Housing affordability is a hot topic especially after the strong price appreciation that has occurred in our market over the last 7 years.
Here’s some interesting research on affordability…
Each quarter the National Association of Home Builders measures affordability in hundreds of markets across the Country.
Their method is to count the number of homes in a market that could be purchased with that particular market’s median income.
For example, San Francisco is the least-affordable market where only 8.4% of the homes could be purchased with their median income.
The most-affordable is Monroe, Michigan where 95.3% of the homes could be purchased with their median income.
Guess where all of the 10 least-affordable markets are. California!
Guess where almost all of the 10 most-affordable markets are. The rust belt (cities in Michigan, Ohio, upstate New York, etc.)
The U.S. average is 63.6%.
Metro Denver comes in at 55.3% and Northern Colorado at 54.5%.
So, roughly half of the homes in our market could be purchased with our local median income.
According to research done by Real Trends there is zero correlation between election years and the number of transactions in the market compared to non-election years.
They found that sales were down in 1980, 1988, and 2008 compared to prior years, and sales were up in 1992, 1996, 2000, 2004, 2012, and 2016.
To hear more about what will happen this year in real estate and the factors that really do impact our market, be sure to get registered for our annual Market Forecast event next week.
It’s time to register for our annual Market Forecast event. We will be live at 5:30 on January 16th at the Fort Collins Marriott. Back by popular demand is our Chief Economist Matthew Gardner. Save your seat HERE.
It turns out a lot of real estate changes hands over the course of a year in our market.
In 2019 Metro Denver had…
- Over 56,000 residential sales
- Over $28 Billion of residential sales volume
Overall, 2019 saw a slight increase in the number of transactions compared to 2018 and approximately a 5% increase in sales volume.
For a detailed look at the 2019 numbers plus our forecast for 2020, click the links below…
It’s time to register for our annual Market Forecast event. We will be live at 5:30 on January 16th at the Marriott. Back by popular demand is our Chief Economist Matthew Gardner. Contact me if you are interested in attending.
- 1 is the ranking Colorado owns for long-term home price appreciation versus all other states
- 2.6% unemployment rate in Colorado right now
- 3.73% mortgage rate for a 30-year mortgage which is about half of the long term average
- 4.7% apartment vacancy rate in Metro Denver, the lowest since 2015
- 5.5% is the long-term average for yearly home price appreciation along the Front Range
- 6,000,000 live in Colorado
- 7,000 residential properties are for sale in Metro Denver right now and the average for this time of year is 14,700
- 80,000 is the number of people that is added to our state’s population each year
- 9 homes are for sale in Larimer and Weld County priced over $2,500,000
- -10% is the decrease in new home construction in Larimer County compared to last year while Weld County grew by 17%
- 11 times in the last 40 years home prices have gone up at least 8% along the Front Range
- $1,202,488 is the average price for a single-family home in the City of Boulder
It’s time to register for our annual Market Forecast event. We will be live at 5:30 on January 16th at the Marriott in Fort Collins. Back by popular demand is our Chief Economist Matthew Gardner. Save your seat HERE.
Home Builder’s confidence in Baby Boomer buyers is at an all time high.
The National Association of Home Builders (NAHB) surveys their members each quarter to discover what they expect of future sales.
The builders base a large part of their answer on how many people are visiting their sales centers and model homes versus the same time last year.
The results in their most recent survey show that builders have never been more confident about buyers who are 55 and older.
The confidence index for this age group is actually double of what it was in 2012. The NAHB sites low interest rates and strong job growth as the reasons for the high confidence.
Here are some interesting takeaways…
If you want to find the least expensive new home on the Front Range, the places to look are Weld County and El Paso County.
· Weld County Average New Home Price = $411,269
· El Paso County Average New Home Price = $427,361
The most expensive place for a new home is in Boulder County (no surprise) at $698,208.
Jefferson County has the largest difference between the average price of a new home and the average price of a resale home: $664,600 vs. $510,003.
Here’s the County by County breakdown of the average price of a new single-family home:
· Boulder = $698,208
· Jefferson = $664,600
· Douglas = $624,315
· Broomfield = $612,779
· Denver = $581,480
· Arapahoe = $545,943
· Larimer = $507,105
· Adams = $480,464
· El Paso = $427,361
· Weld = $411,269
There is an abundance of great news when it comes to employment in Colorado.
The unemployment rate is incredibly low at 2.7% which is almost a full percentage point lower than the U.S. average.
According to the Bureau of Labor Statistics, Metro Denver added 28,300 jobs over the last year which ranks 15th out of all metropolitan areas nation-wide, many of which have much larger populations than Denver.
While this is positive news, what is even more remarkable is what is happening in the other, smaller cities along the Front Range.
Anytime job growth exceeds 2.0% per year, it is a sign of a very healthy economy.
Here is what the other Cities have seen in terms of job growth over the last 12 months.
• Fort Collins 2.6%
• Greeley 2.5%
• Colorado Springs 1.9%
This is a Tale of Two Counties.
When it comes to new home activity, there is a big difference between Larimer and Weld Counties.
Larimer County’s new home starts are down 10% and new home closings are down 15% compared to last year.
Weld County’s new home starts are up 18% and new home closings are up 8% compared to last year.
This is all according to the new home research experts and Metrostudy.
So why the difference? It comes down to price and availability.
There is more land available for new home development in Weld County.
Plus, the land tends to be less-expensive than Larimer which means that builders can deliver a lower-priced product and reach a larger pool of buyers.
The average price of a new home in Larimer County is $507,105 while the average new home price in Weld is $411,269.
If you want to see even more insights about the Colorado market so that you can make really good decisions about your real estate, you are welcome to watch this complimentary webinar, just click HERE.
Here is a fact…
If you have ever thought about owning a new home, the last two months of the year are usually the best time to make that happen.
Many builders have year-end goals and sales quotas to hit. If they have a “standing inventory” of homes that are completed but not sold, they are typically motivated to sell these homes by the end of the year.
This dynamic can be especially true for publicly-traded builders who are even more motivated to hit year-end sales numbers.
Up and down the Front Range there are beautiful new homes in fantastic neighborhoods. The builders of these homes may be happy to make concessions and provide incentives as long as you close by year-end.
We just recently helped a buyer with a very compelling incentive package from a builder which included a lower price, additional landscaping and window coverings.
If you would like more details about these kinds of opportunities, reach out and I can help.