Here’s a question on the mind of some buyers today…
“Should we just wait?” They see how active the market is. They see prices up and inventory down. They wonder if they would be better off to wait.
There are two powerful forces at work in our market and two key reasons why we think the greatest risk for a buyer today is to wait.
The first is prices. If you research the last 40 years of prices in our market what you will notice is that Larimer County’s average yearly increase is 5% and Weld County’s is 4%.
You will also notice that prices increase much more often than they decrease. In 40 years, prices have gone up in Larimer County 34 times and down only 6 times. The most prices have ever gone down is 3%.
The second force at work is interest rates. Rates today are essentially half of their 40-year average. Money is on sale, half off!
When rates increase (like they have in the last 6 months), you can measure the direct impact to a buyer’s payment using the 1%/10% rule. For every 1% increase in rate, the payment increases 10%.
So, if a buyer chooses to wait, the odds are they will be met with higer prices and higer interest rates.
We just released a video which covers this important topic. Check it out below.