Waiting and Waiting

Anytime the market cools off we sometimes hear prospective buyers say “I think I’ll wait for the market to correct, then I’ll buy after prices come way down.”

The reality is this… History shows that this wouldn’t be a good strategy.

Our go-to source on price appreciation is the Federal Housing Finance Authority who produces a quarterly home price index.  They have been tracking Larimer County for 41 years.

Their numbers show:

  • Yearly prices have decreased only 6 times in history
  • The average amount of that decrease is only 1.7%

So, someone who is waiting for prices to drop:

  • Might be waiting a long time
  • Might be disappointed that prices didn’t drop by all that much

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83 Miles Per Hour

 

Pretend you have been driving on the Interstate at 100 miles per hour. 

Also, pretend you have been doing that for a long time.

Now pretend you slow down to 83 miles per hour.

How would that feel?

It would probably feel slow, right?

83 miles per hour is a 17% decrease from 100. It may feel slow, but it’s still pretty fast.

How does this relate to real estate?

Well, the market has been moving fast for a long time.

It’s been going 100 miles per hour for at least two years (some would argue even longer).

We’ve recently seen a 17% change in terms of number of transactions that are occurring.

There were 17% fewer sales in October 2018 versus October 2017 in Metro Denver.

It feels slow because we’ve been driving so fast for so long. But, our market is still moving.

For example, prices are still up. So, remember, that it’s all relative.

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Good News for Buyers

Here’s some good news for buyers who have been waiting for more selection…

No need to wait any more because the numbers show that more new listings are hitting the market compared to the recent past.

In Metro Denver, the number of homes for sale is up 14.42% compared to last year. 

That equates to 800 more homes to choose from.

Start spreading the news!

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A History Lesson

One of the most common questions we hear from clients is “Where do you think interest rates are going?”

Virtually all of the experts we follow put rates above 5% going into next year and some see rates approaching 5.5% by the middle of 2019. What’s certain is that there are economic forces at work that are pushing rates higher.

So, how about a little history lesson? How do today’s 30- year mortgage rates compare to this same date in history going all the way back to 1990?

• Today = 4.85%
• 2017 = 3.94%
• 2015 = 3.82%
• 2010 = 4.27%
• 2005 = 5.98%
• 2000 = 7.84%
• 1995 = 7.75%
• 1990 = 10.22%

While today’s rates feel high only because they are higher than 2017, they are quite a bit lower than at many times in history.

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Fall Perspectives 2018: Our Pledge To You

Change is afoot. We suppose it always is, but doesn’t it all seem to come at us so much faster in today’s world? We see change all around us. Just consider, for a moment, how much technology has changed our lives thanks to innovators like Uber, Google, and Apple, to name a few. Technology has also changed the way we do real estate.

The real estate world is a complex environment that most of us only travel once every 10 years. This infrequency, coupled with the ever-changing laws and emotional toll, makes it very hard for most of us to navigate. That’s why we rely on a professional. Even those of us who live and breathe real estate every day use a Windermere agent to conduct our personal transactions.

Thanks to technology, certain aspects of the real estate process that were once difficult are now very easy, like searching for a home. Within minutes of a property being listed, it’s fed to websites all over the world for potential buyers to see. Information about neighborhoods, schools, and home values are also readily available online to help buyers make smart decisions.

There’s no doubt that real estate will continue to benefit from technology, but we’re concerned about the companies that are beginning to look at consumers less as people and more as data that can be generated and shared for monetary gain.

At Windermere, our agents don’t treat their clients like data points being fed into an algorithm; they know them on a personal level. They help buyers make one of the biggest financial and emotional decisions of their lives. They help sellers understand the nuances of the market so they can get top dollar for their home. They are experts in neighborhoods, market trends, contracts, and negotiations. They treat their clients with respect and compassion. And they care deeply about their local community.

As the saying goes, the more things change, the more they stay the same. Real estate is the perfect example of that. Technology will continue to change and improve how people buy and sell homes, but our pledge to you is that it will never replace what has always mattered most to us: relationships.

 

– OB JACOBI, JILL JACOBI WOOD, AND GEOFF WOOD

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Did You Know?

Did you know the average price appreciation over the long term, according to the Federal Housing Finance Authority (who’s been studying this for 40+ years) is…

·         5.63% per year for Metro Denver

·         5.35% per year for Larimer County

·         4.5% per year for Weld County

If you want to be totally clear on all the stats, facts and trends in Colorado real estate so that you know what the future value of your home looks like, watch this video.

This is a complimentary service for our clients and friends.

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Colorado Real Estate Market Update

The following analysis of the Metro Denver & 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

It’s good news for the state of Colorado, which saw annual employment grow in all of the metropolitan markets included in this report. The state added 63,400 non-agricultural jobs over the past 12 months, an impressive growth rate of 2.4%. Colorado has been adding an average of 5,300 new jobs per month for the past year, and I anticipate that this growth rate will continue through the balance of 2018.

In February, the unemployment rate in Colorado was 3.0%—a level that has held steady for the past six months. Unemployment has dropped in all the markets contained in this report, with the lowest reported rates in Fort Collins and Denver, where 3.1% of the labor force was actively looking for work. The highest unemployment rate was in Grand Junction, which came in at 4.6%.

HOME SALES ACTIVITY

  • In the first quarter of 2018, there were 11,173 home sales—a drop of 5.6% when compared to the first quarter of 2017.
  • With an increase of 5.3%, home sales rose the fastest in Boulder County, as compared to first quarter of last year. There was also a modest sales increase of 1.2% in Larimer County. Sales fell in all the other counties contained within this report.
  • Home sales continue to slow due to low inventory levels, which were down 5.7% compared to a year ago.
  • The takeaway here is that sales growth continues to stagnate due to the lack of homes for sale.

HOME PRICES

  • Strong economic growth, combined with limited inventory, continued to push prices higher. The average home price in the markets covered by this report was up by 11.7% year-over-year to $448,687.
  • Arapahoe County saw slower appreciation in home values, but the trend is still positiveand above its long-term average.
  • Appreciation was strongest in Boulder County, which saw prices rise 14.8%. Almost all other counties in this report experienced solid gains.
  • The ongoing imbalance between supply and demand persists and home prices continue to appreciate at above-average rates.

DAYS ON MARKET

  • The average number of days it took to sell a home dropped by three days when compared to the first quarter of 2017.
  • Homes in all but two counties contained in this report took less than a month to sell. Adams County continues to stand out where it took an average of just 17 days to sell a home.
  • During the first quarter, it took an average of 27 days to sell a home. That rate is down 2 days from the fourth quarter of 2017.
  • Housing demand remains strong and would-be buyers should expect to see stiff competition for well-positioned, well-priced homes.

 

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 2018, I have left the needle where it was in the fourth quarter of last year. Even as interest rates trend higher, it appears as if demand will continue to outweigh supply. As we head into the spring months, I had hoped to see an increase in the number of homes for sale, but so far that has not happened. As a result, the housing market continues to heavily favor sellers.

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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Final Four

At the end of this weekend College Basketball’s Final 4 will be established. It might make you wonder, what the top 4 and bottom 4 real estate markets across the country?

Here they are, ranked by the last 12 months of appreciation according to fhfa.gov:

Top 4:

  1. Tacoma, WA 14.6%
  2. Seattle, WA 14.3%
  3. Port St. Lucie, FL 13.7%
  4. Las Vegas, NV 13.6%

Bottom 4:

  1. Atlantic City, NJ -3.14%
  2. Peoria, IL -3.0%
  3. Huntington, WV -2.6%
  4. Jackson, MS -1.2%

If you’d like to receive our monthly newsletter with local Northern Colorado real estate updates, just contact us at noco@windermere.com or simply call (970) 460-3033. You can also receive a neighborhood news update and see all the sales in your neighborhood by clicking HERE.

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