Q3 Northern Colorado Real Estate Market Update

2018 NORTHERN COLORADO Real Estate Market Update

Q3

Steady as she goes! Q3 brought smooth sailing for Northern Colorado housing market Nationally, the third quarter brought us a topsy-turvy stock market and the beginnings of a stormy political campaign season. But here in Northern Colorado, our ship of real estate continued to hold an even keel between July and the end of September.

Home sales statistics for the latest quarter show that overall transaction numbers and inventory totals maintained a steady course in the third quarter, and average sales prices – while still growing – are rising at a modest clip compared to last year.

3 percent – to 1,893. Average prices increased 5.5 percent to $393,220, down from the growth rate of 8.9 percent the year before.

As a further sign of price moderation in the region, we see that the average sale price actually declined by 1.7 percent from the second quarter ($399,909) to the third quarter.

Across the region, the number of sales totaled 3,027, down slightly – 2.3 percent – from the third quarter of 2017. Similarly, housing inventory slipped a little –

THIS CHART COMPARES AVERAGE THIRD QUARTER SALES PRICES FOR EACH LOCAL SUB-MARKET FROM 2016 TO 2018 Q3 Q3 % CHANGE Q3 2018 % CHANGE 2016 2017 (‘16-’17) 2018 (‘16-’17)

SUB-MARKET

Fort Collins

$378,301

$407,754

Timnath

$575,639 $588,918 2.30% $627,365 6.53%

Wellington

$304,284 $312,342 2.65% $347,531 11.26%

Greeley/Evans

$255,067 $281,111 10.21% $302,758 7.70%

Loveland/Berthoud

$350,089 $383,829 9.64% $403,037 5.00%

Windsor/Severance

$394,682 $442,084

12.01%

Estes Park

$393,874

7.03%

Ault/Eaton/Kersey/Milliken/

Johnstown/LaSalle/Mead TOTALS

$324,556 $357,055 10.01% $370,320

$421,573

7.78%

$420,879

3.21%

$441,061 -0.23% $468,076

11.03% 3.71%

$341,926 $372,485 8.94% $393,220 5.56%

Source: IRES

At a glance | employment Northern Colorado is among the most robust regions in the country for job growth. The Greeley metro area (Weld County) leads the way locally and is No. 5 nationally for job growth percentage the last five years. The Fort Collins-Loveland area (Larimer County) is No. 11. The chart below reflects five-year (2013-2018) and one-year (2017-2018) growth rates for Boulder, Larimer and Weld counties.

NUMBER OF JOBS EMPLOYMENT 2013, 2017, 2018

130,000

140,000

150,000

LARIMER COUNTY WELD COUNTY 132,744 BOULDER COUNTY Source: Colorado Department of Labor & Employment.

Note: Figures are not seasonally adjusted.

THE GROUP, INC. REAL ESTATE | Q3 2018

160,000

170,000

180,000

161,908 167,617

200,000

195,413 199,865

166,832 156,519

190,000

5-YEAR CHANGE

+2.3% +19.8% +3.4% +21.9%

185,863

188,210

+1.3% +12.3%

1-YEAR CHANGE

Here’s a closer look at how third quarter sales in each of the local sub-markets compared to the same quarter in 2017:

Fort Collins-Wellington-Timnath

Fort Collins and the surrounding area saw total transactions slipped by 9.6 percent to 1,017, due in part to a loss of inventory, which declined 3.1 percent to 649. Demand held strong, as reflected by a 7.7 percent increase in average prices to $428,366.

Focusing on each individual community, we see that Timnath showed the strongest growth in the number of transactions, with total sales nearly doubling from 36 to 66. Wellington sales took an opposite turn, with the volume dropping by more than half from 186 to 82.

Fort Collins sales were down just 3.8 percent.

Greeley-Evans

Just like the Fort Collins area, prices for the Greeley-Evans market increased 7.7 percent to $302,758 for the quarter. It was also the only sub-market in the region to witness a gain in inventory, up 2.2 percent to 275. Total transactions were also up 3.4 percent to 634.

RESIDENTIAL INVENTORY JANUARY 1-SEPTEMBER 30 (5-YEAR HISTORY) FORT COLLINS WELLINGTON / TIMNATH 3536 3422

3824

3660

3038

2956

3989

3862

3076

2970

BUILDING PERMITS JULY 1 - SEPT 30 FORT COLLINS

99

318

WELLINGTON

25 ’14

’15

’16

Homes Listed

’17

’18

5 TIMNATH

Homes Sold

38 LOVELAND / BERTHOUD

2038 1590

’14

2220

2165

1722

1643

’15

’16

Homes Listed

2438

2267

1852

1722

’17

’18

Homes Sold

98

Single-Family

Multi-Family

LOVELAND

45

250

Single-Family

Multi-Family

Loveland-Berthoud

Inventory dropped slightly, off 2 percent to 390, while total transactions slipped 3.9 percent to 588. Average prices surpassed the $400,000 threshold, increasing 5 percent to $403,037.

Windsor-Severance

Based on year-over-year growth, Windsor-Severance was the most active market in the area, with a 15.6 percent increase in transactions to 356. Average prices actually declined – albeit a scant 0.2 percent – to $441,061, and the inventory of 339 homes equaled the yearago quarter.

Ault-Eaton-Johnstown-KerseyLaSalle-Mead-Milliken

GREELEY AREA 3343

3385

3296

3086

3264

2660

2672

2596

2551

2603

’14

’15

’16

’17

’18

Homes Listed

Homes Sold

24

844

Estes Park

601

12

Single-Family

154

’14

1083

1149

666

763

783

’15

’16

’17

902

Homes Listed

1512 1099

’18

Multi-Family

WINDSOR

WINDSOR / SEVERANCE

This collection of outlying Weld County towns experienced a small decline in sales, down 1.7 percent to 343. Inventory took a dip of 15.4 percent, while average prices increased 3.7 percent to $370,320.

Average sale prices in the Estes Valley jumped 11 percent to $468,076. Transactions were off 4.3 percent to 89, and inventory fell 6.9 percent to 81.

GREELEY

4

SEVERANCE

100

0

Homes Sold Single-Family

Multi-Family

THE GROUP, INC. REAL ESTATE | Q3 2018

Vacancy rates The residential vacancy rates have been extremely low in our area causing escalating rents. As several new apartment projects were completed in 2017 we have seen a bump in the vacancy rates.

Vacancy rates have remained low in nearly every sector of the commercial market. The increase in demand for land and office space, coupled with the low vacancy rate for retail space point to a healthy overall market for commercial real estate.

APARTMENT VACANCY RATES

COMMERCIAL VACANCY RATES

FORT COLLINS AREA

FORT COLLINS AREA

4.1% 3.7% 3.2%

INDUSTRIAL RETAIL OFFICE

2.3% 5.0% 4.2%

INDUSTRIAL RETAIL OFFICE

3.2% 3.2% 8.4%

3.2% 3.6% 9.5%

4.0% 3.2% 8.0%

INDUSTRIAL RETAIL OFFICE

2.6% 4.6% 3.8%

GREELEY AREA 3.0% 4.9% 3.6%

3.1% 5.2% 3.4%

2.7% 4.5% 8.4%

GREELEY/WELD AREA 3.6% 1.4% 3.8%

Q3 2017

4.0% 4.6% 5.1%

LOVELAND AREA

LOVELAND AREA

Q2* 2018

2.4% 5.1% 4.9%

LONGMONT AREA

Q3 2016 INDUSTRIAL RETAIL OFFICE

*Q3 Information not available at time of printing

3.5% 6.7% 11.4%

Q3 2018

3.7% 6.9% 10.1%

4.0% 7.7% 10.3%

Q3 2017

Q3 2016

MORTGAGE RATES

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3.81%

3.46%

4.63%

SEPT 2018

SEPT 2017

SEPT 2016

Source: freddiemac.com