The recent boom in the Fort Collins area can, at least, partially be attributed to the Mile High City’s current population jump. This has caused Denver’s cost of living to jump in response and forced some Denver residents to turn their eye toward Fort Collins as an alternative. Currently, Fort Collins rings in as the fourth most populated city in a state that is certainly undergoing a significant population increase. Demand is steadily increasing, as is the pricing of housing across our fair city. Among many wise real estate buyers, there is some worry brewing over the current environment of the market.
All Cash Home Buyers Weigh-In
In Fort Collins, at this moment, there is some false inflation of housing prices going on. Builders will claim that it’s because building material prices are hiked so high that building affordable housing is impossible. However, most experienced real estate buyers, especially all-cash home buyers who are familiar with the actual value of homes, depending on how much work they need, are skeptical of this excuse. Especially since there is significant data that leads us all to believe this is totally false. Realtor.com states that the average home price is around $450,000. The actual average value of a Fort Collins home is around $335,000 which means that the current average is around 30 percent higher than it should be. Most people in the real estate industry would claim that this is a sign of the climate being a seller’s market. But that’s because they’re not weighing all of the facts. Forgive us for being brash, but they’re about to get caught with their pants down. The demand will not be sustainable for this kind of market, especially since 2016 was the first year that Colorado started to see a decline in the sudden rush of people. The population dropped considerably and continued to in 2017, and yet housing prices continue to skyrocket closer and closer to half a million dollars, rather than the somewhat more conservative $300,000 price point. This does not mean we’re living in a healthy real estate market. It means we’re living in an incredibly bloated one that will favor neither the average middle class family or real estate investors.
The Coming Results
As demand for housing drops, this so-called seller’s market where you can seemingly drive up the bid with no consequences will collapse as the people leech away. Location Inc., a real estate data firm, predicts that the years of rapid appreciation and bloated sale pricing on property the Fort Collins community has enjoyed for the last couple of years will result in absolutely falling prices starting in 2019. This prediction was based on growing gaps in wages and home prices. This company is predicting twenty-one percent drops in median home average prices. When you combine this with stagnant wages, you’re looking at a lot of foreclosures across the market.
The Key To Decline
Many insist on ignoring the connections between stagnant wages and economic health. Assuming that businesses are healthy does not imply the people working for them have enough money to power the local economy. If wages remain stagnant at the median $59,000, the predicted housing bubble pop is an inevitability. Currently, houses are 4.5 times higher than income which is incredibly high compared to the national 3.49 times average. Doubtful about this company’s credentials? They’re not Nostradamus claiming to know the future based off of prophecies. They predicted the LA and Miami housing price decline in ‘06.
How To Avoid The Disaster
Make sure your funds are liquid. If you’ve recently sunk your money into a house that you think is an investment and will gain value, understand that is no longer the case. The remarkable thing about the original housing crisis was that the rich weren’t the ones who got hit by the consequences—it was the middle class. Instead of falling to the same mistakes your parents made, ensure that you’re ready to ride the wave by liquidating your assets with an all cash home buyer now. Avoid bankruptcy later and feel secure in the assets you still have with the help of Colorado All Cash. Our personable staff is here to look out what’s best for you. Don’t let the panic set in, take action. Contact us today.