Why we have the "Perfect Storm in Real Estate"...

Welcoming the storm & all that it brings

You've seen the buzz all over the news, Denver Post, and on Facebook.  Why now?  What is happening to create the ideal combination and why is this important to you (whether you are in the market to buy/sell or not)?

The 1st variable:  Low Inventory. Why do we have such low inventory?  (click here)
The idea of using your home as a piggy bank has completely vanished from the market.  Homeowners are beginning to make changes to their current home instead of moving to a house that fits all their needs.  Consumer confidence has been low in the past and homeowners who have already taken a hit in the stock market are not willing to withstand a 2nd blow with a low home sale.

The 2nd Variable:  Increased Buyer Demand.  Why do we have so many buyers now?
Low interest rates (below 4%).  The Federal Reserve Board announced in August of 2011 that they were going to keep interest rates low for the next two years.  Now, what is "low"?  For some of us, low interest rates would be below 6% or for others, they consider low rates below 5%.  Low does not necessarily mean below 4%.  (Denver Post - record low rates)


Lender Ease in the Market:  Getting a loan is not as hard as it has been in the past.  Most lenders have a streamlined process that puts the Buyer's mind at ease after the first two weeks.  The knee-jerk reaction that we witnessed two years ago has slowly become more stable and the process has become less complicated.    Did you know that most FHA loans are assumable?  How does this help you when you re-sale your house?  The Washington Post says it best -- click here.

Rental Rates are on the Rise:  (Denver Post article)  With apartment vacancy rates dipping below 4.9%, landlords are charging more for their leases and are signing 2-year lease agreements with their tenants.  Buyers are understanding that purchasing a home (receiving the tax benefits of the interest paid on their home and becoming a homeowner) is far better than paying a large monthly rent payment.

We need a good storm in Colorado!  With a good storm comes growth and stability to what once was a stagnant area.  Job demands grow with home sales, builders are hiring again, permits are being pulled.  We appear to the outside markets as a more desirable area to families, small business, and large corporations.