A Calm, Data-Driven Look at Prices, Income, and What’s Really Happening
If you’ve lived in Fort Collins for any length of time, you’ve probably had this thought:
“Home prices have gone crazy.”
And if you just look at the raw dollar numbers, that reaction makes sense.
In December of 2016, the rolling 12-month median sales price (attached and detached homes) in Fort Collins was:
$345,000
Today, that number is around:
$559,000
That’s a $214,000 increase.
On paper, that feels dramatic.
But the real story only becomes clear when we zoom out and look at the full picture — long-term growth rates, income growth, and what actually happened between 2020 and 2023.
Let’s walk through this calmly.
Because the numbers tell a much more balanced story than most headlines suggest.
Long-Term Price Growth: What Do the Numbers Actually Say?
From late 2016 to today, home prices increased about 62% total.
That sounds like a lot — and it is.
But when we calculate the average annual growth rate over that nine-year period, we get:
Approximately 5.5% per year.
That’s important.
In strong, desirable markets, 5–6% annual appreciation over long stretches of time is not abnormal. It’s not bubble behavior. It’s steady long-term growth driven by demand, limited land, quality of life, and economic strength.
When you zoom out, Fort Collins has followed a fairly consistent long-term trajectory.
The 2020–2023 Acceleration
Now let’s address the period that really shaped perception.
In June of 2020, the median sales price was:
$400,000
By June of 2023, it had jumped to:
$550,000
That’s a 37.5% increase in just three years.
When broken down annually, that’s:
About 11.2% per year.
That was not normal.
That was a surge.
It was driven by:
- Historically low 3% interest rates
- Remote work expansion
- Migration from higher-cost markets
- Severe supply constraints
That period felt intense because it was intense.
Prices were rising at double the long-term average.
But here’s the key point:
That rate of growth did not continue.
When we zoom back out to the broader 2016–2025 window, we land right back around that 5.5% annual growth rate.
That’s normalization.
The Income Side of the Equation
Most housing conversations focus only on prices.
But prices alone don’t determine affordability.
Income matters just as much.
In 2016, the HUD Area Median Income (AMI) for a four-person household in the Fort Collins area was:
$78,200
Today, that number is:
$127,600
That’s a 63% increase.
When we calculate the annual growth rate, income has grown at roughly:
5.7% per year.
That’s almost identical to home price growth over the same period.
Let that sink in:
- Home prices: ~5.5% annually
- Income growth: ~5.7% annually
They have moved in near parallel.
The Price-to-Income Ratio
One of the simplest measures of housing affordability is the price-to-income ratio.
You divide the median home price by median income.
In 2016:
$345,000 ÷ $78,200 = 4.4 to 1
Today:
$559,000 ÷ $127,600 = 4.38 to 1
That is almost unchanged.
Despite everything that happened between 2020 and 2023.
Despite the emotional impact of large dollar increases.
The structural relationship between income and home prices has remained remarkably steady.
That’s not what you typically see in markets experiencing extreme long-term imbalance.
Why It Felt Like Prices Were Out of Control
The psychological impact of 2020–2023 cannot be overstated.
When prices grow at 11% per year, people feel like they are being left behind.
When bidding wars are common and listings sell in days, it creates urgency and stress.
That period reshaped perception.
But when growth returned to the long-term 5–6% range, the emotional narrative didn’t fully reset.
Markets often move in waves:
- Steady growth
- Acceleration
- Normalization
What we experienced was acceleration followed by normalization — not permanent runaway growth.
What Would It Take to Reach a 3-to-1 Ratio?
Let’s address a common benchmark: the 3-to-1 price-to-income ratio.
Right now, Fort Collins sits around 4.4 to 1.
To reach 3 to 1 at today’s income level of $127,600, the median home price would need to be:
About $382,800
That would require roughly a 31% price correction.
That’s significant.
Another path would be a combination of:
- Income growth
- Flat or slowly rising home prices
If incomes grew at 5.7% annually and prices stayed flat, it would take about seven years for incomes to “catch up” enough to reach 3 to 1.
But realistically, long-term income growth nationwide tends to average closer to 3–4% annually. And Fort Collins, as a premium, high-demand market, is unlikely to experience a prolonged period of flat prices without a broader economic shock.
That leads to a more important question:
Is 3 to 1 actually the goal?
Fort Collins is a highly desirable market:
- Strong schools
- Outdoor access
- Limited developable land
- High quality of life
- Strong in-migration
Premium markets rarely trade at 3-to-1 ratios long term.
Instead of chasing a theoretical ratio, the more realistic focus is:
- Increasing attainable housing supply
- Supporting income growth
- Encouraging diverse housing types
- Improving access to entry-level ownership
Affordability is rarely solved by price crashes. It’s more often addressed through gradual income growth and thoughtful housing policy.
The Bigger Picture
When we step back and remove emotion from the analysis, here’s what we see:
- The 2020–2023 period was an abnormal acceleration.
- Long-term appreciation has averaged around 5–6%.
- Income growth has closely tracked home price growth.
- The structural price-to-income ratio has remained stable.
- Fort Collins continues to behave like a premium, supply-constrained market.
That doesn’t mean housing is easy.
It doesn’t mean affordability challenges don’t exist.
But it does mean the narrative of “runaway, unsustainable growth” doesn’t align with long-term data.
Final Thoughts
Fort Collins is not immune to housing cycles.
But when we look at the numbers objectively, our market appears more balanced than many people assume.
The surge happened.
The normalization followed.
And incomes, surprisingly, kept pace over the long run.
That’s a very different story than the one most people are telling.
And in a world of emotional headlines, calm data-driven analysis matters.