What are the challenges facing our Industry?
Demand exceeding Inventory – this will continue to plague our market as CSU and job growth outpace affordable new construction.- Increasing Home Prices – given the demand v supply issue, prices will continue to tick upwards and will further restrict homebuyers who may be priced out of the market.
- Increased Construction Costs and Time – The combination of a lack of labor force and increased land prices continue to push the cost of new development and the time to build. Construction timelines are now an average of 9-12 months from the more common 6 month expectation in years past. Currently, the majority of new development in Fort Collins is in the $450k-600k price range (doing nothing to relieve the pressure on prices for the majority of the market).
- Limited Water Availability – Developing lots requires the securing of water for the future homes and Colorado’s tight water shares are a challenge for the expansion of each of the outlying communities around Fort Collins. Towns that source water from the CBT (Colorado Big Thompson) are facing a cost of $30,000 per acre foot, which is required per new home in many areas.
- Rising Interest Rates – The expectation of interest rates finally going up may be the final straw for many would-be homebuyers as purchasing power diminishes against a decreasing affordability overall.
So.. it’s a bubble, right? Click to Read More
