FORECAST ’22: HINTS OF ANOTHER HOT MARKET AHEAD
After a year of record housing sales in Northern Colorado in 2021, where do we go from here?
The Group is projecting another record year, looking for 13,500 local sales in 2022 in Northern Colorado Communities, after buyers set a one-year record of 13,148 homes during 2021—a 7.5 percent increase over 2020.
Additional highlights from The Group’s Annual Real Estate Forecast include:
Follow the water. In some communities, it’s tough for developers to access water for new homes. Growth will happen where water infrastructure is available and where communities are friendly toward metro tax districts. Look for the U.S. Highway 34 corridor—including Windsor, Johnstown and Greeley—to bustle this year and well into the future .
Construction conundrum. Even with access to water, homebuilders are dealing with supply chain snags on key construction materials, such as windows, HVAC equipment and appliances. On top of that, the price of lumber is soaring, and the availability of labor is tight and number of ready-to-build housing lots is at record lows.
Prices and appreciation. Last year, the median price for a detached home increased 17.3 percent in Fort Collins, 13.9 percent in Loveland and 14.4 percent in Greeley. Demand is still high, so look for double-digit sales price growth this year. Meanwhile, appreciation – reflecting changes in home value – will keep rising. The Group predicts after final data is released, 2021 will end up with the highest rate of appreciation ever for Greeley, and second highest for Fort Collins-Loveland.
The Forecast also addressed housing availability, and how the high velocity of sales has inspired a “myth” about inventory shortages. Explore that topic and more by viewing the entire Forecast presentation here, and read the Insider each month to follow our dynamic market.
Call me to learn more about the velocity of housing sales. No yard signs in your neighborhood doesn’t mean that there aren’t homes for sale.
A TALE OF THREE CITIES: MEASURING MARKETS ON THE FRONT RANGE
In the world of real estate, there’s a long-standing slogan that “all markets are local.” For evidence to support that statement, look no further than our own backyard.
With “The Boulder Benchmark,” an annual comparison of home price trends across Northern Colorado, we can see how unique each of our local housing markets can be – even between three bordering counties.
By of way of explanation, “The Boulder Benchmark” compares the recent sale prices of three ranch-style brick homes, all constructed by the same homebuilder at roughly the same time – the late 1950s or early 1960s – but in three different Front Range cities: Boulder, Fort Collins and Greeley. Here’s what our research found for 2021:
Of course, it’s hardly a shock to see Boulder houses fetch a much higher price per square foot than anywhere on the Front Range. But a longer view will show how the cost of housing is climbing at a faster pace in Fort Collins and Greeley. Since the 2017 “Benchmark” report, the prices per square foot for the “Benchmark” homes are up 8.3 percent in Boulder, 52.1 percent in Fort Collins, and 49.8 percent in Greeley. Looking at the near-term trend, Greeley prices jumped the most, up 13.7 percent between 2020 and 2021, while Fort Collins increased 8.0 percent and Boulder 10.4 percent.
MARSHALL FIRE BRINGS FOCUS TO HOME INSURANCE GAPS
From tragedy we can look for teaching.
In the wake of some 1,000 homes lost to the devastating Marshall Fire in Boulder County late last year, many of those homeowners face the long, hard challenge of rebuilding their lives. But it may be equally hard to rebuild their homes. Many have sadly learned that their homeowner’s insurance coverage is not sufficient to pay for their property loss.
Similar stories have played out in other communities—notably in California—where wildfires have consumed suburban neighborhoods. The reality in these fast-growing communities is that rising home values have rapidly exceeded the value of the insurance policies on the property.
Even more, the escalating price of lumber and building materials is compounding the cost of construction.
Consequently, many of us don’t realize the gap that likely exists between our insurance coverage and the replacement cost of our homes. There are also wrinkles—some policies won’t pay the full cost of the loss without complete documentation of your belongings—that have come back to haunt some other victims of fire loss.
Our hearts go out to all the victims of the Marshall fire. We need to rally to help them where possible. We also need to realize that such catastrophes can happen anywhere, and at anytime.
Here are just a few tips to consider:
- Contact your insurance agent to evaluate your homeowner’s coverage.
- Ask about policies that can automatically cover gains in home values.
- If you’re a landlord, investigate the status of coverage for your rental properties, including the possibility of requiring renters’ insurance for your tenants.
Call me to schedule your annual real estate review where we can also examine your current coverage.
THE GROUP DIFFERENCE
INTRODUCING OUR NEW TIMNATH OFFICE
- We just moved into the Plaza at Riverbend, Timnath’s first neighborhood mixed-use development.
- Our new office features a modern industrial design with a café vibe and will have a professional barista on staff.
- It’s the perfect spot to meet with one of our amazing real estate brokers and have a delicious latte.
- Our new address is: 4650 Signal Tree Drive, Suite #600, Timnath, Colorado.
REAL ESTATE BY NUMBERS
- $647,200. New limit for conforming mortgages in 2022 in Larimer and Weld counties. The new limit, up $98,950 over the 2021 limit of $548,250, applies to loans acquired by Fannie Mae and Freddie Mac.
- 237. Acreage for the proposed new Ledge Rock Center in Johnstown. The project, located near the southeast corner of Interstate 25 and Colorado Highway 60, calls for 750,000 square feet of commercial space, about 1,200 housing units and two hotels.
- $18,600. Additional average cost for a new single-family home in the United States due to rising lumber prices between August and December 2021, according to lumber industry newsletter Random Lengths.
- $17.75 million. Price paid by a California investor for the Strawberry Park Ranch, a 562-acre spread located near Steamboat Springs.
- 70,000. Difference between new job growth (400,000) and new housing units (330,000) added in Colorado over the past decade, according to real estate technology firm Stessa.
- 91 percent. Percentage of newly constructed homes built with wood-framed structures. By comparison, 8 percent are concrete and 1 percent use steel, according to the National Association of Home Builders.
- $101.4 million. Price paid by investors to acquire The Standard, a 227-unit student-housing development near the Colorado State University campus at 775 W. Lake St.
- 298. Number of multifamily units proposed for construction in Greeley by Loveland-based McWhinney Real Estate Services Inc. As planned, the new apartments would be located near the Centerplace shopping center and Greeley West High School.
- $42.9 million. Price paid by Denver-based investors to buy 20 office buildings in the Prospect East Business Park in east Fort Collins. Taken together, the buildings amount to approximately 360,000 square feet.
- 48,000. Square footage for the Greeley Harley-Davidson-Wild West Motorsports showroom, which was recently purchased by the Elway Dealership Group.
- $15.2 million. Price paid by Northern Colorado developer Martin Lind for the Thornton Farm, a 320-acre agricultural property near Windsor.
- 24 percent. Percentage decline in bankruptcy filings in Colorado in 2021 compared to 2020. Also, filings dropped 26 percent in Larimer County and 17.5 percent in Weld County.
- $8.5 million. Price that the cities of Greeley and Windsor have agreed to jointly spend on approximately 1,000 acres of open space near the interchange of U.S. Highway 34 and Colorado Highway 257. As planned, the land will be set aside for recreational use and conservation.
- $7 million. Price paid by manufacturer Ursa Major Technologies for the former Ball Aerospace & Technologies test facility in Berthoud. The site includes a manufacturing building and 90 acres of land.
- 10 percent. Percentage growth in car dealership sales in Colorado from 2020 to 2021, according to the Colorado Automobile Dealership Association. Colorado growth compares to just 5.1 percent sales growth nationwide.