Fear, Loathing and Boulder Colorado Real Estate
If there is one thing I hear a good deal in the Boulder Colorado real estate and housing market, it is, “why didn’t I buy more homes to rent during the recession?” Guess you could say, hindsight is 20/20. Looking back, houses were cheap and plentiful for the taking; and the homes for rent market was chancy with vacancies. Acquiring a house or two back in 2009 would have allowed for massive rental income today and a path to retirement. The folks that did buy suddenly look like geniuses, while I’m wondering, what kept me from grabbing a rental or two?
US Stock Markets Down
We’re not talking a little dip here. The DOW, as of February 12, 2016 was down 1,451 points for the year. There is talk on television of a global recession. The newscasters point to China’s slowing economy, bailouts in the Eurozone, increasing debt in the developing world. Gosh, it sounds like a lot of doom and gloom. And US stock markets are not immune.
And this is where that last recession comes into play. Back then, there was a lot of fear and trepidation. It was difficult to buy homes to rent for two reasons. First, your money invested in the stock market was suddenly worth less and second, no one was quite certain what would happen next.
Cut to present day, and while the overall market vibe in Boulder Colorado real estate is much stronger, there is some real underlying fear about whether we are heading for a global recession. And what that would mean for you and I.
Terrible Year For US Stocks
Whether you own stocks or mutual funds doesn’t really matter. If you don’t own stocks, your cash is still worth every cent it was before the down turn. Now is that moment, when you can invest in real estate while it is still affordable. I’m not saying it is easy, when there is so much doom and gloom on the news. But know this for certain: it is far less gloomier than say in 2009 during the height of the Great Recession.
If you are holding stocks, it gets a little trickier. Having watched some of your hard earned wealth evaporate, it can be a big deal to sell while down and then reinvest into real estate. And yet, that’s exactly what the smart ones were doing several years back. They existed stocks and mutual funds and acquired housing for rentals at great prices. The bonus for investors today is that home values are climbing. So that investment will possibly start paying for itself immediately. I just wrote an article on Denver’s market, showing that market gained 14 to 18% percent in 2015 – and is continuing to see growth in home values, median sales price and other criteria of a strong housing market.
Economic Data To Watch
There is a large amount of new data emerging this week that will impact financial markets and home interest rates. Watch to see what occurs with the Empire State Index, an important indicator for manufacturing. The Housing Index will be released, detailing new home starts and building permits and addressing the inventory of homes to rent for the metro area.
The Consumer Price Index comes out just before the weekend, while the most recent jobless claims will be shared on Thursday. It’s difficult to sway what is best here. Good economic news will send stocks up, but also give you more competition in today’s Boulder Colorado real estate market.
So, if you want less competition, you are hoping for disappointing economic news. On the other hand, if you need your down payment from stocks, improving economic news will feel good, until you discover your home mortgage interest rate is up considerably.
Buying In the Face Of Uncertainty
Thus, we have this window of opportunity. To take action and buy Boulder Colorado real estate while there is economic uncertainty. Not the easiest decision, but clearly the best opportunity to make a profit with homes to rent.
Home Mortgage Interest Rates Under 4%
The most current home mortgage rates are hovering under four percent. This is great news for investors and purchasers in the Boulder Colorado real estate market. You’ll have a low monthly payment for your new property. For investors – this gives you the opportunity to have a greater profit margin on your monthly rental income. For home buyers, you’ll have a low, easily managed payment for the life of your mortgage.
Important Note: for those waiting to see if the market holds up, if the threat of a global recession impacts the market, be aware. Of course, acting in the face of uncertainty is exactly what this article is based upon. Those that took action in the recession are today seeing big profits. What will you do? Call me to discuss your real estate investment strategy at 303-443-3334 or contact me here
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