Is this real estate market going to crash? This is one of the most frequent topics of conversation in the United States and even across the world. So today, we’re going to address it specifically for Fort Collins and the Northern Colorado area. Here are some key factors to consider when thinking about whether the Fort Collins real estate market is going to crash.
We have seen interest rates go from 3% a year ago to now 6.8%, which immediately impacts a person’s monthly mortgage payment, and at the same time, potentially impacts the overall demand.
According to the Mortgage Bankers Association, new purchase applications are down 29% versus one year ago, and refinances are down over 80%, so you can tell that mortgage applications are in direct correlation to the demand for home purchases, and there are 30% fewer buyers in the market than a year ago.
Supply and demand
Compared to previous years, our supply is extremely low right now. For instance, in 2008, we had 1500 homes on the market on a monthly basis, whereas right now, we have under 400.
Supply and demand are currently in an imbalance. BUT, supply is increasing (slowly) and demand is decreasing more and more.
Rent vs. buy
We are definitely seeing rents increase. And in the next couple of years, we might also see more and more people start renting instead of buying which drive rents even higher. Right now, some people are renting versus buying hoping for the market to come down. Real estate is very geo specific and each market will act separately of another but similar.
Overall, I think Fort Collins is situated well. When it comes to supply and demand, we’re not going to see a huge influx of supply. Compared to 2008, we’re at 25% of what the inventory was. This is still a great place to live, but I’d definitely watch inflation, supply, and demand, net inflows and outflows of individuals, and of course, affordability.
I hope this article helped you understand whether or not the Fort Collins real estate market is going to crash. If you’re looking for more information, drop us a message; we’d love to help you out! We hope to be the best source of information and provide our clients the highest and best value in the Fort Collins Real Estate market.
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