Friends,
I’m excited to share that I am starting my Real Estate Newsletter again. In each email (once or twice a month), I will share a few facts and commentary in real estate & investing. I focus on Colorado but much of this can be applicable around the country as I keep an eye on other markets as well. I hope you enjoy.
Have a blessed weekend!
Andrew
Fun Fact #1:
The Federal Reserve recently raised rates a half-percentage-point from .33% closer to 1%. Mortgage rates as of today sit around 5.36%.
Source: wsj.com, Bay Equity
Commentary: I think we can all agree that there needs to be some course correcting at the Fed level and maybe, just maybe, this increase will help curb inflation. However, discretionary spending for the every day consumer is going to get tight, which could affect lease payments or booking short term rentals.
Buyers, you might be priced out of your desired monthly payment for now, but the good news is that if you can afford it, you will have less competition since other buyers may be knocked out of the current race.
Sellers, keep in mind that your pool of buyers might be reduced if you are getting ready to sell. This is not neccesarily a problem, just a reminder to price, stage and list strategically.
Home Owners, be glad you own.
Long Term Lease Owners, vet your applicants with scrutiny and be prepared in case your tenants mis-prioritize their housing costs.
Short Term Lease Owners, bolster your savings account to cover a possible shortage of bookings.
Fun Fact #2:
Median Sales Price (Colorado Springs) April, 2021: $420,000
Median Sales Price (Colorado Springs) April, 2022: $480,000
Source: COS Realtor Services Corp
Commentary: That’s 14.3% appreciation based on market sales price. The average annual return on the stock market is 10%.
Buyers, owning is better than renting.
Sellers, plan for good sized profits but don’t get greedy. If you over-price, your home could still sit on market longer than you want, reducing your competitive offers.
Owners, this is great news. However, you might be thinking that this cannot continue. Good news! Even if this trend does not continue year-over-year, we anticipate that worst case, it will slow to 7-10% year-over-year, which is still very good.