Real Estate Information Archive

With an abundance of housing inventory in most markets and foreclosures common across the country, it seems unfathomable to envision a housing shortage. However, some trends are taking shape that foretell just such a possibility in certain parts of the United States.

According to a recent article reported on MSN Money, economists are pointing at the convergence of two trends - a depressed level of home construction (new home starts in 2009 were one-third of the historical norm of 1.6 million), and the inevitable emergence of a generation that will soon be entering the work force and forming households - that could cause a shortage.

Overbuilt markets such as south Florida, Las Vegas and Phoenix may not be in danger of such a squeeze anytime soon. But the article identifies Western states such as Oregon, New Mexico and Utah, where housing supply and demand is considered to be in balance, as locations that could be under supplied as early as mid-2012.

The Group Real Estate Insider. Believe it or not: Housing shortage could be on the Horizon. September. Volume 34, No. 9

In the looks-can-be-deceiving department, it appears Northern Colorado's new home market is stronger position than it may seem on the surface.

Traditionally, a valuable measure of any new home market is the months of inventory available for sale. For example, if 10 homes have sold over the past year in a certain market segment, and there are 10 homes currently available for purchase, then it follows that there is a 12-month supply of homes on the market. Most experts agree that a six-month supply represents a healthy equilibrium in a local market.

Through extensive research conducted by The Group Inc., we've found a number of "phantom listings" in the Northern Colorado market that have exaggerated new home inventory and artificially increased the months of supply. These "phantom listings" consist of properties that appear on the Multiple Listing Service as being available for sale, when in fact the home is not yet under construction. Because construction is not under way, it could be many months before the home is actually ready for purchase. For example, there are currently 37 new homes in the Fort Collins market listed for sale priced between $200,000 and $250,000. However, only seven of those are under construction and 30 are considered "phantom listings."

It is important for sellers, buyers and lenders to have a true picture of the new home market. Contact me for more details on "phantom listings" and the state of the new home market.

The Group Inc. Real Estate. New home market stronger than it appears: impact of "phantom listings." Volume 34, Number 9. September 2010.

Colorado State University employees and its alumni living across the state earn more than $4.1 billion in household income, according to a recent report titled Created to Serve: Colorado State University's Impact on the State's Economy. According to the study, the collective income represents 3.1 percent of all household income in the state, generates $130.8 million in state income taxes and $50.2 million in annual sales taxes.

Other findings from the study include:

- CSU employees represent 11 percent of household income in Fort Collins.

- CSU generates more than $300 million in annual research spending.

- CSU research results in a 0.2 percent increase in overall productivity of Colorado firms, worth $79.7 million annually.

- Students spend $168 million in Fort Collins each year, which supports 628 jobs.

- CSU employs 6,200 workers and approximately 50,000 CSU alumni are employed in the state.

- Spin-off companies created by CSU research have created 550 jobs in the state.

The Group Inc. Real Estate. Study finds CSU stirs Colorado's economy. Volume 34, No. 6

When a customer spends $100 at a local independent business, 68 of those dollars stay locally. If that same $100 is spent at a non-local business, only $43 stay here, according to the Andersonville Study of Retail Economics.

The Be Local 20/20 Challenge, sponsored by Be Local Northern Colorado, asks residents to pledge to spend $20 per week from their normal household budget at local, independent businesses for the next 20 years.

As of May 21, 2010 634 people had accepted the 20/20 Challenge. The direct dollar amount impact of this is $253,000. With the economic multiplier effect, where a dollar turns over and circulates in the economy four to seven times, these 634 people have at least $1,014,400 dollar impact on our local economy.

To learn more or take the 20/20 Challenge pledge, visit www.belocalnc.org/2020-challenge/

The Group Inc. Real Estate. How 634 = $1 million: Be Local. Volume 34, No. 6.

Single women have become an increasing force in the residential real estate market, representing 21 percent of all home buyers in 2009, according to an assessment by the National Association of Realtors. That compares to just 14 percent of the market as recently as 1995. Some additional statistics about impact of single-women buyers.

- Second largest share of adult households who purchase homes

- One quarter of all first-time home buyers

- 17 percent of all repeat buyers

- 58 percent of single-women buyers were first-time buyers

The Group Inc. Real Estate Insider. Survey finds single women have growing role in housing market. Volume 34, No. 6

Apparently there's no place like home for Colorado high school graduates this year. Colorado State University and the University of Northern Colorado are each reporting large waves of applications from in-state students for next fall's freshman class.

As of May 15, CSU reported 8,548 in-state applications, up 1 percent over last year's total of 8,467. UNC has fielded 6,325 in-state applications. Out-of-state applications at CSU, meanwhile, slipped this year, with 6,390 requests for acceptance, down 6 percent. UNC reported 1,268 out-of-state applications.

Overall, to date CSU has received 14,938 applications, and expects the freshman class to total about 4,500, likely making it the largest incoming class ever. The previous freshman class record was 4,404 in 2008. The 2010 class is also shaping up to be the most ethnically diverse ever, with a 15 percent increase in minorities. UNC has received 7,593 applications, a 7 percent overall increase from 2009. The school expects 3 percent growth for the incoming class over last year's 2,377 freshman class.

The Group Real Estate Insider. In-state applications to CSU on record pace: UNC up 7%. Volume 34, No. 6.

While mortgage rates continue to hover near 5 percent, expect rates to rise in the near future. According to Lawrence Yun, chief economist for the National Association of Realtors, a resurgent U.S. economy combined with growing federal deficit will nudge mortgage rats higher over the coming months. In his latest projections, Yun said 30-year of the year and maybe even 6.5 percent by late 2011.

While such rate increases may seem minimal, each percentage increase can have significant ramifications on purchase power. That's because each 1 percent increase in mortgage rates erodes total buying power by 10 percent. So, if you are in the market for a $300,000 house, and rates increase from 5.0 percent, you'll need to adjust your price point down to $285,000.

The Group Inc. Real Estate. Economist: 30-year mortgages to reach 5.6 percent by end of 2010. Volume 34, No. 6.

A recent article in USA Today featured Fort Collins, CO; Silicon Valley, CA; New York City, NY; Huntsville, AL and Fort Wayne, IN - among 200 metro areas out of 384 nationally - that are experiencing pockets of economic recovery in the country. Fort Collins was recognized for the diversity of employment, including 6,100 workers at Colorado State University and an emerging alternative energy sector that has created 827 new jobs since the middle of 2006.

The Group Inc. Real Estate Insider. Report Focuses on Fort Collins among cities on the rebound. Volume 34, No. 6.

The risk of a housing price decline in the Fort Collins-Loveland markets is just 10.4 percent, according to the latest PMI U.S. Market Risk Index. The report, which ranks384 metropolitan markets across the country, says Fort Collins-Loveland is the safest market among Colorado cities, and therefore has the best opportunity for housing price gains in the state. The next safest market in Colorado is Boulder, which registered a 21.4 percent risk of price decline.

Another way to interpret the PMI report - Fort Collins-Loveland homes have an 89.6 percent chance of holding steady or increasing in price.

The PMI score, which is recalculated every quarter, projects risk for a two-year period. The risk for the Fort Collins-Loveland market declined significantly in the fourth quarter, down from reaching 20.4 percent in the third quarter. Nationally, Fort Collins-Loveland ranked 54th safest out of 384. The average risk for depreciation is 53 percent across the country.

Price risk is generally improving across the country. Out of 384 metro areas surveyed, risk declined in 356. And the number of metro areas in the highest-risk category (90 percent or higher) decreased by 26.4 percent. The number of metros in the lowest-risk category (10 percent or less) increased by 79 percent. Seven of the 10 highest-risk cities are located in south Florida.

The Group Real Estate Insider. Report: Fort Collins-Loveland homes a better bet for price gains. Volume 34, No. 6.

High real estate prices usually attract yawns in Southern California, but a Houston oil executive  raised some eyebrows recently when he paid $12 million for an 11,246-square foot beachfront lot in Dana Point, CA. That's the equivalent of $46.5 million per acre, which is a record deal. Still, the lot isn't even the most expensive in the Headlands Reserve development. An 11,773 square-foot lot is on the market for $17.25 million.

The Group Real Estate Insider. That's a lot for a lot. Volume 34, No. 4.