EAST VS. WEST: DATA SHOWS REAL ESTATE PRICES GOING DIFFERENT DIRECTIONS
A recent article in the Wall Street Journal said the United States “is a country of two housing markets.” It points out that major markets in the West were experiencing annual price declines at the beginning of 2023 while in the Eastern half of the country, average sale prices in metro markets were almost entirely on the upswing.
But standing somewhat by itself is Northern Colorado, where prices are holding steady, or even rising, in 2023.
So, what gives?
According to the Journal, most Western metro markets had experienced some price gains since the 1990s, coinciding with the growth of the technology sector. And cities such as Boise and Phoenix witnessed drastic price increases during the pandemic-fueled surge of 2020-2022.
The reaction to the impact of rising interest rates and a softening high-tech sector, has chilled housing demand in the West. Consequently, average prices are falling in places like San Francisco (down 10 percent), and Seattle (down 7.5 percent).
By comparison, prices in many Eastern markets did not see the same dramatic uptick in prices. Certain markets are also adding jobs, which keeps demand high for homes. That combination of factors is giving prices a push in places like Orlando (average prices up 9.3 percent) and Buffalo, N.Y. (up 8.3 percent).
For Northern Colorado, prices in January 2023 made slight gains over January 2022, rising 2.2 percent in Fort Collins, 1.9 percent in Loveland, and holding essentially flat in Greeley at -.025 percent. Only Windsor is an outlier from that trend, with a price gain of 15.2 percent.
A quick analysis tells us that while prices climbed in Northern Colorado between 2020 and 2022 (about 28 percent over the two-year period), it was slightly less compared to other Western cities. Also, population growth (primarily due to job growth) was strong, thanks in part to a diversified local economy. Larimer and Weld counties accounted for half of the state’s growth over the last year.
More people with more jobs translates to more people ready and willing to buy homes. And that translates to a relatively healthy housing market.
Call me to learn more about the Wall Street Journal’s A Tale of Two Housing Markets: Prices Fall in the West While the East Booms.
INVENTORY GETTING BETTER, BUT STILL A STICKING POINT FOR HOMEBUYERS
Northern Colorado’s local real estate markets are seeing an increase in housing inventory. But the availability of homes for sale continues to keep pressure on prices around the region.
Available housing data tells us that the number of homes for sale in March in Fort Collins reached 231, up 85 percent over March 2022. Other markets across the region are also showing upticks between March 2022 and March 2023. Loveland’s March supply doubled over that time period, up 101 percent. Greeley’s availability increased 19 percent, and Windsor’s supply is up 40 percent.
But a closer look shows that months of supply are still extremely tight, compared to historical norms. The National Association of REALTORS® defines “Months of supply” as the number of months it would take for the current inventory to sell out, given the current pace of sales.
Looking at price ranges between $300,000 and $499,999, supply is typically less than a month across all four of Northern Colorado’s four largest markets. In the price ranges between $500,000 and $699,999, supply is mostly between one month and 2 months.
In all cases, these supply statistics remain well behind the six months of supply that the National Association of REALTORS® considers to be the threshold for a balanced market – a condition where price appreciation and competition for housing among buyers is modest.
In the Denver market, a similar trend is unfolding. According to the Colorado Association of REALTORS®, active listings in the seven-county region were up 45.1 percent from March 2022 to March 2023. But monthly supply is just 1.3 months.
While higher interest rates have curbed the heated homebuyer competition that the Front Range was experiencing this time last year, real estate analysts believe the less-than-ideal supply is likely to keep prices on the upswing. And remember, interest rates are still below the 30-year average.
Remember, interest rates are still below the 30-year average.
CREATING CURB APPEAL CAN BE AS SIMPLE AS PLANTING A TREE
There are all kinds of projects – many of them expensive – that can help you dress up your home or punch up your landscape.
But the greatest bang for your renovation buck might just come from the simple act of planting a tree.
Landscape designer John Gidding, the one-time host of “Curb Appeal Xtreme” on HGTV, put it this way. “The right tree is jewelry for a home’s façade,” he told the Wall Street Journal in a recent article headlined “How to Transform Your Front Yard (Forever) With One Economical Move.”
Of course, the right tree depends on your climate. And Gidding tells the Journal that it’s important to work with a knowledgeable local nursery to determine the type of tree for your yard. Free advice is also available from the Colorado State University Extension Service or Colorado Tree Coalition for selecting, planting and nurturing trees on the Front Range.
Before investing in a tree, experts advise homeowners to know what the tree offers and how it corresponds with what you want people to see in your yard. Does the tree flower? Does it create berries? Is it known for bright fall colors or its ornamental bark?
The right tree in the right place will pay off, Gidding told the Journal.
“There’s a reason mature trees are used as selling points in real estate marketing brochures.”
Call me to learn about how you can create more curb appeal for your home.
Earlier this year, we asked planning departments in several Northern Colorado communities about development trends and local priorities. In the third of a series, we feature responses from Timnath Public Works Department Director Don Taranto. His comments were edited for length and clarity.
TIMNATH: PLANNING TO KEEP UP WITH THE PACE OF GROWTH
What are your town’s current priorities or focus areas of impact?
As the town grows, the focus will be on planning for capital improvements that we need to keep pace with development. Specific areas of note will be:
- Recreation and open space amenities for the residents.
- Infrastructure projects to address the impacts of growth.
- Encourage the appropriate development of the Harmony Corridor by focusing on appropriate land uses and architecture in the corridor.
- Work closely with utility service providers to be sure that the development demands are being properly identified and met.
How has residential development changed?
Timnath is seeing more diversity of housing types and options. The town started out as only single-family detached developments, and is now seeing a mix of smaller lots, patio homes, attached housing options, and some apartments. The shift from lower density to higher density creates some concerns from existing single-family residents in the form of more traffic, noise, and strains on facilities. The town routinely revisits its comprehensive plan, and has taken steps to account for these different densities. By introducing higher density land uses to the plan, we will be prepared for additional population and consequently be enticing to the types of commercial land uses that our residents desire.
What trends have you seen in residential development?
As noted above, there has been a shift to smaller lots and attached products. We are seeing more condominium-style projects as well. Patio homes are becoming increasingly popular, too. The custom home market continues in neighborhoods such as Harmony and Wildwing. Creative land planning and a mixing of housing types has been the latest trend. This helps to diversify the options within a neighborhood, rather than seeing a monoculture of houses and lot sizes within a neighborhood.
What are your projects of note?
The Harmony Corridor is seeing a significant amount of interest from the commercial sector. These projects must meet rigorous architectural and site design standards to achieve the town’s expectations.
- The town just completed a new Police Station located on Harmony Road.
- There is a new veterinary hospital.
- Along the I-25 corridor and adjacent to Harmony Road, the town has regional commercial opportunities. Specifically, a new Floor and Decor store has opened. There will continue to be more development in the area in proximity to the Harmony interchange.
- The town’s Main Street area is beginning to see more interest in redevelopment.
- The existing Timnath Beerwerks is a magnet for residents and regional patrons.
LOOKING FOR A ONE-STOP-SHOP FOR ALL THINGS NORTHERN COLORADO?
Then look no further than our blog, Northern Colorado Speaks. We cover everything from home improvement and curb appeal to community events and things to do in Northern Colorado. Whether you’re a current homeowner looking to spruce up your property or a prospective buyer searching for the perfect place to call home, our blog has something for you. Our team stays up to date on the latest community events in the area, providing you with the inside scoop on local happenings. And if you’re looking to explore NoCo, we have you covered with our recommendations for the best things to do in the area. Trust us to be your go-to resource for all things real estate in Colorado.
REAL ESTATE BY NUMBERS
- 750,000. Approximate square footage for the proposed Ledge Rock Center in Johnstown. The project is planned for a site near Interstate 25 and Colorado Highway 60. Missouri-based Woods Supermarket plans to open an 85,000-square-foot store on the site.
- $3.97 million. List price for the four-bedroom, 6,457-square-foot home near Longmont that Deion Sanders recently bought. The property sits on 2.5 acres and is part of a gated community. Sanders is the new University of Colorado football coach.
- 48 percent. Approximate share of total net worth for Americans aged 60 and older that comes from housing ownership, according to a report from the financial firm Vanguard Group.
- 123,000. Square footage for a new King Soopers grocery store, planned for the new Silverstone Marketplace shopping center in Frederick. The retail center will be located at the northwest corner of Colorado Highway 52 and Colorado Boulevard.
- $5.4 million. Sale price for the former Old Timer meatpacking plant, an 86,578-square-foot facility located at 1000 S. Lincoln Ave. in south Loveland.
- 194. Number of housing units proposed for a new apartment complex in downtown Greeley. Located at 1024 Eighth Avenue, the site is the one-time home of Gallery Furniture. As planned, the project will include 116 one-bedroom apartments, 39 two-bedroom units and 39 studio apartments.
- 359,800. Total square footage for a proposed three-building industrial complex in south Broomfield. Known as Arista 36, the complex would be located on a site between Wadsworth Parkway and Uptown Avenue.
- $57 million. Price paid by Utah-based investors for the 391-home Cloverleaf Community mobile home park, located at 4412 E. Mulberry St. in east Fort Collins. The same investors also bought an adjacent single-family home site for $3 million.
- $1.2 million. Price that owners of Deacon Lumber paid for a 6,000-square-foot building located at 209 E. Fourth St. in downtown Loveland. The property was previously owned by the nonprofit Colorado Youth Outdoors.
- 28 percent. Percentage of home sales that were paid for in cash during March, according to the National Association of REALTORS®. It’s the highest one-month rate for cash deals since 2014.
- 621. Net gain in retiree population in Fort Collins during 2021, which ranks 20th among 146 cities analyzed by personal finance website SmartAsset. Mesa, Ariz., ranked No. 1 at 3,629.
- 4.58 million. Annualized rate of existing home sales during February, a 14.5 percent increase from January, according to the National Association of REALTORS®.
- 57 percent. Share of homebuilders nationwide who offered some type of sales incentive to buyers during February, according to research by the National Association of Homebuilders.