 15 years instead of 30. Maybe it’s earning just enough cash to cover the mortgage, insurance, taxes, and maintenance, and nothing more....but it’s a long hold investment strategy...and that works too.

With a positive highlight from this year being consistent low-interest rates, you may not realize how your home is working for you already. You may be making money in your sleep. And if you haven't purchased a home yet or refinanced the one you want to stay in, this is the time.  Align yourself with an experienced Realtor so they can help you realize your dream of owning real estate, or making more money in equity from the property you already own.

Listen to this valuable round up to shift your thinking and start building wealth.

Finding Your Niche Will Serve You and Your Clients Well


"Our industry really has a need for professionals that use their platforms to take a stand for things and to help be change-makers in our community. I think the general public oftentimes looks at real estate, certainly in a city like Denver, a growing city where the prices have gone high, and there's people that can't afford to live in certain neighborhoods anymore and all of that." Nicole's guest is Ryan Belinak from Live Urban Real Estate. 

His two big takeaway points for agents are these, Be kind to yourself, especially those who are new in the industry. Also, don't be afraid to adapt and put yourself out there. We have all learned new skills this past year and have had to listen to our own voices on playbacks more often than we thought possible.

Nicole says to and about Ryan:

This week I have Ryan Belinak with me, who is the Assistant Managing Broker for Live Urban real estate and also the head of recruiting. Ryan, you have been a pleasure to get to know. We've been able to work together a bit. And your energy, your positivity, your enthusiasm for the business, for serving your clients. It really is phenomenal.  I know that this new recruiting position that you've just taken on for Live Urban is going to not only suit you, but it's really going to capitalize on what makes you unique.

Listen to this 8 minute episode for more ideas and inspiration.

Let your home help you make money in your sleep.


With a positive highlight from this year being consistent low-interest rates, you may not realize how your home is working for you already. You may be making money in your sleep. And if you haven't purchased a home yet or refinanced the one you want to stay in, this is the time.  Align yourself with an experienced Realtor so they can help you realize your dream of owning real estate, or making more money in equity from the property you already own.


Supply Isn’t the Story, Demand Is.

Denver Market Area Report - The Rueth Team

DMAR’s December Market Trends Report was released this morning and provided numbers supporting what we already knew. Demand is strong! Inventory hit an all-time low of 3415 active listings at month-end. Compare this to the average active listings for November month-end of over 14,000 and a happier place of 6,000 units.  Sellers are exceeding the typical seasonal holiday slowdown of decreased supply. The added fears of job security, prospective buyers entering their homes, and finding a replacement home are adding to their resistance to sell. Potential Sellers are also starting to face what will become more widespread, something called rate lock where the appeal of staying in their current home with a lower rate and monthly payment will outweigh their desire to move. We will continue to see tenure increase from its current average of 10 years as well as homeowners holding onto their primary homes with low-interest rates and choose to convert them into rental properties.

Be a leader for your clients.


Thank you for joining us for another agent talk This week I have Drew Morris, who I've got to know through DMARs Market Trends Committee. He jumped on just a little bit before I did about 2.5 years ago, and he's been a real estate agent for 7.5 years and I bring up the half because he claims it just like I claim my half an inch.


Drew Morris is with Your Castle Real Estate. I wanted to bring him on board because he has some of the same views I have and looking at real estate as a wealth-building opportunity and right now, having been through the most turbulent year I can personally remember and not being quite done yet. So how do we continue on our path to 2021 into 2022, 2023? How do we engage with our clients on a very personal level to continue to support their success in real estate?

There is so much news to absorb whether or not we'll get shut down again, whether or not or how long, I should say before a vaccine comes out and we can return to whatever new normal looks like. What would you, and how do you relate to your clients today? How do you keep engaged with them so that you continue to be that adviser for them? I think being a person that is experiencing it firsthand and being a, I think a voice of reason, a voice of confidence. A very like, in a way, is like being even-keeled approach to things. That's something that my clients always mention. It's almost like a common theme where they could always rely on me to just kind of be even-keeled about things. No matter what's going on, the house could be burning down, and I'm like, OK, Well, here's what we're gonna do, just work through it.


 So while everybody is ramping up help, trying to bring that back down and slow it down can be super helpful. And that's something that I learned from the Marine Corps, actually, because you have to be in that kind of setting. Dealing with friction and dealing with emotional responses and emotional environment and unstable environment. You know, again, bringing that to the table has been super helpful.


Nicole asked, "As far as being the even keel kind of advisor, I think that there's a lot of stress, especially this year. Small things become very big very quickly, and to be able to have that person standing beside you and walking through because the long term opportunity and you even said you know before we started recording is that one of your main focus is to continue to educate people and advise them on the power of real estate. Real estate is a wealth-building vehicle. I couldn't agree more with that, especially when we're in the turbulence of the stock market and the economy and the environment. The one thing real estate does is increase in value." 

Listen to this 10-minute episode to be inspired.

Financial Independence for Early Retirement through House Hacking


Nicole's guest today is Zeona McEntyre. In this episode, they talk about house hacking to financial freedom. House hacking is the way that Zeona thought to be financially independent. And her role now is really just to help empower people, inspire people and get them excited about what's possible. People they think, "Oh yeah, financial independence or early retirement, that's for other people, that can't happen for me. Or if I'm going to do that, it's going to take me 15 years." But she did it in two years with house hacking. She also believes it's really doable in five and traditional people that are doing just financial independence with index funds, they do it in about 10. So it's almost about just knowing it's possible and then allowing yourself to have that.

In this episode she talks about the foundations of financial independence. Some of the kind of like misnomers or confusion around it. She'll go into why, why would you want to house hack? Why would you want to share your home if it's your COVID palace, why would you want to do that? It better be for a good reason.

Shen then goes through four strategies that you can use, like four different ways you can house hack, as well as some case studies and resources at the end.

Zeona's story:

It all started when... Zeona's best friend got laid off from a big time job in New York City and could no longer afford his apartment. He called her one day excited to share his decision to travel with his new found "funemployment" funds and rent out his apartment on this website he just heard about called Airbnb. That was 2011....

After much persuading she finally decided to give it a try and never looked back!

Fast forward nearly 8 years and a whole lot of hospitality magic later. Zeona now owns seven properties, manages 20 (& counting! worldwide). She teaches others how to invest in properties with Airbnb in mind & create automated businesses. She lives in Boulder, CO half of the year and spends the other time traveling the world as an International Pet/House sitter.

Don’t Be Afraid of No from Your Lender


There's No Bubble to Burst
I keep hearing that people are waiting for the Denver market to cool down to buy or sell. But is that the best plan? Appreciation is at 6.9% year to date, which mean phenomenal growth for those who have purchased and opportunity for those just diving in. How do I know? Because three years ago I was sitting in my backyard saying nearly the same thing. The difference between now and then? Low interest rates.

Know What Your Getting
So often clients will come to us and be scared or timid in asking questions. But I'm here to say, as the top lender in the state, you should ask every question you have and leave nothing on the table. Because sometimes a few answers can make all the difference in your lending outcome. You should be confident in your lender.

Buyers, Sellers, Agents, this is not the time to rest.

No rest for the agent, the buyer the seller

November’s DMAR report highlighting October data reflects just how important the home has become by producing nearly as many records as we saw in last month’s report. Now is not the time to sit on the sidelines in fear that the bubble will burst; it is the time to stay engaged. Finding the right home might be challenging, but waiting will only cost you more.

Nicole Rueth
The Rueth Team of Fairway Independent Mortgage Corporation
750 W Hampden Avenue, Suite 500 Englewood, CO 80110

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