Who should be waiting to buy right now?

You may have your down payment saved, but there's more to consider before you purchase your new home.

As a lender and Realtor, we get this question A LOT. Especially with the rollercoaster market we’ve seen since 2020. Even if you have nerves of steel, purchasing a home requires due diligence.

Bottomline, the right time to buy a home is when it works for you. Even during challenging economic times, like a recession, parking your money in an appreciating asset has historically given big returns over time.

Of course every market is different, but a recent study (October 2022 covered by The Denver Post) Found that Metro Denver ranked 10th among the 187 metros, with an average daily gain in home prices of $94 from 2011 - 2021. And a price increase from $231,400 to $607,100, representing a gain of 162.4%. The study didn’t cover the first half of 2022 when prices soared even faster.

But there are some circumstances which might give you pause. If any of these situations apply to you, it might not be the right time for you to buy.

You know you will need to move out of the area within two years.

While this may not be a deal breaker if you are open to having an income property, from a conservative perspective, you should plan to live in the home for 2+ years.

This being because, if the property you purchase is your primary residence for 2+ years in a 5 year period, you can avoid capital gains tax. If you sell the property before you have owned and lived in it for a full two years, any profits will be subject to capital gains tax. Always consult with a CPA or tax advisor

Additionally, real estate markets do experience natural cycles. The longer you plan to hold a property, the less risk you’ll be exposed to.

After purchasing, you'll be left without a small contingency fund.

We are big fans of down payment assistance and first time home buyer programs. But having even just $2,000 in the bank after your down payment and closing costs can prevent running up high interest credit card debt.

Things come up, life happens, and now that you own a home we want you to keep your credit score and financial health high and be in a position to leverage the equity you will gain over time. Without stress.

If you are even thinking about a purchase, it is always a good idea to speak with your realtor and lender team. If it isn’t the right time now, they can work with you to create a custom strategy and path to home ownership.

Don’t have a team? We can help you anywhere in the country. There is no one size fits all solution and we often work with Buyers for 2+ years before they close on their first home.