Housing - To buy or not to buy? (Denver, Aurora: sales, real estate)

[ArthurDaly]

Happy New Year to All (probably very happy for some this year starting today

Quick Real Estate quiz for the folks with crystal balls (mines broken) given the latest RE figures and mortgage rates, would you purchase a home now, or would you sit on the sidelines and wait awhile?

I'd be interested in everyone's opinions. Just how quickly are mortgage rates going to go up, and are property values really going to drop much even if they do. It seems to me that we still have a very low housing inventory?

Thoughts?

[mic111]

Sorry, no crystal ball. If you are planning to make a home here for many years and enjoy living in something you own then you can't go wrong buying. If your planning to buy as an investment in the hopes that it appreciates and you can sell soon I would suggest renting. The direction is too uncertain. If your planning to buy with the hopes that it goes up and you can sell and then buy what you really want I would suggest not buying either.

Now, you may well ask, why do I say this since Denver is so hot with no end in sight to the in-migration. Because it seems like people moving here today want it to meet their every single need and be better in every way than where they moved from. Well it just ain't so. When we moved here, as is probably the case for most people who moved here pre-city-data and the internet, we did it because we had jobs, thought the area was good enough and were prepared to make a life here. We weren't chasing a pipe dream of rainbows with unicorns jumping over them. Some blizzardy winters, a couple more bad forest fires that pollute the air all summer long and/or take out parts of the city, more severe drought years...who knows what it will take to turn the tide. But it may not turn. Who knows. We can't expand indefinitely but maybe people in SF or LA or NY said the same thing.

[davebarnes]

1. Interest rates will climb a little, not a lot. The Fed is still dedicated to keeping them low. See Mortgage Rate Trend Index

2. Prices are expected to increase by 10% in greater Denver in 2014. See Crystal ball: rosy outlook for Denver | Inside Real Estate News

3. Inventory is at a record low. All signs point to bidding wars this coming Spring. See deptofnumbers.com/asking-prices/colorado/denver/

4. Real prices in Denver (not nominal prices) are still below their peaks. See Case-Shiller for Denver-Aurora-Broomfield CO Metropolitan Statistical Area

5. People are still moving to Colorado. See Denver County Remains Population Growth Leader in Colorado « DenverUrbanism Blog

We own (outright, not sharing with a bank) our house so it is easy for me to say: BUY.

Here is what I would do:
1. Get as much cash together as you can.
2. Line up financing. Understand the 203K program.
3. Determine neighborhood. Walk every block and take notes. (We did this both times we both our houses in Bonnie Brae and Berkeley.)
4. Look at "potential". Estate sales and foreclosures (which are declining dramatically). Be the person who is not insisting on perfect, move-in ready.
5. Find a buyer's agent who really knows your desired neighborhood. Find a buyer's agent who has done more than 20 sides in the last 12 months.
6. Be mentally prepared to look at house and make an offer on the spot. You always have the inspection and appraisals contingencies as an out.

[Repatriated]

It sounds like you're planning to stay put for a while if you're thinking about buying. I'd buy. Buying is almost always better than throwing away rent each month to some apartment complex...while dealing with living in an apartment complex.

[2bindenver]

It's hard for a real estate broker to tell anyone it is not a good idea to buy a property.

If you have the cash or qualify for a loan, and you like the housing stock in an area close to work and in your price range, now would be a very good time to plan to move.

Interest rates are low and everything points to their increase.
Housing prices are expected to increase.

Interview Buyers Brokers and select one.

We are all brokers in Colorado. We have new listing and sales contracts staring today.

[davebarnes]

Originally Posted by mic111

We can't expand indefinitely but maybe people in SF or LA or NY said the same thing.

Denver - 150 sq miles 600K pop
Singapore - 275 sq miles, 5300K pop
Macau - 12 sq miles, 600K pop
I think we have room.

[SkyDog77]

I agree with everyone else. If you are planning to stay a while, buy. If you see yourself moving within 5 years it becomes a very iffy proposition.

[dude_reino]

If you weren't fortunate enough to buy last year, then you definitely should buy this year. My crystal ball says prices are going to continue to rise for a few years, and then either stabilize or keep rising for the next ten.

[zenkonami]

Originally Posted by davebarnes

Denver - 150 sq miles 600K pop
Singapore - 275 sq miles, 5300K pop
Macau - 12 sq miles, 600K pop
I think we have room.

Well, physically, perhaps. The water table may have something to say about it, though

[coloradoalimony]

Originally Posted by davebarnes

Denver - 150 sq miles 600K pop
Singapore - 275 sq miles, 5300K pop
Macau - 12 sq miles, 600K pop
I think we have room.

We may have room, but we don't have the water. At some point the water issue will come home to roost, and in a bad way. We are already living on the graces of the lower basin states on the Colorado River not raising a ruckus about Colorado's generous water allotment. Someday, LA, Phoenix, Las Vegas, and San Diego are going to point out that between them they have five times the population of the Front Range, and they would like the water allotments to be more "fair". This is not that far off, because Lake Mead and Lake Powell continue to fall. Every gallon piped under the divide for use by the Front Range is a gallon that can't be used downstream. Not only is the water used for consumption downstream, but also for power generation.

Douglas County continues their desperate search for water since they are rapidly depleting the groundwater upon which they currently rely. There are a few storage projects in the works to enlarge existing reservoirs, but it is very unlikely there will ever be any new reservoirs built to serve the Front Range.

Meanwhile, there is absolutely *zero* will to curtail growth along the Front Range. It is inevitable that someday there will be strict population limits and water restrictions put on the metro area.

We are in a historic drought period in some parts of CO already. Did you see this?

Dust storms blow over the Eastern Plains | 9news.com
Massive dust storms hit southeast Colorado, evoking "Dirty Thirties" - The Denver Post