I’m sure there is a lot of reason’s why you may feel you shouldn’t buy a home right now, but here are reasons you should.
1. You are an investor with a long term view to acquire properties that should appreciate during the next cycle while cash flowing in the short term. Great investors don’t buy in hot markets, they buy when no one else wants to. In Denver, one of the best deals of this type are in close proximity to current and planned transit oriented developments all across the city. Check out the Overland neighborhood of Denver and the University Hills neighborhood.
2. You are not a current home owner and have good credit. You sir/or maam are a hot commodity. You should take advantage of that. The smart money may realize that the current low interest rates on mortgages + downward pressure on home values = A great deal. You have a chance to ‘lock in’ a payment for your living space. Your rent in many areas of Denver is expected to rise along with inflation and eventually demand. Inflation when you own a home is a good thing. In many ways, inflation can actually help the home owner. The payments over time ‘seem’ more affordable as competitive wages adjust to the cost of living changes. In addition, home values traditionally keep pace with inflation over the long term. By picking the right area, you can combine the gains from inflation with actual appreciation that comes when an area is revitalized (Gates redevelopment in Southeast Denver, Platte Park) or business moves into the area (Check out the Fitzsimmons area of Aurora).
3. You need a place to live. Sure you could rent a place, but you’ll soon be back in the same situation again. Many homeowners will now be open to leasing a home with the option to buy it. This is rarely an option in a hot market.
4. Your current home is inadequate. Often, you just need to make a move. In this case, the overall market just doesn’t matter. When you sell a home and buy a home in a similar market, it’s likely that the value that you think you are losing is balanced when you consider both sides of the home equation. The increased inventory can make it hard to sell but it can be also give you more choice when its your turn to buy.
5. You just want a good deal. Good deals are to be had if you know where to look. If you want a good deal, buy a home in a market that is continuing to appreciate even now. For example, Denver Highlands up 10%. “But I thought this was a buyer’s market”. Or buy in an area that you expect to recover first such as DU, Rosedale, Washington Park. These are all close to the popular parks, nightlife, and of course Denver University while still having easy access to downtown and the Denver Tech Center. Trying to locate a foreclosure deal in one of these neighborhoods is highly unlikely. Rather than looking elsewhere at foreclosure in depreciating areas, buy the best VALUE in the best neighborhoods that you can afford. Now that would be a good deal.