Market Update Winter 2018

Let’s do the numbers (Disclaimer!  I did the math below.  I cannot guarantee it’s accurate…don’t take it to Vegas!)

Well…here we are at the end of 2017 and the beginning of 2018.  As many of you know, I also complete real estate appraisals as a Colorado licensed Certified General appraiser.  This appraisal license allows me to appraise any property of any complexity.  As a side bar… I started appraising in 1980 and while I mostly do residential now, for approx. 10 years I did commercial narrative appraisals.   Because of all those years of appraising, I have an affection for real estate statistics, as I commonly refer to them for support about what the markets done, and what it’s going to do.   Strange affection, I know…

What the market is going to do is anybody’s guess.  Things happen, like 911, and the collapse in 2008.  The last few years the residential real estate market in Fort Collins has been white hot.  Recently I would say its red hot…cooling a bit.  Commercial has been another story. The market is dominated now with big players doing big projects.  The small user, small investor, and small developer has largely been left out of the market, and this trend is the result of a lack of small project land, and city regulations making it where only the big players can afford to play, but I digress.  That’s fodder for another blog!

Okay, let’s look at the big picture in residential in Fort Collins.  The 17-year average annual appreciation rate, starting in 2000 to the end of 2017, for single family detached homes (SFR’s), was 5.66%.

Remember, this time includes 911, the Iraq, Afghanistan wars, and the economic collapse of 2008.  Many of you may not have been to impacted by 2008, but the real estate industry was eviscerated for months if not years (it was labeled a 10-year recession).  In fact, the residential market did not start to rebound until 2011 and after, because that was the time when all the foreclosures and funny money, i.e. adjustable rate mortgages finally wandered off and died.  Since then, the real estate and banking/lending industry has seen tons of new regulations to prevent it all from happening again, although Wall Street has renamed “Subprime” Mortgages as “Non-Prime” mortgages, due to the stigma, and still deals in them.  But again, I digress…

The Average Annual Appreciation Rate in Fort Collins from 2000 to 2010 was 8.43%

The Average Annual Appreciation Rate in Fort Collins from 2011 to 2017 was 9.26%

The median sales price of a single-family home as of the end of October, was $375,000.  The average sales price was $417,000.

The current housing inventory (months’ supply of homes to purchase) is 2.1.  Yes, that’s right, 2.1-months’, which still makes the current market a significant sellers’ market. A balanced market is felt to be 6 months of inventory.  This same information for condos and townhomes is completely different.  They have been on fire with appreciation rates between 15% and 20% the last few years because they are the most affordable product, although they have weakened a bit.  Thats the next blog.

I once read the 20-year average annual appreciation rate in Colorado, (pre-2008) was 6%. That included everything from Wild Horse to Aspen, and I would hope everyone would agree Fort Collins is above average!  I believe, If the economy holds and nothing drastic happens, and interest rates do not go up significantly, Fort Collins should stay near 10% average annual appreciation for single family homes under $600,000 this next year.

Happy New Year!

Ross