With 2019 coming to a close and 2020 on the horizon, we’re looking forward to the excitement of the new year — and a whole new decade. After experiencing improved and steady market trends in the wake of the housing crisis, we remain hopeful about the trajectory of real estate in 2020 — especially in Northern Colorado.
While economic pundits are likely to keep sounding sirens about trends in the broader economy, there are ample reasons to contend that real estate — especially in Northern Colorado — will be holding steady for the foreseeable future. Waiting for the local housing market to lose ground may be a sure strategy for missing out.
If you’re on the fence about buying a home in Northern Colorado this year, consider these factors, both data-driven and lifestyle-focused, that make this a wise decision! And let us know if we can make your 2020 goal of homeownership a reality.
Northern Colorado is experiencing a promising yet steady housing market. While home prices have eased over the past year (which is good news for buyers!), homeowners are still building equity at a healthy rate, most notably in the western U.S. In fact, Fort Collins was ranked the number four city in the U.S. on SmartAsset’s list of The Best Housing Markets for Growth and Stability in 2019. And nearby Boulder and the Denver Metro Area landed at the first and eighth spots on the list, respectively. While Fort Collins has experienced a growth rate of 245 percent between the first quarter of 1994 through the fourth quarter of 2018, the growth rate has slowed down, but remained positive. In fact, Fort Collins homeowners have a 2 percent chance of seeing a significant decline of value (of at least 5 percent) within 10 years of purchase.
Now that we are a decade removed from the housing crisis that forced many homeowners in foreclosure, we are seeing a growing number of individuals back on solid financial footing, ready to take a stab at ownership again. Plus, millennials are entering the market as the generation ages (but more on that later!).
In short, the Northern Colorado market is steadily improving, but has entered a cooling period. What was once a seller’s market with low inventory and high demand is now a relatively even playing ground for both buyers and sellers.
The debate between renting and buying depends on each individual’s unique financial situation, life stage, the local market, and other personal factors. However, if you are ready to put down roots in Northern Colorado, investing in real estate here may prove to be a wise choice. According to Yardi Matrix’s National Multifamily Report, the United States as a whole experienced a 3.2 average percentage growth in rental costs between September 2018 and September 2019. And more specifically, the average rent for a 900-square-foot apartment in Fort Collins is $1,542 (December 2019), an increase of 2 percent compared to the previous year. Other Northern Colorado communities saw similar increases in rent.
Frankly, you’re paying someone else’s mortgage when you rent. And if you plan to stick around, you have an incredible opportunity to build equity by investing in a home.
Economists agree that jobs and income are at the root of growing real estate markets. On that basis, the most promising region for future real estate activity in the United States is in the west. In their recent State Employment Monitor, the National Association of Realtors Research Group reports that nine of the top 10 states for job growth (over the year ending in June) were located west of the Mississippi River — and six of those are in the Rocky Mountain region, including Colorado, which ranked number eight at 6.7 percent.
According to the Colorado Department of Labor, Larimer, Weld and Boulder Counties experienced a 2.7, 2.6 and 3.2 percent increase in employment between 2018 and 2019. And perhaps more importantly, this growth is expected to increase in 2020 and beyond! The upshot for homeowners, homebuyers and investors, is that increased demand for housing predictably trails job growth by 12-18 months.
The Northern Colorado economy is strong as a whole. Greeley ranked number 23 on WalletHub’s list of American cities with the fastest-growing economies over a seven-year period (out of a total of 515 cities), with Denver trailing close behind at 37, Loveland at 63, and Fort Collins at 70. Those numbers may not seem impressive until you realize that Greeley received the number five ranking for the “Jobs & Economy” category.
While there are many major employers in Fort Collins, Loveland, Greeley and other Northern Colorado communities, residents may commute to nearby cities like Boulder and Denver for even more employment options. Improved infrastructure and the option to telecommute has made this even more possible.
If you are a millennial, you may be encouraged to know that many of your peers are now entering the homeowner world. In fact, one in every three homebuyers today are millennials! Low interest rates and ever-increasing inventory are putting homes in reach for eager buyers who want to transition from renting to owning. Plus, as the years go by and millennials get older, there will be even more millennial buyers snatching up homes. This creates a sense of urgency if you’re considering a purchase yourself!
As mentioned, the decision to buy a home has a lot to do with your willingness to stay in an area for a substantial period of time (unless, of course, you’re considering an investment property — but that’s a whole other conversation!). And if you’re on the fence, let us assure you that Northern Colorado is an excellent place to put down roots. With a ton of family-friendly activities and so many things to do, great schools, and a well-connected community where people know their neighbors, Fort Collins is an especially great place to raise a family. In fact, Fort Collins was ranked number four on MarketWatch’s list of The Best U.S. Cities to Raise a Family for its attractions for kids, from outdoor recreation at Fossil Creek Park to indoor adventure at the Fort Collins Museum of Discovery. Not to mention, the communities all throughout the region provide endless fun for kids of all ages — and kids at heart!
For a while now, we’ve lingered at a national interest rate in the mid-to-upper 3 percent range. While that rate is predicted to rise slightly, it is predicted to remain relatively low, not exceeding 4.2 percent for a 30-year fixed mortgage in 2020. To put this rate in perspective, the average 30-year fixed mortgage has ranged from 3.31 percent (2012) to 18.63 percent (1981) over the past 49 years. To see updated rates for both 15- and 30-year fixed rate mortgages, click here.
Whether you’re looking for a home in a rural area with lots of scenic land or a historic property in the heart of activity, you’ll find it in Northern Colorado. Our communities each have a distinct personality and list of attractions and amenities, from hiking trails and scenic lakes to coffee shops and local boutiques. With the attractions of urban life, rural life and outdoor adventure just minutes away, our communities offer some of the best amenities for individuals and for families in all walks of life. Not to mention, we have a wide array of homes for sale, ranging in size, style, price point and amenities.
To learn more about our communities, including Fort Collins, Loveland, Greeley, Windsor, Wellington, Timnath, Berthoud and more, click here. And make sure you follow our blog, Northern Colorado Speaks, so you are up-to-date on the latest community events, hotspots, and more local insight.
The smaller cities in Northern Colorado offer a more laid-back alternative to the more populated cities of Boulder and Denver. However, both can be accessed for employment opportunities, major events, additional dining and entertaining options, and of course, DIA.
And there’s something to be said about the small-town feel the communities in Northern Colorado provide. It can be easier to get plugged in, get to know your neighbors, and become a regular at your neighborhood coffee shop or favorite brewery. And yet, with relatively modest populations ranging from 7,946 (Berthoud, estimated 2018) to 167,830 (Fort Collins, estimated 2019), they aren’t extremely small towns either. There’s plenty to do, see and experience in each of our Northern Colorado communities, whether you’re looking for local businesses or outdoor recreation. You truly get the best of both worlds here!
You know how the saying goes: the best time to buy a home is now (…as long as it makes sense financially!). In many cases, the sooner you can begin the process of building equity in a real estate investment, the better. Plus, you will be creating a space that is your very own — your home sweet home!
We update our Regional Market Statistics every quarter and publish our newsletter, The Insider, on a monthly basis, so you can stay up to date on the housing market throughout the year. We also publish a new Annual Report every year; to see the most current one, click here.
If you have a specific question about buying a home, selling a home, or if you just want to know more about the market and the communities of Northern Colorado, please contact us directly.