06.27.08
Is the Colorado Springs Real Estate Market Making a Rebound?
I just finished listening to a program about the state of the real estate market across the nation. There are a lot of great things happening and many major predictions are calling for a strong real estate year in 2009. I think this is very possible…both for our nation and for the Colorado Springs real estate market. Why is this? Because a lot of home buyers who have been sitting on the fence waiting for things to begin appreciating again are starting to make their move. Buyers are realizing that now is the time to make a move and they are acting in droves.
First of all, real estate is a viable way to grow wealth, isn’t it? Think of the people you know who have accumulating great wealth over their lifetimes. The vast majority of them have real estate holdings, don’t they? According to a study conducted by PMI Group, Inc. (a Private Mortgage Insurance Company) that was released in February, investing in real estate brings a return that most other investments cannot touch. They looked at 5,000 homeowners who put an average of just under 20% down on their home purchase. They learned that their return on investment (ROI) after 5 years was approximately 135%! When they held a home for 10 years, the return was 301%. Amazingly, after 15 years, homeowners’ ROI was 495%. I don’t know of any other investment vehicle that nets this sort of wealth development. Do you?
If you look at the last 18 months, values may have been flat (or even declined). However, as they mentioned in this program, “those who invest in real estate are not day traders”. They understand that real estate needs to be held longer. When those who purchased real estate 18 months ago sell in a couple of years, they are going to recoup their initial investment with numbers similar to those in the last paragraph.
There are normally two costs when someone buys the house…the cost of the home and the cost of the financing. Allow me to play Devil’s Advocate. If the real estate market declines 8% over the next 6 months (which NO ONE is predicting…especially in our Colorado Springs real estate market), if someone buys a home now they will still be doing better than if they wait 6 months and finance with a 1% higher interest rate.
The other part of the picture (of course) is the fact that there is more inventory out there and better deals to be made now than anytime in the last 5 years. Now is the time to make the move. You may be more excited about finding a home that is safe and comfortable…however, you cannot ignore the fact that a home is a great way to grow your wealth. Contact me if you are looking for a great Colorado Springs buyer’s agent.
