The Colorado real estate market is not seeing the same slowdowns as the rest of the nation, but it is true that things are cooling off. The results are fewer multiple offers which mean fewer bidding wars as well as fewer inspection concessions. However, homes in Colorado are still selling when they are priced properly, especially when the home is in great condition. In many cases, these houses are still selling very quickly which in turn means there is a real cost of to waiting to buy.
Since the primary news around the housing market is that it’s slowing down, many prospective home buyers are considering waiting to see what happens. However, this ‘wait and see’ mentality often comes with higher prices. The primary reasons for this are that interest rates and home prices continue to rise despite the market cooling. Currently, interest rates are a little more than 0.5% higher than a year ago, and experts predict them to be another 0.5% higher by this time next year. Homes are appreciating at approximately 10% per year in the last four years, and market forecasts predict appreciation will continue at least 5% for the next two years.
Looking At The Numbers
Because the increases on interest rates and home prices only continue to rise, waiting to buy has an actual cost. For example, consider a house that is currently priced at $450,000. In just one year, a 5% appreciation on the price results in a home that will be priced at $472,500 in only 12 months. The 5% increase is also a conservative estimate, so even a small increase of a half percent would increase monthly payments by $206 for an 11% increase. Therefore, waiting to buy will result in higher prices even if the housing market continues to cool because the price of existing homes will still continue to climb.
If you are looking to buy a home in Colorado, now is the time to speak with an experienced real estate agent that can help you navigate the ups and downs of the housing market. Before the cost of waiting climbs any higher, fill out a contact form to be connected with an agent today!