Are you waiting for the real estate market to cool off? We have discussed in the past it is unlikely that there will be a market crash like the 2008/09 housing crisis. There is still a chance that at some point the market will shift. This could be from a sellers market to a buyers market or even a balanced market.
Sitting, Waiting, Wishing
You might be wondering if you should wait for the real estate market to cool off before purchasing. This is a fair question and one that we get fairly often. Unfortunately, even if the market cools over the course of the next few years, it still may mean housing costs are just as high. Let us illustrate this point with some math if you will bear with us.
Do The Math

So are there any benefits to waiting for the real estate market to cool off? Let’s say that you can purchase a home today for $400,000 with a 3% interest rate, this would make your monthly payment roughly $1,686 per month. This is when you factor in a rough estimate for property taxes and insurance. Now let’s say that the market takes a nose dive. With your crystal ball you wait and buy that same house in a year or two. Now that house sells for $350,000 but with interest rates climbing your rate is now 4.75%. This would make your monthly payment $1,826 (allowing for the same estimate for taxes and insurance). You are still paying $140 more per month on the same property. Even though the value of the property has gone down.
In this scenario it is also important to note how unlikely that situation is to occur. In Fort Collins during the housing crisis, home prices dropped less that 1%. On a $400,000 home this would equate to it being worth $396,000. In the above example the home decreasing in value at that rate equates to a price drop of 12.5%.
Waiting Doesn’t Work
The simple thought experiment above demonstrates that waiting for a hypothetical market shift does not result in any real cost savings for you. If home valuation trends continue you will have lost out on thousands of dollars of appreciation waiting for a day that may never come. So, if you have been on the fence about beginning your home search contact us and we can help you get started today.