How's the Market?

Friends, family, new acquaintances, my wife, my mom, everyone always asks this question...and rightly so.  Real estate represents a major investment and with all of the different news stories floating around out there how is one to know but to ask a professional.

Here is the tidbit that many of the large media outlets gloss over when discussing this topic.  There is a very large scale national affect to the real estate market, and we all saw that affect during the recession and the housing bubble as a result of the CDO issues that occurred.  However, real estate has a major local component.

An analogy may provide the best clarity, so here it goes:  Talking about real estate on the national level is like talking about the weather on the national level.  The nation on the whole may be a few degrees higher or lower, on average across the nation, and sure that means something, but if you are only concerned about the weather in Fort Collins, CO then you aren't really concerned that the whole nation is a degree warmer on average for the year.  You want to know the daily high's and low's for Fort Collins.  Further, if you are planning to camp at Horsetooth Mountain Park (they have a few backcountry sites but they may be closed due to the recent fire) then you would really like to know the specific forecast for the weather station there, not the high's and low's for the whole city, on average or the high's and low's for the weather station at I-25 and Mulberry.  The weather can be very different in different parts of town, much less different parts of the country.

So, back to the How's the Market question.  According to the Federal Housing Finance Authority, Fort Collins is ranked in the top 20 markets nationally for price appreciation.  The quarterly results (which combine Fort Collins with Loveland into one statistical area) have us up 1.44% for the 2nd quarter and we were up 2.21% for the first quarter.  These numbers would probably be higher if we only considered Fort Collins as Fort Collins tends to have a little higher appreciation than Loveland, but none the less, 3.61% for the first two quarters of the year (that is all the data currently available even though it is October) is pretty darn good.  I bet third quarter will continue the trend, and specific segments of our market are experiencing appreciation at an even higher rate.

With all that good news there has to be a little something else right, some gloom and doom.  The news folks would not lie to us would they?  One segment of the market is lagging a bit, as one would expect in a recovery such as this.  The high end price ranges (over say $500,000 or more) are still a bit soft.  Homes are selling, but there is not huge demand and there are still some bargains, read buyers market, to be had.

English teachers have always taught me that you have to wrap things up with a good conclusion, so here it is: CAVEAT:  These are generalities and each case in real estate is unique!!   If your home is under $400,000 and in Fort Collins proper, chances are good that you have had a good year in terms of appreciation and demand.  If your home is $400,000-600,000, depending on your location, finishes and other amenities, you are holding steady.  If your home is over $600,000, chances are things are still a little soft and you may need to sell at a discount, but maybe not.

This combination of variables means that if you have a home under $400k and you are thinking of moving up to a larger home, now is the time as you may be able to sell in a high demand market (under $400k) and buy in a lower demand (over $500k) market.  If you thrown in the low interest rates, there is a chance you could do all of this without increasing your monthly mortgage payment.

Sorry to any of my past English teachers if the quality of this composition is not up to your standards.