Is the Fort Collins real estate market in a bubble?
With all the news and hype about the red hot real estate market in Fort Collins we are hearing a lot of our buying clients drop the B word and ask if they are buying in the midst of a bubble in home prices. It’s a valid question that deserves a look at historical data.
It’s extremely helpful to have just gone through “the great recession” and be able to look at what prices did during this period and how quickly they recovered. Take a look at the Fort Collins median home price before, during, and after the recession. In 2007, just prior to the housing collapse of 2008, our median home price was $235,000. Our median price ended up bottoming out in 2009 at $226,000. That is a drop of just 3.8% during what has been dubbed the worst recession since the great depression.
Certainly the recession was terribly difficult for many in our community and the value of some Northern Colorado homes fell much more than 3.8%. But compared to what happened in other markets across the country, we weathered the storm surprisingly well. And what has happened since? Prices have roared back and our median price is up 24% since the bottom in 2009. But of course, that huge increase is the point of concern; how do we know prices won’t take an unprecedented fall?
The market will correct again but consider the following as you ponder the depth of our next price correction: Larimer county’s projected population increase is 34% over the next 17 years. An oil boom is happening just to our east in Weld County. We have a continued track record of attracting employers. We receive unending accolades touting our region as the nation’s most satisfied city, a top 10 place for business and careers, 3rd in the nation as the best place to do business, top downtown in the country, and many other praises. When you consider these things, you might share my optimism that there is still room for growth in Northern Colorado real estate prices.