RE Summit: Shortage of single-family homes shows no signs of abating

The single-family home market in Northern Colorado has taken off since a brief blip at the start of the COVID-19 pandemic, and amid rising construction costs, historically low interest rates and high demand, the market shows no signs of slowing down. The housing shortage in Northern Colorado could continue into the foreseeable future.

That was the message Thursday morning during a panel discussion at BizWest’s Northern Colorado Real Estate Summit, moderated by RE/MAX Alliance Broker Associate Dominic East.

“From the minute the no-showings restriction was lifted, it’s been an all-out sprint to the closing table,” East said. “When seeing today’s numbers for yourself, it’s unbelievable.”

East estimated an average of 37 buyers for every single-family home on the market in Northern Colorado.

Dave Armstrong, mortgage loan operator for Elevations Credit Union, said it’s not unusual to see eight to 10 offers per property, most of them over list price. This has created a sizable appraisal gap that to make up homebuyers have to put up extra cash or take out a bigger mortgage — and the latter scenario often leaves buyers with less than a 20% down payment, meaning they have to buy mortgage insurance.

“We have to figure out ways we can help,” Armstrong said.

Lauren Hansen, CEO of IRES, said the demand is easy to trace — Larimer County’s population has grown 23% since 2010, and Weld County’s has grown 35%, the highest in the state.

“The Front Range is on fire,” Hansen said. “But this is not just a Colorado issue. Inventory is shrinking throughout the U.S.”

In Larimer County, sales are up 14.7% and homes under contract are up 8% compared to last year, while in Weld County sales are up 12.8% and homes under contract are up 10%, Hansen said.

Chad Walker, principal and CEO of Pinnacle Consulting Group, said that many of the factors that have made single-family homes unattainable — such as rising costs of construction, land and water and housing demand — will be difficult to change in the future.

What could help ease the housing shortage, Walker said, is an increase in public-private partnerships such as Title 32 special districts. As high infrastructure costs prove a barrier to housing construction, special districts allow municipalities to create either single-purpose or metropolitan districts to construct and maintain infrastructure improvements over time through tax revenue from within the district.

Until such efforts become widespread enough to affect the shortage of inventory, though, single-family housing in Northern Colorado will remain a seller’s market.

“Anyone involved with the buyer side of the market, may the Force be with you,” Hansen said.

© 2021 BizWest Media LLC

The single-family home market in Northern Colorado has taken off since a brief blip at the start of the COVID-19 pandemic, and amid rising construction costs, historically low interest rates and high demand, the market shows no signs of slowing down. The housing shortage in Northern Colorado could continue into the foreseeable future.

That was the message Thursday morning during a panel discussion at BizWest’s Northern Colorado Real Estate Summit, moderated by RE/MAX Alliance Broker Associate Dominic East.

“From the minute the no-showings restriction was lifted, it’s been an all-out sprint to the closing table,” East said. “When seeing today’s numbers for yourself, it’s unbelievable.”

East estimated an average of 37 buyers for every single-family home on the market in Northern Colorado.

Dave Armstrong, mortgage loan operator for Elevations Credit Union, said it’s not unusual to see eight to 10 offers per property, most of them over list price. This has created a sizable appraisal gap that to make up homebuyers have to put up extra cash or take out a bigger mortgage — and the latter scenario often leaves buyers with less than a 20% down payment, meaning they have to buy mortgage insurance.

“We have to figure out ways we can help,” Armstrong said.

Lauren Hansen, CEO of IRES, said the demand is easy to trace — Larimer County’s population has grown 23% since 2010, and Weld County’s has grown 35%, the highest in the state.

“The Front Range is on fire,” Hansen said. “But this is not just a Colorado issue. Inventory is shrinking…