Whether you want to buy your first home or buy a home that better fits your needs in 2024, there are a few things you need to know. Below are five unpopular facts that many real estate professionals are not talking about. However, if you don’t understand these facts, your homebuying journey could go from exciting and a good investment to a nightmare quickly. Let’s get right into it.

1.     Property Taxes Are Up

You may remember the media talking about increasing property taxes a lot last May and June. Well, those increases are here and are now the new base amount for annual property taxes. The problem is that many listing agents aren’t including the most recent property tax amount in their MLS listings and are instead showing 2022. Normally, this isn’t a huge deal because when property taxes go up, it’s usually by 10% or less; this would only result in a slight increase in monthly payment for new buyers. However, with the large jump in property taxes for 2023, some homes are seeing an increase of more than 50%, with the average seeing a jump of 25%. This huge jump could result in a $100 or more increase in monthly payment, an amount a buyer should definitely be aware of when making a buying decision. To avoid any surprises, make sure you look at the property tax year being displayed in the listing. The listing agent is required to disclose what year they are showing.  
 

2.     HOAs Are on the Rise

I don’t think anyone will argue that the general cost of goods and services has gone way up over the past several years. This isn’t just true for consumers, but also businesses and entities, such as HOAs. HOAs are dealing with increased fees for everything, including landscape maintenance, common area building repairs, and insurance premiums. Many HOAs are finding that their monthly dues are just not enough to cover the increased expenses, and this is causing HOAs to be forced to increase monthly HOA dues and in some cases issue special assessments to unit owners to cover these increasing costs. If you already own a unit, there’s little to nothing you can do about these increased expenses. However, when you’re purchasing, you still have a choice. To avoid any surprises, make sure you review the HOA docs provided with the contract very carefully. Review the financials of the HOA to see if they are collecting enough to cover today’s expenses, have room for ever increasing expenses, or if they are barely making ends meet. You will also want to review the most recent meeting minutes to see if there are any conversations going on about possible upcoming monthly dues increases or special assessments. At TK Homes, we highly encourage any buyer purchasing in a community with an HOA to call and talk with the HOA directly to see if there’s anything they should be aware of. This call could save you thousands.
 

3.     Hazard Insurance Is on the Rise

As mentioned above, many HOAs’ insurance premiums are going up and so are residential hazard insurance premiums. With many recent hailstorms, insurance companies have been having to pay out thousands for roofs and other storm related damages. These payouts are being averaged and passed onto homeowners across the state. My own personal hazard insurance recently renewed with a 33% increase. Like the property taxes, this directly results in an increased monthly payment. To help avoid surprises with higher than expected hazard insurance, be sure to talk with an insurance agent about what type of home you’re considering buying and get a realistic idea or quote on what the premium is for hazard insurance. Then make sure your lender is using this figure when generating your loan estimates.
 

4.     Home Prices Aren’t Dropping

It’s not uncommon to hear a buyer tell us they are waiting to buy a home until home values in Denver drop. Unfortunately, if history tells us anything, this just might not happen. In 2023, interest rates were at higher levels than we are seeing right now, and we saw positive appreciation. This means if you didn’t buy a year ago, you’re paying more for the house today than you would have then. With interest rates trending lower, we have no reason to believe we won’t see additional appreciation during 2024. If you wait, your next home purchase is likely to be at a higher price than it would be right now. 

5.     Interest Rates Won’t Drop Quickly

Home values dropping isn’t the only reason many buyers are deciding not to purchase right now. High interest rates are holding many back as well. 2024 started with most believing we’ll be seeing interest rates go down this year. However, at TK Homes, although we believe rates will come down, this may just happen at a much slower pace than many are thinking. With inflation data, job data, and sales data still coming in strong, the Feds are likely going to continue to keep the rate as-is longer and be very slow to reduce it. Even if we see lower rates in 2024, they may not come quickly or be as low as many buyers are hoping for.

 

The famous saying is there is no time like the present, and this could very well be true for your next home purchase. However, it’s important to know the facts to be able to make an educated decision on your home purchase. Without a complete picture, your decision, whether it’s buying or deciding not to buy, could be the wrong decision. Luckily, you don’t have to make this decision on your own. Contact TK Homes today, and let’s talk about your specific goals, real market conditions, and let’s create the perfect game plan for you.

~ Written by CEO/REALTOR®Trevor Kohlhepp