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The Cost of Waiting

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The Cost of Waiting

Gerald Mayo

The first time I drove over the hill in 1974 I thought if God doesn't live here He should, and I need to...

The first time I drove over the hill in 1974 I thought if God doesn't live here He should, and I need to...

May 28 5 minutes read

Do you remember borrowing money at 18% knowing that it was never going to get any cheaper? That was just a few short years ago. I just wanted to take a moment out of our day to reflect on that. The average cost of a home in Estes Park is over $500,000.00 today. Just three years ago that was not true it was closer to $350,000.00. When Suzie and I purchased our home we paid too much for it and we had no idea how we were going to pay for that $97,000.00 purchase. The home today is worth about $585,000.00. Yes, we’ve been making money while we have been sleeping in our home all these years. It helps you sleep better at night in case you haven’t tried it.

Sometimes the stars line up. Right now interest rates are at historical lows. You can see by the differential in interest rates the payment you have to make and what you can afford. Right now you can afford more house than you ever could in the past. Getting back to my first thought on interest rates. The payment on a $500,000.00 loan today at 2.75% is $,2,041.21. This is an amazing opportunity as the same loan $500,000.00 at 18% (yes I did so did some of you) is $7,535.43 per month. I’m pretty sure you can tell where I’m going with this. The same house but the cost at the higher interest rate is $5,494.22 per month. Who wants to pay $5,000.00 more per month for the same house. We know that interest rates are not going to stay this low forever they will be going up and so will the payment on that same house. Buying a million-dollar house I’m sure is not what many of you are thinking about today but that $7,535.45 house payment at 2.75% interest rate today would make a payment on a $1,800,000.00 home. You may not be in the market for a million-dollar house but with rates this low you can afford a very nice home. Whether it be your primary home (might be time to move up) a second/vacation home or your retirement home in that special place like Estes Park.

Estes Park is a very unique community as approximately 60% of the homes here are paid for or paid for with cash when purchased. During the last several economic meltdowns Estes Park lives in its own economic bubble. While other parts of the country had devastating losses in real estate values Estes Park did not. Our values did not go up however they did not go down either. California suffered 45% or more losses in value, Nevada over 60% in some areas along with Florida and many other parts of the country. Your assets in Estes Park seemed to be sheltered.

Many of you have watched and suffered a 23% or greater loss in your stock portfolio as of this morning. This is probably going to continue for a little bit longer. Property values have not done the same and I don’t anticipate that they will with the current interest rates. Is the stock market going to recover – yes it always does. Will interest rates go up? I’m pretty sure they will. Is not the time to hedge against inflation? Do you need a home or a second home in Estes Park? Maybe not. Will you live longer living here – maybe. Estes Park is the oldest community in Colorado with our average age of 58. I moved here when I was 41 and watched Ted Williams at the age of 91 go past me on a hiking trail like I was standing still. I’ll never forget that. He was up the trail eating gorp and watching me struggle on a short break he took. He was off like a flash before I could even get to his resting place on a fallen log. I’m sure he was laughing at me but maybe not he was a true gentleman.

Moving here from Nebraska was the second best decision I think I have ever made. Anyone that knows Suzie, knows what the best decision was. Waking up and looking at the mountains, our sleepy little town, and the elk or deer in the yard—I guess one of the credit card companies would call that priceless. If you have been talking yourself out of making the decision that you wished you had made five, ten, twenty years ago maybe now is the time to stop and just buy the house. It’s the right time.

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