How does rental shortage affect values of real estate?
I keep hearing on the news and reading in The Denver Post how there is such a seasonal rental shortage for employees in the mountain resort towns. It seems to be worse in Steamboat and Breckenridge, but presuming we have some of the same shortage issues here, how does that affect the value of my real estate here? Does that make it a better time to sell … or buy?
The answer is yes! It is always such a plus to be able to rent your property easily.
Buyers are not as worried about buying because they know that if they have a change in their plans or lives, they know they can always rent their property for a while until they decide to sell. And, of course, sellers have more demand for their homes in low and middle price ranges because of the same reasons that make their property attractive to the buyers. Plus, there are more buyers automatically because they can not find reasonable rentals.
Since the interest rates are still incredibly low and primary home buyers can often get in for 3 to 5 percent down and even 0 down if they qualify for a USDA loan, we are now at a point where it very well may produce lower monthly payments to purchase rather than rent. This situation, which comes and goes over the years in our ever shifting real estate market, is one to be taken advantage of, as it certainly is not always the case. But just like every other opportunity, there are pitfalls, so you will need a knowledgeable, attentive Realtor that is willing to look out for your best interests.
As you know, it is alright to buy in a rising market, but no one wants to buy at a peak, just before a shift that will start prices decreasing. If you can believe some of the experts on economic and real estate trends, we probably have three or four more years of experiencing this upward trend. We usually trail economic trends on the East Coast and West Coast and the Front Range by 18 to 24 months and their shift, as predicted by some experts, will be starting to happen in the next couple of years. That does not necessarily mean prices in the Vail Valley will be shooting up, but we could see a gradual rise in values for the next few years. And, as history has taught us, the next lows will not be as low as the previous lows.
Of course, economists have been known to be entirely wrong, or miss by a substantial amount of time, so my best advice is make yourself as knowledgeable as possible and rely heavily on an objective, integress, intelligent, hard working Realtor who will keep you up to date at all times. Ask for a market update monthly and you can start to track trends in your neighborhoods.
Good luck with your future decisions!
Joan Harned is an owner and broker for Keller Williams Mountain Properties and heads up Team Black Bear, her own real estate team. Harned has been selling real estate in Eagle County for 27 years, is a past chairman of the Vail Board of Realtors, past Realtor of the Year, past director on the Great Outdoors Colorado Board and a member of the Luxury and Land Institutes. Contact Harned with your real estate questions at Joan@TeamBlackBear.com, 970-337-7777 or http://www.SkiAndTeeHomes.com.