It’s undeniable: times are uncertain right now, and Colorado isn’t immune to the shifts in the economy. We’ve seen buyer activity change, and in many of our conversations with clients and friends, we hear a common concern: isn’t it too risky to buy right now?
The answer will never be the same across the board: as always, whether or not it makes sense for you to buy a home at any given time depends on your plans for the future, your lifestyle, your financial situation and much more. At the same time, when weighing the risk, it’s important to consider the flip side: what are you losing by not buying?
These are a few considerations to keep in mind as you decide whether now is too risky a time to buy.
Diversification of Assets
When economies shift, we see downturn reflected in multiple ways: higher unemployment and a lower stock market are a couple of key markers. For those who have assets they’re hoping to grow in order to be able to retire, buying real estate in addition to any stock market investments is a way to mitigate risk — diversifying assets is the real-world application of the age-old wisdom, “don’t put all your eggs in one basket.” When uncertainty abounds, spreading out your wealth can be a helpful strategy, whether that means investing in a rental property or moving into your first owned home.
Predictability of Expenses
In a time when the cost of daily goods is uncertain and job stability is a luxury, predictability has significant value. Rent can change at the end of each lease, and the cost of moving often leaves people stuck in their current situation.
On the flip side, mortgage costs are more set when you purchase your home. Not only that, but your mortgage payments build your equity while rent payments only pay your landlord. For many, the predictability and the chance to build equity means a more stable future, not more risk.
Balanced Market
On top of these considerations, we’re now living in a much more balanced market than we’ve seen in years along the Front Range. Buying now could mean getting into a home that’s very well-priced, and coming to the negotiating table with serious bargaining power. Now is a great time to buy knowing you can always refinance later.
If you have plans to stay in the same area for the next few years and your financial situation leaves you in a position to buy a home, there are several reasons why that purchase may leave you in a much more stable situation during an unpredictable time.
While none of us can know the future, we can do our best to control our living situation, recurring costs, and asset management. Risk and uncertainty will always be a part of any financial decision, but operating based on your personal situation and future plans can help you come to the best decision for you.
We’re always happy to talk through your questions and concerns. Reach out anytime!
