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Prices won't drop. If they do, it'll be offset by interest going up.
You shouldn't buy if you don't plan to be in the house for a while. Assuming you plan to be in the house for a while borrow while it's cheapest. 5-10 years from now, the price will surely be higher.
Feel ya, but they have to live in those LCOL cities, not enjoy Denver!
I live in Denver and the market right now is dumb, the whole thing. Rent isn’t cheap either.
That being said, I feel like you have a bit of debt already, and your HHI isn’t super high given how expensive the homes are here.
I think it’s definitely possible to pay the mortgage between the 2 of you without many issues, but you also have other debt to pay, and you won’t have much $ leftover to allocate to other investments (savings, brokerage, etc.)
Depends on your goals. Do you want a home or do you want to build some of your investment portfolios first? Real estate may continue to to rise, however it may also stay stagnant.
Use some mortgage calculators and include your student debt payment, and see how much of your % would be going to mortgage
Can you share your monthly budget? Seems impressive numbers for that low HHI.
Time in the market….
I know people who sold their house in 2018 and have been renting ever since. They were sure the housing market would crash and they could buy back cheaper. Oops.
😬 I bought in 2018 and am up 50%. Hopefully they put that cash in the market!
Further context - our HHI is 170k, 45k student loan debt, no other debt, would put at least 10% down, credit score 760
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I don't expect a 2008 level crash as back then too many people gambled with ARMs or sucked all the equity out of their houses with HELOCs and cash out refis which they then couldn't afford to pay back if anything went wrong and then when the market pulled back they were underwater, owing more than their house was worth. I tried to buy a short sale house and it was so slow we eventually moved on and bought a foreclosure.
Now, even if someone can no longer afford to stay in their house odds are it has appreciated enough to at least break even and avoid foreclosures/short sales. There may be more inventory and days on market but especially at the $500k level I don't personally see too many people that would be forced to sell.
Similar thoughts OP. I absolutely love Denver and have always envisioned moving there (I'm American but doing expat life for a bit right now). I'm at the point where I can almost have a solid down payment (20%, which I know isn't a necessity anymore) on a respectable 1bd condo in the greater downtown area but I'm trying to think of is worth pulling the trigger in the next year or so and trying to rent it out or if I should keep saving, and maybe get a 2bd with a longer time horizon.
We bought on the edge of Arvada end of 2018 and at that time we had been watching and prices were just going up and up - we still bought over budget and got less house than we wanted at $370k 😣 Now our house is worth $500k and I would consider it a “starter home.”
Just dropping this here because I’ve owned property in Denver since 2013 and I’ve never seen the prices dip in that time. I’m of the opinion it’s going to take a long time for supply to catch up with demand - and if you’re looking in a desirable area I don’t see that going down anytime soon.
My suggestion if you do decide now to ease some of your concerns would be to focus on things about a property that retain value - location, square footage, potential for Airbnb/rental, garage, yard, etc. If you have a good property, it should retain value.
Thank you for sharing your experience. I will keep this in mind as we continue to look. Congrats on your 130k appreciation!