Economist’s Perspective

Our Chief Economist made a video for all of our clients where he shares his perspective on COVID-19’s impact on housing.  You can watch it by clicking the image below:

The post Economist’s Perspective appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

Economist’s Perspective

Our Chief Economist made a video for all of our clients where he shares his perspective on COVID-19’s impact on housing.  You can watch it by clicking the image below:

The post Economist’s Perspective appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

Corona Rates

Interest rates on a 30-year mortgage right now are just about the lowest they have ever been in history.

  • The rate today is 3.45%
  • The lowest-ever in November, 2012 was 3.31%
  • A year ago they were 4.35%

So, what gives?  Why are rates so low?  It turns out that the coronavirus is pushing rates down to historic lows.

The virus is causing uncertainty in the global financial markets.  When there is uncertainty, there tends to be a flight from stocks into bonds.

Specifically, there tends to be a flight to U.S. Treasuries.

High demand for U.S. Treasuries means that the interest rates on those bonds goes down.

30-year mortgage rates track the rates on the 10-year Treasury and the 10-year Treasury just hit their lowest rates ever at 1.31%.

The uncertainty around the virus will likely keep rates down for the foreseeable future.

If you haven’t done so already, we encourage you to reach out to your mortgage lender to see if you would benefit by refinancing your loan.

If you would like to see a video recap of our annual Market Forecast you can watch that HERE.

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

Matthew Gardner’s 2020 Mortgage Rate Forecast

Each year Windermere’s Chief Economist, Matthew Gardner, forecasts into the next. Here’s what he expects for Mortgage Rates in 2020.

The post Matthew Gardner’s 2020 Mortgage Rate Forecast appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

The 12 Facts of Real Estate

While your true love may be getting you a partridge in a pear tree in the near future, we decided to give you the 12 facts of Colorado real estate:

  • 1 is the ranking Colorado owns for long-term home price appreciation versus all other states
  • 2.6% unemployment rate in Colorado right now
  • 3.73% mortgage rate for a 30-year mortgage which is about half of the long term average
  • 4.7% apartment vacancy rate in Metro Denver, the lowest since 2015
  • 5.5% is the long-term average for yearly home price appreciation along the Front Range
  • 6,000,000 live in Colorado
  • 7,000 residential properties are for sale in Metro Denver right now and the average for this time of year is 14,700
  • 80,000 is the number of people that is added to our state’s population each year
  • 9 homes are for sale in Larimer and Weld County priced over $2,500,000
  • -10% is the decrease in new home construction in Larimer County compared to last year while Weld County grew by 17%
  • 11 times in the last 40 years home prices have gone up at least 8% along the Front Range
  • $1,202,488 is the average price for a single-family home in the City of Boulder

 

 

 

 

 

 

 

 

 

 

 

 

 

 

It’s time to register for our annual Market Forecast event.  We will be live at 5:30 on January 16th at the Marriott in Fort Collins.  Back by popular demand is our Chief Economist Matthew Gardner.  Save your seat HERE.

The post The 12 Facts of Real Estate appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

2020 Economic & Housing Market Forecast

As we head toward the end of the year, it’s time to recap how the U.S. economy and housing markets performed this year and offer my predictions for 2020.

 

U.S. Economy

In general, the economy performed pretty much as I expected this year: job growth slowed but the unemployment rate still hovers around levels not seen since the late 1960s.

Following the significant drop in corporate tax rates in January 2018, economic growth experience a big jump. However, we haven’t been able to continue those gains and I doubt we’ll return to 2%+ growth next year. Due to this slowing, I expect GDP to come in at only +1.4% next year. Non-residential fixed investment has started to wane as companies try to anticipate where economic policy will move next year. Furthermore, many businesses remain concerned over ongoing trade issues with China.

In 2020, I expect payrolls to continue growing, but the rate of growth will slow as the country adds fewer than 1.7 million new jobs. Due to this hiring slow down, the unemployment rate will start to rise, but still end the year at a very respectable 4.1%.

Many economists, including me, spent much of 2019 worried about the specter of a looming recession in 2020. Thankfully, such fears have started to wane (at least for now).

Despite some concerning signs, the likelihood that we will enter a recession in 2020 has dropped to about 26%. If we manage to stave off a recession in 2020, the possibility of a slowdown in 2021 is around 74%. That said, I fully expect that any drop in growth will be mild and will not negatively affect the U.S. housing market.

 

Existing Homes

As I write this article, full-year data has yet to be released. However, I feel confident that 2019 will end with a slight rise in home sales. For 2020, I expect sales to rise around 2.9% to just over 5.5 million units.

Home prices next year will continue to rise as mortgage rates remain very competitive. Look for prices to increase 3.8% in 2020 as demand continues to exceed supply and more first-time buyers enter the market.

In the year ahead, I expect the share of first-time buyers to grow, making them a very significant component of the housing market. 

 

New Homes

The new-home market has been pretty disappointing for most of the year due to significant obstacles preventing builders from building. Land prices, labor and material costs, and regulatory fees make it very hard for builders to produce affordable housing. As a result, many are still focused on the luxury market where there are profits to be made, despite high demand from entry-level buyers.

Builders are aware of this and are doing their best to deliver more affordable product. As such, I believe single-family housing starts will rise next year to 942,000 units—an increase of 6.8% over 2019 and the highest number since 2007.

As the market starts to deliver more units, sales will rise just over 5%, but the increase in sales will be due to lower priced housing. Accordingly, new home prices are set to rise just 2.5% next year.

 

Mortgage Rates

Next year will still be very positive from a home-financing perspective, with the average rate for a 30-year conventional, fixed-rate mortgage averaging under 4%. That said, if there are significant improvements in trade issues with China, this forecast may change, but not significantly.

 

Conclusion

In this coming year, affordability issues will persist in many markets around the country, such as San Francisco; Los Angeles; San Jose; Seattle; and Bend, Oregon. The market will also continue to favor home sellers, but we will start to move more toward balance, resulting in another positive year overall for U.S. housing. 

 

 

About Matthew Gardner:

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 2020 Economic & Housing Market Forecast appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

Rate Bounce

Rates hit near-historic lows this week and are now at 3.49% for a 30-year mortgage.

There have only been two other times in history when rates have been this low- April 2013 and October 2016.

It’s interesting to see what happened soon after bottoming out these last two times.

In April of 2013 rates hit 3.41%. By August 2013 they had jumped to 4.40%.

Rates bottomed again in October 2016 at 3.42%. Just two months later in December 2016 they were 4.32%.

Each time the increase was nearly 1% within just a few months.

So, if history proves itself as a guide, we can’t expect these rates to last for long.

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

Mortgage Rate Forecast

Geopolitical uncertainty is causing mortgage rates to drop. Windermere Chief Economist, Matthew Gardner, explains why this is and what you can expect to see mortgage rates do in the coming year.

 

Over the past few months we’ve seen a fairly significant drop in mortgage rates that has been essentially driven by geopolitical uncertainty – mainly caused by the trade war with China and ongoing discussions over tariffs with Mexico.

Now, mortgage rates are based on yields on 10-Year treasuries, and the interest rate on bonds tends to drop during times of economic uncertainty.  When this occurs, mortgage rates also drop.

My current forecast model predicts that average 30-year mortgage rates will end 2019 at around 4.4%, and by the end of 2020 I expect to see the average 30-year rate just modestly higher at 4.6%.

The post Mortgage Rate Forecast appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

Down Again

Mortgage rates dropped again for the fourth week in a row.

The average 30-year rate is now 4.06% which is the lowest it has been all year.

Rates today are actually the lowest they have been since early 2018.

The main factor driving rates down is the trade war with China.

Investors are shifting money from stocks into bonds which causes the yield on the 10-year Treasury to drop.

Mortgage rates are closely aligned with the 10-year Treasury.

At the beginning of the year, most experts believed that 2019 would have a trend of increasing mortgage rates eventually reaching 5.5%.

Instead, the opposite has happened which is good news for real estate.

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

Down Again

 

Mortgage rates dropped again for the fourth week in a row.

 

The average 30-year rate is now 4.06% which is the lowest it has been all year.

Rates today are actually the lowest they have been since early 2018.

The main factor driving rates down is the trade war with China.

Investors are shifting money from stocks into bonds which causes the yield on the 10-year Treasury to drop.

Mortgage rates are closely aligned with the 10-year Treasury.

At the beginning of the year, most experts believed that 2019 would have a trend of increasing mortgage rates eventually reaching 5.5%.

Instead, the opposite has happened which is good news for real estate.

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