home prices continue to rise? (Colorado Springs: sales, real estate, 2014)

[willc86]

Hey guys, I was wondering how long home prices will continue to rise? Mostly by union? Ive heard its a great time to buy now since equity will be very nice in a few years. Maybe some of you guys are pros on this and guessing the market.


I read in an article that another 6% is estimated to go up by end of 2016.

and the homes I am talking about are the 1980s 200 - 220k

[Vision67]

Home prices are heavily influenced by jobs. Unemployment rates are falling here because people are exiting the job market.

In Colorado Springs, the job market remains weak. Most of the growth is in low paying jobs. People working in call centers for $10 per hour are likely renters.

I don't think it's possible to accurately predict home price appreciation. I think they will be flat at best.

[Kar54]

Originally Posted by Vision67

Home prices are heavily influenced by jobs. Unemployment rates are falling here because people are exiting the job market.

In Colorado Springs, the job market remains weak. Most of the growth is in low paying jobs. People working in call centers for $10 per hour are likely renters.

I don't think it's possible to accurately predict home price appreciation. I think they will be flat at best.

Agreed. It's also a contributing factor as to why rents are so high in this area. Many folks are being squeezed. If you can afford the down payment, with current interest rates you'll pay less monthly for a mortgage than to rent.

[beezle1]

I don't know that anyone can accurately predict what will happen with home prices and interest rates. But homes prices in COS have continued to rise pretty steadily since early 2014.

[StealthRabbit]

Unique Homes bought at a reasonable price will continue to be a pretty safe purchase in CoS.

It is a desirable place and has some excellent housing options.

I WOULD NOT buy a tract / sprawl home, as your competition is GREAT at resell. (and neighborhoods are 'commuter' / suburban / driving required)

I would strategically buy places that are attractive to active boomers.
Smaller home with NICE walkable neighborhood, with at least ONE of the following:

1. on a park
2. with a view
3. quiet street
4. exceptional street / living appeal
5. Near a college (for culture events)
6. Near a public Golf course
7. On a greenspace
8. With Mother-in-law qtrs.
9. near public transit
10. near senior center
11. near senior living / aging in place facility
12. beautiful garden spot...
    
    

There are several areas in CoS that fit these criteria

Buy wisely. I have a couple rules:
ONLY pay price that equates to a 1% monthly rental rate (i.e, if you pay $300k, it MUST be able to rent for $3k (unlikely!)
ONLY pay a price that allows you to resell tomorrow for 110% (cover your costs)
ONLY buy something that has a unique resell advantage over the normal market.

DIG for your deals (I have only used a realtor once in 30+ properties, that was a miserable and S-L-O-W experience.). A GREAT RE lawyer will cost you 1/10th the fee of a realtor. Lawyer is not required, but can add value in a difficult transaction (I usually use them on commercial properties with environmental / zoning issues). Residential is quite simple.

If you MUST use a realtor, get their stats from MLS. How many homes have they CLOSED in your price range, and what was the transaction time lag. You need a strong, capable negotiator, not a passive sales person.

Know what you want, and be prepared to buy it and close in 1 week!

BTW: there are a LOT better RE investments than a personal home... it is a liability, not an investment Remember that! Often the same amount spent on a good cash flowing commercial property will allow you to rent FAR better place than you dream, AND it can be in Tahiti!

[DoodlemomCoS]

All I know is the last 6 months we have been looking the homes we have been interested in have only stayed on the market for a few weeks at most. This is the northern part of CoS, 2800+ sq ft. and price range between $300k-$400K. And it seems like the buyers of those homes are buying at the current prices. We found the inventory going quickly with these parameters. And similar houses in Albuquerque are going for $40k-$50k less than CoS.
We ended up choosing a home a bit different than we expected but we are excited for a new adventure.

[Mike from back east]

The Gazette reports that Trulia expects the housing market in COLO SPGS to be strong in 2016.

Excerpt: "...a national online real estate firm suggests the Springs will be one of the nation's hottest markets next year, as well. Trulia.com, which offers housing information for buyers, sellers and real estate professionals, has ranked Colorado Springs as No. 6 among its top 10 markets that have strong growth potential for next year. Trulia's rankings - part of a recent report on current and future housing trends - are based on five market indicators: strong job growth over the past year; a tight supply of rental properties; affordability; a large pool of millennials; and data that indicate more people are researching a move to Colorado Springs instead of leaving the city."

Here's the link to the full report on Trulia.

[captain_hug99]

The market has been strong since this time last year. I helped my parents look for homes last fall/winter and homes in their range $175-250, were flying off the market. I should say, homes with a decent layout were going quickly. The homes in my neighborhood have also been selling within 60 days of going on the market.

[Wittgenstein's Ghost]

Remember that a lot of this increase in housing prices is due to low interest rates during an economic expansion period. The fed has been a bit later than normal in raising rates because the recovery from the recession was occurring more slowly than normal and inflation has been quite low. Those rates will climb some, and the elephant in the room is when the next recession will be. Both of those issues will probably dictate when this housing madness will end. You will not see 6-8% growth indefinitely. Housing historically has only barely beaten inflation in terms of appreciation (appreciation has average 3.5% nationwide since 1987).

[Vision67]

I expect the first Fed increase in interest rates that results in an up tick in mortgage rates to motivate buyers who have been sitting on the fence to move.

I also think the Fed will then not move again for several months.