You’ve heard stories of people bidding well over asking price, buying without contingencies, and making cash offers in this hot real estate market. I want you to know that it’s still a very wise economic decision to buy a home over the next few years. There are many reasons to convince you that the time is right, regardless of how competitive it is to buy a home in Colorado.

Benefits of buying now and not waiting:

1. Mortgage rates are still low – Your loan’s interest rate should remain at historic lows, and this is a fixed rate that we secure for you for 15-30 years.

2. Appreciation is high – We are seeing a 9% increase of home value in the Denver Metro region, year over year, and an annual gain of 14% in the median price of regional single-family homes sold in August. Nationally, home values are expected to grow 12% over next 12 months.

3. Surge in demand for homes – The average prices for properties have increased in most regions throughout Colorado. As more people move here, long-term real estate stability can be expected. By 2040, the state’s population is estimated to be ~7.52 million (an increase of 2.5 million people over the next 25 years).

4. First-time homebuyers are coming in strong – Millennials make up the majority of the first-time home buyers, and 25% of all home purchases were made by first-time home buyers during the last two years. These millennials are 33 years old, born in 1988, and they are rapidly entering the home purchase market. The graph below shows how birth rates track with the national home buying market. Looking back 33-34 years ago, we’re headed into an upswing for home demand over the next 4-5 years.

5. Rent is increasing – Nationally, rent is up 5.5% year over year. Zillow rentals increased in cost 11.5% from August 2020 to 2021. Denver rents have increased 3% over just the past month and are up 5.8% compared to this same time last year. Your rental expenses may continue to rise, while a fixed mortgage is a locked payment that you expect every month.

6. Home prices continue to rise – You may be priced out of the market if you wait to buy. A single-family home in Denver Metro costs the owners $213 more a month in August 2021 than it did in August 2020 (assuming a 20% down payment, 30-year mortgage, and including the principal and interest payments).

As you can see, there are many incentives to buy a home as soon as possible. Every month you wait, you’re losing equity and the opportunity to build up your financial portfolio. Purchasing a home is a smart investment, and your risk is minimal over the next few years. Since there is no indication that the real estate market will weaken, we can conservatively estimate an appreciation rate of 5% every year. The longer you wait, the less you earn. Or the quicker you buy, the more you earn.

I have many client stories over the last six months that help make this case, such as:

  • An hourly-wage worker purchased her starting home with down payment assistance that required her to put down only $1,000. Her one-bedroom condo has already appreciated $15,000 in less than a year.
  • A couple moved to Eagle County and bought their first home for $490,000 a year ago. In nine months, that home sold for $590,000. The $100,000 profit allowed them to afford a bigger house which they needed for their growing family.
  • Nearing retirement age, my long-time client’s only savings plan is her home in Loveland. All paid for, this home is worth $400,000 and should provide her with a sense of security when she decides to retire and downsize.
  • My nephew in his late 20s was renting a condo for three years, when his landlord offered him the chance to buy it earlier this year. Convinced it was the correct decision, he continues to make the same payment each month, now as an owner. His mortgage charges are rolled into his monthly payment, and he has already experienced 8% appreciation in seven months.
  • Clients bought a home for $905,000 two years ago, and it recently appraised for $1 million. The $95,000 that they earned in value translated into a home equity loan (also known as a home equity line of credit) which will enable them to update their kitchen, invest in landscaping, and build a storage unit on the property.

Bottom line – get in the market! We never know exactly when factors will change, but we’re secure for the next 3-5 years. Sure, appreciation may flatten over this period, but there is no risk of property depreciation. It’s time to play ball in real estate’s fast-paced game, so you can come out a winner. Contact me anytime, and I will help you throw that first pitch.

Let's get you started on a home loan!