Real Estate Market. Thoughts?

[Dave_L]

Things are out of control here. We've touched on it in some other threads but no dedicated thread. What are your thoughts on the real estate market? It has to pop again at some point, right? Is Colorado insulated enough based on the masses of people seemingly flocking here? So many people are selling and taking the crazy equity while they can it makes me wonder on what to do.

Do you see an end to it? Would you sell and take what you can now and roll it over to a different home if you could find one with some nice upgrades you wanted, even if you don't need them yet? Try to wait a little longer and let it grow even more?

How do you see the Colorado real estate market, current and future?

[Wulf202]

I have a set price when my house gets to im selling.

Yes we're in another bubble. Yes it will crash. How bad depends on many factors but I see financial articles saying businesses are worth 250mil and have no assets and no real income. It sends red flags of the dot com crash.

[Firehaus]

A 10% annual increase in your home isn't really a bubble that will pop easy. Look at the bubble markets like California where a 200%- 300% increase in value happened. That's a bubble.

This is just a tight market due to under supply and over demand.

Rents increased 12% last year in the metro area as well for the same reason. 3.9% was the metro vacancy rate for apartments.


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[ruthabagah]

A couple of things to consider for Colorado where Real estate prices are high for 3 factors: low inventory, a good economy, and low interest rate.

Disrupt any of the 3, and the market will either go down, or will stabilize itself.

The economy here in CO is strong for now, and will probably remain like this for the time being. The big unknown, is the oil market. Our economy is dependent of it, and there is rumor of big layoff in some of the companies based downtown....

Inventory, is not catching up. Now, a lot a baby boomer are looking into downsizing, and we may see a surge of available home this spring. But it should not impact properties value.

Interest rate: My take is that they will remain (artificially) low until the next presidential election.

[def90]

The problem is that sure you can sell at your inflated price and make some cash but you then still need to buy a new place which will be at an equally if not more inflated price.. Are you still making money when you look 10, 15, 20, 30 years down the road?

[Irving]

I'm afraid I'm not ready to take advantage of this bubble. Want to sell before it pops and buy land.

[Dave_L]

The problem is that sure you can sell at your inflated price and make some cash but you then still need to buy a new place which will be at an equally if not more inflated price.. Are you still making money when you look 10, 15, 20, 30 years down the road?

My thoughts with that is my current home will take any hit the next purchase would also. I look at what hard cash I actually have invested in the home (my original down payment). That's all I really risk losing, in my opinion. If I can take that small amount and turn it into 100k equity for the next home, that leaves me at that same cash out-of-pocket expense for the next house. So if you pay 350k for the new home, it loses 100k in equity, you're still only X amount in for a larger home. I wouldn't look at any of this if it meant bringing extra cash to the table. It's all funny money right now.

[Firehaus]

There are still foreclosures and short sales going in houses with land outside the metro area. Good deals ( compared to the metro area) if you want to drive.


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[Wulf202]

A 10% annual increase in your home isn't really a bubble that will pop easy. Look at the bubble markets like California where a 200%- 300% increase in value happened. That's a bubble.

This is just a tight market due to under supply and over demand.

Rents increased 12% last year in the metro area as well for the same reason. 3.9% was the metro vacancy rate for apartments.


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greeley is over 30% increases and 0.9% vacancy rate.

A house on my block sold for 32k two years ago is listed for over 100k. They did maybe 20k of improvements.

[PugnacAutMortem]

Would you sell and take what you can now and roll it over to a different home if you could find one with some nice upgrades you wanted, even if you don't need them yet?

That's exactly what we did. Sold our house that gained $60k in equity inside of 3 years, paid off tons of debt and put a down payment down on a house that was twice the size in a very new neighborhood that only has anywhere to go but up in value. It was totally worth it for someone in our situation, but YMMV.