The #1 question I got asked over the holidays: “How is the real estate market?”
My answer is: Opportunistic
If you are a Buyer:
- You have a great chance to lock in on historic low interest rates. According to Freddie Mac’s Primary Mortgage Market Survey®, the average interest rate on a 30-year fixed mortgage was 3.99% for November 2011. That is the lowest level it has ever been since the survey was initiated in 1971. Compare that to the average interest rate on a 30-year fixed mortgage since 1971 of 8.80%.
- Prices for homes has decreased in many areas
- Sellers are willing to negotiate. The most common compromise is to assist with closing costs. This could potentially equate to you only needing to bring your down payment to the closing
- Combine decreasing home values and lower interest rates means your buying power has significantly increased compared to years past
If you are a Seller:
- Competition in Metro Denver has decreased significantly. The year to date stats show that at the end of November 2011, there were 12,634 residential properties (single family homes & condo/town homes) on the market in Metro Denver. Compared to 19,881 residential properties on the market at the end of November 2010. That is a 36% decrease in active listings at the end of a period.
- You might lose money when you sell your home, but with interest rates at historic lows and prices down your opportunity for a larger home at a better price is very realistic (see above point as a buyer)
- If you can afford to keep your current home but still want to take advantage of this opportunistic real estate market, consider keeping your current home as an investment property (see below point as an investor). When the market is more in your favor then consider selling.
If you are an Investor:
- Now is one of the best times to own a rental in the Metro Denver area
- Vacancy rates are extremely low compared to years past
- Rental rates have increased
- At some point in the next 5-10 years there will most likely be a housing shortage in the Metro Denver area. New home builders have slowed on building new homes while the population of Metro Denver continues to increase.
Now is the time to take advantage of this opportunistic real estate market in Metro Denver, contact me today to discuss how you can benefit from the current real estate market.