Economist predicts Northern Colorado housing market will continue cruising in 2021
While the COVID-19 pandemic may have dampened overall economic growth in 2020, the virus did little to slow down the red-hot residential real estate market in Northern Colorado. As recovery gains speed during 2021, the local housing market is expected to remain strong, according to a real estate economist.
“We went through a health crisis, not a housing crisis,” Windermere Real Estate chief economist Matthew Gardner said during a virtual market forecast put on by the company Thursday. The housing market did “spectacularly better” last year than did the overall economy.
Extremely low supply, combined with spiking demand — due in part to Colorado’s relative economic strength, low prices compared with the coasts and superior quality of life — created conditions for a strong sellers’ market in 2020.
In November there were an average of 3.3 offers made for every home sold in the United States, according to Gardner.
“With demand as high as it is and supply as low as it is, it’s almost impossible for prices to fall,” Windermere Fort Collins president Eric Thompson said.
While 2021 is still expected to be a sellers’ market both nationally and in Northern Colorado, prices should moderate a bit, he said
Home price growth nationwide in 2020 was 7.5% and is expected to slow to 4.1% in 2021. In Larimer County those figures were 8.3% and 5.5%, respectively. Weld County saw prices rise 7.3% last year, and Gardner expects that figure to be 6.4% in 2021.
“I’m totally fine with that,” he said of the lower growth rate. A moderate tapering off of price increases is indicative of a healthier overall housing market that’s more accessible to first-time millennial buyers.
In 2021, the region is likely to experience a “more realistic market” for sellers in terms of value appreciation, Gardner predicted. Sellers can’t simply expect to see this kind of growth every year forever.
In addition to slower appreciation, Gardner said he expects the 2021 Northern Colorado housing market to be defined by increased listings and sales, rising mortgage rates and more new construction.
All things considered, the local housing market — along with the overall economy — is far healthier than many across the country.
“Your economy has diversified significantly,” Gardner said, and the Colorado “lifestyle is going to attract more industries into the area,” both of which are factors in creating a solid residential real estate market.