News and Views in Estes Park, Colorado

The environment surrounding the national, regional and local real estate markets is converging into a perfect storm of buying signals for people who are looking to buy real estate in Estes Park. You’ve heard it before from real estate agents from time to time across the country that “now is the time to buy” without much to back up that statement. Right now, I believe that now is the right time to buy and here are several reasons why you should be looking to buy Estes Park real estate in the next few months.

Low Interest Rates

In March the Federal Reserve will stop buying mortgage-backed securities which was a part of the stimulus programs congress passed several months ago. The Fed has essentially been buying down mortgage rates to make real estate more affordable. Without the Fed buying mortgage-backed securities, rates will rise until they are attractive to investors once again. Where they will end up has been speculated to be between 5.5% to over 7%, depending on who you talk to.

A rise in interest rates is bad for people who need to rely on a mortgage to purchase a home. For example, if you were to buy a $300,000 home and had 20% as a down payment, an increase from 5% rate to a 6% rate would increase your monthly payment from $1,288.37 to $1,438.92 (an 11.7% increase) excluding taxes and insurance.

High Inventory

“Absorption rates” is a real estate industry term that describes the relative health of the real estate market. The absorption rate describes how fast the current inventory levels are projected to sell based on how many sales actually happen per month. Nationally, it is considered a buyer’s market if you have more than 6 months of inventory. Right now, we have over 13 months of inventory available in the Estes Park real estate market. Here is another post I wrote about absorption rates in Estes Park.

Being in a “buyer’s market” makes it easier to be a buyer. Basically, buyers are in more control during negotiations because of the increased inventory to choose from and less competition from other buyers. Therefore sellers are more likely to be more flexible.

Home Buyer Tax Credits

Both the first time home buyers tax and the existing homeowner tax credit will be expiring in the next few months. First time buyers can get $8,000 and existing homeowners can get $6,500 if they follow the rules correctly. If you are a first time home buyer, you must not have owned a home in the past 3 years and must be under contract to purchase a home by May 1st in order to qualify. Existing home buyers need to purchase a new primary residence and have to have owned your previous home for 5 years. You can buy a smaller home or a larger one as long as the new home will be your primary residence.

While it is my opinion that these tax credits should not be the ONLY reason you make a move, if you were already thinking about moving, then why not take advantage of the free money? If you are looking for more information on the tax credits, here is a great blog post by Jay Thompson filled with more information on taking advantage of the tax credit.

Bounce in Median Sale Statistics

I reported in my most recent monthly stat report that the median price of homes sold in Estes Park has increased in each of the past two months. While I’m not guaranteeing this was the bottom of the market, I will say it is a very solid step in the right direction for homeowners in Estes Park. If you are a buyer sitting on the sidelines waiting for our prices to bottom out, this might have been it.

Great Deals Available RIGHT NOW

• Half finished cabin and separate lot for $150,000 in Glen Haven
• Luxury home on 10 acres has reduced its price over $500,000
• 2600 square foot home with views in a great neighborhood for under $300,000
• Brand new 4 bedroom condo with 2200 square feet for $429,000

These aren’t the only deals out there. If none of these trip your trigger, contact me with what your ideal property is and we can see what deals are available.

Increased Buyer Activity

Since the beginning of the year, our office has seen a flurry of activity including several offers and excellent showing activity on all of our listings . January numbers were very solid with single family homes selling twice as many this year as sold last January.
Also, all of the sale prices in January were higher than the median value of homes sold in the last 12 months in Estes Park. That is very good news for anyone trying to sell a home in Estes Park; it’s even better news for those trying to sell a luxury home in the area.

Pent Up Demand

I hear plenty of talk about “pent up demand” in our market place. Personally, I know several clients who are waiting for the market to show a solid and unmistakable rebound before they will be ready to purchase real estate. Other potential buyers are waiting for the stock market to get back to where it was before the “recession.” The problem with waiting is that the first-movers are the only ones that will get the best deal. Everyone else will be buying after prices have already appreciated some.

Summer Weather is Just Around the Corner

Longs Peak and Mount Meeker from Lily Lake
Click for Full Size

Summer is coming, and you know you want to be in Estes Park during the summer. Let’s face it; summer in Estes Park is why everyone wants to live here. Highs in the low eighties, plenty of sunshine, beautiful snow-capped peaks, a gentle breeze. Just thinking about it makes me sad that there is still snow on the ground. If you buy now, you’ll have plenty of time to get the property ready so you can sit back and relax as soon as summer gets here.

Purchasing Real estate needs to be a long term, focused decision. The days of massive short term appreciation are long gone. Looking back at the history of Estes Park real estate values, we are known for long term steady growth without major downswings or upswings. In light of the recent volatility in real estate across the country, long term steady growth rates sound very appealing. Are you going to let this perfect storm pass you by?

***Thanks to millicent_bystander for the Estes Park storm photo via Flickr.

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