Your R eal Estate Connect ion
A PRODUCT OF C3 REAL ESTATE SOLUTIONS, LLC
ISSUE 20
INSIDE THIS ISSUE
L OCA L RE A L E S TAT E
REGIONAL SNAPSHOT JAN-MAY DETACHED RESIDENCE
FTC, GREELEY/EVANS & LOVELAND/BERTHOUD
FORT COLLINS MEDIAN SALES PRICE LOVELAND/BERTHOUD MEDIAN SALES PRICE GREELEY MEDIAN SALES PRICE
REGIONAL SNAPSHOT
$450,000
TERMINOLOGY TIP:
$400,000
DEED RESTRICTIONS
$350,000
FUN FACT/QUOTE
$300,000
NORTHERN COLORADO
$250,000
MAY NOT BE ON THE VERGE OF A HOUSING
Statistics
$200,000
JAN
FEB
MAR
APR
MAY
CRISIS DESPITE REPORT
TERMINOLOGYTIP FEATURED LISTINGS
DEED RESTRICTIONS: Provisions placed in deeds to control how future owners may or may not use the property.
RESIDENTI AL | C OM M ER C IA L | P R O P E RT Y M A N A G E MENT
FUNFACT / QUOTE
“You can’t buy happiness but you can buy real estate and that’s kind of the same thing.”
Northern Colorado may not be on the verge of a housing crisis despite report Source: Coloradoan Home sales in Fort Collins remain strong as median prices near $425,000. Fort Collins’ home prices have soared since the Great Recession, far outpacing wage growth. But that does not necessarily portend a looming housing crisis, said Martin Shields, a professor of economics at Colorado State University.
Nationwide, the median home value is equivalent to 3.61 times the median household income. Realtor Mike Salza of C3 Real Estate Solutions in Fort Collins said the housing crisis a decade ago was caused by predatory lending practices and federal policies that encouraged homeownership even for people who couldn’t afford to buy. Today, those predatory lenders have largely disappeared, loan guidelines have tightened and fewer risky loans are being made, Salza said. More: Hughes Stadium developer takes first steps for new Fort Collins housing
A recent blog posting on 24/7 Wall St. listed 15 U.S. cities where median home prices have escalated well beyond pre-recession levels, indicating the areas were ripe for a crash.
In May 2008, 270 homes were sold in Fort Collins. Last month, 295 homes were sold. The biggest change, Salza said, was in financing of those homes.
The report largely blamed predatory lending practices for the housing bubble that led to the recession and identified 15 areas where home prices had escalated at least 20% beyond their nearest pre-recession peak.
In May 2008, 69% of loans were conventional-fixed rate mortgages, 12% were through the Federal Housing Administration, or FHA, which requires a smaller down payment, and 13% were cash.
“In several of these cities, prices are over 50% above that level,” Mike Sauter and Brian Jackson wrote in their blog posting.
This year, the rate of conventional fixed-rate mortgages was up to 73%, only 4% were FHA and 15% were cash, he said.
Four Colorado cities were among the top seven. Colorado Springs came in at No. 7 with a nearly 43% jump in prices; Fort Collins was third, with a 67% increase; Denver-Aurora-Lakewood was second, with a 68% uptick; and Greeley was tops in the nation, with a 79% increase in home prices.
That means more people were putting more money down or paying in cash, putting them at a lower risk of default.
“Prices have risen in these metropolitan areas for good reason,” the report stated. “Most of these areas are home to growing job sectors in high-paying industries and are attracting new residents and families.” The blog description accurately describes Fort Collins and Northern Colorado, which also face a low housing supply. Of more concern to Shields is wage growth that lags behind the appreciation in home prices. “It’s more of an affordability issue than the 2007-09 housing crisis,” he said. “I look at this more as an indicator of housing affordability rather than a market issue.” The 24/7 Wall St. report is more an indicator that housing costs are taking a much bigger bite out of homeowners’ paychecks. “I don’t know if people are going to walk away from their mortgages ... the data tells me this is an increasingly expensive place to live and it will hurt low-income and younger families, pricing them out of the market.” Fort Collins didn’t experience the same kind of housing bubble seen a decade ago in hard-hit regions in California, Nevada, Florida and Arizona. “2007 prices weren’t wildly out of line with what the market should have seen,” Shields said. So when the national bubble burst, Fort Collins didn’t see the wide swing in prices, he said. “An unaffordable housing market is another hallmark of a housing bubble,” the blog states, while noting 24/7 Wall St. does not claim to be able to predict the presence of a housing bubble in a given market.
“The number of people buying with 96.5% financing is way down, which means the housing market is healthier,” he said. “It’s tough to see a bubble when people are putting that much cash in.” Both Salza and Shields caution that a significant national event that throws the country into a recession could alter the local landscape.
REGIONAL SNAPSHOT JAN-MAY ATTACHED RESIDENCE FORT COLLINS MEDIAN SALES PRICE LOVELAND/BERTHOUD MEDIAN SALES PRICE GREELEY MEDIAN SALES PRICE $340,000 $320,000 $300,000 $280,000 $260,000 $240,000 $220,000 $200,000
JAN
FEB
MAR
APR
MAY
O U R NORTH E R N COL ORADO FEATURED
2621 Riverfront Dr - LVLD $675,000 MLS#883758 3 Bed, 2 Bath, 2538 SF
526 Del Clair Rd - FTC $480,000 MLS#883810 5 Bed, 3 Bath, 2591 SF
61 Le Conte Dr - LVRMR $545,000 MLS#884235 3 Bed, 2 Bath, 2567 SF
1509 9th Ave - LNGMNT $435,000 MLS#884234 3 Bed, 2 Bath, 1372 SF
2577 E CR 60 - WLLNGTN $2,700,000 MLS#81763 6 Bed, 6 Bath, 9766 SF
220 E Prospect Rd - FTC $579,500 MLS#885392 4 Bed, 2 Bath, 1900 SF
3452 Sandalwood Ln - JHNSTWN 8978 Spirit St - WLLNGTN $550,000 MLS#885665 $334,500 MLS#885670 5 Bed, 4 Bath, 4017 SF 3 Bed, 2 Bath, 2900 SF
Listings
806 36th Ave Ct - GRLY $255,000 MLS#886130 3 Bed, 1 Bath, 1390 SF
1989 Sonoma Pl #42- FTC $370,000 MLS#883333 4 Bed, 3 Bath, 2057 SF
Cities on the verge of a housing crisis
8. Urban Honolulu, Hawaii
According to an analysis by 24/7 Wall St.
•
Home price change from pre-recession peak: 37.8%
(The numbers below listed for Fort Collins are not 2019 numbers. Fort Collins’ median home price for the first four months of 2019 is $424,000, and the median income in 2019 is expected to be about $82,000).
•
Current median home price: $565,000
15. Seattle-Tacoma-Bellevue, Washington •
Home price change from pre-recession peak: 23.1%
•
Current median home price: $437,000
14. Durham-Chapel Hill, North Carolina •
Home price change from pre-recession peak: 27.1%
•
Current median home price: $225,000
13. Boise City, Idaho •
Home price change from pre-recession peak: 27.2%
•
Current median home price: $254,379
12. Spokane-Spokane Valley, Washington •
Home price change from pre-recession peak: 29.1%
•
Current median home price: $226,000
11. Portland-Vancouver-Hillsboro, Oregon-Washington •
Home price change from pre-recession peak: 31.5%
•
Current median home price: $367,000
10. Provo-Orem, Utah •
Home price change from pre-recession peak: 31.6%
•
Current median home price: $309,296
9. Salt Lake City, Utah •
Home price change from pre-recession peak: 34.3%
•
Current median home price: $318,750
7. Colorado Springs •
Home price change from pre-recession peak: 42.6%
•
Current median home price: $285,000
6. San Jose-Sunnyvale-Santa Clara, California •
Home price change from pre-recession peak: 43.4%
•
Current median home price: $1.0 million
5. Nashville-Davidson-Murfreesboro-Franklin, Tennessee •
Home price change from pre-recession peak: 54.9%
•
Current median home price: $240,000
4. Austin-Round Rock, Texas •
Home price change from pre-recession peak: 62.1%
•
Current median home price: $302,000
3. Fort Collins •
Home price change from pre-recession peak: 66.9%
•
Current median home price: $365,500
2. Denver-Aurora-Lakewood •
Home price change from pre-recession peak: 68.2%
•
Current median home price: $382,000
1. Greeley •
Home price change from pre-recession peak: 79.2%
•
Current median home price: $326,950
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Lindsay Chacon
Realtor®, CNE, CMRS 970-631-3458 lchacon@c3-re.com www.lindsaychacon.com
Information is deemed reliable, but not guaranteed. © 2019 C3 Real Estate Solutions, LLC.