According to the latest American Community Survey from the U.S. Census Bureau, the net migration into our state in the last year was 30,859 people. In Northern Colorado the net migration in Larimer County was 7,001 people – for Weld County it was 7117.
What Does This Mean For Housing?
On average, 2.5 people are in each home so the number of new units required for these new residents would be 2800 in Larimer County and in Weld County it would be 2874. Clearly we will continue to have a housing deficit as builders struggle to keep up with demand. Also, prices continue to rise all across Northern Colorado, as indicated in the chart below, while wages continue to lag behind the increasing costs of housing.
These ever increasing housing prices are going to impact the potential sale of homes available at higher price points – they are simply not going to sell like they have in the past when Baby Boomers were looking for bigger homes for large families to gather in. The next wave of buyers are the Gen-Xers, who seem to be more interested in putting their resources into life experiences and less into a big home. This attitude, in combination with the cost of getting into a loft, condo, or town home, has already impacted the sale-ability of homes over $700,000.
The Dichotomy and Importance of Housing Inventories at Different Price Points
High end homes are available in large numbers in NoCo and their supply sits at around 9 months. For the average priced home in Fort Collins, the available inventory has traditionally set at about 6 months. The supply for that $400,000 home is now very tight at 1.89 months. Larry Kendall, in the Biz Week Magazine, predicts that prices in the high end market homes have the potential to actually decline. There are just not enough buyers out there when compared to the inventory on hand.
So, we have a market with two faces. If you are looking for that large home you have always dreamed about owning, now may be the time to buy as competition for these homes has decreased and low interest rates still prevail. Kendall says, this is “the best ‘move-up’ market in 40 years.”
For more information about how to approach this dual market, please contact us.