March Madness

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When things get crazy on Wall Street, it’s often good for real estate.

Uncertainty in the stock market attracts investors to the stability offered by Treasury Bonds.

Higher demand for bonds means lower interest rates which is obviously good for real estate buyers.

“Turbulence in the financial markets is putting significant downward pressure on rates” said Sam Khater, Freddie Mac’s chief economist.

After peaking at just over 7% at the end of October, rates have been trending down.

The current rate on a 30-year loan is 6.6%.  A year ago it was 4.16%.

The post March Madness appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

March Madness

/in , , , , , /by

When things get crazy on Wall Street, it’s often good for real estate.

Uncertainty in the stock market attracts investors to the stability offered by Treasury Bonds.

Higher demand for bonds means lower interest rates which is obviously good for real estate buyers.

“Turbulence in the financial markets is putting significant downward pressure on rates” said Sam Khater, Freddie Mac’s chief economist.

After peaking at just over 7% at the end of October, rates have been trending down.

The current rate on a 30-year loan is 6.6%.  A year ago it was 4.16%.

The post March Madness appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

Equity Cushion

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You may remember the term “Home ATM” from the mid 2000’s. This term stemmed from the abundance of homeowners who pulled significant amounts of equity from their homes in the form of Home Equity Loans and Lines of Credit. Home values dropping in 2008, 2009 and 2010 caused many homeowners to be ‘underwater’ meaning that, all at once, their home was worth less than they owed.

Today, there are two big differences compared to the Home ATM years.

First, homeowners today have a lot of equity and very few homeowners are underwater. Of all the properties in the U.S. with mortgages, only 2.1% have negative equity. At the end of 2009, 24% of properties were underwater.

Second, homeowners are not pulling cash out of their homes like they were in the mid 2000’s. Net Equity Extraction is only 1.6% of disposable income compared to 8% during the housing bubble years.

The post Equity Cushion appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

Equity Cushion

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You may remember the term “Home ATM” from the mid 2000’s. This term stemmed from the abundance of homeowners who pulled significant amounts of equity from their homes in the form of Home Equity Loans and Lines of Credit. Home values dropping in 2008, 2009 and 2010 caused many homeowners to be ‘underwater’ meaning that, all at once, their home was worth less than they owed.

Today, there are two big differences compared to the Home ATM years.

First, homeowners today have a lot of equity and very few homeowners are underwater. Of all the properties in the U.S. with mortgages, only 2.1% have negative equity. At the end of 2009, 24% of properties were underwater.

Second, homeowners are not pulling cash out of their homes like they were in the mid 2000’s. Net Equity Extraction is only 1.6% of disposable income compared to 8% during the housing bubble years.

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Small is the New Big

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The average size of new homes is dropping.  This is after a two-year period that saw size increase significantly.  This is according to the National Association of Home Builders’ Eye on Housing.The COVID-19 pandemic changed how much time people spent in their homes and also how they used their homes. Homeowners discovered a need for more residential space as work-from-home became more prevalent.  This caused a demand for larger space.Now, as housing affordability has become more important, that trend is reversing.  Median single-family square floor area fell to 2,203 square feet during the fourth quarter of 2022, and is now the lowest it has been since 2011.

The post Small is the New Big appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

Small is the New Big

/in , , , , /by

The average size of new homes is dropping.  This is after a two-year period that saw size increase significantly.  This is according to the National Association of Home Builders’ Eye on Housing.The COVID-19 pandemic changed how much time people spent in their homes and also how they used their homes. Homeowners discovered a need for more residential space as work-from-home became more prevalent.  This caused a demand for larger space.Now, as housing affordability has become more important, that trend is reversing.  Median single-family square floor area fell to 2,203 square feet during the fourth quarter of 2022, and is now the lowest it has been since 2011.

The post Small is the New Big appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

A Little Perspective…

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Those of us in the real estate industry agree that the years 2020 to 2022 were anomalies.  During that time there were unique factors which drove abnormally high real estate activity. The number of transactions that occurred in those three years were at levels never seen before.It has become customary to compare the market in 2023 to the years 2016 to 2019 when looking at the number of closed transactions.Here’s what is interesting, while the number of closings so far this year is much less than last year, it is very close to what we saw in the more normal market of 2016 to 2019.Last month, 295 properties closed in Larimer County and 296 closed in Weld.The average January during 2016 to 2019 was 334 in Larimer and 303 in Weld.So, this year is only 12% lower than the average in Larimer County and 2% lower in Weld.

The post A Little Perspective… appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

A Little Perspective…

/in , , , , /by

Those of us in the real estate industry agree that the years 2020 to 2022 were anomalies.  During that time there were unique factors which drove abnormally high real estate activity. The number of transactions that occurred in those three years were at levels never seen before.It has become customary to compare the market in 2023 to the years 2016 to 2019 when looking at the number of closed transactions.Here’s what is interesting, while the number of closings so far this year is much less than last year, it is very close to what we saw in the more normal market of 2016 to 2019.Last month, 295 properties closed in Larimer County and 296 closed in Weld.The average January during 2016 to 2019 was 334 in Larimer and 303 in Weld.So, this year is only 12% lower than the average in Larimer County and 2% lower in Weld.

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Rate Prediction

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Our Chief Economist, Matthew Gardner predicts that interest rates will hit 5.4% by the end of 2023.

His prediction is aligned with most expert real estate economists.

While rates will continue to bounce up and down as the year goes on, the general trend will be lower rates.

This prediction is mainly based on the Fed tempering their increases as inflation starts to ease in the second half of the year.

Because of this prediction, we see housing demand increasing as rates decrease throughout the year.

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Jobs Bounce

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As the job market goes, so goes the housing market.  This is a fact about any primary housing market.

If employment is growing, the housing market will keep growing.

One of the many positive indicators of the healthy Northern Colorado economy is the fact that the jobs lost during the pandemic have bounced back.

Not only has employment recovered, it now exceeds pre-pandemic levels.

Northern Colorado unemployment is now down to 4.1%.

These facts were reported by our Chief Economist Matthew Gardner during our annual Market Forecast event.

If you would like to see any of the slides from the presentation, please let us know.

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