Why Sell Now?
✓ Higher Inventory
There are currently 54% more homes in Colorado Springs than there were this time last year. That number is only going up. Your comps will start being set by desperate sellers. People who lost their job, forced to move, getting divorced or worse.
✓ Higher Interest Rates
Interest rates have dramatically increased since their pandemic lows. If they don't come down soon, buyers will stay on the sidelines and wait. Increasing desperation among home sellers.
✓ Hidden VA Foreclosures
The Biden administration stopped foreclosures on all VA loans. This helped protect veterans and increased values for Colorado Springs homeowners. However, this moratorium on Dec. 31st 2024. Those properties could start going back to the bank and hitting the open market soon. TBD.
✓ Hidden FHA Foreclosures
Nearly 15% of all FHA loans are in default and being backstopped by the FHA. That's over 1 million homes throughout the US that should be on the market, but aren't. When they hit the market, it will dramatically increase inventory and impact property values.
✓ FHA Subprime Bubble
Nearly 65% of all FHA loans in 2024 had Debt to Income levels above 43%. Worse than the 2008 subprime crisis. All backed by our Federal Govt. Only 45% of borrowers had a similar Debt to Income in 2008. We already know how this ends.
✓ Hidden New Builds
Home builders aren't getting a certificate of occupancy for their new builds so they don't have to add them to the books. It's estimated that there are 2 years worth of completed new builds hidden from the market.
✓ Higher Unemployment
As the economy deteriorates, there are many more folks who are going to lose their jobs. In the short term, there is going to be a lot of pain and the neighbors of your rental properties are going to be forced to sell.
✓ Higher Vacancy Rates
Vacancy rates across the country have been exploding. Some markets are seeing 10% vacancy rates and many rentals are offering 3 months free rent just to get heads in beds. Competition is increasing for renters.
✓ Higher Insurance Rates
As an investor, you already know your insurance rates are going up. Eating into your profits. Insurance companies are increasing rates across the country. Many homeowners will not be able to afford the increases and be forced to sell. Creating more inventory.
✓ Lower Rents
As homes sit on the market for sale...many will turn them into rentals to cover their mortgages. Increasing rental inventory and eventually dropping rental rates across the board.
✓ Lower Govt Spending
The Trump administration is cutting government spending to tackle the looming debt crisis. That could start to hit the employees at DOD facilities in Colorado Springs. Even a 10% drop in spending could dramatically impact the Colorado Springs market.
✓ Deflating Asset Values
We're entering a period of deflation in order to correct the inflation period of the pandemic years. Our economy is built on the middle class that has been hit hard by inflation. The goverment will soon force deflation in order to rebuild the middle class.
✓ Recession Signs
Everyday more and more data is pointing to new signs of a recession. It's difficult to say how long the recession will last and what actions the government will do to make it better(or worse).
✓ No Gains
Equity gains for the next 10 years are unlikely. It took 15 years and a global pandemic for homeowners in Phoenix to get back to the 2006 price they paid. There's a lot more downside risk than upside potential. You're more likely to lose equity than gain it over the next 5 to 10 years. Unless aliens come to visit and Space Force is fully activated...it's likely time to sell.