Northern Colorado home prices are expected to remain high for the foreseeable future as new residents flock to the region and rising construction costs keep the supply of new homes tamped down. 

“I keep looking at the numbers and asking, ‘Where is the end?’” Dennis Schick, broker/owner of Re/Max Alliance, said Tuesday morning during a residential market forecast at BizWest’s Northern Colorado Real Estate Summit. 

Low interest rates, Northern Colorado’s high quality of life and the region’s relative affordability compared to places such as California combine to make Schick’s rhetorical question a difficult one to answer. 

With only one home on the market for every 37 buyers, prices and competition aren’t likely to drop off anytime soon. 

In February, 45% of detached homes sold in Larimer County fetched more than the asking price. In Weld County, the figure was 50% last month.

“We’re seeing a rush to overpay,” he said, citing one home that was sold for $200,000 more than asking.

Schick forecast home values to grow 5% to 8% in the next year and 3% to 5% annually over the next three years. 

Inventory will remain tight because developers, faced with rising costs, are in no rush to build new homes, he said. New construction cost increases are driven primarily by water and material price increases, he said.

“Water is a part of everything we’re talking about today,” Schick said. 

The Front Range has roughly 80% of Colorado’s residents but only about 20% of the water resources, he said.

Because there are so many buyers competing for relatively few homes, it’s more important than ever for brokers to pay attention to customer service. 

“People are in panic. It’s so important we bring a sense of calm … There’s never been a better time to be a good citizen,” Schick said.  “The number one way to grow your business in this market is to do the right thing.”

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