|With the stock market on a wild ride and the Dow Jones dropping nearly 1,000 points yesterday, it makes some people wonder if the local real estate market might also crash or at least “correct.”
A little history lesson is in order.
Over the last 40 years, the real estate market along the Front Range has averaged 5.5% appreciation per year.
The highest appreciation in one year was 15.9% in 1994.
The lowest ever was -4.0% in 1982.
The last time Wall Street was in turmoil and the stock market was plummeting was 2008. This was, for many reasons, the worst economy of our lifetime.
That year real estate along the Front Range dropped 2.2%.
Meanwhile that year the Dow Jones fell 33.8%.
Bottom line, our market has no history of crashing or even experiencing a major correction.
Why is that?
The answer is fundamentals.
Our local economy has inherent fundamentals that insulate it from big downturns.
We have an incredibly diverse economy which is not reliant upon a single industry. We have all the way from health care, to technology, agriculture, oil and gas, major universities, and financial services (just to name a few).
We are a global destination with a major international airport.
Oh, and the quality of life here isn’t too shabby.
Prices of real estate, just like prices of anything, come down to basic economic principles of supply and demand.
Because of our diverse economy and desirable quality of life, there has been strong, consistent demand for housing along the Front Range.
While there may be little bumps along the way, over the long term our market has proven that it performs.
Now that we have finished with the election turmoil, we’ll start to see what the results will mean for the housing market. If you’d like to see Windermere’s Economists point of view on the matter, check out this link.
We are still seeing signs of low inventory and a quick moving market, and even some antidotal evidence that the $500,000 to $750,000 segment of the market is starting to see more showings and activity than we saw in August through October. The average price in Fort Collins year to date is up 10.4% to $395,913, almost $400,000 average price. We are also at 1.8 months of supply (remember the National Association of REALTORS says a balanced market is 6 months), and that is a 28% drop since last year at this same time. This means we have even LESS homes to satisfy the market.
While interest rates have started to climb a little since the election, we are still historically low for interest rates so if you need or want to buy then now is a great time! And as a seller, as we’ve seen with the data I’ve presented above, if you want to sell your home give me a call and we can talk about how the Windermere Certified Listing program can help get your home sold quickly!
If you have any questions about this data, please feel free to give me a call or shoot me an email. I hope you all have a great Thanksgiving week!
Buyers and Sellers, there are opportunities for both parties in this northern Colorado real estate market. The only caveat to that statement is that we need to be ready for whatever comes our way and be able to move quickly. On the Buyer side, that means being proactive about seeing homes that come on the market and having me use tactics to try and find homes that have not hit the MLS yet. For Sellers that means being ready to knowledgably review multiple offers on your listing, and choose the one that gets you not only the most money, but has the best chance of closing (not always the same thing).
I would love to talk with you in more detail about the real estate market opportunities in northern Colorado, so feel free to give me a call, I'll take you to coffee!
Are you interested in finding out what is going on in real estate in your neighborhood area? Sign up for my Neighborhood News report, and get the inside track to the housing activity that can affect your home's value!
If you or anyone you know needs a Market Analysis to find out exactly what your home is worth in this competitive market, please contact me and let me know.
I hope that you have a fantastic Monday and week ahead!
Well here we go again, homes are being absorbed into the market even faster than they were back in April! Absorption rate is the time it would take to sell all of the homes on the market today, kind of a balance sheet snapshot of inventory vs speed of sale. The interesting thing is that new listings are about the same, so the homes that are hitting the market are selling even more quickly. Instead of an absorption rate of 3.12 months in April, we are down to 1.46 months, a HUGE change. A lot of this can be attributed to the under $300,000 market moving so quickly as buyers clamor to get the remaining affordable homes in Fort Collins, but homes are still moving much more quickly even in the upper price ranges than a balanced market would usually allow for.
What to do with this information? Basically, as a buyer you need me to be proactive in searching for homes for you, and need to be ready to make very fast decisions on making an offer. This means being pre qualified and ready to go at a moment’s notice. As a seller, if you own a home in the under $300,000 price range and have considered selling, now is the time.
I hope you all have a great week, and as always please give me a call if you or anyone you know is in need of real estate help!
2014 continues to be a record year, in many different ways. As a buyer or a seller, we are seeing trends in the market that we have not seen in the last decade at least. There are opportunities on both sides of the transaction, but you need to be very focused on how to take advantage of those opportunities.
What I think everyone and their mother knows by now is that inventory is low. As in, crazy low. But an interesting statistic is that pending or under contract sales are down 27.5 percent year to date, and new listings (while still lower than last year) are down only 5.5 percent. What that tells me is that the good properties that are priced well have been picked over, and we are starting to see more listings come on the market that may be over priced as sellers are trying to catch the wave of appreciation. Don’t get me wrong, appreciation has CERTAINLY occurred with the average sales price up 8.4 percent year to date at $311,979 for Fort Collins. But, I think there are more and more sellers (and correspondingly their brokers) who are taking a “let’s see if we can get it” type mentality. While I am happy to help you as a seller get the premium for your home, I think pricing accordingly to your appreciation and not just a gut feeling is important.
On the buying side, with interest rates still low, taking advantage of the properties that are priced appropriately still makes sense in the long term. Year to date the average percentage of sold price to list price is right at 99%, so understanding that beating sellers up on price if they are even remotely close to where they should be on price is in most cases not feasible. As long as you as a buyer are willing to move quickly on good homes and have all of your financing in order, then I still think it is possible for you to find the right home.
If you have any questions, or know of anyone looking to buy or sell a home, feel free to contact me anytime!