RSVP Time

There are four key questions that our clients have right now:1. What will values do this year and is there any chance of a housing bubble?2. When will mortgage rates drop below 6%?3. Will inflation subside this year?4. Is now a good time to buy or sell? All of these questions will be answered by our Chief Economist Matthew Gardner on February 1st at our annual Market Forecast.  Fun Fact, Windermere is the only real estate brokerage in the United States with a Chief Economist. You can RSVP for Matthew’s lively and informative presentation at ColoradoForecast.com.The Windermere Forecast is at 5:30pm on Wednesday, February 1st at the Fort Collins Marriott.

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

RSVP Time

There are four key questions that our clients have right now:1. What will values do this year and is there any chance of a housing bubble?2. When will mortgage rates drop below 6%?3. Will inflation subside this year?4. Is now a good time to buy or sell? All of these questions will be answered by our Chief Economist Matthew Gardner on February 1st at our annual Market Forecast.  Fun Fact, Windermere is the only real estate brokerage in the United States with a Chief Economist. You can RSVP for Matthew’s lively and informative presentation at ColoradoForecast.com.The Windermere Forecast is at 5:30pm on Wednesday, February 1st at the Fort Collins Marriott.

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

Inflation and Housing

Yesterday’s Consumer Price Index report for October showed a lower-than-expected increase in inflation.  Many believe, based on the numbers, that inflation rates may have peaked.  Investors cheered and the stock market showed its biggest increase since bouncing back from the pandemic-caused bear market in 2020.So, what does yesterday’s news mean for housing in the short term?
  • Higher real estate consumer confidence as fears of inflation will likely subside and people will feel wealthier as their investment accounts rebound
  • Lower mortgage rates because they track the yield on the 10-year treasury which has fallen over 8% since Friday 
Yesterday’s news certainly is a positive for Front Range real estate.

The post Inflation and Housing appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

Inflation and Housing

Yesterday’s Consumer Price Index report for October showed a lower-than-expected increase in inflation.  Many believe, based on the numbers, that inflation rates may have peaked.  Investors cheered and the stock market showed its biggest increase since bouncing back from the pandemic-caused bear market in 2020.So, what does yesterday’s news mean for housing in the short term?
  • Higher real estate consumer confidence as fears of inflation will likely subside and people will feel wealthier as their investment accounts rebound
  • Lower mortgage rates because they track the yield on the 10-year treasury which has fallen over 8% since Friday 
Yesterday’s news certainly is a positive for Front Range real estate.

The post Inflation and Housing appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

The Big News

The big news this week is obviously the rise in interest rates.

Average 30-year fixed mortgage rates are now at 6.7% which is the highest they have been since July 2007.

So, how is this affecting the market?  Here is what we notice…

There are fewer buyers in the market.  Sales activity, measured by closed and pending sales, is down 30% compared to last year.

Prices, however, continue to rise.  Average prices are roughly 11% higher than last year.  This is driven by the market being under-supplied.

Inventory levels, as measured by months of supply, tells us we still have a Seller’s market.  There is 2 month’s of supply currently for sale.

Ultimately, we expect the rise in interest rates to slow the pace of price appreciation.  We believe the market will return to its long-term average of 6% per year.

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

Q1 2022 Colorado Real Estate Market Update

The following analysis of select counties of the 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 your Windermere Real Estate agent.

 

Regional Economic Overview

The most recent jobs data showed that by February of this year Colorado had recouped all of the more than 375,000 jobs that were shed due to the pandemic and had added an additional 6,000 positions. The recovery in employment was faster than I had expected, which has led me to revise my 2022 forecast: I now predict that the Colorado job market will increase by 4% this year and will add more than 112,000 new jobs. The state unemployment rate in February was 4%, which is well below the pandemic peak of 11.8% but still above the 2.6% average in 2019. Regionally, unemployment rates ranged from a low of 3.1% in Boulder to a high of 4% in the Colorado Springs and Greeley metropolitan areas.

Colorado Home Sales

❱ In the first quarter of the year, 8,178 homes sold, representing a drop of 6.3% compared to the same period a year ago and 30% lower than in the fourth quarter of 2021.

❱ Sales increased in 4 of the 12 counties covered by this report but fell in the balance of the market areas.

❱ Similar to last quarter, low inventory levels continue to constrict sales. Listing activity was 17.3% lower than the same period in 2021 and 29.5% lower than in the fourth quarter of 2021.

❱ Pending sales, which are an indicator of future closings, also declined, though the drop of 4.3% is not that significant. That said, unless we see a surge in inventory levels in the spring, second quarter sales may also be light.

A bar graph showing the annual change in home sales for various counties in Colorado between Q1 2021 and Q1 2022.

Colorado Home Prices

❱ With limited inventory and rising mortgage rates, buyers were motivated, as demonstrated by the 14.9% increase in average prices compared to a year ago. Home prices in first quarter averaged $637,963, which is 4.5% higher than last quarter.

❱ Boulder County continues to see average sale prices holding above $1 million. Although we have seen some softening in list prices, I expect this market to remain above the $1 million mark as we move through the year.

❱ Year over year, prices rose by double-digits across all markets covered by this report, with a huge jump in the small Gilpin market.

❱ With little in the way of choice for buyers—as well as a “fear of missing out” given rising mortgage rates—it’s no surprise there was such solid price appreciation. That said, there is normally a lag between rising rates and any impact on home prices. The second quarter should indicate if the jump in rates has had a softening effect on price growth.

A map showing the year-over-year real estate market percentage changes in various counties in Colorado for Q1 2022.

A bar graph showing the annual change in home sale prices for various counties in Colorado from Q1 2021 to Q1 2022.

Mortgage Rates

Average rates for a 30-year conforming mortgage were 3.11% at the end of 2021, but since then have jumped over 1.5%—the largest increase since 1987. The surge in rates is because the market is anticipating a seven- to eight-point increase from the Federal Reserve later this year.

Because the mortgage market has priced this into the rates they are offering today, my forecast suggests that we are getting close to a ceiling in rates, and it is my belief that they will rise modestly in the second quarter before stabilizing for the balance of the year.

A bar graph showing the average rates for a 30-year conforming mortgage, plus Matthew Gardner's mortgage rate forecasts for Q2 2022 through Q1 2023.

Colorado Days on Market

❱ The average number of days it took to sell a home in the markets contained in this report fell four days compared to the first quarter of 2021.

❱ The length of time it took to sell a home dropped in every county other than Gilpin compared to the same quarter a year ago.

❱ It took an average of only 21 days to sell a home in the region, matching the previous quarter.

❱ Compared to the final quarter of 2021, average market time fell in Clear Creek, Adams, Denver, Jefferson, and Arapahoe counties, but rose in the balance of the markets contained in this report.

A bar graph showing the average days on market for homes in various counties in Colorado during Q1 2022.

Conclusions

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

With Colorado on solid economic footing, I expect housing demand to remain strong even in the face of rising financing costs. Inventory levels remain very low, and new home construction has not expanded enough to meet demand, which continues to put upward price pressure on resale homes. The market appears to have shrugged off the jump in mortgage rates in the first quarter, but the full effects won’t be felt until later this spring. We’ll have to wait and see what impact, if any, there will be, but data on listing prices shows that home sellers remain bullish.

A speedometer graph indicating a seller's market in Colorado during Q1 2022.

Given all these factors, I am leaving the needle in the same position as last quarter. The market clearly still favors sellers, but we need a few more months of information to determine how rising mortgage rates may impact home sales and/ or prices.

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

The post Q1 2022 Colorado Real Estate Market Update appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

Expert Opinion

This week, take a listen to Matthew Gardner, Windermere’s Chief Economist as he discusses the current state of the housing market.​​​​​​​

 

He takes a deep dive into interest rates, price appreciation and where the market is headed.

 

You can watch his video HERE

 

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

Interest-ing

The recent increase in mortgage rates has started some home buyers to look at programs that have fixed rates for 7 years or 10 years instead of 30 years.

If a buyer believes it is likely they will move or even refinance within this timeframe, these types of programs can be a good option.

The obvious benefit is a lower monthly payment compared to a 30-year program. 

Another benefit, which most people underestimate, is the savings in interest.

Today, for example, a buyer would have these options:

  • 5.25% 30-year fixed
  • 4.375% 10-year fixed
  • 4.125% 7-year fixed

Over the first five years of the loan, the buyer would pay the following amounts in interest for each loan program for a $400,000 loan:

  • $101,126 for 30-year
  • $83,764 for 10-year
  • $78,831 for 7-year

So the savings in interest over the first five years compared to the 30-year program is:

  • $17,362 for 10-year
  • $22,295 for 7-year

The post Interest-ing appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

Buy Before 5

30-year mortgage rates just exceeded 4% for the first time in three years according to Freddie Mac.

We have new advice for anyone considering a home purchase in the next couple of years.

Buy before 5.  This means buy before rates go to 5%.

Even though rates have been ticking up over the last several weeks, we believe that in a few years we will look back on this time and realize what a tremendous opportunity it was to have a mortgage under 5%.

So, don’t be discouraged by recent uptick in rates.  Instead, feel great that you were able to buy before rates hit 5%.

The post Buy Before 5 appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

Money at a Discount

This week, for the first time in 32 months, mortgage rates hit 4%.

While this increase may feel painful for buyers currently looking at property, it is important to put today’s rates in perspective.

We believe we will look back a few years from now and see that a 4% rate was like buying money at a discount.

Interest rates hovered between 4.5% and 3.75% for the 8-year span of June, 2011 to June 2018

Between January, 2000 and December, 2010 rates were as high as 8.25% and as low as 5.0%.

When looking at the history of interest rates and researching economists’ forecasts, we believe it is reasonable for rates to hit 5% within the next 24 months. 

When interest rates increase 1%, a buyer’s monthly payment increases 10%.

So, if rates do go to 5%, it is like an additional 10% price increase for a buyer.

Given all of this information, we believe the biggest risk to a buyer in today’s market is to wait.

Mortgage rates are likely on their way up and there is an opportunity to buy money at a discount today.

The post Money at a Discount appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.