Forget selling for big bucks. With a steadying market in NoCo, it might be time to buy.
Look around at that three-bedroom palace you bought 15 years ago for $220k: you know, the one that can easily fetch almost a half-mill to a cash buyer, like, this afternoon. You might be dying to sell it and cash in. According to Brandon Wells, president of The Group, maybe you should hold on for a second. It might be time to buy another. Well, if you’re a cash buying investor.
Over the past decade, as the U.S. economy steadily reloaded and the Great Recession receded into memory, the Northern Colorado housing market hit the weight room. The results were double-digit appreciation of home prices and a shortage of homes for sale. “We call that a ‘mosh pit market,’” Wells says. “Unfortunately, this led to sticker shock in Northern Colorado communities, especially for homes under $400,000. And that was unsustainable. Now we need a healthy stabilization in our marketplace.”
This normalization, as Wells sees it, is happening as we speak. A buyer’s market appears to be looming in 2019, particularly for investors.
“In the past 24 months, we’ve seen a huge influx of multi-family apartment complexes in the region, and people are also purchasing single family rentals because they believe there is opportunity long term to have those properties filled and to generate cash flow for themselves,” Wells says. And with steadily increasing supply, he predicts that prices will begin to level off. “Going from eleven percent appreciation [over the past decade] down to a more realistic four percent is healthy. So as long as you don’t bank on making a ten percent profit on your home, it might be worthwhile for you to find another [purchasing] opportunity, which can be a great way to accumulate personal wealth.”
Rising prices, while challenging circumstances for new buyers or investors searching for a quick flip, can be beneficial for existing homeowners because they lead to more available equity for things like buying an additional property and diving into short- and long-term rental markets, like those listed on platforms like Airbnb or VRBO. In the long run, Wells says, slow and steady favors both the housing market and the overall economy. And quite possibly, you.