2019 Economic and Housing Forecast Preview
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2017 Real Estate Market-Where Are We Going?
What’s Happening In The 2017 Real Estate Market?
I want to thank everyone who came out to the Windermere Forecast last week, it was great to see so many people there interested in the real estate market and where we are headed in the future. I wanted to make sure that even if you did not make it, you are familiar with some of the big takeaways from the presentation.
The big story of course is the ongoing low inventory in Northern Colorado. We are at a quarter of where we were back just 6 years ago in 2011, just check out the graph below. This will continue to drive a fast moving market through 2017, although potentially not at the same pace we saw in 2016. That cooling off will be a product of increasing interest rates as the year progresses. While it is certainly great to be a seller in this market, there are still great ways for buyers to get more home than they could have afforded in the past because of where interest rates are currently.
What that low inventory has driven is an above average appreciation rate for the Fort Collins/Loveland areas (as well as the rest of Northern Colorado). As you can see below, we are above the long term 5% appreciation average, so again that will probably slow down just a little bit in to 2017, although we will still be appreciating!
One of the other big questions I get is from my investors, and that is “why should I buy an investment property with these increased prices?”. The answer lies in two things. The first is low interest rates, and the second is with massively increased rents. Even when a 3 bedroom 2 bath home near the CSU campus was $100,000 less than it was today, we are STILL cash flowing about 60% more than we were back when prices were lower. As you can see below, we have seen an increase in rents, along with a decrease in vacancy (especially if you look at a longer 10 year term).
If you have any questions about this info, or want to talk more about buying, selling, or investing in real estate, I’d love to take you to coffee to discuss it!
Inventory! Inventory! Inventory!
The three most important parts of real estate may be location, location, location; but I would argue right now they are inventory, inventory, inventory! In Fort Collins we were still at only 215 homes active and on the market this month. In a town of over 150,000 people that definitely is NOT enough. We have 1.27 months of inventory available, which is WELL below the 6 months that the National Association of REALTORS describes as a balanced market.
There is good news for both buyers and sellers though. On the seller side, even with a slowdown in the higher end of the market, we have seen really great results in our Windermere Certified Listing process as well as our high end Premier Program. Many sellers are deciding to capitalize on their increase equity in their homes and sell in a seller’s market (below $400,000) and buy in a buyer’s market (over $500,000).
The good news for buyers is that even with the small bump in interest rates we have seen in the last couple months, the rates are still so low that buyers can afford more than they have before! Call me if you want to talk about the ways we can definitely still find you a home in this low inventory market.
If you have any questions about buying or selling a home in Northern Colorado, please give me a call and I’d be happy to take you to coffee to show you more stats and help you with your decision. Also, if you would like detailed information about what is going to be happening in the 2017 real estate market, come to our Windermere Market Forecast next Thursday the 19th at 5:30pm at the Fort Collins Marriott. We will have our chief economist fly out from Seattle to give us a rundown on the National, State, and Local markets. I hope you can make it!
2016 Windermere Real Estate Forecast
Thank you to everyone that joined us for our Forecast event last week! It was great to see so many people here and to hear about where our market is going for the next year. Our chief economist came out from Seattle to give a run down on the national and state markets, and Eric Thompson discussed our local market dynamics. Then I was lucky enough to get to present our Windermere Foundation check to our non profit partner Homeless Gear. Check out the link below to watch a quick recap of the Forecast highlights!