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3 Things That Will Help You Buy a Home in Fort Collins, Colorado

I met with a couple of people, co-workers, who are thinking of investing in Fort Collins real estate. They  would live there together, pay mortgage instead of rent and hopefully add some financial equity in their lives. With prices as they sit in Fort Collins, it isn’t always easy for one individual to get started owning real estate. Their solution? Teamwork! I love it!

We chatted. They told me about themselves and what they wanted. They asked me questions about the process, market and outlook and how it would affect the investment. Diving deep, I found that they had given substantial thought to the whole situation.

They were an excellently inquisitive duo, and we accomplished a lot because they had done some research, and showed with questions and an open mind. I really enjoyed our meeting because I could tell that they wanted to do this right, and were willing to listen and understand. People like that always teach me things, as well.

I introduced them to Herb Irvin, a lender at Home Mortgage Alliance, gave them a few more names to look into as far as Fort Collins lenders go, and they were on their way.

Afterward, I prepared some informative items for them that I realized would be good for you to see as well.

So, here are some of the things I’d show you as your Realtor® in the early stages of investigating buying a home for the first time in Fort Collins, Loveland, Greeley, Windsor, Wellington, Timnath, Longmont, Severance, Laporte, Berthoud, Johnstown, or any other of the great towns along Colorado’s Northern Front Range.


Homes in Fort Collins are Generally Selling for More than the Listing Price

List Price Compared to Sold Price in Fort Collins and Surrounding Communities


List Pricethe price that the seller is asking the buyer to pay in the official Multiple Listing Service (MLS). See listing example below.

The chart above is basically exhibiting what the seller asked for compared to the price they agreed upon and finally received. How many of them achieved 100% of their listing/asking price? Pretty much all of them.

For every market listed, they’ve been at or over asking price for a few years now.

What’s the lesson? It’s a competitive market and sellers are receiving what they ask for a grand majority of the time. This is one of the fastest moving markets out there. Bring a strong stomach, but more importantly, hire a team of GREAT professionals to help you.

Yes, it’s a tight market, but it is navigable. It’s doable, and I believe it is still a great opportunity. Buying and owning real estate has NEVER been easy. If it was easy, it wouldn’t be so valuable, now, would it?


Fortune Favors the Bold

The two that I met with asked me about a bubble. The bubble. The bubble question comes up often.

Answering the question, “Is the Fort Collins market a real estate bubble?” requires prediction.

The appreciation of this market has been astounding, but I won’t sell you on that as your Realtor®. I am a Realtor® because I believe that even without the appreciation that we’ve seen in Fort Collins real estate, owning is still far superior to renting. That’s right. If the market quit increasing at between five and ten percent per year, it would still be my advice (given other favorable conditions, like rates, terms, etc) for everyone who can buy their home to do just that. And that is because a monthly payment that goes toward paying down your principle is far superior to having your monthly payment pay down someone else’s principle.

The question about the bubble is asking not only will the prices continue to go up, but could the values of the homes go down…considerably, and will these new higher prices be seen as a former paper tiger?

“Is the Fort Collins Real Estate Market a bubble?”

I don’t believe it is, because I believe a bubble implies an artificial, weak, invalid, phony, or otherwise compromised source of growth. So, the hotbeds of bad lending, Arizona, Florida, etc., the ones that were ghost towns after the pre-2010 crash, that was a bubble. People were buying homes they couldn’t even come close to affording. A LOT of people. Subdivisions were filled with people who took out subprime loans. That bubble popped, as well it should have.

I was a person who received one of those subprime loans, right here in Fort Collins. They were happening in Colorado, just like everywhere else. In my situation, I later refinanced (for a bit of a loss) from a horrendous Adjustable Rate Mortgage (ARM) to a 30 year fixed. I had to find ways to make more money, but we got the job done. During that crash, real estate came to a screeching halt. Building stopped. It was scary.

However, after the people who couldn’t fulfill the obligations of the loans were out of the picture, Northern Colorado was one of the first real estate markets to pick back up and become active again.

In Northern Colorado, we have a diversified work force with numerous different large businesses and employers, a great number of people who are self employed or own small businesses, a thriving university (go CSU Rams!), towns scattered within an hour of distance of I-25, the Rocky Mountains, Denver, Denver International Airport, rivers, lakes, mountains, hills, farmland, wetlands…I could go on all day.

The prices of homes in Fort Collins aren’t rising, in my opinion, because of any type of artificial inflation—they are rising because of demand. And demand is increasing because it is amazing to live here.

People have been hearing that on a national scale for years. The area’s fame exploded since social media became a deity just 10 years ago.

And frankly, a lot of the rest of this great country just isn’t as cool as this. Sorry, not sorry, and it’s not. Colorado’s Front Range is vibrant, it is community oriented, the amenities to help us get outside are almost at overkill status, and people are nice.

The word is out. Colorado is the bomb, and the world knows it. They are moving here like crazy for so many reasons. They want to be here, and that almost palpable desire does not create something as weak as a bubble. It creates a solid, albeit expensive market.

In my humble opinion.

When I say I don’t believe we are in a bubble, I am saying that I don’t think that there is any reason to think that the value of homes in this market will suddenly disappear, or that home values will suddenly drop significantly.

Now, if the whole state, country, or world experiences something that causes bad market conditions everywhere, we wouldn’t be immune. As for the bubble… Here? I think not.


So, How Much?

When I first want to start working with a buyer, I want them to see what the general numbers look like. So I share a graph like the ones below.

Median and Average Sales Prices – Fort Collins, Colorado

Median Sales Price – Fort Collins, Wellington, Loveland, Laporte

Rather than enter into a ‘median’ vs. ‘average’ and which is the more reliable number, I’ll post the average next.


Fort Collins Real Estate Inventory

High prices? Check. Low inventory? You better believe it.

Guess what? We can still find you a great home! But we aren’t going to begin without understanding what we are facing. I want my buyers to know what the process will be like.

Months supply of homes shows, in a general sense, how many choices we can expect when we start shopping for a home. A healthy market has about six months supply of homes. We do not.

Days on Market is just that—how many days the home was for sale until it closed and belonged to someone else. Keep in mind that it usually takes 30 days to close, and we must do the math when looking at these numbers. So, the average of 57 days on the market means we can intuit that it took 17 days or fewer to accept an offer. That is very fast.

Now, when the price point goes up, the time the property spends on the market usually goes with it. Especially in the much higher price points, those that are double the average price of a single family home, Days spent on the market varies.

Inventory is an issue in this market. But it doesn’t have to be a deal breaker.


Listings 

Once I familiarize people with the market, I’ll want them to see what a listing looks like. This home, one of my listings, is an example. It tells all or most of the major details that any buyer would want to know about a property.

Also, it is RELIABLE. Zillow, Trulia, even Realtor.com, they are good, but they often have the wrong information on a home. Great for browsing, but not for a serious search. The information in these listings really needs to be correct, because the agent’s reputation, and possibly even license or ability to use the MLS service, depends on it.

For a complete look at this listing, click here. 


The moral of this blog post is that I would love to help you and be your Realtor®. This is one of the most challenging markets we’ve ever seen, so all the talent, creativity, imagination, ability, connection and skill your team can bring to the table..well, you may need all of it. Please let me know if I can help.