We have a contract to buy in Co Springs, but mortgage companies are telling us it's a declining market We

Asked by Becky, Newport, RI Wed Apr 30, 2008

will need to sell in summer of 2011, is this a good time to buy?? We're paying about $93/finished sq ft and on a 1/4 acre

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David Chambe…, , Saint Petersburg, FL
Sat Jan 24, 2009
Homeownership is long term, if you need to sell in two years you should probably rent.
1 vote
Matt Pickett, Agent, Colorado Springs, CO
Sat Mar 5, 2011
No one can guess the future. Go ahead and put a roof over your head
Web Reference:  http://EveryListingNow.com
0 votes
Sassy Skelton, , Colorado Springs, CO
Sat Jan 24, 2009
IMO, the market here didn't really dramatically climb before the down-turn, so while prices have come down, I think data on trulia show that they've stablized more or less.

There are some GREAT deals to be had. New builds are currently going for nearly $100,000 less than they were a year and a half ago, with free finished basements.

That said.

Check out http://www.zillow.com and see if that 93/finished is 'good' or if its high, sounds high to me based on my memory of the last time I was checking.

For such a quick turn around, I would NOT expect that you'd make much money when you sell. You MIGHT make enough to cover closing costs and realtor fees, etc. However, you'd have the tax write off for the interest each year and may decided to try out the rental market for a few years (2011-2014?) before you sell and the market has bounced back more. WIth mortage lending being tighter these days, the rental market is pretty strong.
0 votes
Mary Kelly, , Colorado Springs, CO
Sat Jan 24, 2009
Becky,
It all depends partly on your tax situaton. Let's assume the market stays stagnant or even falls a little. Okay.

For example, if you can buy a house for $300,000 now and sell it in 3 years for $300,000 (minus the 6% plus closing fees, so guess 7%) so you have $279,000. Some people don't think that's a good investment.

But you have to live somewhere for 3 years, so a $2,000/mo (min) rent x36 months is $72,000 with no tax breaks.

At least with a primary residence you have tax breaks.

However, if you think you are going to be in CO Springs less than 3 years, you might want to reconsider buying simply because many very good homes are taking 6-9 months to sell right now. That is partly because buyers are wary and partly because many potential buyers are not able to secure loans at low rates because of the credit crisis. That should change by 2011, but it is something to consider.

Just my opinion. :)

Best of luck!
Mary Kelly
Economist
MaryEconomist@aol.com
Web Reference:  http://www.kellyseminars.com
0 votes
Sassy Skelton, , Colorado Springs, CO
Tue Oct 7, 2008
Its a good time to buy because there are currently more houses on the market than buyers so you should be able to find a good purchase. However, even in a booming market, return on your house in the next few years will be limited by the amount of new build happening at the time. Just something to bear in mind given the limited info....
0 votes
Margo Fredla…, , 80525
Thu May 8, 2008
Colorado Springs was one of the fastest growing areas along the front range of Colorado just a couple years back, now it's slowing down. However, it always depends on the specific area of the Springs.
0 votes
Brian L. A.…, Agent, Colorado Springs, CO
Wed Apr 30, 2008
Hi Becky

Real Estate is Local...so local as to differ from neighborhood to neighborhood. Some neighborhoods in Colorado Springs are experiencing modestly declining prices while some are stable and a few of the most desirable areas have even increased.

Unlike some markets across the United States, Southern California, Las Vegas and Southern Florida to name a few, the 2005 study of home prices found the Colorado Springs market prices not to be much over inflated so when the current downturn began there wasn't much value to be lost.

The Colorado Springs market is currently showing stability with about as many homes coming on the market as are sold each month and while this leaves the market in an oversupply, buyers market position, the market remains healthy.

I agree with Mark's observation that we are seeing signs that the market will begin it's recovery in early 2009 once the uncertainties from the Presidential Election and the current reorganizations in the lending industry all shake out.

So, based on historic real estate appreciation trends, if you purchase now; in a stable or appreciating area of Colorado Springs; and buy at the right price for the current market based on a solid market analysis and uninfluenced appraisal; you should be in an ok equity position to sell in late 2011 and at least break even after costs. Of course this is barring any local or national catastrophe that would make all this moot.
0 votes
Mark Wallick, Agent, Colorado Springs, CO
Wed Apr 30, 2008
Becky,

Since you will need to sell in 2011 you should be ok to purchase now. I think the market will come back in 2009 and that will give you a couple years of growth before you sell. Of course you will need to make sure that you are buying right give our current market. If you do the math and feel that a couple positive years will not give you enough appreciation to sell in 2011 then you may need to re-think the purchase.

I've run into the "declining market" comment from a couple different lenders as well. The lending and underwriting world has changed so much in the last year that ultra-conservative is the norm. Also, appraisers are only going back 3 months to find comparables so you need to make sure there are very recent sales to support your purchase price or you could have additional issues on getting a satisfactory appraisal.

Also, be careful about using price per sq ft as a rule for finding a good buy. The only way to determine if you are paying fair market value is to look at what has sold recently in the same neighborhood. If you have any additional questions contact your realtor or email me at mark@markandshari.com

Thanks,

Mark
Web Reference:  http://www.markandshari.com
0 votes
Eddie Hurt, Agent, Colorado Springs, CO
Wed Apr 30, 2008
Becky;
If you send to me the zip code where you are wanting to buy I can check to see if the lenders I recommend consider it a declining market. There are very few declining markets in Colorado Springs.

Also, it is a great time to be a buyer in the Colorado Springs market; inventory is high but level, mortgage rates are excellent and currently buyers are somewhat scarce. What this all means to you is that is seems are market is at or near its bottom, you have great buying power with the low mortgage rates and you have fantastic clout as a buyer. The old axiom "buy low and sell high" is absolutley correct.

One word of caution is with new developments. New developments offer great opportunities IF you get a great deal. If you overpay in a new home development, you are at great risk as you will be competing with them in 2011 when you plan to sell. Please contact me with any questions.
Web Reference:  http://www.EddieHurt.com
0 votes
Kathy Torline, Agent, Colorado Springs, CO
Wed Apr 30, 2008
It is considered a declining neighborhood in some sections of Colorado Springs, maybe only about 10% of the city. The declining market classification will affect the amount of money you can borrow on a property.

I think it is a great time to buy in the city, especially if you know that you are buying at the right price. Your Realtor (if you don't have a Realtor I'd be glad to help) should be able to do a CMA (Comparative Market Analysis) for the house you are buying. This will give you a good starting point to make sure the house is priced correctly.

The square footage price varies vastly with different neighborhoods and different parts of the city. So it is a good starting point for comparisions, but you need to make sure it is comparable with other properties that have sold in the same area. Some areas of Colorado Springs are going to see more decline in prices, some areas are stables, and some areas are already starting to see an include.

If you have any questions, feel free to call or email me. I have a chart I've done on pricing per sq foot by zip code in the city; you may find it helpful.
Web Reference:  http://www.kathytorline.com
0 votes
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