As Economy Improves, Colorado's Housing Market Starts To Heat Up
Homes in Northern Colorado are selling faster than they have in years. That’s not too surprising, considering recent state budget projections showing Colorado’s economy improving.
What is surprising to some in the business community is how quickly the real estate market is heating up. Northern Colorado Business Report publisher Jeff Nuttall says low interest rates, limited rental vacancies and a short supply of homes are all combining to fuel the demand.
“In some cases, houses are on the market for less than a day before they’re purchased,” he says. “Some never even make it to the multiple listing service (MLS). Brokers are also dealing with multiple offer situations for the first time in a long time.”
Nuttall adds that there doesn’t seem to be a ‘typical’ buyer right now, with both conventional buyers and investors eager to snap up foreclosed or distressed properties. And with Colorado’s unemployment rate better than about half of other states at 7.3 percent, people are moving here from elsewhere, adding pressure to the real estate market.
On how active the market has been, by the numbers…
“The latest data from Information and Real Estate Services, or IRES, shows that the average amount of time a home spends on the market in Loveland has dropped by 23 percent year-over-year in February, to 110 days. Fort Collins and Greeley have seen similar, if less dramatic, decreases, with Fort Collins’ average days on market dropping by 17.4 percent from February 2011 and Greeley’s falling by 8.6 percent.
Another way of looking at it is to consider ‘time to offer.’ In the first two months of 2013, homes priced at $300,000 and below spent an average of 61 days on the market before an offer was made. In the first two months of 2012, this number was 98. During the recession, a home could spend 120 days on the market before an offer was made, twice as long as today.”
On whether builders are stepping in to help ease the demand…
“They are -- but we know that isn’t an instant solution. In Fort Collins alone, the number of residential buildings permits issued in 2012 was more than six times larger than it was in 2011. But getting permits and building homes takes time, and isn’t filling the demand just yet. One broker told us that there’s an eager buying public that doesn’t have anything to buy.”
On how long this particular trend has been going on…
“One source told us that this situation hasn’t been seen for some 20 years, and it’s been picking up steam now for nearly a year. Real estate is a cyclical industry, with home-buying usually picking up in the spring and summer, then tapering off. As is typical, demand increased in the spring of 2012, but then never slowed down.
Now, the market is entering spring 2013 with even greater demand than last year. In total, in the first two months of this year, $180 million worth of Northern Colorado homes have been sold, according to IRES. To compare, in 2012, that number for the same period was $128 million.”