or Should I wait? 2023 Should I Buy

The question as to whether buyers should get off the fence in 2023 is lingering on many peoples’ minds. The answer will differ from coast to coast, but when we focus in on our Foothills market, here is what we think:

Our foothills area tends to hold values well and we have a finite amount of housing. When you think of the areas to the north, east and south of the Denver Metro area, those areas have an abundance of undeveloped land that can be converted into housing. The west side of Denver abuts to mountain passes so we have a unique terrain that limits housing expansion. Why is this a reason to buy?

Our housing values tend to hold well in down markets and up markets because there is nothing like our foothill suburban areas. There seems to be a never-ending desire to live here. This makes your investment a safer bet. So, while the prices will ebb and flow, over time, your investment should be more secure than other areas of the Metro area.

You have a better chance this year of securing a house than last year. Last year’s record low inventory disenchanted many buyers who were out-bid time after time. While there still may be instances of that happening, overall, the buyer pool has temporarily shrunk. So if you have the ability to purchase a home, now may be your best time. You are less likely to be up against 5, 10 or 20 cash offers. And while prices may appreciate, it is most likely not at the unsustainable rate we saw over the past few years.

The interest rate debacle comes into play. So if you are buying your first house, yes interest rates are higher than they have been in recent years, but this “higher” interest rate level will most likely not last beyond 2023. If economic predictions hold true, we should see interest rates decline in the second half of 2023. So the interest rate you lock into now may be something you can refinance in a year or two. Also, there are alternative options available – such as interest rate buy-downs or adjustable-rate mortgages – that will allow you to enjoy a temporary lower rate until the time comes that you refinance.

Buyers should have more bargaining power than in 2022. Last year, due to the buying frenzy, buyers didn’t have time to even think about their offers (and in some cases, didn’t have time to even see the home they wanted to buy) – they just had to throw their hat in the offer ring on a moment’s notice. In 2023, buyers should have the ability to shop around, have a little more room in negotiations and may not have grovel to sellers the way they did in 2022. Houses that need more updating, maintenance or are vacant, may be good options for the buyer looking for a “deal”.

So look back 5, 10 or 25 years ago. Our foothill investments have been some of the best, long-term wealth building options available. If you look at your purchase as a long term investment, you should be in a good position. Renting a 3 bed/2 bath house may cost you over $2500/month. Investing in your own home is almost always a better option than renting. No one has a crystal ball, but we do have the expertise to look back over the past 25+ years to see the trends and know that 2023 is probably a great time to take the plunge and buy a home this year.