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REAL ESTATE INSIDER Vol. 46, No. 7 | AUGUST 2022

HOUSING MARKET HAS SHIFTED GEARS, BUT IT'S NOT IN NEUTRAL

What a difference a few months makes.

A real estate market that was running in overdrive as recently as this winter and spring has downshifted for the summer, a change brought on by the dual impact of rising interest rates and inflation.

But we shouldn’t mistake a shift for a skid.

Many of the same factors that made Northern Colorado one of the most compelling real estate markets in the country in recent years still apply.

Employment is a foundation of housing demand, and the local job market remains healthy. Local job growth remains strong by traditional standards, hitting 5.9 percent for Larimer County and 4.9 percent for Weld County during May.

And Northern Colorado’s physical beauty and reputation as a recreation hub continue to make it attractive for people to relocate for lifestyle decisions.

There’s also the broader demographic wave to consider. The Millennial generation is reaching peak homebuying age, and they need a place to live.

While higher interest rates may cause homebuyers to reconsider their monthly housing budget, people still want to buy homes. For first-time buyers, take note that today’s average mortgage rate (about 6 percent for a 30-year-fixed loan as of late June) is in line with the average rate during the decade of 1998-2008. Also, the ultra-competitive market of the past two years has relaxed, with housing inventory (total homes for sale) up this summer in nearly every Northern Colorado community compared to 2021. That means more choice and less tension.

Sellers also need to adjust to the market shift. Don’t expect a bidding war for your home, even if it happened at a similar property in your neighborhood back in March. Pricing your property correctly will be imperative for sellers to get buyers to their doorstep.

Call me to help you navigate the shifting market. A trusted real estate advisor can help you understand local market conditions to help buyers find the right property and help sellers price your property right.

NORTHERN COLORADO AT A GLANCE: WHAT ARE THEY BUILDING? MAJOR CONSTRUCTION PROJECTS AROUND THE REGION

Wherever you live in Northern Colorado, it seems there’s a construction crew nearby that’s kicking up a cloud of dust, from massive commercial buildings to new housing neighborhoods. Here’s a snapshot of some high-profile projects that you might be seeing as you make your way around the region this summer.

  1. Amazon Logistics Center. Loveland. West of I-25 & south of Larimer County Road 30 (northeast of the airport). 3.87 million square feet on 75 acres.
  2. Kinston, master-planned neighborhood. Loveland. East of Centerra Parkway and north of U.S. Highway 34. 240 build-to-rent homes.
  3. Buc-ee’s Travel Center. Johnstown. Southwest corner of Weld County Road 48 and I-25. 74,000-square-foot retail center with 120 fueling stations.
  4. MorningStar at Old Town. Fort Collins. North of Cherry Street and west of College Avenue. 215,000-square-foot mixed use development, including retail and 160 senior-assisted living units.
  5. Sonders. Fort Collins. Morning Star Way and west of Turnberry Road. Master-planned neighborhood. 377 homes.
  6. Future Legends Sport Complex. Windsor. East of Colorado Highway 257 and north of Eastman Park Drive. Multiple sports facilities on 118-acre sports park.
  7. Prairie Song. Windsor. Colorado Highway 257 and southwest of Weld County Road 72. Master-planned neighborhood with about 2,000 homes planned.
  8. Kitchel Lake. Timnath. Prospect Road & Larimer County Road. Master-planned neighborhood with 250 homes located east of Timnath Middle-High School.
  9. Timnath Lakes Farm. Timnath. Larimer County Road 5 & northeast of Harmony Road. Master-planned neighborhood with about 1,100 homes planned.
  10. Elkhorn Lodge. Estes Park. West of W. Elkhorn Road. Renovation of historic hotel and lodge.

ECONOMIST: 5 THINGS TO KNOW ABOUT TODAY'S MARKET.

While market conditions can change, people still need to buy and sell real estate. Marriage. Job changes. Growing families. Life events. They all drive housing decisions.

If you are considering buying, selling, or both, what’s most important to know about today’s market before you make that decision?

Lawrence Yun, chief economist for the National Association of Realtors, spells out five factors that could influence what you do next.

Adjust your budget. Rising mortgage rates mean bigger monthly payments. You may realize that the house you wanted is more than you budgeted for. Recalculate to be sure about what you can afford.

Stay ready to act fast. While higher interest rates are cooling demand, it doesn’t mean housing competition is going away. Inventory is still low in Northern Colorado and across most of the country. So, take all the steps – such as pre-qualifying for a mortgage – to move fast on the house you want.

Prices aren’t dropping. Low inventory, combined with sufficient demand and inflation, will keep prices from falling. If you’re ready to buy, don’t sit on your hands to wait for lower prices.

Know your neighborhood. As more Americans are looking for homes to accommodate work-at-home lifestyle, it’s keeping demand high in suburbs and communities outside metro areas. If that’s where you’re looking, then be prepared for high prices.

What about a 5-year ARM? If you think you won’t be in your home much more than five years, then a 5-year adjustable-rate mortgage (ARM) could improve your affordability. Rates on ARMs start out lower than 15- or 30-year fixed rates, then scale up after five years.

Call me if there are any questions I can answer about how today’s market affects you.

LATE SUMMER FUN FOR EVERYONE

The calendar may say August, but there is still plenty of summer fun to be had throughout Northern Colorado. Check out these events – most of which are free – celebrate summer, make some memories, and eat some good food.

FoCo Food Truck Rally, Fort Collins - City Park The FoCo Food Truck Rally takes over Fort Collins City Park, Mulberry Street and Sheldon Drive, each Tuesday night with more than 15 food trucks and free live music! Tuesday Nights 5:30 p.m. – dusk | through September 13.

Fort Collins Peach Festival - Holiday Twin Drive-in The Fort Collins Peach Festival, presented by the Rotary Clubs of Fort Collins, is all things peach – wash down a peach pie or peach cobbler with your choice of peach beer created by local craft brewers. 11:00 a.m. – 6:00 p.m. | Saturday August 27.

Tour de Fat Fort Collins - 500 Linden Street Don a fun costume and grab your bike for New Belgium Brewing’s Tour de Fat bike parade in downtown Fort Collins. Saturday, September 3.

Bohemian Nights Free Concerts, Fort Collins - Old Town Square Enjoy free performances on the outdoor stage in Fort Collins’ Old Town Square. Thursday Nights 7:00 p.m. - 9:00 p.m. | through September 15th.

Greeley Friday Fest - 9th Street Plaza Friday Fest offers live music on 9th Street between 5th and 6th Avenue each Friday. Friday Nights 6:30 p.m. – 9:30 p.m. | through September 16.

Larimer County Fair and Rodeo, Loveland - 5280 Arena Circle Come out to The Ranch Events Complex for the annual fair parade, entertainment, PRCA rodeo, 4-H, marketplace, carnival, junior livestock sale and more! August 5 - 9.

Sculpture in the Park, Loveland - 29th Street and Aspen Drive The 38th Sculpture in the Park is held at Benson Sculpture Garden and showcases over 2,000 pieces of sculpture created by 160 sculptors from around the world. August 12 – 14.

Loveland Corn Roast Festival - Old Fairgrounds Park The Old-Fashioned Corn Roast Festival, 700 South Railroad Avenue, features roasted corn sales, a parade, a beer garden, food and a kids zone. August 26 & 27.

Windsor Summer Concert Series - Boardwalk Park On Thursday nights, Windsor’s Boardwalk Park is buzzing with activity! Enjoy live music and food from a variety of local vendors. Thursday Nights 6:30 p.m. – 8:30 p.m. | through August 18.

Windsor Harvest Festival - Boardwalk Park/Windsor Lake The 100th annual Windsor Harvest Festival features hot air balloons on Saturday morning at Windsor Eastman Park along with a parade, concert, street dance and fireworks at Boardwalk Park. September 3-5.

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REAL ESTATE BY NUMBERS

  • 776. Median credit score for mortgage borrowers during the first quarter of 2022, compared to 712 in the first quarter of 2007, according to Bankrate.
  • $13 million. Asking price for the 5,800-square-foot Vail home once owned by U.S. President Gerald Ford, who lived there in the 1970s and 1980s
  • $169,200. Typical economic impact on the Colorado economy of a single home transaction, according to the National Association of Realtors.
  • $25.5 million. Sale price for the 68-unit student housing complex near the Colorado State University campus in Fort Collins. The Social was acquired by California-based investors.
  • 3. Where Denver suburb Highlands Ranch ranks among the most popular real estate markets in the U.S., according to a recent report by real estate service Zillow. Golden ranks No. 10.
  • 35,788. Estimated population of Windsor as of July 1, 2021, up 9.2 percent from its 2020 estimate of 32,758, according to the U.S. Census Bureau.
  • $30 million. Price paid by North Carolina-based investors for two office-industrial buildings in Longmont, totaling about 80,000 square feet and home to pharmaceutical manufacturer Cambrex Corp.
  • 13.2 percent. Share of homebuyers in the United States in 2021 that were institutional investors, according to the National Association of Realtors. In Colorado, the share was 14 percent.
  • 14,000. Square footage for a proposed new Natural Grocers store at 745 N. Lincoln Ave. in Loveland. Store owners plan to open in February 2023.
  • 1,400. Number of new homes (1,200 apartments, 200 houses) planned for the Ledge Rock Center development near the intersection of Interstate 25 and Colorado Highway 60 in Johnstown.
  • $10 million. Price that former Denver Broncos player Orlando Franklin is asking for his 14,361-square-foot mansion in Cherry Hills Village. Franklin bought the house for just $3.1 million in September.
  • 75,600. Square footage for the three-building Wilderness Place office-industrial campus in Boulder, which was recently purchased by California-based investors for about $40 million. The site is currently home to Biodesix Inc.
  • 114,706. Total number of single-family houses and condos in the U.S. that were “flipped” by owners during the first quarter of 2022, or 9.6 percent of home sales, according to ATTOM, a real estate analytics firm.

Photo Credit: Andriy Blokhin - stock.adobe.com

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