When is Washington ever right? When are economists ever wrong? Especially if you are an economist, or a politician.
So...here is my thought. If you are buying a personal, primary residence based on wanting an investment...then you are buying for the wrong reasons. Your personal home is an emotional buy; and there are tons of good values out there right now, especially for those needing to sell - getting married, getting divorced, empty nester, etc. etc. and people have a need - willing seller + willing buyer = motivation. Throw in MUST SELL NOW and you have desparation, causing a good deal! However, your primary home is never really an investment, now is it? It's only an investment in lifestyle choice, a place where your kids will be brought up, go to school, have birthdays and give you memories of playing touch football in the front yard.
If you are searching for an investment, where you'll eventually make money on the buy, that's another story. Steamboat's got great opportunities for investments, but don't count on most any cash flowing. If you are able to pick up one of the many condos/townhomes available at below what a seller paid for at purchase, many buyers would be happy. In today's market, all buyers want to feel the seller's pain before they will sign on the dotted line. And there are those available if you have the right broker dig deep and find out the history of each property to benefit you before you make the offer.
So, you're right on all counts - but in purchasing real estate, it's so important to look at what your lifestyle dictates and how the property is going to increase your quality of life. That's why people buy here; because they want that little piece of the wild west so they can share their bragging rights. For most, the clock is ticking and they don't want to wait to enjoy the natural outdoors, friendly people, and take advantage of giving their kids a place to breathe. Everyone wants to where "bottom" is. None of us knows. But I do know one thing I can share with you...the clock is ticking and you may want to ask yourself, how long do I want to wait before I decide to change my life, and do what I've always wanted to do for me and my family?
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Thank you again for your input,
Instead, as an Exclusive Buyer Agent, what I am advising my clients is to create your own reduced price rather than wait for it. Sellers have told me directly that their asking prices today are inflated because they know buyers want to feel they got a good deal, and so they want to have plenty of room to move down in their price. To find that bottom we need to make an offer.
Be willing to be proactive to get what you want, at the price you want it, and maybe this ski season you'll be in your own home enjoying it rather than guessing about it. Call me at 970-846-3728. I don't have any seller's prices to protect; only buyers I want to make happy.
Good question! You may very well be right about the interest rates rising. However, I don't know of anyone who has been able to accurately predict when that rise might happen. Essentially you are taking a big gamble for a potential bigger payoff.
Let me put out a scenario to see if it's worth the risk for you. Say you were interested in purchasing a 2 bedroom condo in Steamboat for $225,000. With an interest rate on a 30-year fixed mortgage hovering around 4.75%, your monthly payments would cost you $1174. If in three months the interest rate jumped to 5.75% and the price reduced to $200,000, you monthly payment would drop to $1167. Not much payoff there. It the interest rate rose to 6.75% within six months and the price of the condo dropped to $175K, your payment then would be $1135.
Now $60/month may be a significant savings to you. But again you are only left with "what ifs." Sure an interest rate hike of 2 percentage points and a condo price reduction of $50,000 in six months is a possibility, but is it likely? I don't know the answer to that. Is the gamble worth the risk? Only you can answer that.
A new question then comes back to you, Mike. "Why do you want to buy in Steamboat right now?" That is a conversation best had with your broker. How you answer that question can help your broker tailor a home search to fit your needs, be that first time homeownership or investment property. Good luck to you and I hope this answers your question. John James-Broker Associate-Coldwell Banker Silver Oak, Ltd. 970-846-0797
As you know, it is difficult to predict when interest rates will rise but what we are experiencing now are lower interest rates than in the last 30 years. From the early 80's to the early 90's rates gradually fell from the 13% mark to 7.39%. All through the 90's there was not much of a change. In 2002 there was a drop and also a drop in Steamboat housing prices. When Steamboat was at the height of selling properties, and the prices were unnaturally elevated due to speculation & supply and demand after Interwest bought the ski mountain, the rates were still only in the mid 6 range. Now we see prices on property here as low as they have been in over 6 years and interest rates are lower than in 30 years. if you have the means there are two really good reason to purchase now - low prices (especially with all the short sales and foreclosures) and low interest rates. talk with a Broker to see the significance in lower rates vs. holding out for a bottom that may rise while you are waiting. Best of luck to you...Michelle Diehl - Broker - Prudential Steamboat Realty - 970.846.1086