Wells: The health of Northern Colorado’s housing markets

We continue to keep close watch on the real estate markets in Northern Colorado, looking for any meaningful changes that paint a picture of what we can expect in regional residential markets. 

At The Group, we pay close attention to employment; we’ve identified it as a 12-18 month leading indicator that can predict future housing market conditions. The last year and a half has been very volatile, and at times hard to read the employment situation. Jobs reports have varied during the pandemic as a result of federal and state unemployment benefits, the temporary closure of businesses, and the fact that employment conditions differ greatly between industries.   The facts are that the region’s employment situation has continually improved, working its way back to be above the national average rate.  

As a state, Colorado has reached a job recovery rate of 78.1%, surpassing the national rate of 76.1%.  Specifically in Larimer County, the current number of people employed sits at 192,949 through August of 2021, compared to 150,203 in August of 2020.  The pre-pandemic number of employed in Larimer County hit a high of 201,519 in February of 2020. In Weld County the current number of employed sits at 158,713 vs 153,034 in 2020. Weld reached a pre-pandemic number of employed in February 2020 of 165,488. Both of these counties continue to rebound nicely with employment and are experiencing the impacts of remote workers relocating from other states.

So, how have the real estate markets responded, and have we seen the impact of rising employment itself in real estate?  

The truth is the data is still unclear as a result of eviction moratoriums — as well as mortgage forbearance programs — put in place to protect the housing market and tenants and owners who may have been impacted. Policy makers are looking at many of the same metrics to see if employment can improve enough to diminish the impact.  

While there are concerns of a slowing housing market, we’re not seeing signs to confirm that fear. Re-introduction of seasonality to the real estate markets are healthy indications that supply-and-demand fundamentals are finding balance. Looking closer at Northern Colorado, home sales year-over-year have increased 9.5% to 11,088, up from 10,127 sold from January through August of 2020. Areas that are leading home sales growth are Estes Park at 23.8%, Boulder at 20.7%, and Windsor/Severance at 19%.  Many of these markets are seeing absorption that is far outstripping new listings, a fact that is driving median price growth. The average median price gains for Northern Colorado cities and towns is 17.8%.  This is being led by Boulder at 30.7% growth ($1.25 million YTD), Estes Park at 26.8% ($697,500), and Fort Collins at 17.8% ($530,000).  Only one market — Loveland — experienced more new listings in 2021 compared to 2020, at 1,414 vs. 1,379 last year (-3%).  Across all Northern Colorado cities and towns, we have 8% fewer new listings this year — 12,180 compared to 13,308 a year ago.

What does the data tell us? The job market seems to be recovering, but we can’t be sure about the impact of employment on the housing picture as long as policies are in place to keep the impacts of employment losses at bay. However, we do know that a lack of replenishing housing supply combined with a high velocity of home sales is keeping this Northern Colorado market resistant to any sort of slow down.

Brandon Wells is president of The Group Inc. Real Estate, founded in Fort Collins in 1976 with six locations in Northern Colorado. He can be reached at bwells@thegroupinc.com or 970-430-6463.