Loading

REAL ESTATE INSIDER Vol. 45, No. 12 | JANUARY 2022

ENCORE! HOUSING STAYED RED HOT IN 2021

At the close of 2020, housing sales were already heating up. Borderline sizzling, in fact – thanks to high demand, low interest rates, and tight housing inventory.

Could those same defining factors hold up in 2021? Or would the doom-and-gloom predictions of a bursting housing bubble come to pass? Nearly a year later, we’ve got our answer. The real estate market in Northern Colorado, and across much of the United States, burned right through 2021 for many of the same reasons it got hot in 2020. The year also brought attention to the ups and downs of a relatively new player in residential real estate – the iBuyer.

Here’s a quick recap:

Demand didn’t go away. While total sales in Northern Colorado may not top 2020’s record, when 11,685 homes were sold, there’s no lack of demand. How can we be so sure? In September, a time when demand is supposed to cool off, sellers were getting more than 100 percent of the list price in every local sub-market.

Supply was squeezed. Traditionally, a balanced housing market is characterized by about six months of supply – meaning enough houses are available that it would take six months to sell them all, based on historical buying trends. With the exception of homes priced over $1 million, supply is at less than two months across the region.

Interest rates were still low. One of the driving factors behind demand this year was interest rates holding below 3 percent for much of 2021, making it easier for buyers to qualify for mortgages. As of mid-November, average rates for a 30-year fixed loan were still just 3.1 percent – that compares to 4.8 percent in November of 2018.

iBuyers emerged—and one exited. Lured by soaring price gains – average U.S. home values jumped more than 18 percent from August 2020 to August 2021 – corporate-backed “iBuyers” started swooping into local markets with cash offers, often outbidding regular homebuyers. But as we learned in the fall, one of the big players bet and lost. In October, Zillow shut down its algorithm-based Zillow Offers homebuying division, realizing it had overpaid on many of its purchases.

Call me if you’d like help navigating the housing market in 2022. I can work with you on a real estate review, providing local expertise to assess the housing values that can’t be determined by an algorithm.

A LETTER FROM THE PUBLISHER

Friends,

As we wrap up another eventful year, we want to thank you for placing your trust in us. In this fast-moving marketplace, it’s important for us at The Group to be your source of real estate information and to deliver it in a timely fashion. We have learned a lot during the pandemic. First and foremost, you can’t make progress when you’re standing still. For over four decades we’ve never hesitated to do things differently if we believed there was a better way. Our commitment to you is to be even better in 2022 and provide customer service that is not only high-touch, but high-tech.

We have doubled down on video to deliver the best property tours and video conferencing possible. We will once again be streaming our annual real estate forecast online in January 2022 for those who cannot attend in person.

Also, all of our market reports are online and our cloud-based systems allow us to work anywhere in the world with an Internet connection.

We also still believe that every person should have a place to call home. It’s our mission and why we founded GroupGives in 2013. GroupGives is a fund of the Community Foundation of Northern Colorado and we have given $827,490 back to the community since its inception. We know where we live is truly a special place and we never take that for granted. We will continue to do whatever we can to make our community even more special.

We are grateful every day for the opportunities we have to serve our community and our customers. Happy holidays from all of us at The Group!

REPORT: RENTERS MISSING OUT ON REAL ESTATE WEALTH

Rents are rising sharply across the U.S. this year. But that means much more than just households forking over bigger monthly rent checks.

At the same time that median rents increased 16.4 percent between January and November (according to the National Rent Report from Apartmentlist.com), equity for homeowners has been soaring. And that’s equity that a renter could be earning for themselves if they were paying on a mortgage instead of paying their landlord.

Call it a missed opportunity.

In fact, real estate analysis firm CoreLogic reports that the average homeowner gained approximately $51,500 in equity over the past year. Put another away, that’s $51,500 that a renter might have added to their household wealth – in addition to the likelihood that your monthly rent is requiring significantly more out of pocket this year.

While home equity growth this year has been surging beyond historical trends, the recent gains serve to reinforce the long-standing distinction between homeowners and renters when it comes to wealth. In 2019, the Federal Reserve reported that homeowners held a median net worth of $255,000 – or 40 times the $6,300 median net worth held by renters.

Call me if you want to learn more about the benefits of buying compared to renting, and to get started on the path to building wealth.

Holiday displays are brightening up the nights

Check out how some communities in Northern Colorado are illuminating the winter sky:

Fort Collins: Thousands of strands of white low-energy and sustainable LED lights will twinkle through alleyways, sidewalks, and tree-tops of historic Old Town Fort Collins through Feb. 14, 2022.

Loveland: Chapungu Sculpture Park hosts Winter Wonderlights where 100,000 lights illuminate 82 African stone sculptures through Jan. 2, 2022. Festival of Lights in Downtown Loveland displays holiday lighting along 4th Street.

Greeley (not pictured): The Greeley Lights the Night Holiday Parade kicked off the holiday season with a parade of about 70 floats culminating with a lighting ceremony in Lincoln Park.

REAL ESTATE BY NUMBERS

  • $10 million. Estimated investment that Simply Delicious Inc. plans to make to build a new bakery facility in east Loveland. The Boulder-based maker of Bobo’s Oat Bars is building a 125,000-square-foot facility at 4501 Viking Way near the Northern Colorado Regional Airport.
  • 18.1 percent. Average home sale price increase across the U.S. between August 2020 and August 2021, the largest annual gain for August in the 45-year history of the CoreLogic Home Price Index. Among states, Idaho posted the largest increase at 32.2 percent.
  • $66 million. Price that New York-based investors paid for The Outpost apartments, a 220-unit student-oriented complex located at 530 Lupine in northeast Fort Collins.
  • 159. Number of housing lots that Trumark Homes has acquired in the RainDance development in Windsor. The homebuilder said 11 of the lots border a golf course.
  • 154. Number of new apartments planned for Avenida Loveland, a 55+ adult apartment complex now under construction in the Centerra development. The project also includes a 10,000-square-foot community building.
  • 25,209. Number of foreclosure filings that lenders made during the third quarter of 2021 across the United States, up 67 percent from the same period last year, according to ATTOM Data Solutions, a real estate analysis firm.
  • 42. Colorado’s rank among the 50 states for the rate of foreclosures, or ninth lowest. Colorado reported one foreclosure for every 6,611 household units in the second quarter of 2021. Nevada had the highest rate, at one for every 1,463 units.
  • $42.5 million. Price paid by Boston-based investors for the 195,000-square-foot Axis 25 property, located across Interstate 25 from the Embassy Suites hotel in east Loveland. The property consists of two industrial buildings.
  • 180. Number of affordable rental units, including 60 reserved for Colorado State University employees, proposed for a location in east Fort Collins near the intersection of Timberline Road and Custer Drive.
  • 272. Number of apartment units in Broomfield that were recently acquired by a real estate division of Goldman Sachs Group Inc. The new owner paid $95 million for the Arista Uptown complex.
  • 64.9 percent. Home ownership rate in Colorado during the second quarter of 2021, 11th-lowest among states according to the U.S. Census Bureau. That rate was once as high as 71.6 percent in the second quarter of 2005.
  • 45. Average number of days that a home spent on the market in the United States during October before it was sold. According to a Realtor.com report, that’s eight fewer days than October 2020 and 21 fewer days than October 2019.
  • $25.1 million. Total net taxable sales recorded by the Fort Collins lodging industry in the third quarter, more than doubling the $10.2 million total from the same time last year. The sales yielded $916,000 in sales taxes for the city.
  • 74.3 percent. Occupancy rate for hotels in Greeley during October, the highest among Northern Colorado cities, according to the Rocky Mountain Hotel and Lodging Association. Statewide, the rate was 63.1 percent.
  • 92. Number of student housing units that developers plan to create at the former Best Western Plus Boulder Inn, located near the intersection of 28th Street and Baseline Road. The 99-room hotel recently closed after 52 years in business.
  • 158. Number of new affordable housing apartment units approved for development by the City of Broomfield. The Crossroads at Arista project is planned for 8710 Uptown Avenue in south Broomfield.

A Monthly Publication Of:

Credits:

Created with images by Pixel-Shot - "Interior of kitchen decorated for Christmas celebration" • fizkes - "Head shot serious married couple looking at computer screen."