Larimer Resilience

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To see the resilience of the Front Range market, look no further than Larimer County.

The average price for closed single-family homes in the month of July was $724,000.

This is only the third time in history Larimer County has exceeded $700,000 for average price in a month.

July’s average price is a whopping 12% higher than February’s average price which was $646,000.

A 12% difference in just a few months is significant in any market.

What makes this increase especially significant is that interest rates have been above 6.5% the entire time.

Higher rates did not keep prices from going higher.

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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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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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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…

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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.

The “R” Word

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Our clients wonder what a recession would mean for the real estate market.

Many assume it would translate into a downturn in prices.

Some even worry that it would cause values to come crashing down.

We looked back in history, at past recessions, to gain an understanding of what recessions mean for the Front Range market.

We used the extensive data from the Federal Housing Finance Authority to look at home price appreciation during the five recessions dating back to 1981.

What we found was quite interesting.

During the five recessions of 1981, 1990, 2001, 2008 and 2020, home prices along the Front Range went up in all but the 2008 recession.

What was unique about 2008 was that housing led the recession.  Whereas the other recessions were triggered by some combination of inflation, oil prices, and stock market issues (plus the pandemic in 2020).

So, if the past is an indicator of the future, a recession is not guaranteed to result in lower real estate prices.

The Front Range real estate market has always demonstrated long-term health and a great resiliency to outside economic events.

See the chart below for the detailed research…

The post The “R” Word appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

The “R” Word

/in , , , , , , , /by

Our clients wonder what a recession would mean for the real estate market.

Many assume it would translate into a downturn in prices.

Some even worry that it would cause values to come crashing down.

We looked back in history, at past recessions, to gain an understanding of what recessions mean for the Front Range market.

We used the extensive data from the Federal Housing Finance Authority to look at home price appreciation during the five recessions dating back to 1981.

What we found was quite interesting.

During the five recessions of 1981, 1990, 2001, 2008 and 2020, home prices along the Front Range went up in all but the 2008 recession.

What was unique about 2008 was that housing led the recession.  Whereas the other recessions were triggered by some combination of inflation, oil prices, and stock market issues (plus the pandemic in 2020).

So, if the past is an indicator of the future, a recession is not guaranteed to result in lower real estate prices.

The Front Range real estate market has always demonstrated long-term health and a great resiliency to outside economic events.

See the chart below for the detailed research…

The post The “R” Word appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

Two Week Snapshot

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Here is a quick snapshot of our markets two weeks into July versus the same time last year…

Larimer & Weld Counties:

  • Inventory up 61%
  • Transaction count down 44%
  • Prices up 17%

Metro Denver:

  • Inventory up 62%
  • Transaction count down 31%
  • Prices up 12%

The post Two Week Snapshot appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.