Wow – What a year! 2021 started out pretty casually. Many experts weren’t exactly sure what to expect after a year of COVID made real estate extra interesting. Even my own predictions were low. I certainly wasn’t able to predict the huge demand and rising prices we saw. I expected 6-8% increases in real estate across the region, but when all was said and done, the entire region increased between 15-16% from 2020. It really began in January and February when the vaccines rolled out, making many feel much more comfortable with the future of the economy. Hoards of buyers who were able to permanently work from home decided Northern Colorado was where they wanted to land, and who could blame them? Prices really shot up and escalated throughout the early spring and throughout the remainder of the year. Even in December, when records are usually not broken, had 20%+ gains in Fort Collins, Loveland, and Greeley as compared to December 2020. If you’re a homeowner, life has been great – ample appreciation, security and safety. If you’re an eager homebuyer, it has been harder and harder to get an offer accepted.
Northern Colorado Median Home Values
Northern Colorado Home Sales
Fort Collins (IRES Area 9, Including Fort Collins, Wellington, Timnath, & Western Larimer County)
It has been a busy year in Fort Collins, capped off by an inventory strained December. Sales dipped nearly 15% this December as compared to December 2020, mainly because there were just too few homes to actually sell that sales couldn’t keep up. Because of that, prices popped up to $559,400 in December, up 25.29% from December 2020. I believe this is the highest increase in year over year median value that I have seen in my 12 year career. It represents a $112,932 gain in value in a median home in just one year! Not bad at all. I don’t see anything letting up in 2022.
Loveland/Berthoud (IRES Area 8, Including Loveland, Berthoud, & SW Larimer County)
Loveland/Berthoud had an equally delightful 2021, and an especially nice pop in price in December. Sales actually increased in Loveland/Berthoud in December, nearly 6% higher than December 2020. The median value jumped 21.03% in December 2021 as compared to December 2020 – an increase of $89,500 for the median homeowner. Conditions in Loveland/Berthoud will continue, and although there is a “fair” amount of new construction, primarily in Berthoud, they cannot build homes fast enough to relax the furious demand of homebuyers. Again, I don’t see anything letting up in the new year.
Greeley/Evans (IRES Mail Cities Greeley and Evans)
The Greeley/Evans market stayed very much in line with its regional counterparts in December, with a 10% gain in sales. Because Greeley remains the last “affordable” market in the region, they are attracting a few of the buyers who have been priced out of the surrounding areas. Even with a 10% increase in sales, prices jumped 22.78% to $415,000 in December 2021, representing a $77,000 increase in just one year. Incredible. The region is is flooded with homebuyers and there are just too few homes available.
A very tight market only squeezed tighter in December, which will result in even higher sales prices in January and early February. Across the region, there were only 180 single family homes for sale in December – that is nearly 100 homes fewer than the year before, which was the fewest listings ever. It’s tight and it’s not improving.
A Look Ahead
I think it’s safe to say that there will be a larger than normal increase in real estate prices in 2022. A healthy/balance market is anywhere between 4-5% appreciation year over year. With the lack of inventory, supply chain issues, and labor shortages, we will certainly not be building enough homes to put a dent in our demand, and it is becoming more and more apparent that people don’t want to leave Northern Colorado. They are riding high on the appreciation they’ve gained, and the lifestyle they have grown happily accustomed to. The only thing that could slow down the appreciation is an interest rate hike, which the fed has promised in 2022. But, it really depends on what the economy looks like. COVID and its many variants are affecting macro and micro economies across the world. Rising interest rates would just make homebuying more difficult, so there will need to be a healthy balance. I expect between 10-12% growth in median prices in Fort Collins, Loveland/Berthoud, and Greeley Evans as compared to the previous year.
One big issue affecting real estate in Colorado is the recent Marshall fire that broke out in Boulder County and destroyed nearly 1000 homes in Louisville and Superior. Although it’s within a different market, it is still close enough to affect how real estate works in Northern Colorado. The ripple effect of 1000 displaced families is real. Some will find longer term rentals as their homes are rebuilt, however that will create a larger demand for rentals in Boulder, Louisville, Longmont, and Mead. That will push some renters to different markets, and competition will be higher, and rents and prices will likely drive up because of it. Along with rents, some displaced residents will permanently relocate, some in Northern Colorado, which will drive more demand with an already limited supply. On top of that, many will chose to rebuild their homes, however, with limited and expensive building supplies, stretched labor pools, and longer timeframes already present, this could linger for another 2-3 years. It was an absolute tragedy and will certainly not be cleared up quickly.
My promise to you is to keep showing up – providing you everything you need to make a smart decision when you want to make a move. I’ll be here all year taking your questions, writing blogs like this, and updating you when things get crazy. Contact me if you’re looking to make a move and I’ll be ready to go!
I provide the expert guidance, resources and confidence to easily make a move in Northern Colorado. Every real estate transaction is unique and I work closely with you to develop a plan, strategy and approach to get the most out of your next sale or purchase. If you, a friend or a neighbor have a real estate need, please get in touch with me | Jared@TheCraftBroker.com or 970.222.1049
About the Author: Jared Reimer is a native Coloradoan and an Associate Broker at Elevations Real Estate in Old Town Fort Collins. He’s a community advocate, business champion, blogger, leader, tireless volunteer, innovator, thinker and expert on all things real estate in Fort Collins and surrounding Northern Colorado. You’re likely to find Jared spending quality time outside with his wife, Kacie, and kids, Hudson and Isla, or sharing a beer or two with a friend throughout Fort Collins. Call or text Jared at 970.222.1049 or email him at Jared@TheCraftBroker.com