Fortunately, Breckenridge CO real estate is holding its own midst reports of drastic market declines in some areas of the country. As a world-class ski resort and year-round vacation Mecca, Breckenridge real estate is not seeing the large numbers of foreclosures and available properties as our neighbors in Denver real estate or in California, Arizona, and Florida.
Breckenridge real estate mountain vistas remain on the dream boards of many active baby-boomer retirees as well as the active creative professionals with two incomes. Prices in the Breckenridge real estate market are still rising, though more slowly than in the last five years.
Nonetheless, we must consider that the Case-Shiller Home Price Index in mid 2007 by Standard & Poor reported that home prices dropped more in the first quarter of 2007 than it had in the last 68 quarters. The riskiest markets identified by the index are located in areas that saw rapid price appreciation, a reduction in affordability followed by a rapid decrease in the rate of price appreciation
An additional report from PMI Mortgage Insurance implies that the trend may last two more years. The biggest cities with the greatest risk for price decline by 2009 were overwhelmingly located in California and Florida. The major metros with the least risk were the stable markets of Texas and the Midwest that were largely untouched by the real-estate boom.
What lessons can we learn from a changed market?
Buyers: If homeownership has looked to be too costly, look again. Housing may have gotten more affordable, which is defined as the percentage of income spent on housing. But leave yourself some slack in case the market drops further. Look at the long term. Choose a mortgage by the interest rate and not by the monthly payment. A conservative fixed-rate loan will assure the same payment amount for the entire life of the loan and will be easier to fit into the long-term budget. When the introductory period is over on many option-ARMs with initial low payments, remember that the interest rate is likely to rise.
Be aware that life comes with the unexpected before you take on additional debt, which could affect your long-term stability. It is best to think of a home as a place to live and not as a money machine. Slow home appreciation of about 4 to 6 percent a year is historically the average over any given 10-year period.
Sellers need to realize that the Internet has changed how people shop. Buyers now use Web research to learn what’s for sale locally before stepping a foot out of their homes. Find a way to distinguish your home from others like it on the Internet. Some people create a website for each home; others find a realtor with a dynamic website like www.realestatecolorado.com that will feature lots of photos and a tour of the property so buyers can get a 360-degree view of the property from a single vantage. With virtual tours, buyers in other states and other countries can get a good feel for your home without actually stepping foot inside.
Potential buyers who could make monthly payments may be waiting because they do not have a down payment. Some states allow sellers to pay up to 3 percent of closing costs.
It will take a bit of time for wages to catch up to prices so more people can afford to buy homes. On an encouraging note, in most markets where price reductions are predicted there are strong local economies and low unemployment-good foundations for good news ahead.
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Breckenridge Real Estate
