Next week, the state-wide, Colorado Association of Realtors statistics
will be released. One of the graphs will show the housing affordability
for the State of Colorado. This index is a measure of how affordable a
region’s housing is to the consumers. A higher number means greater
affordability.
Housing
Affordability Spells Opportunity!
The index is based on interest rates, median sales price and average
income. For the index to increase, the income in the area must improve,
prices must come down, or interest rates must have a reduction. At the
lowest moment in the national real estate market, it was stated that homes were
the most affordable in decades, as all three points of the index had improved
(incomes were up, interest rates were lower, and prices had reduced).
As you would guess, this is changing around the country with prices
improving and the upward movement of interest rates. Next week, we expect
to see the housing affordability index in Colorado move lower, meaning homes
are less affordable. This means that fewer people will be available to
afford the median price home.
In Southwest Colorado we expect to see the affordability index remain at
high levels, as our median prices have not moved upward as much as the state,
and interest rates are still at very low levels.
If we continue to see a recovering housing market, we would expect to see
higher increases in median price, and we would expect to see interest rates
increase as the market will bear. If this is the case, homes will be less
affordable in the future.
What does this mean to the savvy home buyer or real estate
investor? They should consider buying now. Typically, we see
opportunities in the fall and winter market, as some sellers are more motivated
to sell, as they want to complete a sale during this season or by year end.
Do you want to take advantage of this opportunity? If so please
call me and we will take action!
Don Ricedorff, Broker
Associate, GRI, CRS, CCIM, ABR, RSPS, CDPE
The Wells Group Real Estate Brokerage Don
Ricedorff, Broker Associate, GRI, CRS, CCIM, ABR, RSPS, CDPE
Direct: 970-375-7014
Fax: 970-259-5007
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