Northern Colorado Economic Snapshot - January '12

That light at the end of the tunnel may not be another train coming this way. For the Northern Colorado real estate market that light may be the end to the darkness the area real estate market has experienced since 2005.

For the past two years sales activity has been approximately the same. In 2010 there were 7,699 single family/attached unit sales across Northern Colorado. In 2011 that number was 7,883; an increase of 2.38%.

The Absorption Rate for the Northern Colorado real estate market at the end of 2011 stood at 149 days (4.9 months) for single family homes. The Absorption Rate is the time it would take for the market to absorb itself assuming the sales rate stayed the same and no new inventory came into the market.

Home mortgage rates continued at historic lows throughout 2011, with the traditional thirty-year fixed rate loan vacillating around 4%. New home builders took advantage of the reduced inventory of resale homes and began to build spec inventory; something that hasn’t happened for the past few years as lenders have been wary of providing financing on homes that don’t yet have a buyer in hand. Look for this element of the local real estate market to continue to expand in 2012 as builders develop land they purchased at rock-bottom prices.

In the past, corporate relocation was an important aspect of the Northern Colorado real estate market. Local companies would search across the country (world) for qualified individuals to fill local positions. For the past few years, those positions (if there were any) were filled with qualified individuals who were already living here. Look for that to continue as the cost associated with relocating individuals and their families has become economically prohibitive for many companies.

Click below for an overview of sales activity for the past two years for single family homes and attached units in the various Northern Colorado areas, courtesy of IRES – the Northern Colorado MLS.