Real Estate Roundup: Has the ‘best time to buy’ real estate already passed by?
Real Estate Roundup
As the availability of affordable properties seemingly declines, that is a question first-time home buyers or those looking to move up may be asking.
The resounding answer is “no.” It’s still a great time to buy real estate in Western Colorado. Within Garfield County, there are 300 properties with improvements already in place that are offered for sale at prices under $400,000, many of those under $250,000.
The interest rates for new loans are still very low, hovering around five percent. Lenders are again willing to lend to qualified buyers, and many first-time buyers are finding financing available with minimal down payment. Sometimes the seller may be asked to help with the buyer’s closing costs, and depending upon the seller’s own situation, this can be possible. Meeting face-to-face with a local lender and getting pre-qualified, before shopping for a home, is an essential element of a successful home purchase. The buyer will then know what amount he or she is pre-qualified for, and, with a realtor’s help, can shop for desirable properties within those parameters. Refining the “wish list” for what you must have in a property will allow for timely decisions on properties that may have more than one interested buyer bidding to purchase at the same time. When properties are priced to sell, frequently there are multiple offers submitted at the same time.
Fewer foreclosed properties are entering this resale market now. This could indicate an improvement in the ability of current owners to meet their loan payment obligation – a reflection of an improved overall U.S. economy filtering down to local situations. It could also reflect the possibility that some of the banks have not yet processed their backlog of delinquent loans and filed their paperwork to foreclose on past-due notes and deeds of trust. This perceived backlog of properties may come into the market in the months ahead.
Many buyers look to foreclosed properties for below market value. Sometimes these properties do sell below the current traditional market properties; however, sometimes the properties are so distressed from damage or neglect that many dollars need to be invested to return them to habitable properties. Thankfully, there are rehabilitation loans now available to patient and determined buyers who want to pursue that route. Or good old sweat-equity can produce beautiful results with time and energy well spent.
As the supply of affordable homes declines, the price pressure will go up. It is unlikely we will see the significant appreciation in value that we saw from 2000-2007 in this area, but when supply is down, prices trend upward. It seems now is a good time to be seriously considering your home purchase before that occurs.
Currently, interest rates are close to historic lows. In the early 1980s, interest rates hovered around 16 percent. Now, they are much more affordable at close to five percent. Will they continue to go up? All economic signs seem to say yes, as the Federal Reserve slowly backs off from purchasing the monthly monetary paper they have been buying for several years now.
In the past, perhaps you have heard “buy now” before prices go up and inventory goes down. Yes, it does seem to be a wise saying for prospective buyers to pay particular attention to now. Sellers, on the other hand, can take comfort in the fact that, with fewer homes on the market, theirs may sell at a satisfactory price.
The real estate industry, as well as buyers and sellers, have been through “interesting” and challenging times over the past six years. The Garfield County Public Trustee’s office has functioned well through a remarkable workload during that period. All of us in Western Colorado look forward to more normal times, and without a crystal ball to the future, we all know that time and hard work will show all of us the ultimate results.
Mary Huffine is a broker at Real Estate Out West.
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