Investing in Northern Colorado Real Estate
Financial Planners and experts in building wealth tell us that we should be investing to make our future dreams become realities. Along with various strategies, many guide us to Wall Street, even though it can be extremely volatile.
But a wonderful, tangible source to build wealth is right under our noses.
If you happen to be a homeowner in Colorado, this map from @KeepingCurrentMatters tells us that, on average, you might have gained $60,000 - $75,000 in equity in 2021. The continual hike in values is caused by the age-old tug between supply and demand. Although there is a great deal of building going on in Northern Colorado, the region where I specialize, that supply is not meeting the demand.
People continue to come to Colorado. BizWest Staff, August 31, 2021 said: “Projections are for the region to add hundreds of thousands of new residents over the coming decades. Much of that growth will occur in Broomfield, Larimer and Weld counties. Weld, in particular, will attract residents because of its less-expensive housing, available water and land, and proximity (in southwest Weld County) to Boulder and the Denver metro area.”
According to the World Population Review, the City of Timnath, Colorado, right in the middle of Fort Collins, Loveland, Windsor and Severance, is “the fastest growing city in Colorado over the past 10 years, having grown 1158.70% since 2010.”
Here is the growth found over the past 12 years in other cities in Northern Colorado:
Source: World Population Review
So, what does this mean for you?
First, your equity can help you to refinance from a high rate mortgage. Talk with your mortgage broker to see if this is a good option for you! There is a cost to refinancing, so check how long it would take to recuperate those fees and weigh that against how long you expect to stay in the property.
Next, this chunk of equity can be used as a downpayment for your next home as you go through life changes and want to “right-size” your property. With the median property values being in the $550,000 range, a new home purchase with conventional loan often requiring 20% down would make your down payment around $110,000. That $75,000 in the past year, and even more if you’ve lived in the house longer, will go a long way to meeting that downpayment need.
Another consideration in using your property as an investment is to use your current home as a rental and find a new property in which to live. It’s likely in this market to have enough equity to cash flow your home as a rental property since home values and the rental markets have both gone up significantly. Being a landlord is not for everyone, so do some self-evaluation, but it could be a viable option.
Understand this is a competitive market. Setting that expectation is important so you can be as ready and able to make a great offer when the right property comes along.
Work with your mortgage broker to get pre-qualified for a comfortable payment range. If credit is a problem, your lender can connect you with agencies to help you raise your scores.
Reach out to me, or a local real estate agent you feel comfortable with, to:
Help you gain insight into the market,
Learn about neighborhoods with amenities that fit your lifestyle and
Obtain guidance in what the buying process entails.
**Having a professional alongside you will make the difference in your success!**
Start driving around different areas to see where you could see yourself living.
JUMP IN! Even though prices are high and rising, we see the prices only going up from here. While interest rates are rising slightly, they are still in the 4-4.5% range, well below historic averages, so this is still a good time to buy a home.
I recommend seeking advice from trusted professionals throughout your journey.