Re Bubble

The activity in the Front Range market is causing us to hear the bubble question again.

People are curious to know, based on recent growth in price appreciation, if we are in a housing bubble.

This questions seems to crop up when prices go up.

While we do not believe that the current double-digit price appreciation is sustainable, we firmly believe we will not see prices crash or see any kind of a bubble bursting.

Here’s why we think that…

This past Tuesday we hosted a private online event for our clients which featured our Chief Economist Matthew Gardner.

Matthew is well-known and well-respected in the industry.  He is often quoted in leading real estate publications.

He sees four reasons why there is no real estate bubble that is about to pop in Colorado.

  1. Inventory is (incredibly) low. The number of homes for sale is down over 40% compared to last year. The market is drastically under-supplied.  Based on simple economic principles of supply and demand, inventory would need to grow significantly for prices to drop.
  2. Buyers’ credit scores are very high. The average credit score for buyers last month, for example was 759. So, by definition, average buyers today have excellent credit which means there is low risk of them walking away from their mortgage and causing a foreclosure crisis.
  3. Buyers have high down payments. On average, buyers are putting 18% down on their purchases. This means that prices would need to fall by a considerable amount in order for the average buyer to be ‘upside down’ on their mortgage.
  4. Owners are equity rich. Well over a third of property owners along the Front Range have more than 50% equity in their homes. This means that a severe economic downturn causing a slew of distressed properties to hit the market is highly unlikely.

Bottom line, as Matthew Gardner reminded us, what we are experiencing in the economy today is a health crisis not a housing crisis.

If you would like a recording of the private webinar, we would be happy to send it to you.  Just reach out and let us know.

Posted on October 9, 2020 at 1:03 pm
Paul Hunter | Category: About the area, Blog, Buyer Tips, Friday Fun Facts, Homes for Sale, Real Estate, Seller Tips | Tagged , , , , , , , , ,

Stat of the Month

We just completed a review of the September numbers in our market.

Here is the one number that is standing out to us- average price.

Prices are way up over last year.  Here are the specific average price increases in each of our markets compared to September 2019:

Metro Denver = 13.2%

Larimer County = 16.9%

Weld County = 7.4%

This change in prices has of course generated questions from our clients.

To help our clients answer questions about prices and other real estate topics, we have set up a private online event with our Chief Economist Matthew Gardner.

The event is set for Tuesday from 9:00 to 10:00.

Simply reach out to any Windermere broker to receive your registration link.

Matthew will be addressing these questions as well as many others:

What effect will the election have on the economy and on real estate?

How long can interest rates stay this low?

Can prices keep appreciating at their current pace?

This online event is for the clients and friends of Windermere.  If you would like to register, please connect with your Windermere broker.

Posted on October 2, 2020 at 12:59 pm
Paul Hunter | Category: About the area, Buyer Tips, Friday Fun Facts, Homes for Sale, Real Estate | Tagged , , , , ,

Price Report

The Federal Housing Finance Authority just released their most recent quarterly report which tracks home price appreciation in the top 100 metropolitan areas in the U.S. plus appreciation in individual states.

Some significant findings from the report:

House prices have risen for 36 consecutive quarters, or since September 2011.

House prices rose in all 50 states and the District of Columbia between the second quarters of 2019 and 2020.

The top five areas for annual appreciation were:

1) Idaho 10.8%

2) Arizona 9.1%

3) Washington 8.6%

4) Utah 8.1%

5) New Mexico 7.7%.

Idaho has been the leading state for the last 7 quarters.

Colorado showed annual appreciation of 4.4%.

The areas showing the lowest annual appreciation were:

1) West Virginia 1.1%

2) North Dakota 1.1%

3) District of Columbia 1.4%

4) Illinois 2.5%

5) Alaska 2.6%.

House prices rose in 99 of the top 100 largest metropolitan areas in the U.S. over the last four quarters.

Annual price increases were greatest in Honolulu, HI, where prices increased by 11.7%.

Prices were weakest in San Francisco, where they decreased by 0.3%.

At Windermere Real Estate we are taking Safer at Home and Social Distancing very seriously.  Our people are following our Safe Showings protocol, staying connected to their clients, and providing help wherever needed.

 

Posted on August 28, 2020 at 9:30 am
Paul Hunter | Category: Friday Fun Facts, Homes for Sale, Real Estate, Seller Tips | Tagged , , , , , ,

Caught Up

We’ve been waiting for June to catch up. It finally happened (almost).

Back in April, real estate activity was significantly limited and the showing of property was restricted which caused the number of closed properties in May and early June to be much lower than last year.

Bottom line, fewer properties going under contract in April caused fewer closings 30 to 45 days later.

Closed properties in May were down compared to 2019 by 44% in Northern Colorado and 43% in Metro Denver.

Then activity jumped significantly in May. The number of properties going under contract was way up compared to last year.

We’ve been wondering when we would see this sales activity reflected in the number of closed properties.

Well, it finally happened (almost).

The number of closings so far in June compared to the same time period through June of 2019 is only down 1.8% in Northern Colorado and 1.6% in Metro Denver.

In both markets, there are only a handful of closings separating activity in June 2020 versus June 2019.

By the end of the month, when all the transactions are tallied up, we expect that June of this year will out pace June of last year in terms of number of transactions.

This is significant not only because of COVID-19, but also because of the reduced inventory compared to last year. Quite simply, there are fewer homes to buy.
All of this speaks to the health and resiliency of the Front Range market.

At Windermere Real Estate we are taking Safer at Home and Social Distancing very seriously. Our people are following our Safe Showings protocol, staying connected to their clients, and providing help wherever needed.

Posted on June 26, 2020 at 1:35 pm
Paul Hunter | Category: About the area, Homes for Sale, Real Estate | Tagged , , , , , , ,

Faster

 

Here’s something true about today’s market. Properties are selling fast.

Compared to one year ago, the number of days it takes for a property to sell is significantly lower.

The industry term is “Days on Market” or DOM.

DOM is way down.

Here is the comparison of May 2020 versus May 2019:

• Metro Denver down 22%
• Larimer County down 19%
• Weld County down 16%

Initially, this may seem counter-intuitive. How could homes be selling faster in today’s environment?

Here’s the deal. The buyers and sellers who are active in today’s market are serious.

There really aren’t ‘tire-kicker’ buyers out looking at properties just for the fun of it.

There really aren’t sellers testing the market to ‘see what they can get.’

For the most part, buyers and sellers are on a specific mission and this mindset is showing up in the numbers.

For sellers especially, this is no time to test the market and be overly aggressive on price.

Properties that are priced right and in good condition are selling and often selling fast.

 

At Windermere Real Estate we are taking Safer at Home and Social Distancing very seriously. Our people are following our Safe Showings protocol, staying connected to their clients, and providing help wherever needed.

Posted on May 22, 2020 at 12:50 pm
Paul Hunter | Category: Buyer Tips, Friday Fun Facts, Homes for Sale, Real Estate, Seller Tips | Tagged , , , , , , ,

Leading Indicator

We are watching close to see where the real estate market is headed. Anecdotally we can tell you that the vast majority of transactions that are under contract are still closing. We have seen very few transactions cancel because of employment issues or the wild swings of the stock market.

An interesting leading indicator was announced this week that sheds some light as to where the market is headed. Each week the Mortgage Bankers Association releases their index which tracks new mortgage applications.

They track both purchase applications and refinance applications. To no one’s surprise, the index was down this week but not as much as you may have guessed.

New purchase applications were down 11% compared to the same week this last year. Refinance activity fell more sharply, down 34%.

This is a statistic we will watch closely as time goes on.

Each week our Chief Economist produces a video with the latest on the national economy and the housing market. Reach out to us if you would like to see that video.

Posted on March 27, 2020 at 2:30 pm
Paul Hunter | Category: Buyer Tips, Friday Fun Facts, Homes for Sale, Real Estate, Seller Tips | Tagged , , , , ,

Another Big Out Of State Investor Purchase in Fort Collins

The interest in the Fort Collins apartment market is heating up even more! With the latest sale of The Mill House in Old Town Fort Collins to an investor out of New Jersey for $13.6 million, that equates out to $251,852 per unit according to the Colorado Real Estate Journal. This used to be a much less attractive side of Old Town, but we are seeing more and more development and re-development in the area. The increasing rents, especially in the realm of urban living has made it even more attractive for these investors.

The good news, is single family and smaller multiunit investments (like duplexes, triplexes, and fourplexes) are all seeing rental increases as well. The cash flow and yield numbers are working great on those as well even with the increase in pricing we have seen.

If you have any questions about this information, please feel free to give me a call to talk investment properties!

Posted on March 13, 2017 at 9:03 pm
Paul Hunter | Category: About the area, Buyer Tips, Investment, Real Estate, Seller Tips | Tagged , , , , , , ,

New Northern Colorado Development Project Coming

Happy Monday! I wanted to bring you some good news if you have not already heard, that according to the Colorado Real Estate Journal, an large retail/mixed use development will be coming to the I-25 and Crossroads Boulevard areaIt will be called the Brands at the Ranch and will be on the east side of I-25. It will be a three phase development, and will cost $572 million over 5 years. They plan on having a 12 screen I-MAX theater, restaurants, and 600 luxury apartment units. While this will be especially great for Loveland, the rest of Northern Colorado will benefit from the increased activity. They also plan to add another hotel to that area. Exciting times in Northern Colorado!

Check out the link below to see more info from the developer, and as always if you have any questions or need anything, feel free to click here and give me a call or shoot me an email!

http://www.brandsattheranch.com/#intro

Posted on February 27, 2017 at 2:50 pm
Paul Hunter | Category: About the area, Buyer Tips, Investment, Places to Eat, Real Estate, Seller Tips, Things to Do | Tagged , , , , , , ,

Colorado Association of REALTORS Position!

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I’m happy to announce that I am taking my involvement in the REALTOR organization to the state level! I was elected as the Northeast District Chairman for the Colorado Association of REALTORS, and my term has just begun. In this volunteer position, I will be the avenue of communication between the local boards in my District, and the State Association of REALTORS.

I really look forward to advancing the professionalism of REALTORS and the REALTOR brand, and I am certain that this position will give me even more insight for me to bring back to you all, the most important part of my business, my real estate clients!

If you or anyone you know are in need of buying or selling a home, please feel free to give me a call today and I’ll take you to lunch to talk about it!

Posted on December 11, 2016 at 7:46 pm
Paul Hunter | Category: Real Estate | Tagged , , , , , , ,

Been Waiting On Selling? Let’s Talk About Your Home’s Value!

Are you interested in taking advantage of the 16.1% appreciation year over year in Fort Collins or the 8.6% number in Loveland? Give me a call and I would love to give you an idea of what your market value is today, and what your equity is in your home. That way if you do decide to sell or refinance this spring, you’ll be in a position to know what you can expect! I can share the Windermere Certified Listing program with you that has successfully helped my sellers beat the market when it comes to days on market sold price. Have a great week!

Posted on December 4, 2016 at 7:59 pm
Paul Hunter | Category: About the area, Buyer Tips, Investment, Real Estate, Seller Tips | Tagged , , , , , , , ,