Homebuyers head east to find best opportunities

In a twist on Horace Greeley’s historic plea to “Go west, young man,” homebuyers in Northern Colorado are finding cause to go east — east of Interstate 25, that is — for the best housing opportunities.

The primary attraction east of I-25 is significantly lower prices than in Fort Collins, Loveland or Longmont. With an average home price of $257,409 based on August sales, buyers in the Greeley-Evans area can save approximately $100,000 compared with Fort Collins, Loveland and Longmont. While the price difference is less dramatic for the towns of Ault, Eaton, Johnstown, Kersey, La Salle, Mead, and Milliken, their collective average price ($321,187), is still 14 percent below Fort Collins, 6 percent below Loveland, and 18 percent below Longmont.

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Another dimension of this “eastern” phenomenon is that markets east of I-25 are all experiencing home-price appreciation at double-digit rates — even greater than the cities west of I-25. In Greeley-Evans, for example, average sales prices were up 10.7 percent from August 2015 to August 2016. For the Ault-Eaton-Johnstown-Kersey-LaSalle-Mead-Milliken group of communities, the average was up 12.1 percent. By comparison, Fort Collins and its immediate area — including Wellington and Timnath — was up 6.4 percent, and Loveland-Berthoud was up 1.4 percent. Longmont (both Weld and Boulder counties) was an outlier in this picture, with prices up 11.7 percent.

These price-appreciation trends are notable for still another reason, given that all of these communities are in Weld County, where oil-and-gas activity has been declining over the past two years. The housing market not only seems largely unscathed, but is prospering — defying predictions of an economic slump.

Looking at the number of transactions, all sub-markets east of I-25 were up in August, and all sub-markets west of I-25 — except for Estes Park — were down. Sales in Greeley-Evans were up 4.3 percent over last August, and Ault-Eaton-Johnstown-Kersey-LaSalle-Mead-Milliken sales were up 15.9 percent. While the Windsor-Severance sub-market doesn’t provide the same price advantages of other “eastern” communities, it is sharing in the sales growth, with transactions up 35 percent. In fact, all of the larger markets west of I-25 registered a slight decline in the number of sales. Only Estes Park saw an increase, up 12.9 percent.

Some additional observations from August sales figures:

• Home supply remains tight. Inventory across the region totaled 1,821 last month, down 14.1 percent from the previous August.  Among Northern Colorado’s sub-markets, only the Windsor-Severance area — where home construction has been the most active across the region — experienced a rise in supply, but only a scant 1.3 percent.

• Despite the lack of inventory, the number of homes sold across the region was up slightly in August, by 2.2 percent over last year. In all, homebuyers purchased 1,210 homes last month.

• Estes Park reported the largest average sales price for August, at $441,844. Along the I-25 corridor, Windsor-Severance was the most expensive market at $398,802, followed by Longmont at $392,443.

• Across Northern Colorado, average prices increased 7.8 percent over last August to $346,150. And since August 2014, the average price is up 23.4 percent. But the August average dipped slightly from July, when the average hit $349,866. In fact, prices declined from July to August in five of Northern Colorado’s seven sub-markets, with Estes Park and Longmont providing the exceptions.

Larry Kendall co-founded associate-owned The Group Inc. Real Estate in 1976 and is creator of Ninja Selling. Contact him at 970-229-0700 or via www.thegroupinc.com.