March Madness

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

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.

A History Lesson

With the stock market on a wild ride and the Dow Jones dropping nearly 1,000 points yesterday, it makes some people wonder if the local real estate market might also crash or at least “correct.”

A little history lesson is in order.

Over the last 40 years, the real estate market along the Front Range has averaged 5.5% appreciation per year.

The highest appreciation in one year was 15.9% in 1994.

The lowest ever was -4.0% in 1982.

The last time Wall Street was in turmoil and the stock market was plummeting was 2008.  This was, for many reasons, the worst economy of our lifetime.

That year real estate along the Front Range dropped 2.2%.

Meanwhile that year the Dow Jones fell 33.8%.

Bottom line, our market has no history of crashing or even experiencing a major correction.

Why is that?

The answer is fundamentals.

Our local economy has inherent fundamentals that insulate it from big downturns.

We have an incredibly diverse economy which is not reliant upon a single industry.  We have all the way from health care, to technology, agriculture, oil and gas, major universities, and financial services (just to name a few).

We are a global destination with a major international airport.

Oh, and the quality of life here isn’t too shabby.

Prices of real estate, just like prices of anything, come down to basic economic principles of supply and demand.

Because of our diverse economy and desirable quality of life, there has been strong, consistent demand for housing along the Front Range.

While there may be little bumps along the way, over the long term our market has proven that it performs.

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