The New Gardner Report Is Out!

by Paul Hunter

The following analysis of the Metro Denver and Northern Colorado real estate market 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 me.

ECONOMIC OVERVIEW

Colorado added 45,800 non-agricultural jobs over the past 12 months, a growth rate of 1.8%. Within the metropolitan market areas included in this report, annual employment growth was seen in all areas other than Grand Junction (where employment was stable) with substantial growth seen in Fort Collins (4.6%) and Greeley (3.5%).

In August, the unemployment rate in the state was 2.2%, down from 3.1% a year ago. The lowest reported unemployment rates were again seen in Fort Collins at just 1.8%. The highest rate was in Grand Junction, at a very respectable 3.0%. It is still reasonable to assume that all the markets contained within this report will see above-average wage growth given the very tight labor market.

HOME SALES ACTIVITY

There were 17,140 home sales during the third quarter of 2017, which was a drop of 3.3% from the same period in 2016.
Sales rose the fastest in Boulder County, which saw sales grow 4% more than the third quarter of 2016. There were marginal increases in Weld and Larimer Counties. Sales fell in all the other counties contained within this report.
Home sales slowed due to very low levels of available inventory. Listing activity continues to trend at well below historic averages, with the total number of homes for sale in the third quarter 5.5% below the level seen a year ago.
The takeaway here is that sales growth has stalled due to the lack of homes for sale.

HOME PRICES

With substantial competition for the few available homes, prices continue to rise. Average prices were up 7.5% year-over-year to a regional average of $428,602.
Slower appreciation in home values was again seen in Boulder County, but the trend is still positive.
Appreciation was strongest in Weld County, which saw prices rise 12%.
Due to an ongoing imbalance between supply and demand, home prices will continue to appreciate at above-average rates for the foreseeable future.

DAYS ON MARKET

The average number of days it took to sell a home dropped by one day when compared to the third quarter of 2016.
Homes in all counties contained in this report took less than a month to sell. Adams County continues to stand out as it took an average of just two weeks to sell a home there.
During the third quarter, it took an average of 20 days to sell a home. This is up by 3 days compared to the second quarter of this year.
Demand remains strong, and well-positioned, well-priced homes continue to sell very quickly.

CONCLUSIONS

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

In the third quarter of 2017, I have chosen to leave the needle where it was in the second quarter. Homes are still scarce; however, there is a small slowdown in price growth and a decline in both closed and pending sales. This may suggest the market is either getting weary of all the competition or that would-be buyers are possibly putting off buying until they see more choices in the number of homes for sale.

ABOUT MATTHEW GARDNER

Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has more than 30 years of professional experience both in the U.S. and U.K.

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About the area • Buyer Tips • Investment • Real Estate • Seller Tips • May 15, 2017

The New Gardner Report!

by Paul Hunter

ECONOMIC OVERVIEW

Annual employment in Colorado grew by a respectable 2.3% in February, which equated to about 64,000 new jobs over the past 12 months. Within the metropolitan market areas included in this report, employment has been mixed, with Denver, Fort Collins, and Colorado Springs reporting above-average growth. However, Greeley and Grand Junction saw a modest decline in employment.

In February, the unemployment rate in Colorado was 2.9%, down from 3.3% a year ago. The lowest reported unemployment rates were in Fort Collins and Boulder, at just 2.6%. The highest rate was in Grand Junction, but it was still a respectable 4.7%.

HOME SALES

There were 11,640 home sales during the first quarter of 2017, an annual increase of 2.2%.
Arapahoe County saw sales grow at the fastest rate over the past 12 months, with a 7.9% increase. There were also impressive increases in Douglas County. There were very modest sales declines in the relatively small Larimer and Weld Counties.
Listing activity remains well below historic averages, with the total number of homes for sale in the first quarter 10.7% below that seen a year ago.
Home sales are generally higher than seen a year ago, but inventory levels are well below where they need to be to satisfy would-be buyers.

HOME PRICES

With demand remaining strong, home prices continue to escalate. In the first quarter of this year, average prices rose by 8% when compared to a year ago. Average home prices across the region broke the $400,000 barrier at $402,273.
Home prices remain well above historic highs and continue to trend upward. While there are very modest slowdowns in price growth—possibly a function of rising interest rates—they should continue to appreciate at above-average rates throughout 2017.
Appreciation was strongest in Arapahoe and Weld Counties, where prices rose by 12.2% and 10.1% respectively.
The housing market remains strong and this will continue until we see a substantial increase in the number of homes for sale, which is unlikely in the near-term.

DAYS ON MARKET

The average number of days it took to sell a home dropped by one day when compared to the first quarter of 2016.
Homes in a majority of the counties took less than a month to sell.

During the first quarter, it took an average of 30 days to sell a home. This is down by one day compared to the same time last year.
Demand remains very strong across the region, which is evident by the remarkably short amount of time that it takes to sell a home.

CONCLUSIONS

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

In the first quarter of 2017, the needle remains well into seller’s territory. The recent increases in mortgage rates have not had any dampening effect on either demand or home prices, and I expect this will remain unchanged through the end of the year.

ABOUT MATTHEW GARDNER

Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has over 25 years of professional experience both in the U.S. and U.K.

About the area • Investment • Real Estate • Seller Tips • April 3, 2017

Your New Property Tax Valuation…..WOW!

by Paul Hunter

If you own a home in Larimer County, you are probably excited about the increase in equity over the last few years due to the appreciation level we have seen. If you are buying a home in Larimer County right now, don’t worry you aren’t left out in the cold, the prognosis for property values in the next 5 years is still good! But there is one fly in the ointment when it comes to appreciation, and those are your property taxes. The county assessor is re-assessing values, and most of these are going to be going up. The way that the Assessor looks at values is interesting, and if you would like help trying to fight your tax value and getting it lower, I can pull the specific information that is required to do that, and show you the steps. Give me a call or shoot me an email if you are interested and we can talk more about the details!

About the area • Buyer Tips • Investment • Real Estate • Seller Tips • March 17, 2017

Friday Fun Facts – Mortgage Rates

by Paul Hunter

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.

About the area • Buyer Tips • Real Estate • Seller Tips • March 10, 2017

Friday Fun Facts

by Paul Hunter

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.

About the area • Real Estate • Seller Tips • March 3, 2017

Friday Fun Facts

by Paul Hunter

Luxury Spotlight

So how’s the luxury market? Let’s look…

Today there are 88 single family homes for sale in Larimer and Weld County priced at $1 Million and above.

Over the last year, 63 of these properties have sold.

This means it would take 17 months to sell all of these luxury properties at the current pace of sales.

Where do most of these sales occur? The most active city is Fort Collins with 18 luxury sales followed by Loveland with 13.

The most active neighborhood in all of Northern Colorado for luxury properties is the Harmony Club in Timnath with 8 sales.

Windermere Real Estate is proud to have represented the most expensive home to sell in Northern Colorado in the last two years – a $2,800,000 property in the Harmony Club which featured a gourmet French Kitchen, reclaimed barnwood floors and handmade peg wood beams.

Contact me to learn more about our Premier Properties program which is custom designed to sell luxury homes.

About the area • Buyer Tips • Real Estate • Seller Tips • Uncategorized • February 24, 2017

Friday Fun Facts!

by Paul Hunter

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 college towns nestled against the foothills. They both have affordability issues which push real estate buyers to satellite communities (what is happenning 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 (which is great for us Fort Collins-ites who love the culture here!). 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.

About the area • Buyer Tips • Investment • Real Estate • Seller Tips • February 13, 2017

The First Gardner Report!

by Paul Hunter

Happy Monday everyone! We now have a GREAT resource at our disposal at Windermere. Our Chief Economist Matthew Gardner will be releasing the Garner Report each quarter that gives pertinent information about the Northern Colorado and Denver markets. See below to check it out, and if you would like to have a hard copy mailed to you, please let me know!

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The following analysis of the Metro Denver & Northern Colorado real estate markets 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 me.

ECONOMIC OVERVIEW

Annual employment growth in Colorado was measured at a respectable 2.2% in November and will likely finish the year having created around 55,000 new jobs. Within the metropolitan market areas included in this report, we are seeing employment growth at or above the state level and I anticipate that this will continue to be the case in 2017.

Unemployment rates continue to drop, and with rates now below three percent, all of Colorado’s metro areas are at full employment. Because of this robust level of growth—in concert with very low unemployment levels—I anticipate that we will see some fairly substantial income growth as companies look to recruit new talent and keep existing employees happy.

HOME SALES ACTIVITY

There were 14,614 home sales during the fourth quarter of 2016—up by a marginal 0.7% from the same period in 2015.
Jefferson County saw sales grow at the fastest rate over the past 12 months, with a 5.9% increase. Sales activity fell in three counties, but this was a function of short supply rather than slowing demand.
Listing activity continues to remain well below historic averages, with the total number of homes for sale in the fourth quarter 12.8% below that seen a year ago.
The key takeaway from this data is that 2017 is shaping up to be one which will still substantially favor home sellers. I do anticipate that we will see some improvement in listing activity, but it is almost a certainty that demand will exceed supply for another year.

HOME PRICES

Demand continued to exceed supply in the final three months of 2016 and this caused home prices to continue to rise. In the fourth quarter, average prices rose by 9% when compared to the fourth quarter of 2015. The average sales price across the region is now $393,969.
In many parts of the region, prices are well above historic highs and continue to trend upward. With double-digit price increases over the past year, the market remains very hot.
Annual price growth was strongest in Larimer and Jefferson Counties, where prices rose by 11.8% and 10.9% respectively.
While we will likely see some modest softening in home price growth in 2017, we can still expect a very strong market.

DAYS ON MARKET

The average number of days it took to sell a home dropped by one day when compared to the fourth quarter of 2015.
Homes in a majority of the counties took less than a month to sell.
In the final quarter of the year, it took an average of just 27 days to sell a home. This is down from the 28 days it took in the fourth quarter of 2015.
The Northern Colorado housing market is still firing on all cylinders. The only missing piece is listings, which remain well below the historic average.

CONCLUSIONS

This speedometer reflects the state of the region’s housing market using housing inventory, price gains, sales velocities, interest rates, and larger economic factors.

For the fourth quarter of 2016, the needle remains firmly in the seller’s territory. It will be interesting to see if the recent increase in mortgage rates has any effect at all on the housing market. I believe that it will; however, I expect that it will likely cause a slowdown in home price growth rather than any collapse in home prices.

ABOUT MATTHEW GARDNER

Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has over 25 years of professional experience both in the U.S. and U.K.

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About the area • Buyer Tips • Investment • Real Estate • Seller Tips • January 27, 2017

2017 Real Estate Market-Where Are We Going?

by Paul Hunter

About the area • Buyer Tips • Investment • Real Estate • Seller Tips • January 23, 2017

What’s Happening In The 2017 Real Estate Market?

by Paul Hunter

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!