Is now the time to invest in real estate in Colorado?

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Is now the time to invest in real estate in Colorado?

If you have been asking yourself, "Is now the time to invest in real estate", you will want to read this information!is now the time to invest in real estate

Buyers are looking for a guarantee they are buying at the best possible price, not necessarily buying at the best possible time or the best possible cost. Let me explain what I mean.

To answer that question, is now the time to invest in real estate? you have to recognize the cost of real estate, the home, is a combination of the sales price plus the mortgage interest rate you will be paying on the loan. A couple of specific reports of interest to our industry were published the other day which will help me make my point.

is now the time to invest in real estateHome sales prices:
The National Association of Realtors (NAR) released their 4th quarter housing analysis survey. Within the report, they revealed that residential home sales increased 15.4% within the fourth quarter during the 3rd quarter. In addition they indicated that selling prices continued to be stable during the year:

The nation's median existing single-family selling price was $170,600 during the 4th quarter, up 0.2 % from $170,300 during the 4th quarter of 2009.

Any new buyer that delayed an investment could find comfort from the simple fact that selling prices haven't elevated. On the other hand, another report released that gives quite another perspective on the question of "Is now the time to invest in real estate?"

Home Mortgage Rates:is now the time to invest in real estate
The Primary Mortgage Market Survey was in fact released by Freddie Mac pointing out that the 30 yr fixed interest rate home loan had been at 5.05%. Frank Nothaft, vice president and chief economist of Freddie Mac stated:

"Long-term bond yields jumped on positive economic data reports, which placed upward pressure on mortgage rates this week...As a result, interest rates on a 30-year fixed-rate mortgage rose to the highest level since the last week in April 2010."

Therefore home prices have remained stable but mortgage rates have increased significantly during the last 3 months. What does that mean for a buyer thinking about purchasing their home this year?

The home price is the same. It simply costs more. Keep that in mind when looking for an answer to your question: Is now the time to invest in real estate?

But here's what you really need to understand: all lenders qualify on the cost of the home, not the sales price of the home. Meaning we base your maximum qualification based on your proposed monthly payment, not off the sales price. So continuing to delay might mean you have to settle for a smaller home tomorrow vs the larger home today!!

So, is now the time to invest in real estate? What does that mean?

is now the time to invest in real estateRegardless of whether selling prices drop 10% this year, the cost of your home increases in the event that mortgage rates increase more than 1%. Buyers really should not be concerned where prices are. Rather, you must be concerned about what the overall costs might be later in the year.

If you don't currently own a home, it is the time to invest in real estate.

If you do currrently own a home, it is the time to invest in more real estate!

Call us today and see if you qualify to start creating your real estate investment portfolio. The timing couldn't be better, as interest rates dipped down a bit yesterday.

Posted by

Colorado's Preferred Home Lending Resource

Views and opinions expressed on this site are not necessarily those of WR Starkey Mortgage. 

colorado lender      Phone: 720-289-6383  

   Jim Vogt  


     NMLSR# 257588  

   Ruth Vogt   


NMLSR# 257576 

Comments (5)

Kellie Morrissey
Keller Williams Realty Success LLC - Littleton, CO

Ruth your nailed it!  The power of that interest rate is far more important than $10,000 to $15,000 and more depending on the size of the loan.  Buyers should really consult with a great lender (like Ruth Vogt) and their Realtor when considering buying a new home, to review what the rate will do to their monthly payment....

Way to go Ruth!

Mar 17, 2011 01:39 AM
Karin Lundeen
Keller Williams Realty - Denver Southlands - Centennial, CO
Realtor Centennial Homes For Sale

Great information here Ruth!  Our buyers need to consider interest rates and overall costs and we need to be getting them this message! Thanks!

Mar 17, 2011 02:01 AM
Jason M. Keith
Caliber Home Loans - Parker, CO
Equal Housing Lender

Great information Ruth and you are absolutely correct.  Too many buyers will wait too long and miss out!

Mar 17, 2011 05:25 AM
Nancy Murray
Keller Williams Clients Choice Realty, Colorado Springs, CO - Colorado Springs, CO
Your NICE Real Estate Agent in Colorado Springs

Ruth, Great write-up.  This is the first time I have heard about "cost" of real estate vs. "sales price."  Certainly something all our buyers need to be aware of.


Mar 17, 2011 03:08 PM
Gwen Poindexter
Gwen Poindexter WR Starkey Mortgage LMB#100025921 - Aurora, CO
First Choice Colorado Lender FHA VA Conv

Ruth, I couldn't agree more.There is no time like the present to invest in the Colorado real estate market.  Whether you are a first time home buyer (it doesn't get any better) or move up buyer, what are you waiting for......

Mar 21, 2011 04:10 PM