Colorado Real Estate Market Update

 

The following analysis of the Metro Denver & Northern Colorado real estate market (which now includes Clear Creek, Gilpin, and Park Counties) is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere agent.

 

ECONOMIC OVERVIEW

The Colorado economy continues to grow, adding 69,100 new non-agricultural jobs over the past 12 months, which represents a solid growth rate of 2.6%. That said, we are continuing to see a modest slowdown in employment gains, but that is to be expected at this stage of the business cycle. My latest forecast suggests that Colorado will add a total of 65,000 new jobs in 2019, representing a growth rate of 2.3%.
In November, the state unemployment rate was 3.3%, up from 3% a year ago. The increase is essentially due to an increase in the labor force, which rose by 77,279 people. On an un-seasonally adjusted basis, unemployment rates in all the markets contained in this report dropped between November 2017 and November 2018. The highest rate was in Grand Junction, but that was still a very respectable 4%. Fort Collins and Boulder had the lowest unemployment rate of 2.9%. All the regions contained in this report are essentially at full employment.

 

HOME SALES ACTIVITY

  • In the fourth quarter of 2018, 12,911 homes sold — a drop of 13.8% compared to the last quarter of 2017 and down 22% from the third quarter.​
  • The only market that saw growth in sales was Clear Creek, which rose by 3.8%. This is a small market, however, and is prone to rapid swings in price as well as sales. There was a significant drop in sales in the Denver market. I will be watching closely to see if this is an anomaly or a longer-term trend. At this time, I believe the former to be true.​
  • Interestingly, this decline in sales in Denver came as inventory levels rose by 37%. For now, I attribute this to seasonality and expect to see sales growth return in the spring.
  • Inventory growth continues to give buyers more choice, allowing them to be far more selective — and patient — before making an offer on a home. That said, well-positioned and well-priced homes are selling relatively quickly.

 

 

HOME PRICES

  • Despite the rapid rise in listings and slowing home sales, prices continue to trend higher, though the rate of growth is slowing. The average home price in the region rose 6% year-over-year to $454,903. Home prices were 2% higher than in the third quarter.
  • In all, the data was not very surprising. As with many markets across the country, affordability is starting to become an issue. However, the recent drop in interest rates likely stimulated buyers at the end of 2018 and I expect to see good price growth in the first quarter of 2019.
  • Appreciation was strongest in Park County, where prices rose 28.2%. We can attribute this rapid increase to it being a small market. Only Gilpin County saw a drop in average home price. Though this, too, is due to it being a very small market, making it more prone to significant swings.
  • As mentioned, affordability is becoming an issue in many Colorado markets and I anticipate that we will see some cooling in home price appreciation as we move through late 2019.

 

 

DAYS ON MARKET

  • The average number of days it took to sell a home in Colorado rose by one day compared to the final quarter of 2017.
  • The amount of time it took to sell a home dropped in four counties: Boulder, Larimer, Gilpin, and Park. The rest of the counties in this report saw days on market rise relatively modestly with the exception of the small Clear Creek market, which rose by 20 days.
  • In the fourth quarter of 2018, it took an average of 38 days to sell a home in the region, but it took less than a month to sell a home in five of the eleven counties contained in this report.
  • Housing demand is still there, but buyers appear to have taken a little breather. I anticipate, however, that the spring will bring more activity and rising sales.

 

 

CONCLUSIONS

The speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

For the fourth quarter of 2018, I continue the trend I started last summer and have moved the needle a little more in favor of buyers. I will be closely watching listing activity in the spring to see if we get any major bumps above the traditional increase because that may further slow home price growth — something that would-be buyers appear to be waiting for.

 

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governor’s Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

Posted on April 11, 2019 at 2:45 pm
Fort Collins | Category: Blog, Colorado Housing, Colorado Real Estate | Tagged , , , , , , ,

The First Decade

The other day I was searching for my daughter’s cell phone number – which I haven’t memorized because I simply speed-dial it – and I realized it’s been years since I memorized anyone’s phone number. And this was just after I’d booked a flight online and selected my seat, and downloaded some new music into my iPod.

It occurred to me that these are just three examples of the tremendous changes that have happened just since the new millennium began. At the beginning of this decade, iTunes, YouTube and Facebook did not exist. Today, their combined daily views and downloads are in the billions.

An article in Newsweek a few months ago highlighted how much things have changed in a decade. The numbers are staggering and surprising.

    • Ten years ago, a total of 400,000 text messages were sent per day; today 4.5 billion are zinging through cyberspace every day.
    • In 2000, 12 billion emails were sent each day; today 247 billion are sent daily (many of which were in my spam filter this morning).
    • Ten years ago, about 208 billion letters were mailed through the postal system each day; today the number of letters mailed daily is less than 176 billion.

This decade has been tumultuous, to say the least. Beyond the tremendous technology-driven advances, we are still struggling with this economy. Unemployment rates are too high. Banks are still struggling. And it is heartbreaking that people have lost their homes.

Even though there is a lot of uncertainty, I remain optimistic. I am realistic enough to know that this recovery will take awhile. But recover we will.

One thing that hasn’t changed in the past decade is the resiliency of real estate over time. When you look at median single-family home prices ten years ago versus this year, you’ll see that home values have increased since 2000. This is encouraging, especially when you consider that the stock market today is the same place it was 10 years ago. For most people, their home is worth more today than when they bought it. It might be worth less than it was two or three years ago, but real estate has never been about day trading. It’s a long-term investment. And if the last 10 years, or 100 years, are any indication, we can count on growth in home values.

And that’s a good thing.

July Median Home Prices* 
2000

2010

National
$151,100
$182,600

*Source:  NWMLS

What are some of the most memorable changes for you in the past decade?

Posted on March 5, 2019 at 11:30 am
Fort Collins | Category: Blog | Tagged , , , , ,

What Our Expert Thinks

Here’s what our Chief Economist, Matthew Gardner, thinks about the 2019 U.S. Housing Market. He is regarded as one of the Country’s experts on real estate and is frequently quoted by leading industry publications.

 

• Existing Home Sales up 1.9% to 5.4 million units
• Home Prices up 4.4%
• New Home Sales up 6.9% to 695,000 (the highest since 2007)

 

If you want to see all of Matthew’s predictions including where interest rates are headed, get signed up for our annual Forecast. Click the link below!

https://www.eventbrite.com/o/windermere-real-estate-12011801121

Posted on January 4, 2019 at 8:30 am
Fort Collins | Category: Blog, Fun Facts, Market News | Tagged , , , , , ,

Should We Wait?

Here’s a question on the mind of some buyers today…

“Should we just wait?” They see how active the market is. They see prices up and inventory down. They wonder if they would be better off to wait.

There are two powerful forces at work in our market and two key reasons why we think the greatest risk for a buyer today is to wait.

The first is prices. If you research the last 40 years of prices in our market what you will notice is that Larimer County’s average yearly increase is 5% and Weld County’s is 4%.

You will also notice that prices increase much more often than they decrease. In 40 years, prices have gone up in Larimer County 34 times and down only 6 times. The most prices have ever gone down is 3%.

The second force at work is interest rates. Rates today are essentially half of their 40-year average. Money is on sale, half off!

When rates increase (like they have in the last 6 months), you can measure the direct impact to a buyer’s payment using the 1%/10% rule. For every 1% increase in rate, the payment increases 10%.

So, if a buyer chooses to wait, the odds are they will be met with higer prices and higer interest rates.

We just released a video which covers this important topic. Check it out below.

Posted on May 26, 2017 at 9:13 am
Fort Collins | Category: Colorado Real Estate | Tagged , , , ,

The Next Boulder?

The hottest question we get in Northern Colorado is this “do you think Fort Collins is the next Boulder?”

Let’s look closely at that question and start with what is similar. They are both beautiful college towns nestled against the foothills. They both have affordability issues which push real estate buyers to satellite communities (what is happening is Wellington is not unlike what happened in Louisville).

Yet there are differences at a fundamental level that will forever keep these two places very different from each other. For example the average Household Income in Boulder is 60% higher than Fort Collins. Here is another big deal, Boulder is only half the size of Fort Collins (25 square miles versus 57 square miles). And get this, the City of Boulder owns 71 square miles of open space in and around the City.

Essentially Boulder is a small island surrounded by an ocean of open space inhabited by very high income-earners. That is why the average price of a single family home in Boulder is now over $1 million.

We put together a short video which shows you more detail about this hot question. Check it out:

Posted on February 24, 2017 at 8:31 am
Fort Collins | Category: Colorado Real Estate, Fort Collins Real Estate | Tagged , , , , ,

Stadium Impact?

Today we are looking at one of the hot topics in Northern Colorado. Is the new CSU football stadium impacting real estate values in the surrounding neighborhoods?

The answer, based on the research we’ve done so far, is… yes!

New CSU Stadium Rendering – Image credit: stadium.colostate.edu

Here are the details…

We looked at the residential properties in the 1-mile radius surrounding the new stadium. We pulled the sales over the last three years in that area. Then we compared that area to the market as a whole.

Let’s talk about prices first. Residential prices inside the City Limits of Fort Collins went up 11% last year and 12% the year before that. Within the stadium’s 1-mile radius, prices only went up 1% last year, but 14% the year before that. It seems that recent construction has impacted prices.

Now what about number of sales? Residential transactions have gone down 5% per year each of the last two years. Near the stadium, the decrease has been even larger at 7 to 8% per year.

It does seem that the stadium has had an impact. We will continue to keep our eye on this trend!

*One footnote is that last year had more condominium sales than the year before which has an impact on average price.

Posted on February 17, 2017 at 11:20 am
Fort Collins | Category: Fort Collins Real Estate | Tagged , , , , , , , , ,

Prices Continue to Pop in 2017

 

PRESS RELEASE

FOR IMMEDIATE RELEASE

 

Prices Continue to Pop in 2017

Real Estate Prices in Larimer and Weld Counties Are Up Double-Digits

 Fort Collins, Colo. (Feb. 15, 2017) – Continuing a trend that started four years ago, average residential real estate prices in January 2017 increased by double-digits compared to one year ago.  Larimer County’s prices are 10.5% higher than last January and Weld County’s are up even more at 12.8%.

The average price of a property in Larimer County so far this year is $378,253 and in Weld County it is $310,948.  Both Counties have seen their residential average prices go up by almost $100,000 in just three years.

“For three years now we have had the perfect storm to cause prices to increase at a rate that is double the long-term average.  Northern Colorado is in the top-10 nationally for fastest growing communities, we have an incredibly healthy economy with high employment, interest rates that are roughly half of the long term average, and very few homes to pick from,” said Eric Thompson president of Windermere Real Estate in Colorado.

“The inventory of listings is especially low in the lower price points.  For example, if someone wanted to buy a single-family home in Fort Collins under $300,000 they would have five listings to choose from today.  Greeley has 33 homes at that price point,” Thompson said.  “These dynamics create a unique opportunity for move up buyers to capture the appreciation in their home and leverage the low interest rates to buy the home of their dreams.”

Even though the number of homes available for sale across Larimer and Weld Counties may be down, Windermere Real Estate in Northern Colorado saw their January closed transactions increased 48% compared to last year.  Their new written contracts are up even more at 110% compared to 2016.

About Windermere Colorado:

Since its inception in 1972, Windermere Real Estate has grown to be a network of 300 offices with more than 7,000 agents by focusing on three basic principles: hire the best people, give them the best tools and create thriving communities. Windermere’s growth has allowed them to expand into the Colorado market led by Eric Thompson, President of Windermere Colorado. For more information, visit www.windermerecolorado.com.

 About Windermere Real Estate

Windermere Real Estate is ranked the largest regional real estate company in the Western U.S. serving communities in Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, Oregon, Utah, Washington and Mexico. The Windermere family has a proud heritage of serving our neighbors via the Windermere Foundation, which funds services for low-income and homeless families. Since 1989, the Windermere Foundation has contributed more than 28 million dollars towards improving lives in the communities where we live and work. For more information, visit www.windermere.com.

Posted on February 15, 2017 at 12:54 pm
Fort Collins | Category: Press Release | Tagged , , , , , , , ,