Rencently, a couple I know bought their first home before Fall in Fort Collins, CO. With the current housing condition, they were second-guessing their home purchase, wondering if they could have gotten a better deal, and more profit on their investment down the line had they waited a bit longer.

When investing in properties, buyers need to look at the bigger picture. This article is meant to shed some light on the current housing market trends and what the falling prices across Colorado and the US housing market really means. 

The US Housing Market was predicted to decrease by Location Inc.’s Scout Vision computer model a couple of years back. The same company made a prediction earlier in 2017, warning that the Front Range would see a peak in prices in the fourth quarter of 2019, followed by a decline of 15.6% that would last over a five-year window. The price drops are expected to go as high as 10%. “We still predict that the price will go down, more in some markets than in others,” Andrew Schiller, CEO of the Connecticut-based analytic firm, predicted. 

These early predictions, combined with the knock-on effects of Covid-19, have adversely affected house prices. Both demand and supply are decreasing due to the ambiguous nature of the market. People are shopping less for homes, and that too affects house prices. People do not want to invest when the market is shaky because they are uncertain about future incomes and home price fluctuations.

So what do these falling prices mean to us? 

Lower house prices make it harder for some people to afford mortgages. House prices drop because of higher interest rates, and mortgage-holders pass on higher mortgage rates to banks. When people buy homes during this time, they end up buying more expensive houses. 

Many who bought their homes earlier may feel that their house value has decreased with the recent price drop. It’s not likely. If you purchased your home in February this year, let’s assume the median price for your home was $545,000. If your home was purchased in February 2021, the median price was $425,000. And back to the current value of your home which stands at $625,000. So have you lost money? Again, if you bought a house five years ago for $320,000 and sold this year for $580,000, without which, the home could have been sold for $620,000, have you lost any money? 

Housing is an excellent and stable investment for the long run. The primary way to make money investing in properties is through appreciation. With this strategy, you can buy a property and sell it later at a higher price than you bought it for. This strategy relies on market forces, so risk is always involved. If done correctly, this strategy can yield fantastic results with long-term investment benefits.

Whether you are interested in the investment potential of your current home or one you are going to buy, it is crucial to understand how real estate creates wealth. 

• A property’s location, development, and improvements are the primary ways to increase a residential or commercial property’s value. 
• Over time property value may increase due to factors such as inflation.
• Renting out a commercial or residential property can provide an added fixed income until you sell it.

If you plan on purchasing a home soon, don’t forget to schedule a home inspection before signing the dotted line. Our Inspections ensure that you are getting the full picture of the health of your home. A thorough inspection process can also help you decide whether or not to move on to closing, renegotiate the sale price, request repairs, or cancel the sales contract. Call Axium Inspections at 720-740-2338 or schedule online at axiuminspections.com to get a professional and unbiased report of your investments.