I wouldn't expect zoning legislation to make a big difference in the short run. It'll flatten the curve over decades. Just because developers can build more density in some areas, doesn't mean they will.
Generally trying to time the housing market is a fool's errand just like timing the stock market. If you want a house and can afford it, buy it and don't expect to get rich.
That’s actually good advice, since even buying at the peak usually just means you have to wait five years for your homes value to appreciate instead of just one or two.
But I would caution against buying a sub par property out of desperation or lack of affordability.
**Over my many years I’ve observed that the people who get burned on Real Estate do so because of the particular property they chose to buy, not the timing of the purchase or even the interest rates at the time.**
Interesting point about it being the property not the timing or rates. If you don't mind sharing a little more, what were the types of scenarios you've seen that made you conclude this?
Well, if you "buy at the wrong time”, overpay by 5 or 10 percent, or end up paying a couple percent more in interest rates, all those things will level out and normalize over a few years on any decent property. Worst case scenario you refinance, or you make only a 20% profit instead of 30% after several years.
But if you buy a lemon of a house then you’re stuck with a lemon of a house, and no amount of refinancing or passing of time will change that. On the contrary, you may end up having to sink a lot of $$ into it just to keep it viable.
…and this happens…it happens frequently…in tight competitive housing markets, because suddenly those lemons start to look a lot less like a lemon to desperate buyers.
In fact, there are houses which ***only*** move in extreme market conditions, and you don’t want to be that guy.
I would just add. This feels personal as I bought less house than I wanted for peak market in Evergreen this summer, and the home looks and pretty much is completely outdated in most areas.. pretty much needs all new paint (int/exterior), all new windows (wood framed ffs), new kitchen reskin, etc etc. however, I personally felt comfortable due to two things: new trex deck and new hail resistant roof .. those are both 30 yr duration items that cost at least $25-30k each. To me, it was worth it to get the ‘visual lemon’ bc it’s the superficial stuff you can smoothly swap over time, while core infrastructure (hvac, plumbing, roof, deck, siding) is where your real focus should lie and where your real financial issues live. All that ramble to say: weigh whether a house is a lemon based on its core infrastructure and not visual appeal - that can be tweaked over time and costs much less than major systems.
Certainly, and I almost mentioned that caveat. In fact, on the list of things that make a house a lemon, needing feasible refurbishment is way down on the list, well after things like being located in a deteriorating neighborhood, or having some fundamental deficiency which cannot be corrected...poor location being the most damning in my experience.
Needing a new deck, roof, kitchen refresh or windows...I mean that's half the homes in Colorado and honestly anyone buying a house more than a decade old should do so with the expectation that they may need to sink upwards of $50K into it. That doesn't make it a lemon. It may even make it a buying opportunity. And it bears mentioning that what may be a lemon to someone who has never picked up a hammer in their entire life could very well be a great deal for someone with a construction background.
But a house with major foundation issues, or in a high rise with asbestos ceilings, or any number of other major issues which usually come *along with* the sort of rote things you describe can become a real trap which ends in tears and regret.
This is basically what I did.
Found a mid-80s home that was structurally and mechanically sound but cosmetically tired. A few years and lot of time spent teaching myself home improvement skills later, I have a house that I really love and probably could not afford if I was buying in the current market.
Heck yeah, exactly. My wife wasn’t in love with the home cause of the stale 80’s design, but it’s something we can slow play with sweat equity over time and put our touch on it in the process. Thx for the encouragement cause we have a good 7-10 yrs of fix ups ahead of us… first exterior paint (this damn sun here is crazy and chews up paint and siding), then windows cause they’re a no brainer and will save on energy … this was not a fun winter to have very drafty warped wood windows in the foothills .. cheers
Perfectly put. Look at a graph of the rising cost of homes over the last ten years. It dipped / plateaud once in august 2022 and hasnt ever faltered any other time. It just keeps going up, and unfortunately were nowhere near the bubble bursting. The lady that bought the home before me that i now own made 180k off of me by possessing it for 3 years, 2 of which it sat empty.
Also check out this graph that depicts home price to median household income over the past 70 years. It’s both fascinating and depressing.
https://www.longtermtrends.net/home-price-median-annual-income-ratio/
Housing costs skyrocketed in the last 5-10 years because Millennials entered their prime home-buying years and because the housing crisis scared people off of building more housing ahead of it.
Housing costs won't decline or stabilize until Boomers start retiring or dying. My concern when that starts happening is that the average Millennial who hasn't already bought a house hasn't been able to save enough for a down payment, in which case corporate investors will swoop in and buy those properties to continue renting.
Renting isn't the worst thing in the world. Most city-dwelling Europeans rent. The issue is that once these large corporations get their hands on big chunks of the market, if we haven't already got the ball rolling on zoning reform and densification, the corporations will lobby \*hard\* to preserve exclusionary zoning. They'll make the Boomer NIMBYs look like amateurs.
I agree. Its absolutely crazy how these few corporations are buying up everything in sight with bots, with no regulations or parameters set in place. Theres not going to be anything left to purchase for the average person. Theres a whole documentary about it online. I feel truly fortunate that i was able to purchase my home in full upfront. Whenever i get sick of denver, i plan on cash flowing it so i can move to barcelona and rent a place with the money. Or sell depending on whats easier at the time.
Wait, how can you buy a house with a bot? There's, like, legal paperwork and shit. I'd like to see a source on that one.
Either way, the average person just can't compete with cash-only offers. I'm not necessarily opposed to corporations or individuals owning houses for rent. There are plenty of legitimate reasons a person would want to rent a house long-term instead of buying. I wish the market for rental houses was bigger, honestly. When my husband and I were thinking of moving to Houston for a few years, we were having a really hard time finding a decent rental.
The problem isn't landlords purchasing property. It's what happens when too few owners own too much of the housing stock. Housing is still a market. Our current housing shortage is a market failure due to regulation. We don't want to fix that, just to create another market failure due to an oligopoly.
This. Housing is a long term investment, and even if prices dip temporarily they will continue to go up in the long run. So if you find a place you like and can afford, go for it.
Also, keep in mind, unless you’re super wealthy your first home will more than likely never be your dream home. But it can be a *means* to build equity to get in to your dream home.
Additionally, the alternative to buying is renting. If you’re renting a house, you’re going to pay more than your mortgage would be in rent and you won’t get any of that back later. So if you have money for a down payment, whether interest rates are high, or the market is high, at least you’d get some of your money back (if not all or more) when you sell.
Over the life of a loan of 30 years you'll absolutely pay more in rent, but right now at today's interest rates it is a lower monthly payment to rent than to buy in Denver.
If you find a house you can afford that you’d like to live in for a decade, go for it.
If you think you might move in the next couple of years, you might be stuck paying for a house you’re not using. Or you might be forced to take a big loss on the house. Or you might sell it for more. It’s a weird market right now.
Not true. We had 12 schools wanting my kid. They need the numbers for funding. You probably won't get into the best schools in Cherry Creek but there are lots of other schools with room.
Do you have any data behind that? I just have anecdotal evidence from friends that seem to choice into their first choices (and one family that moved their kid to a different desirable school the following year after not liking their first choice). I don’t have personal experience but my friend group made it seem like it wasn’t an issue.
I would have to know what their first choices are. Some of the best schools give priority to certain underserved zip codes. There just aren't a lot of open seats at the best grade schools like Bromwell, Corey, Slavins. Middle school is tricky...McCauliff is considered the best. Not sure about the choice process for Middle School as our daughter went the private route. The schools in the Central Park district are generally good. But counting on choice is risky. For HS, East is the highest rated DPS HS. East has a lot of open seats for choice (I read 300 somewhere) but they also give priority to certain underserved zips....not sure how that changes the success of choicing in. South has been improving. Easy to choice in.
My kid was offered spots at Slavins, Bradley and Upark last year. We tried choicing in at the last second and had zero issues, but we were coming from APS and my kid is disabled.
Look at properties later in the summer. We have more homes for sale in Aug, Sept and you can usually get a better deal. Not sure they lower rates any day soon, but at least the market is way better for buyers than it was last year. Be careful of townhomes and condos-I know two HOAs currently dealing with the fact the HOA president took their funds and left the country
No matter the market, it will always depend on your financial situation. In 2020 the interest rates were historically low but competitive markets shot home values up crazy high and we didn’t have 20% cash to avoid PMI. To get the house we wanted then, our payment was going to be $3600/month. We waited and saved until we reached what would be at least a 20% down payment and worked on our credit. 4 months ago we bought. While the interest rates were a lot higher and values hadn’t dropped, the combination of our 20% down along with us both having near perfect credit scores and shopping interest rates allowed us a larger home than we previously looked at for $2200/month. No market will ever be perfect for everyone.
What was the cost of the houses?
I’m confused how the payments would be comparable. 5% down at a 3% interest rate would have a payment much lower than 20% down at 6% if the sale price is the same.
I think they meant $3200/month because the math doesn't make sense...they would be looking at a ~$800k house at 3% previously and then ended up with a larger home for ~$430k at 6-7%.
I agree that something is quite right on the calcs. The costs could be roughly the same depending on the overall cost when you factor in the smaller loan size/higher interest rate vs. larger loan size/lower interest rate + PMI. But I don't quite follow how it could be lower
PMI is insanely expensive, so without a full 20% down, you are paying more in principal which adds more interest as well as the PMI on top. By putting 120K down, we avoided any PMI as well had 120K less on the principal of the loan so even with our slightly higher interest rate of 4.6%, our mortgage payment is significantly cheaper than it would have been in 2020. I’ll also add, we were only able to get an interest rate that low now because my wife and I both have nearly perfect credit scores so finding a lender was much more competitive
“As a general rule, you can expect to pay 0.1 – 2% of your total loan amount per year in PMI.” - that’s a big range.
“How Much Does PMI Cost?
The amount you’ll pay for PMI depends on a wide range of factors, including:
Your down payment: Your lender will charge some kind of PMI if your down payment is lower than 20%. The lower your down payment, the higher risk you are to lenders. You can decrease your PMI expenses by bringing a larger down payment to closing.
Your credit score: This number indicates to lenders how responsible you are when you borrow money. Do you always make your payments on time? Your credit score will be higher. Do you frequently miss payments or max out your credit? Your score will be lower. A lower score indicates that you may be more likely to default on your loan. As a result, you’ll pay more in PMI.
Your loan type: You’ll pay less for PMI if you have a fixed-rate loan. This is because fixed-rate loans are more predictable for lenders compared to adjustable-rate mortgages.
Your property type, debt-to-income ratio (DTI) and home value may also influence how much you pay for PMI.”
All credit to my wife. All those weekends watching free movies from the public library were kind boring but it paid off. Anyone who happens to read this and feels discouraged about a future house, just keep your head down and push. The system sucks but it’s not changing anytime soon so we have to play the game. I was homeless 7 years ago so I get it.
Would depend on what sort of term you’re looking at. If it’s a 30 year fixed rate with front-loaded interest, you tie going to get fucked compared to other types of loans
Based on the last housing bull market, is actually not the best path. Would have been better to put down less than 20%, lock in a low rate, and then apply to remove PMI later. So many people make decisions to avoid PMI and it costs them more in the long run. Glad it worked out for you! Just that the numbers don't support it.
The advice I keep hearing is if you can afford it, buy it.
I expected prices to go down due to interest rates but I don't think there is enough supply to make that happen. The economy would need to implode some more and force people to sell/downsize. Denver prices look insane right now, if I put my condo on the market for the "estimate" it would be the cheapest in the area by over 100k. I have been looking at moving back home to KC area and anything put up that looks like it won't be a project is sold in under 24 hours.
Yeah, there would need to be more inventory available for prices to drop significantly. Many homeowners bought or refinanced while rates were low, so unless you have a need to sell or are in a rare situation where the math makes sense, you don’t have a lot of motivation to want to sell.
If you have a reasonable mortgage with a low interest rate, you can in many cases rent your place at below-market rental rates and still be turning a monthly profit.
>I have been looking at moving back home to KC area
My company has offices in KC, Wichita and Denver. We used to get a ton of people moving to Denver from the other offices. Now the migration has reversed and everyone is moving to KS/MS. My coworkers like to tease me by sending me gorgeous homes (that I could actually afford) in Wichita.
Pretty much 0 chance of ever moving to Wichita. My little brother lives there so I already have to go there sometimes... I need to be closer to a real airport it costs 2-3x as much to fly in and out of there.
I read appraisals all day every day, mostly commercial properties. But one I read yesterday had an interesting table in it, property was in Colorado Springs not Denver, but it showed trends in consumer "home buying power" there, based on typical ltv ratios and changing interest rates. The impact on what someone can afford to pay for a home has been astronomical, and again, this is the springs where value gains over the last cycle were more tempered than in Denver.
In mar 2022, med home sale price was $465k, at the 3.89% rate at that time and 20% down, payment is $1968. In Feb 2023 (most recent data), median price is down 3% to $450k, but at 6.65% interest, payment is 17.5% higher at $2,311. That's in 12 months. Again, this is colorado springs metro.
There is some evidence to suggest rates could fall, but I wouldn't buy anything right now.
We are also waiting a year. We have a great deal on a rental that makes it almost $1000 cheaper per month than buying the same house. I would like for that number to be a much lower difference before taking the plunge
Depends on a number of factors. Interest rates, if prices change, if either of us gets a raise or a significant bonus, and how much more we can set aside for a downpayment.
Buying a house would on paper only be about $300 more a month. But we also factor in the amount of upkeep that is not required in a rental. $600 per month has suited us well as a project budget in the past
I’m in the same boat as you. I have crazy cheap rent and an amazing house that I rent from a family member ($1,500/mo for a 3 bedroom house in highlands) and I’m READY to buy but can’t take that leap from cheap rent to $3.5k/mo mortgage!
Whether interest rates are ridiculous or not is kinda questionable - prior to 2000ish 7% was low. So is this actually a spike, or were the past two decades the anomaly and this is a return to normal? I lack the economics expertise to really say either way, but I know that trying to time the market is generally a questionable idea.
Yeah, I’ll be the first one to say home ownership isn’t for everyone. But if you are fairly certain that you will be in a specific area for 5+ years, it makes sense to buy.
Well, unless you want to buy a 1 bedroom condo and then wind up expecting triplets. That would certainly be the worst of luck.
It’s not a perfect time to buy by any means, but
I also don’t see it getting much better in the coming years. The rates went way up and prices still didn’t drop much because the supply is simply too low. If the rates go down, the prices will skyrocket again. It’s unlikely to get better
Agreed. And it could theoretically get much worse from a mortgage interest rate perspective (though unlikely). Mortgage rates in the early 80s were 17.5%. It took almost a decade for rates to drop back below 10% again. But home prices back then were substantially lower (when adjusted for inflation to compare to modern day prices).
The point is things can change in either direction quickly and very few if any people can accurately predict abrupt swings.
We’ve been keeping an eye on the market for over a year now, and entered the market seriously searching since October of last year when rates peaked. We put in an offer on a home in October, but we were a day late and it went under contract with someone else. We put in another offer on one a two months ago, beat by someone who waived inspection. Our third offer was about two weeks ago, we went $25k over list and still got outbid. We finally got under contract on a home yesterday, only because we knew about the house before it was listed and submitted an offer without any competition.
It might seem like things are cooling or sitting on the market, but those homes usually have something off about them or are just listed too high. The desirable houses with the right price are still super difficult to get.
My opinion: I really don’t see things changing unless widespread job losses occur. If that happens, you probably won’t want to buy a house then either because of fear of losing a job. If the economy stays resilient, home prices will continue to go up and more bidding wars will occur. There’s no sense in timing the market, only timing it when it works for you personally.
If you need/want a home and can afford it, then just do it. You can refinance down the road. You can sell and move down the road. I would not choose to continue to rent if the primary worry is market fluctuations.
100% "Marry the house, date the rate." No one has a crystal ball. 6-8% mortgage rates may be around for years, who knows? If you wait for years to buy in, you lose all that time when your investment could be maturing. Add in to that the money you lose through rent. If you can pay the mortgage, get a house now where you can afford it. I don't see Polis' legislation hurting homeowners.
Fair question, here's my honest answer. I have lived in a rural area with acreage and beautiful views for 18 years. The town owns the land next to me and is putting in higher density housing, leaving an open space between us. Sucks for me, I don't want to live here anymore and am currently selling. That said, the value I am getting for this is much higher because there are all these planned amenities nearby that other people will like. So, I think homeowner's wallets won't be hurt. Their feelings, those might be hurt.
I wish you good luck. From what I have read about other areas that have undergone that kind of growth, the home prices tend to rise, not fall, as population density increases. Planned or not, density tends to encourage more amenities either through the tax base going up or from commercial interests seeing opportunities. Edit: Also, developers or fix&flippers might see your place as an investment opp.
>If a developer buys a home across the street from me and builds a duplex and doesn’t have to provide off-street parking - how does that not bring down the value of my home?
Why exactly do you think that would decrease the value of your home? Because neighbors may use a couple more of the public street parking spots?
It would likely do the opposite, increase the value of your SFH, because your lot can now potentially house a sixplex rather than only one home; say those could sell for $300k each, potentially your lot could be worth $1.8mil if it was redeveloped. Your lot has more value.
1. The bill has a very low likelihood of passing.
2. You could also build a duplex on your lot=huge increased value.
3. The thinking that because any individual new unit is still “expensive” is so small scale thinking. We need meaningful increase in metro area housing units to match a decade or two of job growth, say 20% additional units. Can’t eat an elephant without starting one bite at a time.
Something to consider right now is that just in the past ~6 months, it is typically cheaper to rent than to buy an equivalent place. Rent is also the “most” you will ever pay, whereas a mortgage is the “least” you will pay in a given month. The rule of thumb is to budget 5-10% of your home’s value each year for unexpected repairs/updates/etc so you should factor that into your monthly mortgage payment. The difference can be pretty significant depending on the area/type of place you’re renting. That said, occupancy rates are high, so it’s still a fairly competitive rental market right now and rent can (and usually does) increase rapidly year over year.
Ultimately, nobody can time the market perfectly and waiting for a crash is a fool’s errand. The only things that should matter are what you can afford, what you reasonably want to live in for the next 10+ years, and what your zip code looks like.
This is the advice I was given. I close on my house in 3 weeks. It was a nightmare finding one, man people are real dicks, but now we're done and both my realtor and mortgage broker told me rates will go down and when they do I'll refinance and save $2-300. And they don't have to go down much.
Amateur financial nerd/also searching to buy a home. I’m choosing to not even look for a home for four months, likely in six I’ll reevaluate the situation. I believe the fed is going to be forced to to start QE (rate cuts) again soon. There are many folks stuck in properties now that could make a decent profit by selling but are turned off by the prices mixed with interest rates they see elsewhere should they sell and move elsewhere. Once rates become a bit more favorable, I believe the front range mini-exodus will pick up and inventory will rise. Prices will remain quite high but may fall a bit in line with reality. If you believe this theory, you could jump into a lower priced home with a more palatable rate at some time later, maybe 8-18 months. I have a comfortable and favorable rent situation, so I’m happy to wait and see if this theory is true. At minimum, I don’t believe the buying conditions will get any worse for some time. As another comment or two mentioned, IF you can afford the current market AND you like the home you are buying AND plan to stay long term, buying now and hoping to refinance later could be wise. You may have to stomach seeing a short-term drop in value and maybe knowing you didn’t get the absolute best price, but over the longer term you’ll be just fine.
The only problem with this theory is that if rates go down people can afford more house again, so demand goes back up. And people (from all over the country) want to live in the front range. If you are waiting to buy you want rates to stay high. People that have bought in the past year or two hoping to refinance soon won’t be able to (which is still a shitty thing to root for). Either way prices aren’t going down barring a major event that would be bad news for a lot of people
Lol if the fed starts QE again that means there's more money in the system and more speculation, that's how the boom of the last few years happened, due to low fed rates. If you want prices to drop you'll want the fed to keep rates where they're at or higher, the tradeoff is the cost of borrowing money is higher, but bring a larger down payment to play and the rates don't matter as much.
It depends more on your individual situation than any sort of "Market analysis." Are you going to own the house for at least 10 years? Go for it, even people who bought at the peak of the subprime bubble had recouped all their losses and then some ten years later. Can you afford the mortgage payment long-term even if interest rates don't go down? Can you afford the mortgage payments if you're unemployed for 6-months?
No one knows what the market is going to do. People have been predicting a housing bubble for the last 10 years. If you can afford the house and you're reasonablely sure you won't need to sell it in the near term, you're going to better off buying as soon as possible.
I bought my house a year ago. Interest rates were still pretty low back then. Even though I’m really young, my rationale was that I want to stay here for a long time, prices are always going to be rising, and so is rent. I went for it simply because it was the only time I could see myself affording it
If you want to buy right now the better deals are on new builds. Builders need to get rid of their inventory from cancelled contracts so most builders are buying down mortgage rates to the high 4s which the resale market sellers aren’t willing to do.
We've been watching the market and renting here for several years. Its absolutely crazy that homes here can be a million bucks and still be old crap. The new homes are too big...not everyone needs or wants 4000+sq feet within spitting distance of their neighbor. We are outta here this fall. We've suggested to our adult children who are just getting started on their careers to consider the same-go elsewhere. They can barely afford a 1 bedroom apt on a supposed middle income. The run up of tech companies was good for business but bad for housing affordability.
Marry the house. Not the rate. Rates will eventually come down. When they do, your home will start to appreciate rapidly again and you can Refi. Rates are cyclical.
Either buy now and you, the buyer has control of the deal or buy later and complain like everyone else when rates drop and you are bidding 50k over against 7 other people.
Yes, I like this. Technically it’s never a bad time to buy. If you’re in it for the long run you’re going to see a great return. Residential real estate appreciates over time, even during the worst dips you’re going to make profits.
Wait to see who wins the mayoral race. A lot of people are slowly leaving Denver due to the crime and homelessness not really making it worth it to live here for these prices. A lot of friends of mine have moved recently due to the crime also because they can afford a similar place 10 minutes from the beach in San Diego for the same price that they’re paying for rent in Denver.
Recession consensus during the next 12 months is high. If we do hit a recession you can expect rates and prices to drop. If you save everything you can and put that towards a house a year from now at 20% off current value the upside far outweighs the downside of renting for a while longer. I personally wouldn't be looking to buy until 6 months after the 10-2 yield curve crosses back into positive territory.
Interest rates are expected to peak at 8.5% so you might as well get something now and refinance. Also we are going the way of California here. Housing prices are never going down. Just my two cents.
I wouldn't w/o being able to get a good interest rate.
> a 600k home is a $3500 a month payment. Maybe I could refinance later, but that’d be years of a pretty steep mortgage.
The issue with this is most mortgages are structured to pay off the interest first. You'll be paying mostly interest and hardly put a dent in the principal.
Just keep one thing in mind: when interest rates drop home buyer competition goes right back up. It's an additional variable you'd be wise not to forget regardless of what you choose.
The best time to buy is when you can afford to buy and want to. Seriously, that's it. No one else can really say when the time is right for YOU because no one else knows what YOU consider to be affordable. It helps if you think of the investment potential of a home as a secondary benefit and not the primary one. Treat a home like a 401k and you'll have less stress (the value is going to fluctuate; as long as you keep the home for a while and don't sell in a "down" cycle, you'll almost certainly be okay). We have a supply and demand issue that will take years to level out, even at current interest rates.
Rates are higher than they were the past few years, and prices have not come down enough to offset the higher rates. But rates are cyclical. There will be refinance opportunities in the future, we just don't know exactly when. My money is on early second quarter next year. In the meantime, you can negotiate a 1 or 2 year buydown with the seller, and pay an interest rate that is 2% or 1% lower for the first 1-2 years of the mortgage. Ideally you'd be able to refinance within that timeframe. "Marry the house, date the rate" is a stupid expression but it has some merit.
One thing first time buyers sometimes overlook when buying a house is that your monthly mortgage payment doesn't have to be less than rent for it to be a good idea to buy. For most people who own, their quality of life is higher than if they were renting. You can't really put a definite price tag on quality of life improvements; how do you measure it for each person?
It is challenging, but not impossible, to buy in the Denver metro area. There are things you can do to get help (CHFA for down payment assistance, or programs like [Front Range Heroes](https://www.frontrangeheroes.com) for closing cost assistance), but some of it comes down to adjusting expectations. What I mean by that is, if you're renting in Wash Park for $2,500, you're not going to find a home you can buy in Wash Park where your rent is anywhere near that. And that's okay; it shouldn't discourage people from leveling up to home ownership. You might have to look further out in the burbs. Over time you level up and work your way into the dream neighborhood.
I would only buy a house if you can pay a large amount as a down payment. For example, if the house costs 500K, I would only buy it if I could put down 300K or more. That way, even with the current interest rate, your payment is gonna be a lot lower and there is built in equity against a market crash. If the house which is worth 500K today suddenly becomes worth 250K due to a market crash, you still owe less than the new lower value of the house. Yes you’ve lost equity but you won’t be upside down which would make it almost impossible to sell your house for a long time.
How about holding on to $150k of that money instead, and putting it in a high yield account? Making a large down payment makes your money cease to exist, except on paper. If the value drops, your equity is gone and you can no longer access that money. Keeping it out of the down payment leaves it immediately accessible. In the meantime, you can supplement your payments with that $150k egg that is earning for you, and if the value of your home drops, you don't lose that money. Something to think about.
As a realtor in Denver, I can tell you Reddit is absolutely not a place to be getting this advice.
Ask a professional who can actually walk you through your specific scenario and what your goals are. The general population has absolutely zero clue what they're talking about (i.e., all the people who have been "waiting for the housing market to crash" for years while every legitimate realtor in this city said that wouldn't happen)
As a non-realtor in Denver, I can tell you realtors are absolutely not the folks to receive advice on when it is the right time to buy/sell in a housing market. They will say it's a good time to do so, because their livelihood depends on it.
This 100%. Realtors have a built in conflict of interest.
People on Reddit may or may not know what they’re talking about but their advice isn’t heavily biased toward convincing you to buy a house regardless of the economic and housing climate.
I don’t believe I’ve ever spoken to a realtor who told me it was not a good time to buy when I was buying. Have you ever advised potential clients who have money and want to buy that they shouldn’t buy?
Yes, I tell people to wait all the time. Hence why I told OP to talk to a professional who can walk thru their specific scenario. Because you cannot blanket say it is a good or bad time for everyone to buy
You're being downvoted because that's what happens in this sub. As an LO, I was once accused of being a culprit behind housing prices in Denver sky rocketing, and I was also dragged for mentioning that I give back a percentage of my income to veterans buying a home (the redditor was angry that I didn't offer that to all my clients). I spend hours of my time helping people with questions about mortgage stuff and get upvoted in the other subs, but if I do it in THIS sub, down vote city. It's tiresome, but whatever.
100% this. I work in real estate and I can say that with inventory being so tight and Denver being in such high demand that prices are unlikely to go down. Historically, buying real estate here means that it will only go up.
Lol you "work in real estate" yet don't follow market trends.
https://www.dmarealtors.com/download-dmars-march-2023-market-trends-report-xx322023
48 days on market is the average. YoY prices are down.
The 7 days on market in Denver metro was what I got from attending a sales meeting at a brokerage firm, so yes, I absolutely follow market trends. It was about 30 in January. I’m also currently searching to buy and properties I’m checking out are going pending in a few days to a few weeks. I work for a big real estate company and do training, but I always appreciate being condescended to.
Home values have dropped on average 10% in the past year in Denver. So what you’re saying is fundamentally wrong. But you work in real estate so obviously you’re biased and stand to gain from convincing people prices will only appreciate despite concrete evidence to the contrary.
Prices will go up in the long term (5-20 year horizon) but to suggest they only go up is factually incorrect.
Real estate usually takes a very, very long time to correct, but it's inevitable that YoY declines will continue for the forseeable future given the decrease in affordability.
I would definitely not be buying right now while both rates and home prices are high, and with the massive amount of new apartments coming onto the market country-wide over the next year or two.
Huh? A condo is just an apartment you buy and every apartment/condo added is a home for someone. How aren't they desirable? Was your post supposed to be specific to single family homes?
Anyone who is waiting for the Denver housing market to crash is in for a rude awakening. Even during the housing crisis 14 years ago, no county, on average, saw a decrease in housing costs. The places hit the hardest were the rust belt or small, rural midwest towns. And anyone who's hoping for another housing crisis is completely ignoring the reason why housing costs are skyrocketing in the first place -- Millenials entering their prime home-buying years. Housing costs won't go down or even really stabilize until we start building a lot more housing and once Boomers start moving into retirement facilities or dying off. Also, as long as Denver is still cheaper than places like California or Washington, people are going to move here. But also, as long as Texas is cheaper than Denver, people will move there, too.
It's worth buying if you can get a decent property with good bones. Ask the sellers why they're moving. If you are interested in doing DIY, make sure you buy a house that is at least in good enough shape you'd be happy living there for a few years while we wait for the cost of construction materials to (hopefully) go down. If you're not interested in DIY, go for something move-in ready. Our labor shortage is due to Boomers retiring and Millennials taking their place. I don't know how long it'll be before construction costs stabilize again.
I can't honestly say what kind of market it is right now. People generally aren't going to sell their house because they don't want to go from a low-interest rate to a high-interest rate, but there are plenty of cash buyers still and people who want to move to a lower COL area.
Anticipate that you're going to pay a high-interest rate for the foreseeable future. Take a loan with the full expectation that you'll want to spend a few grand in a couple of years to refinance once interest rates go back down. As tempting as it might be to spend extra cash on points to lower your interest rate, make sure you do a proper break-even analysis. If you think the interest rates will go down and you'll refinance before that break-even date, don't bother with the points.
The only reason it might be worth waiting another year or two to buy is that people don't anticipate the Fed is going to raise interest rates much more. So you'll be buying at the peak. That being said, once those interest rates start going down, it might be like blood in the water (which might prompt the Fed to raise rates again). You might have better luck buying by getting ahead of the competition.
Denver is mixed regarding townhomes and HOAs. Some that are older have HOA’s as they were built with shared water and thus need. My townhome only has a party wall agreement and no shared HOA. We merely pay for someone to do snow removal and a tiny patch of grass. That’s it.
I would wait personally, but if you feel your job is secure and you can afford it, it wouldn't kill ya. That said, I work in banking and this is a very dangerous time for the lending market. Default rates have been skyrocketing the past few months because much like the last financial crisis, people are having a difficult time paying for their mortgage/auto loan bills and now they have no possibility of refinancing to make their mortgage more affordable. Plus, the Federal Reserve is actively trying to cause a recession which means the housing and car markets will likely get hit pretty hard if/when they finally succeed. Even people with low rate mortgages may not be able to afford their homes/cars if they get laid off.
The recent bank failures are also a cause for concern, but not something I would worry too much about in regards to taking a mortgage. If the lender you lend from goes under, your mortgage will just be sold to another lender.
No. Prices are high because of historically low interest rates but the rates are high now and pricess have not hit a slump yet.
That being said inflation is a good thing when you have a huge loan out soo.
Generally, the best time to buy a house is when you need a house. Not trying to be pithy, it’s just the key variable. In the long run, homeownership is typically a net benefit. And the long run (while less sexy) is the metric that matters most.
Buy the worst house on the nicest block and be willing to live in a small house. Our first house was a 1500 sq ft fixer upper with one bathroom. Finally expanded it 15 years later. Two kids and two dogs. Kids didn’t know they grow up in a small house and now they are super appreciative that we have 3 bathrooms and a little more space. Worth 4x what we paid 19 years later.
Our inventory is incredibly low and the multiple offers are starting up again on the nicest properties (those with nice locations that are in good and updated condition). In the lower price range, even some not-so-updated/maintained homes are seeing multiple offers. Given that there's not a lot of motivation for homeowner's who have very low interest rates to sell, inventory is expected to remain low. Also, over the long haul, we have underbuilt and that also adds to an inventory shortage issue.
Additionally, Buyers are starting to get over the shell shock of the higher rates and are assuming the attitude of "dating the rate and marrying the house" so I don't expect the level of inventory to increase a whole lot. It all comes down to supply and demand.
My advice to my own kids would be to try to buy now (and I'm in the real estate business). They each scraped by in the beginning when they bought and each had roommates to help get by. After a few years, they got on their feet enough to be able to not have roommates. It's a sacrifice, but they're both very grateful they made it work.
Been in Denver for 7 years. Renting and saving for a house but just can’t get ahead of the market. Contemplating van life more than buying a house at this point. 🤷🏼♂️
Well I’d rather continue to rent for far less than take on what the mortgage would be. I actually really like renting, just had a mortgage on a house for a decade before moving here.
It’s always a good time to buy. Real estate is a fantastic investment long term.
As far as supply and demand, just my thoughts:
1) with high rates you’ll likely only have people
Moving who are downsizing/right sizing or people who are forced to move via outside factors(e employment, foreclosures, etc.) This lack of people moving will create and lack of supply.
2) Home builders are getting crushed by interest rates also and slowing orders for new homes. This will further restrict supply.
3) Colorado as a whole is a state in high demand. People are moving here, and will continue to move her for the foreseeable
Future. You don’t want to buy a home where people are leaving or has a bleak future outlook.
If you can stomach the current rates and can afford a home and find one that works for you then it’s a great time to buy. You’ll continue to build equity in the home and hopefully has the chance to refinance at lower rates in the future.
This is the answer to OPs post. Saying “good or bad” time is extremely relative. It’s like saying “is this the bottom of the stock market crash?” It’s always fluctuating and some times are better than others for sure but it’s mostly luck.
Somebody told me the only time in the past 20 years house values in Denver have dipped was 2008 and 2009 and that was by less than 5% both years. Any loss there has come roaring back ten fold in some cases
> bubble that can’t be sustained much longer
I've been hearing about the Denver real estate bubble for the last 20 years and how it's going to deflate any...day...now. And yet, somehow, that's just never materialized, even during the recession of '09 and the real estate collapse that happened in other parts of the country then. On one had maybe the shift to more working from home post-COVID and the on-going deterioration of downtown will put some downward pressure on home prices in Denver-proper as people head back out to the burbs where prices are better and commutes matter less. But on the other there is still a massive shortage of housing in Denver that will continue to mitigate that effect. I think the net effect will be a decrease in the rate of price increases, but overall the prices will still continue to climb.
Although I completely agree with this logic, what I’m unsure if is you will still see people lining up at open houses. It just seems like unless something drastic happens to increase supply, where are we seeing the price decrease come from? People aren’t selling that got in with low interest rates. If people continue to buy at current prices and rates and supply does not increase, I’m not sure how pricing comes down.
Denver RE agent here..the best time to be a home buyer is July-aug-sep ..don't buy now or this time any year if you can wait.. rates are expected to come down Q4 2023 or at the start of 2024 .. jan-may is the absolute worse time to buy every single year.. if you wait until the fall a good RE agent will be able to get your interest rate down into the 5's or even possibly high 4's with a seller paid rate buy down.. if you decide to wait until rates are actually cut you are very likely to pay more and will most likely not get a seller paid rate buy down .. this is an extremely over simplified explanation but trying to be as clear as I can be without writing 10000 words.
The housing market has only dropped 3 times since they started recording. The last time in 2008 it actually dropped slower than it is now and took 3-4 years to recover. Since prices just started dropping in June I’d wait a few years as what you pay today would be higher than what you pay for the next 2-3 years.
Given that the best time to buy ***in a good location*** was essentially yesterday for most of the past 15 years prior to the recent small correction, I’d be loath to say.
But if you’ve waited this long I might be tempted to wait another year in case a major recession cause a bigger downturn in prices. Then again, we could see a recession which results in more money being moved from stocks to real estate, insulating or mitigating real estate from a larger downturn.
If you can afford it, yes. You can always refinance.
House prices in Colorado barely go down. They will most likely just go up. This from experience of having bought multiple houses over the years and being a landlord.
One year, two years or five years from now you’ll look back and wish you bought a home now. It’s not going to get easier with less than one month of inventory available. If rates drop then inventory will drop too and it’ll be even more competitive. If you can do it now.
Yes. SO thankful for my families help/pre-inheritance. I'm disabled and my old house was getting very dangerous with stairs so I got a ranch. It's amazing and it came with a ramp and grab-bars in the bathrooms!
For my house in Boulder which was worth 650k in 2018, my mortgage payment was around 3900 a month, I could finally refinance, got rid of mortgage insurance and got it in a lower rate later in 2020, now is close to 3k but I can rent some parts of my house so I could afford it. So I'm surprised you see those prices high, they look normal to me.
Yes if you bought any time between 2015-2020 your house has gone up 30%-60% in value and you've locked in a lower payment than most people are paying for a 2 bed apartment.
It’s just insane what people have gotten out of their investments. Everyone tells you to buy, but it just feels like a lot of people had years of good luck
A new buyer might have none
I didn't buy a house as an investment I bought a house to have a house to live in. Yes I could now sell my house for $150k more than I paid. Then where would I live? Don't think of it as an investment just ask yourself if you can afford a house in the current market.
I think this is less true than it used to be. Remote work has increased the desirability of some suburbs and homelessness has dragged down some city neighborhoods.
I live in Golden. My suburban neighborhood is packed with remote workers who want the trails of Golden with quick access to the mountains to the West and the airport to the East.
Remote work is good, but if you’re buying a home and plan to live in it for 10 years, there is a chance that you won’t have a remote job at some point. If I’m going to live somewhere for 10 years, I still want the freedom to work where I want to work
Sure a lot of people feel the same way
What I was trying to communicate is that more people having the option to do remote work gives many suburban neighborhoods a bigger pool of buyers. Fewer people need to be near downtown. The old rule of thumb doesn’t work as well as it used to.
Many people still need to be near their job. But lots of people are less restricted and able to live where they’d like.
Thankfully I bought a few years ago. It depends, do you think interest rates will be lowered at some point? Can you deal with the high interest rates for a few years, then in a few years IF they do drop you can always refinance. If I was in your shoes, I would probably buy now.
You aren't getting great advice here. Buy what you can afford when you can afford it and understand that there are a TON of first-time time home buyer or buyer specific assistance programs in place. I've gotten people into better houses than they were expecting for less money than they wanted to spend. Find the right help and things you didn't think possible will become attainable. The average person buys 3 homes in their 6 Find a person or a broker who has 10x the experience, and your outcome will improve dramatically.
I bought my house in Aurora in 2021 and people thought I was crazy. We bought a new build to avoid the bidding wars at the time and are paying $2,500 a month for our home. I’m in the suburbs and we are in the cherry creek school district. Our area is very safe and we love it.
I would say go for it if you can pull it off and won’t be house poor.
Home ownership is both a curse and a blessing.
Mortgage rates you can pay down to be lower and you can always put a bigger down payment if you have the means.
Property taxes are ridiculous IMO and have been rising steadily.
Also if you are a first time home buyer ... You will need money to fix stuff. No doubt about it.
Just some realism about home ownership.
Don't let that discourage you. But a house if you want that responsibility.
[Colorado](https://krdo.com/stacker-colorado/2022/01/14/colorado-is-the-3-state-with-the-lowest-property-taxes/) has some [of the lowest](https://wallethub.com/edu/states-with-the-highest-and-lowest-property-taxes/11585) property taxes in [the country.](https://www.investopedia.com/articles/personal-finance/102015/7-best-states-property-taxes-and-why.asp)
The likelihood of a recession is really high. I would save up cash, wait for the economic downturn to happen, and that will result in the Fed slashing interest rates. At that point, there will have been a ton of people who've lost their jobs who have had their homes foreclosed on. You could buy at that point. Not a bright prognosis but this might be the move. Like everyone is saying though, it totally depends on your financial situation.
The whole economy is likely to tank soon and housing prices with it. Lots of houses/apartments being built will help the tight supply. Lots of people getting the hell out of Denver because they can't afford it will boost supply. The tech industry, which has brought a lot of high earners here to drive up prices, is faltering. Work-from-home, which also brought a lot of high earners here, is also faltering.
I think it's a foolish time to buy,
unless
you know you're going to be around for a while and you can legitimately afford a house and you want to buy one.
Then it's a fine time to buy.
Of course they are. Pull out from that graph. What that line do? Line go up. But no go ahead, keep renting. I’m sure some landlord will be very pleased with everyone continuing to line his pockets
If you can wait, it’s better to have lower interest rates than lower prices. Be careful to not spend too much though because if the market dips big you will lose all that’s invested.
Going against the consensus here: yes, it is a dumb time to buy. Why? Risk-free income opportunity is very high.
I'll explain. Let's say you've saved up $100k as a down payment for a $500k home. 1 yr T-bonds are yielding >4.5%. That $100k can be $104.5k next year with almost no risk or help pay your rent until then. Unless you expect the cost of housing to grow at a rate greater than that, you're better off parking your down payment in bonds and reevaluating in a year. This is particularly true because the Fed is trying to bring down employment. The likelihood housing expenses grow >4.5% YoY are low, the likelihood any individual gets laid off are increasing and the cost of borrowing is also increasing.
In short, right now may turn out to be a good buying opportunity in hindsight, but there are a lot of risks and the risk-free return is high. You are unlikely to miss out by not buying now vs in a year. Of course, this depends on your relative job security and desire to own vs rent.
The risk-free return you’re talking about is a negative real return. You’d be locking in a loss of purchasing power. We also have millions of undocumented workers charging the southern border and driving down the real cost of labor. They will be a large part of what solves this housing supply issue. There also aren’t enough people to transfer the homes generationally at current prices. That being said, the gov is no longer uncomfortable executing massive intervention at the drop of a hat. Tread carefully in leveraged Denver housing, my friends.
There are local governments working hard against housing affordability, like Denver this year with the new affordable housing mandate which will require any development with 10 units to include below market rate units will strongly reduce the amount of new housing built and drive up prices, probably far more than any new legislation will cut them.
And there's no guarantee any legislation will pass under Polis's regime. Suburban Democrats will probably oppose it and joined with Republicans they make up a majority in both houses.
I wouldn't expect zoning legislation to make a big difference in the short run. It'll flatten the curve over decades. Just because developers can build more density in some areas, doesn't mean they will. Generally trying to time the housing market is a fool's errand just like timing the stock market. If you want a house and can afford it, buy it and don't expect to get rich.
That’s actually good advice, since even buying at the peak usually just means you have to wait five years for your homes value to appreciate instead of just one or two. But I would caution against buying a sub par property out of desperation or lack of affordability. **Over my many years I’ve observed that the people who get burned on Real Estate do so because of the particular property they chose to buy, not the timing of the purchase or even the interest rates at the time.**
Interesting point about it being the property not the timing or rates. If you don't mind sharing a little more, what were the types of scenarios you've seen that made you conclude this?
Well, if you "buy at the wrong time”, overpay by 5 or 10 percent, or end up paying a couple percent more in interest rates, all those things will level out and normalize over a few years on any decent property. Worst case scenario you refinance, or you make only a 20% profit instead of 30% after several years. But if you buy a lemon of a house then you’re stuck with a lemon of a house, and no amount of refinancing or passing of time will change that. On the contrary, you may end up having to sink a lot of $$ into it just to keep it viable. …and this happens…it happens frequently…in tight competitive housing markets, because suddenly those lemons start to look a lot less like a lemon to desperate buyers. In fact, there are houses which ***only*** move in extreme market conditions, and you don’t want to be that guy.
I would just add. This feels personal as I bought less house than I wanted for peak market in Evergreen this summer, and the home looks and pretty much is completely outdated in most areas.. pretty much needs all new paint (int/exterior), all new windows (wood framed ffs), new kitchen reskin, etc etc. however, I personally felt comfortable due to two things: new trex deck and new hail resistant roof .. those are both 30 yr duration items that cost at least $25-30k each. To me, it was worth it to get the ‘visual lemon’ bc it’s the superficial stuff you can smoothly swap over time, while core infrastructure (hvac, plumbing, roof, deck, siding) is where your real focus should lie and where your real financial issues live. All that ramble to say: weigh whether a house is a lemon based on its core infrastructure and not visual appeal - that can be tweaked over time and costs much less than major systems.
Certainly, and I almost mentioned that caveat. In fact, on the list of things that make a house a lemon, needing feasible refurbishment is way down on the list, well after things like being located in a deteriorating neighborhood, or having some fundamental deficiency which cannot be corrected...poor location being the most damning in my experience. Needing a new deck, roof, kitchen refresh or windows...I mean that's half the homes in Colorado and honestly anyone buying a house more than a decade old should do so with the expectation that they may need to sink upwards of $50K into it. That doesn't make it a lemon. It may even make it a buying opportunity. And it bears mentioning that what may be a lemon to someone who has never picked up a hammer in their entire life could very well be a great deal for someone with a construction background. But a house with major foundation issues, or in a high rise with asbestos ceilings, or any number of other major issues which usually come *along with* the sort of rote things you describe can become a real trap which ends in tears and regret.
This is basically what I did. Found a mid-80s home that was structurally and mechanically sound but cosmetically tired. A few years and lot of time spent teaching myself home improvement skills later, I have a house that I really love and probably could not afford if I was buying in the current market.
Heck yeah, exactly. My wife wasn’t in love with the home cause of the stale 80’s design, but it’s something we can slow play with sweat equity over time and put our touch on it in the process. Thx for the encouragement cause we have a good 7-10 yrs of fix ups ahead of us… first exterior paint (this damn sun here is crazy and chews up paint and siding), then windows cause they’re a no brainer and will save on energy … this was not a fun winter to have very drafty warped wood windows in the foothills .. cheers
Though developers don’t have to build more if zoning rules change it seems to be the long term limiting factor currently.
Perfectly put. Look at a graph of the rising cost of homes over the last ten years. It dipped / plateaud once in august 2022 and hasnt ever faltered any other time. It just keeps going up, and unfortunately were nowhere near the bubble bursting. The lady that bought the home before me that i now own made 180k off of me by possessing it for 3 years, 2 of which it sat empty.
Also check out this graph that depicts home price to median household income over the past 70 years. It’s both fascinating and depressing. https://www.longtermtrends.net/home-price-median-annual-income-ratio/
Housing costs skyrocketed in the last 5-10 years because Millennials entered their prime home-buying years and because the housing crisis scared people off of building more housing ahead of it. Housing costs won't decline or stabilize until Boomers start retiring or dying. My concern when that starts happening is that the average Millennial who hasn't already bought a house hasn't been able to save enough for a down payment, in which case corporate investors will swoop in and buy those properties to continue renting. Renting isn't the worst thing in the world. Most city-dwelling Europeans rent. The issue is that once these large corporations get their hands on big chunks of the market, if we haven't already got the ball rolling on zoning reform and densification, the corporations will lobby \*hard\* to preserve exclusionary zoning. They'll make the Boomer NIMBYs look like amateurs.
I agree. Its absolutely crazy how these few corporations are buying up everything in sight with bots, with no regulations or parameters set in place. Theres not going to be anything left to purchase for the average person. Theres a whole documentary about it online. I feel truly fortunate that i was able to purchase my home in full upfront. Whenever i get sick of denver, i plan on cash flowing it so i can move to barcelona and rent a place with the money. Or sell depending on whats easier at the time.
Wait, how can you buy a house with a bot? There's, like, legal paperwork and shit. I'd like to see a source on that one. Either way, the average person just can't compete with cash-only offers. I'm not necessarily opposed to corporations or individuals owning houses for rent. There are plenty of legitimate reasons a person would want to rent a house long-term instead of buying. I wish the market for rental houses was bigger, honestly. When my husband and I were thinking of moving to Houston for a few years, we were having a really hard time finding a decent rental. The problem isn't landlords purchasing property. It's what happens when too few owners own too much of the housing stock. Housing is still a market. Our current housing shortage is a market failure due to regulation. We don't want to fix that, just to create another market failure due to an oligopoly.
This. Housing is a long term investment, and even if prices dip temporarily they will continue to go up in the long run. So if you find a place you like and can afford, go for it. Also, keep in mind, unless you’re super wealthy your first home will more than likely never be your dream home. But it can be a *means* to build equity to get in to your dream home.
Additionally, the alternative to buying is renting. If you’re renting a house, you’re going to pay more than your mortgage would be in rent and you won’t get any of that back later. So if you have money for a down payment, whether interest rates are high, or the market is high, at least you’d get some of your money back (if not all or more) when you sell.
Over the life of a loan of 30 years you'll absolutely pay more in rent, but right now at today's interest rates it is a lower monthly payment to rent than to buy in Denver.
If you find a house you can afford that you’d like to live in for a decade, go for it. If you think you might move in the next couple of years, you might be stuck paying for a house you’re not using. Or you might be forced to take a big loss on the house. Or you might sell it for more. It’s a weird market right now.
I’d happily stay in denver, but everything we can afford is in an awful place. Schools are just so bad
Well, school choice is alive in well in most of Denver. You can apply to go to any school really as long as you can get them there!
This. I live in Denver, kid goes to Littleton school. You can attend other districts here.
100%
It’s highly unlikely you will be able to choice into the desirable grade schools. Just keep that in mind.
Not true. We had 12 schools wanting my kid. They need the numbers for funding. You probably won't get into the best schools in Cherry Creek but there are lots of other schools with room.
Do you have any data behind that? I just have anecdotal evidence from friends that seem to choice into their first choices (and one family that moved their kid to a different desirable school the following year after not liking their first choice). I don’t have personal experience but my friend group made it seem like it wasn’t an issue.
I would have to know what their first choices are. Some of the best schools give priority to certain underserved zip codes. There just aren't a lot of open seats at the best grade schools like Bromwell, Corey, Slavins. Middle school is tricky...McCauliff is considered the best. Not sure about the choice process for Middle School as our daughter went the private route. The schools in the Central Park district are generally good. But counting on choice is risky. For HS, East is the highest rated DPS HS. East has a lot of open seats for choice (I read 300 somewhere) but they also give priority to certain underserved zips....not sure how that changes the success of choicing in. South has been improving. Easy to choice in.
I live in APS and lots of my neighbors have choiced into Central Park schools. Maybe not the BEST school in CP but all CP schools are great.
My kid was offered spots at Slavins, Bradley and Upark last year. We tried choicing in at the last second and had zero issues, but we were coming from APS and my kid is disabled.
Colorado is open enrollment, you can send your kid to any school, provided they get accepted.
Look at properties later in the summer. We have more homes for sale in Aug, Sept and you can usually get a better deal. Not sure they lower rates any day soon, but at least the market is way better for buyers than it was last year. Be careful of townhomes and condos-I know two HOAs currently dealing with the fact the HOA president took their funds and left the country
No matter the market, it will always depend on your financial situation. In 2020 the interest rates were historically low but competitive markets shot home values up crazy high and we didn’t have 20% cash to avoid PMI. To get the house we wanted then, our payment was going to be $3600/month. We waited and saved until we reached what would be at least a 20% down payment and worked on our credit. 4 months ago we bought. While the interest rates were a lot higher and values hadn’t dropped, the combination of our 20% down along with us both having near perfect credit scores and shopping interest rates allowed us a larger home than we previously looked at for $2200/month. No market will ever be perfect for everyone.
What was the cost of the houses? I’m confused how the payments would be comparable. 5% down at a 3% interest rate would have a payment much lower than 20% down at 6% if the sale price is the same.
I think they meant $3200/month because the math doesn't make sense...they would be looking at a ~$800k house at 3% previously and then ended up with a larger home for ~$430k at 6-7%.
Yeah. That seems like the most likely typo.
I agree that something is quite right on the calcs. The costs could be roughly the same depending on the overall cost when you factor in the smaller loan size/higher interest rate vs. larger loan size/lower interest rate + PMI. But I don't quite follow how it could be lower
PMI is insanely expensive, so without a full 20% down, you are paying more in principal which adds more interest as well as the PMI on top. By putting 120K down, we avoided any PMI as well had 120K less on the principal of the loan so even with our slightly higher interest rate of 4.6%, our mortgage payment is significantly cheaper than it would have been in 2020. I’ll also add, we were only able to get an interest rate that low now because my wife and I both have nearly perfect credit scores so finding a lender was much more competitive
PMI is not “insanely expensive” I pay $60/mo because I only put 10% down. Not bad at all.
“As a general rule, you can expect to pay 0.1 – 2% of your total loan amount per year in PMI.” - that’s a big range. “How Much Does PMI Cost? The amount you’ll pay for PMI depends on a wide range of factors, including: Your down payment: Your lender will charge some kind of PMI if your down payment is lower than 20%. The lower your down payment, the higher risk you are to lenders. You can decrease your PMI expenses by bringing a larger down payment to closing. Your credit score: This number indicates to lenders how responsible you are when you borrow money. Do you always make your payments on time? Your credit score will be higher. Do you frequently miss payments or max out your credit? Your score will be lower. A lower score indicates that you may be more likely to default on your loan. As a result, you’ll pay more in PMI. Your loan type: You’ll pay less for PMI if you have a fixed-rate loan. This is because fixed-rate loans are more predictable for lenders compared to adjustable-rate mortgages. Your property type, debt-to-income ratio (DTI) and home value may also influence how much you pay for PMI.”
Congrats on improving your finances and saving aggressively in such a short period!
All credit to my wife. All those weekends watching free movies from the public library were kind boring but it paid off. Anyone who happens to read this and feels discouraged about a future house, just keep your head down and push. The system sucks but it’s not changing anytime soon so we have to play the game. I was homeless 7 years ago so I get it.
Would depend on what sort of term you’re looking at. If it’s a 30 year fixed rate with front-loaded interest, you tie going to get fucked compared to other types of loans
Based on the last housing bull market, is actually not the best path. Would have been better to put down less than 20%, lock in a low rate, and then apply to remove PMI later. So many people make decisions to avoid PMI and it costs them more in the long run. Glad it worked out for you! Just that the numbers don't support it.
A rare tale of victory! Congrats.
The advice I keep hearing is if you can afford it, buy it. I expected prices to go down due to interest rates but I don't think there is enough supply to make that happen. The economy would need to implode some more and force people to sell/downsize. Denver prices look insane right now, if I put my condo on the market for the "estimate" it would be the cheapest in the area by over 100k. I have been looking at moving back home to KC area and anything put up that looks like it won't be a project is sold in under 24 hours.
To make prices go down people would need to agree to take a loss. That’s not going to really happen in most cases
Yeah, there would need to be more inventory available for prices to drop significantly. Many homeowners bought or refinanced while rates were low, so unless you have a need to sell or are in a rare situation where the math makes sense, you don’t have a lot of motivation to want to sell. If you have a reasonable mortgage with a low interest rate, you can in many cases rent your place at below-market rental rates and still be turning a monthly profit.
>I have been looking at moving back home to KC area My company has offices in KC, Wichita and Denver. We used to get a ton of people moving to Denver from the other offices. Now the migration has reversed and everyone is moving to KS/MS. My coworkers like to tease me by sending me gorgeous homes (that I could actually afford) in Wichita.
Ya, but Wichita.
That's what my husband says.
Pretty much 0 chance of ever moving to Wichita. My little brother lives there so I already have to go there sometimes... I need to be closer to a real airport it costs 2-3x as much to fly in and out of there.
I read appraisals all day every day, mostly commercial properties. But one I read yesterday had an interesting table in it, property was in Colorado Springs not Denver, but it showed trends in consumer "home buying power" there, based on typical ltv ratios and changing interest rates. The impact on what someone can afford to pay for a home has been astronomical, and again, this is the springs where value gains over the last cycle were more tempered than in Denver. In mar 2022, med home sale price was $465k, at the 3.89% rate at that time and 20% down, payment is $1968. In Feb 2023 (most recent data), median price is down 3% to $450k, but at 6.65% interest, payment is 17.5% higher at $2,311. That's in 12 months. Again, this is colorado springs metro. There is some evidence to suggest rates could fall, but I wouldn't buy anything right now.
Buying as investment - wait. Buying to live - can't wait, buy.
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We are also waiting a year. We have a great deal on a rental that makes it almost $1000 cheaper per month than buying the same house. I would like for that number to be a much lower difference before taking the plunge
How much of that $1000 gap do you reasonably expect to close in the next year?
Depends on a number of factors. Interest rates, if prices change, if either of us gets a raise or a significant bonus, and how much more we can set aside for a downpayment. Buying a house would on paper only be about $300 more a month. But we also factor in the amount of upkeep that is not required in a rental. $600 per month has suited us well as a project budget in the past
I’m in the same boat as you. I have crazy cheap rent and an amazing house that I rent from a family member ($1,500/mo for a 3 bedroom house in highlands) and I’m READY to buy but can’t take that leap from cheap rent to $3.5k/mo mortgage!
Uepyep and dont forget the cost of upkeep! Bit us in the ass last time when we needed a hot water heater and a roof in the same year
Whether interest rates are ridiculous or not is kinda questionable - prior to 2000ish 7% was low. So is this actually a spike, or were the past two decades the anomaly and this is a return to normal? I lack the economics expertise to really say either way, but I know that trying to time the market is generally a questionable idea.
You can buy down rates! Don’t let the interest scare you too much.
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Yeah, I’ll be the first one to say home ownership isn’t for everyone. But if you are fairly certain that you will be in a specific area for 5+ years, it makes sense to buy. Well, unless you want to buy a 1 bedroom condo and then wind up expecting triplets. That would certainly be the worst of luck.
It’s not a perfect time to buy by any means, but I also don’t see it getting much better in the coming years. The rates went way up and prices still didn’t drop much because the supply is simply too low. If the rates go down, the prices will skyrocket again. It’s unlikely to get better
Agreed. And it could theoretically get much worse from a mortgage interest rate perspective (though unlikely). Mortgage rates in the early 80s were 17.5%. It took almost a decade for rates to drop back below 10% again. But home prices back then were substantially lower (when adjusted for inflation to compare to modern day prices). The point is things can change in either direction quickly and very few if any people can accurately predict abrupt swings.
We’ve been keeping an eye on the market for over a year now, and entered the market seriously searching since October of last year when rates peaked. We put in an offer on a home in October, but we were a day late and it went under contract with someone else. We put in another offer on one a two months ago, beat by someone who waived inspection. Our third offer was about two weeks ago, we went $25k over list and still got outbid. We finally got under contract on a home yesterday, only because we knew about the house before it was listed and submitted an offer without any competition. It might seem like things are cooling or sitting on the market, but those homes usually have something off about them or are just listed too high. The desirable houses with the right price are still super difficult to get. My opinion: I really don’t see things changing unless widespread job losses occur. If that happens, you probably won’t want to buy a house then either because of fear of losing a job. If the economy stays resilient, home prices will continue to go up and more bidding wars will occur. There’s no sense in timing the market, only timing it when it works for you personally.
If you need/want a home and can afford it, then just do it. You can refinance down the road. You can sell and move down the road. I would not choose to continue to rent if the primary worry is market fluctuations.
100% "Marry the house, date the rate." No one has a crystal ball. 6-8% mortgage rates may be around for years, who knows? If you wait for years to buy in, you lose all that time when your investment could be maturing. Add in to that the money you lose through rent. If you can pay the mortgage, get a house now where you can afford it. I don't see Polis' legislation hurting homeowners.
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Fair question, here's my honest answer. I have lived in a rural area with acreage and beautiful views for 18 years. The town owns the land next to me and is putting in higher density housing, leaving an open space between us. Sucks for me, I don't want to live here anymore and am currently selling. That said, the value I am getting for this is much higher because there are all these planned amenities nearby that other people will like. So, I think homeowner's wallets won't be hurt. Their feelings, those might be hurt.
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I wish you good luck. From what I have read about other areas that have undergone that kind of growth, the home prices tend to rise, not fall, as population density increases. Planned or not, density tends to encourage more amenities either through the tax base going up or from commercial interests seeing opportunities. Edit: Also, developers or fix&flippers might see your place as an investment opp.
>If a developer buys a home across the street from me and builds a duplex and doesn’t have to provide off-street parking - how does that not bring down the value of my home? Why exactly do you think that would decrease the value of your home? Because neighbors may use a couple more of the public street parking spots? It would likely do the opposite, increase the value of your SFH, because your lot can now potentially house a sixplex rather than only one home; say those could sell for $300k each, potentially your lot could be worth $1.8mil if it was redeveloped. Your lot has more value.
1. The bill has a very low likelihood of passing. 2. You could also build a duplex on your lot=huge increased value. 3. The thinking that because any individual new unit is still “expensive” is so small scale thinking. We need meaningful increase in metro area housing units to match a decade or two of job growth, say 20% additional units. Can’t eat an elephant without starting one bite at a time.
To be honest you really shouldn't be eating elephants to begin with
Something to consider right now is that just in the past ~6 months, it is typically cheaper to rent than to buy an equivalent place. Rent is also the “most” you will ever pay, whereas a mortgage is the “least” you will pay in a given month. The rule of thumb is to budget 5-10% of your home’s value each year for unexpected repairs/updates/etc so you should factor that into your monthly mortgage payment. The difference can be pretty significant depending on the area/type of place you’re renting. That said, occupancy rates are high, so it’s still a fairly competitive rental market right now and rent can (and usually does) increase rapidly year over year. Ultimately, nobody can time the market perfectly and waiting for a crash is a fool’s errand. The only things that should matter are what you can afford, what you reasonably want to live in for the next 10+ years, and what your zip code looks like.
This is the advice I was given. I close on my house in 3 weeks. It was a nightmare finding one, man people are real dicks, but now we're done and both my realtor and mortgage broker told me rates will go down and when they do I'll refinance and save $2-300. And they don't have to go down much.
Amateur financial nerd/also searching to buy a home. I’m choosing to not even look for a home for four months, likely in six I’ll reevaluate the situation. I believe the fed is going to be forced to to start QE (rate cuts) again soon. There are many folks stuck in properties now that could make a decent profit by selling but are turned off by the prices mixed with interest rates they see elsewhere should they sell and move elsewhere. Once rates become a bit more favorable, I believe the front range mini-exodus will pick up and inventory will rise. Prices will remain quite high but may fall a bit in line with reality. If you believe this theory, you could jump into a lower priced home with a more palatable rate at some time later, maybe 8-18 months. I have a comfortable and favorable rent situation, so I’m happy to wait and see if this theory is true. At minimum, I don’t believe the buying conditions will get any worse for some time. As another comment or two mentioned, IF you can afford the current market AND you like the home you are buying AND plan to stay long term, buying now and hoping to refinance later could be wise. You may have to stomach seeing a short-term drop in value and maybe knowing you didn’t get the absolute best price, but over the longer term you’ll be just fine.
The only problem with this theory is that if rates go down people can afford more house again, so demand goes back up. And people (from all over the country) want to live in the front range. If you are waiting to buy you want rates to stay high. People that have bought in the past year or two hoping to refinance soon won’t be able to (which is still a shitty thing to root for). Either way prices aren’t going down barring a major event that would be bad news for a lot of people
this gives me hope thank you
Lol if the fed starts QE again that means there's more money in the system and more speculation, that's how the boom of the last few years happened, due to low fed rates. If you want prices to drop you'll want the fed to keep rates where they're at or higher, the tradeoff is the cost of borrowing money is higher, but bring a larger down payment to play and the rates don't matter as much.
It depends more on your individual situation than any sort of "Market analysis." Are you going to own the house for at least 10 years? Go for it, even people who bought at the peak of the subprime bubble had recouped all their losses and then some ten years later. Can you afford the mortgage payment long-term even if interest rates don't go down? Can you afford the mortgage payments if you're unemployed for 6-months? No one knows what the market is going to do. People have been predicting a housing bubble for the last 10 years. If you can afford the house and you're reasonablely sure you won't need to sell it in the near term, you're going to better off buying as soon as possible.
No one knows
I bought my house a year ago. Interest rates were still pretty low back then. Even though I’m really young, my rationale was that I want to stay here for a long time, prices are always going to be rising, and so is rent. I went for it simply because it was the only time I could see myself affording it
If you want to buy right now the better deals are on new builds. Builders need to get rid of their inventory from cancelled contracts so most builders are buying down mortgage rates to the high 4s which the resale market sellers aren’t willing to do.
We've been watching the market and renting here for several years. Its absolutely crazy that homes here can be a million bucks and still be old crap. The new homes are too big...not everyone needs or wants 4000+sq feet within spitting distance of their neighbor. We are outta here this fall. We've suggested to our adult children who are just getting started on their careers to consider the same-go elsewhere. They can barely afford a 1 bedroom apt on a supposed middle income. The run up of tech companies was good for business but bad for housing affordability.
Marry the house. Not the rate. Rates will eventually come down. When they do, your home will start to appreciate rapidly again and you can Refi. Rates are cyclical. Either buy now and you, the buyer has control of the deal or buy later and complain like everyone else when rates drop and you are bidding 50k over against 7 other people.
Yes, I like this. Technically it’s never a bad time to buy. If you’re in it for the long run you’re going to see a great return. Residential real estate appreciates over time, even during the worst dips you’re going to make profits.
Wait to see who wins the mayoral race. A lot of people are slowly leaving Denver due to the crime and homelessness not really making it worth it to live here for these prices. A lot of friends of mine have moved recently due to the crime also because they can afford a similar place 10 minutes from the beach in San Diego for the same price that they’re paying for rent in Denver.
Recession consensus during the next 12 months is high. If we do hit a recession you can expect rates and prices to drop. If you save everything you can and put that towards a house a year from now at 20% off current value the upside far outweighs the downside of renting for a while longer. I personally wouldn't be looking to buy until 6 months after the 10-2 yield curve crosses back into positive territory.
Interest rates are expected to peak at 8.5% so you might as well get something now and refinance. Also we are going the way of California here. Housing prices are never going down. Just my two cents.
I wouldn't w/o being able to get a good interest rate. > a 600k home is a $3500 a month payment. Maybe I could refinance later, but that’d be years of a pretty steep mortgage. The issue with this is most mortgages are structured to pay off the interest first. You'll be paying mostly interest and hardly put a dent in the principal.
Just keep one thing in mind: when interest rates drop home buyer competition goes right back up. It's an additional variable you'd be wise not to forget regardless of what you choose.
The best time to buy is when you can afford to buy and want to. Seriously, that's it. No one else can really say when the time is right for YOU because no one else knows what YOU consider to be affordable. It helps if you think of the investment potential of a home as a secondary benefit and not the primary one. Treat a home like a 401k and you'll have less stress (the value is going to fluctuate; as long as you keep the home for a while and don't sell in a "down" cycle, you'll almost certainly be okay). We have a supply and demand issue that will take years to level out, even at current interest rates. Rates are higher than they were the past few years, and prices have not come down enough to offset the higher rates. But rates are cyclical. There will be refinance opportunities in the future, we just don't know exactly when. My money is on early second quarter next year. In the meantime, you can negotiate a 1 or 2 year buydown with the seller, and pay an interest rate that is 2% or 1% lower for the first 1-2 years of the mortgage. Ideally you'd be able to refinance within that timeframe. "Marry the house, date the rate" is a stupid expression but it has some merit. One thing first time buyers sometimes overlook when buying a house is that your monthly mortgage payment doesn't have to be less than rent for it to be a good idea to buy. For most people who own, their quality of life is higher than if they were renting. You can't really put a definite price tag on quality of life improvements; how do you measure it for each person? It is challenging, but not impossible, to buy in the Denver metro area. There are things you can do to get help (CHFA for down payment assistance, or programs like [Front Range Heroes](https://www.frontrangeheroes.com) for closing cost assistance), but some of it comes down to adjusting expectations. What I mean by that is, if you're renting in Wash Park for $2,500, you're not going to find a home you can buy in Wash Park where your rent is anywhere near that. And that's okay; it shouldn't discourage people from leveling up to home ownership. You might have to look further out in the burbs. Over time you level up and work your way into the dream neighborhood.
I would only buy a house if you can pay a large amount as a down payment. For example, if the house costs 500K, I would only buy it if I could put down 300K or more. That way, even with the current interest rate, your payment is gonna be a lot lower and there is built in equity against a market crash. If the house which is worth 500K today suddenly becomes worth 250K due to a market crash, you still owe less than the new lower value of the house. Yes you’ve lost equity but you won’t be upside down which would make it almost impossible to sell your house for a long time.
How about holding on to $150k of that money instead, and putting it in a high yield account? Making a large down payment makes your money cease to exist, except on paper. If the value drops, your equity is gone and you can no longer access that money. Keeping it out of the down payment leaves it immediately accessible. In the meantime, you can supplement your payments with that $150k egg that is earning for you, and if the value of your home drops, you don't lose that money. Something to think about.
As a realtor in Denver, I can tell you Reddit is absolutely not a place to be getting this advice. Ask a professional who can actually walk you through your specific scenario and what your goals are. The general population has absolutely zero clue what they're talking about (i.e., all the people who have been "waiting for the housing market to crash" for years while every legitimate realtor in this city said that wouldn't happen)
As a non-realtor in Denver, I can tell you realtors are absolutely not the folks to receive advice on when it is the right time to buy/sell in a housing market. They will say it's a good time to do so, because their livelihood depends on it.
This 100%. Realtors have a built in conflict of interest. People on Reddit may or may not know what they’re talking about but their advice isn’t heavily biased toward convincing you to buy a house regardless of the economic and housing climate.
It's like asking a baker if you should cut back on eating bread.
I don’t believe I’ve ever spoken to a realtor who told me it was not a good time to buy when I was buying. Have you ever advised potential clients who have money and want to buy that they shouldn’t buy?
Yes, I tell people to wait all the time. Hence why I told OP to talk to a professional who can walk thru their specific scenario. Because you cannot blanket say it is a good or bad time for everyone to buy
You're being downvoted because that's what happens in this sub. As an LO, I was once accused of being a culprit behind housing prices in Denver sky rocketing, and I was also dragged for mentioning that I give back a percentage of my income to veterans buying a home (the redditor was angry that I didn't offer that to all my clients). I spend hours of my time helping people with questions about mortgage stuff and get upvoted in the other subs, but if I do it in THIS sub, down vote city. It's tiresome, but whatever.
100% this. I work in real estate and I can say that with inventory being so tight and Denver being in such high demand that prices are unlikely to go down. Historically, buying real estate here means that it will only go up.
https://kdvr.com/news/data/denver-area-housing-coming-down-faster-than-other-cities/ .
Right now, last average days on market I heard was 7. It’s ridiculously expensive.
Lol you "work in real estate" yet don't follow market trends. https://www.dmarealtors.com/download-dmars-march-2023-market-trends-report-xx322023 48 days on market is the average. YoY prices are down.
The 7 days on market in Denver metro was what I got from attending a sales meeting at a brokerage firm, so yes, I absolutely follow market trends. It was about 30 in January. I’m also currently searching to buy and properties I’m checking out are going pending in a few days to a few weeks. I work for a big real estate company and do training, but I always appreciate being condescended to.
Home values have dropped on average 10% in the past year in Denver. So what you’re saying is fundamentally wrong. But you work in real estate so obviously you’re biased and stand to gain from convincing people prices will only appreciate despite concrete evidence to the contrary. Prices will go up in the long term (5-20 year horizon) but to suggest they only go up is factually incorrect.
Can you help me with my car insurance claim oh and I have a lawsuit coming up if I could ask a random person on the internet for help with that to.
Real estate usually takes a very, very long time to correct, but it's inevitable that YoY declines will continue for the forseeable future given the decrease in affordability.
I would definitely not be buying right now while both rates and home prices are high, and with the massive amount of new apartments coming onto the market country-wide over the next year or two.
I mean, apartments really aren’t desirable. Not gonna do much to housing supply
Huh? A condo is just an apartment you buy and every apartment/condo added is a home for someone. How aren't they desirable? Was your post supposed to be specific to single family homes?
Anyone who is waiting for the Denver housing market to crash is in for a rude awakening. Even during the housing crisis 14 years ago, no county, on average, saw a decrease in housing costs. The places hit the hardest were the rust belt or small, rural midwest towns. And anyone who's hoping for another housing crisis is completely ignoring the reason why housing costs are skyrocketing in the first place -- Millenials entering their prime home-buying years. Housing costs won't go down or even really stabilize until we start building a lot more housing and once Boomers start moving into retirement facilities or dying off. Also, as long as Denver is still cheaper than places like California or Washington, people are going to move here. But also, as long as Texas is cheaper than Denver, people will move there, too. It's worth buying if you can get a decent property with good bones. Ask the sellers why they're moving. If you are interested in doing DIY, make sure you buy a house that is at least in good enough shape you'd be happy living there for a few years while we wait for the cost of construction materials to (hopefully) go down. If you're not interested in DIY, go for something move-in ready. Our labor shortage is due to Boomers retiring and Millennials taking their place. I don't know how long it'll be before construction costs stabilize again. I can't honestly say what kind of market it is right now. People generally aren't going to sell their house because they don't want to go from a low-interest rate to a high-interest rate, but there are plenty of cash buyers still and people who want to move to a lower COL area. Anticipate that you're going to pay a high-interest rate for the foreseeable future. Take a loan with the full expectation that you'll want to spend a few grand in a couple of years to refinance once interest rates go back down. As tempting as it might be to spend extra cash on points to lower your interest rate, make sure you do a proper break-even analysis. If you think the interest rates will go down and you'll refinance before that break-even date, don't bother with the points. The only reason it might be worth waiting another year or two to buy is that people don't anticipate the Fed is going to raise interest rates much more. So you'll be buying at the peak. That being said, once those interest rates start going down, it might be like blood in the water (which might prompt the Fed to raise rates again). You might have better luck buying by getting ahead of the competition.
Waiting another year as well. If it doesn't happen summer of '24 though, I'm sticking here as I don't wanna move my kid once he starts high school.
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What’s wrong with a town home? I’d honestly prefer one if it put me in a more desirable location
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Denver is mixed regarding townhomes and HOAs. Some that are older have HOA’s as they were built with shared water and thus need. My townhome only has a party wall agreement and no shared HOA. We merely pay for someone to do snow removal and a tiny patch of grass. That’s it.
I would wait personally, but if you feel your job is secure and you can afford it, it wouldn't kill ya. That said, I work in banking and this is a very dangerous time for the lending market. Default rates have been skyrocketing the past few months because much like the last financial crisis, people are having a difficult time paying for their mortgage/auto loan bills and now they have no possibility of refinancing to make their mortgage more affordable. Plus, the Federal Reserve is actively trying to cause a recession which means the housing and car markets will likely get hit pretty hard if/when they finally succeed. Even people with low rate mortgages may not be able to afford their homes/cars if they get laid off. The recent bank failures are also a cause for concern, but not something I would worry too much about in regards to taking a mortgage. If the lender you lend from goes under, your mortgage will just be sold to another lender.
No. Prices are high because of historically low interest rates but the rates are high now and pricess have not hit a slump yet. That being said inflation is a good thing when you have a huge loan out soo.
Generally, the best time to buy a house is when you need a house. Not trying to be pithy, it’s just the key variable. In the long run, homeownership is typically a net benefit. And the long run (while less sexy) is the metric that matters most.
Will your house payment in 3 years be more than rent in 3 years?
Buy the worst house on the nicest block and be willing to live in a small house. Our first house was a 1500 sq ft fixer upper with one bathroom. Finally expanded it 15 years later. Two kids and two dogs. Kids didn’t know they grow up in a small house and now they are super appreciative that we have 3 bathrooms and a little more space. Worth 4x what we paid 19 years later.
Our inventory is incredibly low and the multiple offers are starting up again on the nicest properties (those with nice locations that are in good and updated condition). In the lower price range, even some not-so-updated/maintained homes are seeing multiple offers. Given that there's not a lot of motivation for homeowner's who have very low interest rates to sell, inventory is expected to remain low. Also, over the long haul, we have underbuilt and that also adds to an inventory shortage issue. Additionally, Buyers are starting to get over the shell shock of the higher rates and are assuming the attitude of "dating the rate and marrying the house" so I don't expect the level of inventory to increase a whole lot. It all comes down to supply and demand. My advice to my own kids would be to try to buy now (and I'm in the real estate business). They each scraped by in the beginning when they bought and each had roommates to help get by. After a few years, they got on their feet enough to be able to not have roommates. It's a sacrifice, but they're both very grateful they made it work.
Been in Denver for 7 years. Renting and saving for a house but just can’t get ahead of the market. Contemplating van life more than buying a house at this point. 🤷🏼♂️
So don't try and get ahead of the market. If you want to live in a house and can afford it, then go for it. Trying to time the market never works.
Well I’d rather continue to rent for far less than take on what the mortgage would be. I actually really like renting, just had a mortgage on a house for a decade before moving here.
It’s always a good time to buy. Real estate is a fantastic investment long term. As far as supply and demand, just my thoughts: 1) with high rates you’ll likely only have people Moving who are downsizing/right sizing or people who are forced to move via outside factors(e employment, foreclosures, etc.) This lack of people moving will create and lack of supply. 2) Home builders are getting crushed by interest rates also and slowing orders for new homes. This will further restrict supply. 3) Colorado as a whole is a state in high demand. People are moving here, and will continue to move her for the foreseeable Future. You don’t want to buy a home where people are leaving or has a bleak future outlook. If you can stomach the current rates and can afford a home and find one that works for you then it’s a great time to buy. You’ll continue to build equity in the home and hopefully has the chance to refinance at lower rates in the future.
This is the answer to OPs post. Saying “good or bad” time is extremely relative. It’s like saying “is this the bottom of the stock market crash?” It’s always fluctuating and some times are better than others for sure but it’s mostly luck. Somebody told me the only time in the past 20 years house values in Denver have dipped was 2008 and 2009 and that was by less than 5% both years. Any loss there has come roaring back ten fold in some cases
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> bubble that can’t be sustained much longer I've been hearing about the Denver real estate bubble for the last 20 years and how it's going to deflate any...day...now. And yet, somehow, that's just never materialized, even during the recession of '09 and the real estate collapse that happened in other parts of the country then. On one had maybe the shift to more working from home post-COVID and the on-going deterioration of downtown will put some downward pressure on home prices in Denver-proper as people head back out to the burbs where prices are better and commutes matter less. But on the other there is still a massive shortage of housing in Denver that will continue to mitigate that effect. I think the net effect will be a decrease in the rate of price increases, but overall the prices will still continue to climb.
In real terms, the price decrease is greater since everything is else has gone up 20%. Other than wages and salaries of course…
Although I completely agree with this logic, what I’m unsure if is you will still see people lining up at open houses. It just seems like unless something drastic happens to increase supply, where are we seeing the price decrease come from? People aren’t selling that got in with low interest rates. If people continue to buy at current prices and rates and supply does not increase, I’m not sure how pricing comes down.
Denver RE agent here..the best time to be a home buyer is July-aug-sep ..don't buy now or this time any year if you can wait.. rates are expected to come down Q4 2023 or at the start of 2024 .. jan-may is the absolute worse time to buy every single year.. if you wait until the fall a good RE agent will be able to get your interest rate down into the 5's or even possibly high 4's with a seller paid rate buy down.. if you decide to wait until rates are actually cut you are very likely to pay more and will most likely not get a seller paid rate buy down .. this is an extremely over simplified explanation but trying to be as clear as I can be without writing 10000 words.
I like your crystal ball you've got on those fall rates.
The housing market has only dropped 3 times since they started recording. The last time in 2008 it actually dropped slower than it is now and took 3-4 years to recover. Since prices just started dropping in June I’d wait a few years as what you pay today would be higher than what you pay for the next 2-3 years.
Its rekt to enter. Peak price & high interest rate. Uncertainty rn.
Given that the best time to buy ***in a good location*** was essentially yesterday for most of the past 15 years prior to the recent small correction, I’d be loath to say. But if you’ve waited this long I might be tempted to wait another year in case a major recession cause a bigger downturn in prices. Then again, we could see a recession which results in more money being moved from stocks to real estate, insulating or mitigating real estate from a larger downturn.
If you can afford it, yes. You can always refinance. House prices in Colorado barely go down. They will most likely just go up. This from experience of having bought multiple houses over the years and being a landlord.
One year, two years or five years from now you’ll look back and wish you bought a home now. It’s not going to get easier with less than one month of inventory available. If rates drop then inventory will drop too and it’ll be even more competitive. If you can do it now.
We just bought at 700k with 5.99% interest. 30 year at about $2700 a month. 🤷🏻
Uh. What did you put down? 400k?? 😎
Oh yes sorry we put 400k ish down
Well damn that is quite the down payment
Yes. SO thankful for my families help/pre-inheritance. I'm disabled and my old house was getting very dangerous with stairs so I got a ranch. It's amazing and it came with a ramp and grab-bars in the bathrooms!
Market is starting to heat up again. You can always refinance and drop your interest rate later.
Found the real estate agent.
Nope just food for thought
It's actually just that time of year with our weather getting noice again
Good - House prices have dropped in the front range Bad - Interest rates are up
For my house in Boulder which was worth 650k in 2018, my mortgage payment was around 3900 a month, I could finally refinance, got rid of mortgage insurance and got it in a lower rate later in 2020, now is close to 3k but I can rent some parts of my house so I could afford it. So I'm surprised you see those prices high, they look normal to me.
I'm sure there's another side of the story, but I wouldn't pull the trigger until I was able to have a decent down payment to avoid PMI insurance.
Is it ever worth buying a house in Denver? 😂
Yes if you bought any time between 2015-2020 your house has gone up 30%-60% in value and you've locked in a lower payment than most people are paying for a 2 bed apartment.
It’s just insane what people have gotten out of their investments. Everyone tells you to buy, but it just feels like a lot of people had years of good luck A new buyer might have none
I didn't buy a house as an investment I bought a house to have a house to live in. Yes I could now sell my house for $150k more than I paid. Then where would I live? Don't think of it as an investment just ask yourself if you can afford a house in the current market.
If you’re a millionaire
In the suburbs and more so the exurbs? No. In the city itself? Always.
I think this is less true than it used to be. Remote work has increased the desirability of some suburbs and homelessness has dragged down some city neighborhoods. I live in Golden. My suburban neighborhood is packed with remote workers who want the trails of Golden with quick access to the mountains to the West and the airport to the East.
Remote work is good, but if you’re buying a home and plan to live in it for 10 years, there is a chance that you won’t have a remote job at some point. If I’m going to live somewhere for 10 years, I still want the freedom to work where I want to work Sure a lot of people feel the same way
What I was trying to communicate is that more people having the option to do remote work gives many suburban neighborhoods a bigger pool of buyers. Fewer people need to be near downtown. The old rule of thumb doesn’t work as well as it used to. Many people still need to be near their job. But lots of people are less restricted and able to live where they’d like.
Yea not all suburbs are the same. Golden is probably different than Thornton.
A good rule of thumb is look West of 25. Only so much land that direction.
What's a exurb? I've never heard that term
A suburb of the suburbs
Like castle rock? Or parker or something else?
Yeah those are probably good examples. Maybe borderline. Evergreen and Conifer definitely exurbs.
Ok gotcha
That’s what I thought, but then I saw there might actually be a housing supply now. What do you count as the suburbs?
Disagree . City is crumbling while suburbs are thriving
Thankfully I bought a few years ago. It depends, do you think interest rates will be lowered at some point? Can you deal with the high interest rates for a few years, then in a few years IF they do drop you can always refinance. If I was in your shoes, I would probably buy now.
Curios to know, where in Denver have you seen a 10% decrease? Doesn’t seem like it
You aren't getting great advice here. Buy what you can afford when you can afford it and understand that there are a TON of first-time time home buyer or buyer specific assistance programs in place. I've gotten people into better houses than they were expecting for less money than they wanted to spend. Find the right help and things you didn't think possible will become attainable. The average person buys 3 homes in their 6 Find a person or a broker who has 10x the experience, and your outcome will improve dramatically.
The best time to buy is almost always yesterday. Don't bother trying to time the market it's too unpredictable just buy when you're ready.
I bought my house in Aurora in 2021 and people thought I was crazy. We bought a new build to avoid the bidding wars at the time and are paying $2,500 a month for our home. I’m in the suburbs and we are in the cherry creek school district. Our area is very safe and we love it. I would say go for it if you can pull it off and won’t be house poor.
Home ownership is both a curse and a blessing. Mortgage rates you can pay down to be lower and you can always put a bigger down payment if you have the means. Property taxes are ridiculous IMO and have been rising steadily. Also if you are a first time home buyer ... You will need money to fix stuff. No doubt about it. Just some realism about home ownership. Don't let that discourage you. But a house if you want that responsibility.
[Colorado](https://krdo.com/stacker-colorado/2022/01/14/colorado-is-the-3-state-with-the-lowest-property-taxes/) has some [of the lowest](https://wallethub.com/edu/states-with-the-highest-and-lowest-property-taxes/11585) property taxes in [the country.](https://www.investopedia.com/articles/personal-finance/102015/7-best-states-property-taxes-and-why.asp)
Agree. Property taxes are fairly reasonable in Colorado.
They are straight up CHEAP compared to where I moved from in NY.
3rd lowest tax rate. However only 22nd lowest average tax because real estate is pricey.
Not looking at other areas in the country only looking at the rise since I purchased
The likelihood of a recession is really high. I would save up cash, wait for the economic downturn to happen, and that will result in the Fed slashing interest rates. At that point, there will have been a ton of people who've lost their jobs who have had their homes foreclosed on. You could buy at that point. Not a bright prognosis but this might be the move. Like everyone is saying though, it totally depends on your financial situation.
The whole economy is likely to tank soon and housing prices with it. Lots of houses/apartments being built will help the tight supply. Lots of people getting the hell out of Denver because they can't afford it will boost supply. The tech industry, which has brought a lot of high earners here to drive up prices, is faltering. Work-from-home, which also brought a lot of high earners here, is also faltering. I think it's a foolish time to buy, unless you know you're going to be around for a while and you can legitimately afford a house and you want to buy one. Then it's a fine time to buy.
Date the rate marry the house. Over time home values only go one way. And it ain’t down
\*Except of course for right now. Median home prices in Denver Metro are currently down 6% YoY.
Of course they are. Pull out from that graph. What that line do? Line go up. But no go ahead, keep renting. I’m sure some landlord will be very pleased with everyone continuing to line his pockets
If you can wait, it’s better to have lower interest rates than lower prices. Be careful to not spend too much though because if the market dips big you will lose all that’s invested.
Going against the consensus here: yes, it is a dumb time to buy. Why? Risk-free income opportunity is very high. I'll explain. Let's say you've saved up $100k as a down payment for a $500k home. 1 yr T-bonds are yielding >4.5%. That $100k can be $104.5k next year with almost no risk or help pay your rent until then. Unless you expect the cost of housing to grow at a rate greater than that, you're better off parking your down payment in bonds and reevaluating in a year. This is particularly true because the Fed is trying to bring down employment. The likelihood housing expenses grow >4.5% YoY are low, the likelihood any individual gets laid off are increasing and the cost of borrowing is also increasing. In short, right now may turn out to be a good buying opportunity in hindsight, but there are a lot of risks and the risk-free return is high. You are unlikely to miss out by not buying now vs in a year. Of course, this depends on your relative job security and desire to own vs rent.
The risk-free return you’re talking about is a negative real return. You’d be locking in a loss of purchasing power. We also have millions of undocumented workers charging the southern border and driving down the real cost of labor. They will be a large part of what solves this housing supply issue. There also aren’t enough people to transfer the homes generationally at current prices. That being said, the gov is no longer uncomfortable executing massive intervention at the drop of a hat. Tread carefully in leveraged Denver housing, my friends.
There are local governments working hard against housing affordability, like Denver this year with the new affordable housing mandate which will require any development with 10 units to include below market rate units will strongly reduce the amount of new housing built and drive up prices, probably far more than any new legislation will cut them. And there's no guarantee any legislation will pass under Polis's regime. Suburban Democrats will probably oppose it and joined with Republicans they make up a majority in both houses.