The talk of the town... this crazy market.
As a realtor in Boulder and Metro Denver, both booming markets for sellers, I constantly get asked my opinion of when something is going to give? As of January 2018 Boulder, Colorado had a total supply of inventory of 2.8 months. Louisville/Superior had 1.3 months and Lafayette had 1.4 months. This calculation, "Months of Inventory", tells us how many months it would take for the current inventory of homes to sell. 6 months of supply is considered a healthy market, where buyers and sellers are balanced with supply and demand. 6 months! We are at less than half of that in Colorado and much lower in specific areas.
In Denver, "Active listings were at 3,854 total units at the close of December, establishing a new all-time low for any month.
“The lack of active listings should concern us all,” comments Steve Danyliw, Chairman of the DMAR Market Trends Committee and Denver REALTOR®. “Only time will tell if more sellers will choose to stay in their current homes, afraid that they won’t be able to find a replacement.”"
If you are a buyer in this market it can be very very tough. You may have seen the article on CNBC: "Why nearly 100 people toured one Denver home in three days". That's a LOT of competition. If you are a buyer in this price range you aren't just a number in that 100, you are frustrated, overwhelmed and worn down.
Based on this article: "Why move to Denver from Silicon Valley," the market is not slowing anytime soon. This article talks about the new Pivot to Colorado Campaign. A half a million dollar campaign sponsored by state agencies and local tech firms to attract tech talent to make the move to Colorado. Our beautiful state has been discovered. A place where you can work just as much as you play, have business meetings while hiking the Flatirons and call in "sick" on powder days. There's a reason people want to live here.
And then there's this: "HQ2 or not, Amazon is already in Colorado - and rapidly expanding." As you probably know, Denver made the top 20 list for Amazon's second North American headquarters that would bring 50,000 jobs to wherever they decide to land. The whole country is waiting in anticipation to find out the city they will choose. I think most of Coloradans have the same sentiment when it comes to Amazon and housing - we don't need you Amazon. 50,000 more people here means more demand, less supply - not ideal in our already tight market. But, regardless of whether or not we get HQ2 the article above points out:
"The state is already facing 50 percent growth (by 2050) in Colorado anyway, and the majority of that will be in the Front Range."
When I read this all I think is buy, buy, buy. Now's the time. This Denver Post article talks about how Denver is becoming a tech hub. True, and if that's the case we have seen what happens to tech hubs... think San Francisco and New York. Denver is unaffordable for us natives but it's a long way off from these major cities in terms of housing costs.
So this begs the question, is now the right time to buy? I wish I had a crystal ball and could tell you with 100% certainty -- YES -- but I don't. And the quote: "money doesn't grow on trees" is true, so if now is the time how do you accomplish that? As The Denver Post article points out:
"You can push the envelope on borrowing. But should you? The conservative answer is no. If you push it that high, any hiccup in your finances could put you into default and foreclosure. Your other option is to continue renting, but are you much better off renting? Consider that your monthly cost for a $400,000, 30-year mortgage at 4.5 percent is around $2,000. That isn’t too much higher than simply renting a two-bedroom apartment in the city, where rents can easily run between $1,700 and $2,000 a month.
Plus, if you buy your house, your payments are fixed, yet your rent is likely to keep rising over the years. When you eventually pay off your house, then there are no payments and it’s much easier to retire. Although it’s risky to stretch your finances, there are longer-term benefits that may be worth it."
As the article points out, "there are no easy solutions." But, if your planning on staying in Colorado for a long time and your options are to throw away $2,000 a month on rent paying someone else's mortgage or to purchase a place and invest your money each month in a growing market, I know what I would choose!
Give me a call and I can set you up with the right mortgage broker to look at your options. You DO have options!
As always we are here to help!
Kayla & Peter