Bubble Burst

Every so often we will hear a concern that another housing bubble is forming.

To help answer that question it’s valuable to look at the reasons that caused the last one.

There were three main drivers of the bubble that burst in 2008:

1. Easy Credit – loans were very easy to attain
2. Over-Leverage – people were using their homes at ATM’s
3. Over-Supply – too many new homes were being built

Now, let’s compare that to today:

1. Stricter Credit – the average home buyer today has a FICO score of 755
2. High Equity – collectively, U.S. homeowners have $19 Trillion of equity in their homes and collective mortgage debt has not increased for 13 years
3. Under-Supply – today we are building only two-thirds of the new homes being built in 2004 yet the population is much higher

Given this healthy information, we don’t see another housing bubble forming today.

Posted on February 21, 2020 at 3:18 pm
Paul Hunter | Category: Buyer Tips, Friday Fun Facts, Real Estate, Seller Tips | Tagged , , ,

Supply and Demand

Northern Colorado gave us a real-life economics lesson in January 2020.

Compared to one year ago…

  • Inventory was down 10% (Supply)
  • Homes under contract went up 31% (Demand)
  • Prices were up 5% (Result)
Posted on February 7, 2020 at 3:29 pm
Paul Hunter | Category: Friday Fun Facts | Tagged , , , ,

New Home News

Nationally, sales of new homes are stronger than they have been in a long time. March was the best month since 2007 and April was the third-best month in that same time period.

This research comes from the National Association of Home Builders who show that we are on pace to sell 673,000 new homes this year across the Country. 5 years ago there were roughly 450,000 sales of new homes.

For the first four months of 2019, new home sales are 6.7% ahead of the sales pace of the initial four months of 2018.

What is interesting is that those gains have distinct regional clustering. Year-to-date sales are up 10.3% in the South, 6.7% in the West (concentrated in the Mountain states), and 1.3% in the Midwest, while recording a 17.6% decline in the Northeast.

Posted on May 31, 2019 at 1:44 pm
Paul Hunter | Category: Buyer Tips, Seller Tips | Tagged , , ,

Friday Fun Facts!

Posted on October 26, 2018 at 1:10 pm
Paul Hunter | Category: About the area, Buyer Tips, Fort Collins Real Estate, Investment, Loveland Real Estate, Real Estate, Wellington Real Estate, Windsor Real Estate | Tagged , , , , , ,

Friday Fun Facts! A History Lesson

Posted on October 19, 2018 at 2:23 pm
Paul Hunter | Category: About the area, Buyer Tips, Fort Collins Real Estate, Homes for Sale, Investment, Loveland Real Estate, Real Estate, Seller Tips, Wellington Real Estate, Windsor Real Estate | Tagged , , , , , , ,

Friday Fun Facts! The Cost of Waiting

Posted on September 7, 2018 at 1:44 pm
Paul Hunter | Category: About the area, Buyer Tips, Fort Collins Real Estate, Homes for Sale, Investment, Loveland Real Estate, Real Estate, Seller Tips, Wellington Real Estate, Windsor Real Estate | Tagged , , , , , ,

Friday Fun Facts! Different Markets/Different Dynamics

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No Two Alike

Anyone who has more than one child is frequently amazed by the difference between the children. How is it that two kids from the same parents are so different from each other?

Same goes in our Northern Colorado market. We see a major difference between certain price ranges and certain locations right here in our little neck of the woods.

Clients are constantly reading about and hearing about the “hot” market. They make assumptions that every price range and every location in Larimer and Weld Counties are on fire. Not true!

Just like two kids from the same parents are different, two price ranges in the same place are very different.

To make this point, let’s look at months of inventory. This statistic simply measures how long it would take to sell the current inventory of homes at the current pace of sales.

Across all price ranges, months of inventory in Larimer County = 2.0. Meaning it would take two months to sell all the homes currently for sale. But this is misleading, because months of inventory…

  • Under $500,000 is 1.2
  • Between $500,000 and $1,000,000 is 4.2
  • Over $1,000,000 is 11.7

So the $1,000,000 seller who hears that the market is “hot” is actually faced with a year’s inventory currently on the market!

This is a very high level look at the differences in our market. I am happy to give you a detailed look at your exact neighborhood in your exact price range. Let me know if we can help!

Posted on August 18, 2017 at 4:22 pm
Paul Hunter | Category: About the area | Tagged , , ,

Friday Fun Facts

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Housing Shift

We’ve been researching Northern Colorado’s aging demographic and the impact it will have on housing. Here are some interesting facts…

  • The number of people between 65 and 90 years old will grow by 124% in the next 20 years.
  • In 20 years there will be roughly 40,000 more people between the ages of 65 and 90 than there are today.

What does this mean for housing?

  • Let’s assume that as people reach their 70’s and 80’s, they will most likely move from their current housing situation to a new one
  • Let’s also assume that two people live in each of these households (it may be even less, but we will use two for this illustration)
  • If 40,000 shift to this demographic that means that these people are moving from 20,000 housing units into another 20,000 housing units

So the impact to our real estate market will be huge- many homes coming on the market and many new housing units needed.

This is a dynamic I am focused on and will continue to watch closely.

Posted on March 25, 2017 at 12:00 am
Paul Hunter | Category: About the area, Buyer Tips, Investment, Real Estate, Seller Tips | Tagged , , ,

Friday Fun Facts – Mortgage Rates

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So What?

The Federal Reserve raised their benchmark interest rate 0.25% this week.

So what does this mean for real estate?

Some perspective is in order…

First, mortgage rates are not directly tied to the Fed Funds rate. They are, however, closely tied to the 10-year Treasury.

While the Fed was raising their rates this week, mortgage rates actually dipped lower (although slightly).

Mortgage rates today on a 30-year loan are essentially 4.25%.

The long term average for mortage rates, going all the way back to 1970 is 7.5%

For every 1% rise in rates, there is a corresponding 10% impact to the monthly payment.

Mortgage rates have increased about 0.75% since the election.

Most economists expect rates to increase another 0.5% by year-end.

I am watching mortgage rates closely and will continue to keep my clients updated as to where the experts think they are heading.

Posted on March 17, 2017 at 2:59 pm
Paul Hunter | Category: About the area, Buyer Tips, Investment, Real Estate, Seller Tips | Tagged , , , , , , , ,

Friday Fun Facts

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The Results Are In!

You’ve probably heard that prices are up in Northern Colorado 🙂

Anohter source just confirmed this.

The Federal Housing Finance Authority recently released their quarterly report on 260 metropolitan markets across the country.

Get this, Colorado has 4 cities ranked in the top 15 for yearly price growth.

Northern Colorado is well-represented on this list.

  • 11th Fort Collins/Loveland
  • 12th Greeley
  • 15th Boulder

By the way, Denver is 14th. And in case you are wondering, Palm Bay Florida is ranked 1st.

All of the Northern Colorado cities have had just over 10% appreciation in the last year meaning that prices are growing at about double the long-term average.

To receive a copy of the full FHFA report, simply email me at phunter@windermere.com and we will get one in your hands right away.

Posted on March 10, 2017 at 11:30 pm
Paul Hunter | Category: About the area, Buyer Tips, Real Estate, Seller Tips | Tagged , , , , , , ,