In 2016 it wasn’t difficult to find articles and statistics to prove that our Front Range real estate market was anything but “normal” when compared to the national averages. Consider these facts about last year’s market:
– Population-wise, the Front Range was among the fastest growing areas in the nation.
– Our area’s housing appreciation was well above the national average.
– Homes on the market sold faster here than most any other major market in the country.
As we all know, past performance is no guarantee of future performance, but that doesn’t stop the pundits from making their predictions. Here are some thoughts about the year ahead for Front Range homeowners:
A Strong Local Market
►According to Veros Real Estate Solutions, a California-based company that provides tools for property valuation, the Front Range market will top the nation in terms of residential price appreciation over the next 12 months. Their prediction is based on what they call strong market fundamentals of low unemployment rates, growing population, and an inventory supply of around 2.0 months or less. To read their complete report, visit this website:
Two Strong Growth Factors
►The exploding growth of the millennials and retiring baby boomer markets is expected to have a huge impact on the housing market in the next ten years, according to the National Association of Realtors.
Consider this: last year, the median age of the first-time homebuyer was 32 years. Now consider that in 2017, 4.4 million people in the U.S. will turn age 32. Further, the second-largest generation is now moving into retirement. Americans ages 65 to 74 are in a key age range where housing decisions are being made which typically involve a home sale and a purchase. Over the next five years, the number of people in the U.S. over the age of 65 is expected to increase 18 percent, while the population overall grows only 4 percent. Add to that the fact that between 2010 and 2015, Colorado’s growth in its 65+ population was the 3rd fastest in the United States–and it’s easy to see the impact this segment will have on our market.
A Slower New Home Market
►Due to large labor shortages currently experienced, construction starts are lower than historical averages. Given that nearly one in four construction workers are foreign-born, stricter immigration policies from the new incoming administration are likely to make the problem worse.
A Rise in Interest Rates
►The National Association of Realtors predicts the rate on a 30-year fixed mortgage will rise to 4.6 percent by the end of 2017. The Mortgage Bankers Association also predicts interest rates to rise gradually in 2017, but not to rise above 5%.
Greater loan access
►Fannie Mae and Freddie Mac have raised loan limits for the first time since 2006, increasing the limit to $424,100 for most of the country and to $636,150 for more expensive markets. Colorado counties carry different conforming loan limits, so if you’d care to know limit of any particular county, don’t hesitate to call and ask.
Our Front Range market will continue its fast pace, and working with the very latest facts and statistics will be crucial to your success as a seller or a buyer. For up-to-the-minute stats, let’s talk.