Even though sales volumes have slowed, Fort Collins is still a sellers’ market, with prices soaring to new highs as supply failed to keep pace with strong demand. Single-family home sales dropped nearly 5 percent through November compared with last year, but the median sales price rose nearly 12 percent to $375,000. The average sales price topped $412,000, up more than 10 percent. Prices on condos and townhomes, once considered the most affordable option for first-time home buyers, escalated faster than single-family homes because of the small number of sales and lack of new products coming available. "It’s the same story as the last three years," said Clint Skutchan, chief executive officer of the Fort Collins Board of Realtors®. "The supply doesn’t equal demand, and we are seeing prices year-over-year going up and up on single family and multi-family." With new homes popping up all over the city, it would be easy to assume the additional inventory would help drive prices down. But with a growth rate of about 3 percent, Fort Collins is adding the population of a small town (4,800 people) every year, Skutchan said. "Are we building a small town worth of inventory every year? The answer, obviously, is no," he said. Overall market shrinks New listings for single-family homes in Fort Collins are down nearly 11 percent through November this year and closed sales dropped nearly 5 percent. Sales of condos dropped more than 5 percent, while the median condo sales price jumped to $255,000. Several factors are driving the price hike, including the construction defects law, Skutchan said. The law — which allows as few as two condo owners to bring a class-action lawsuit against a builder — was passed to protect consumers from unscrupulous builders and shoddy construction during the nation’s pre-recession building boom. The ease with which homeowners can sue and the threat of litigation has made it prohibitively expensive for developers to insure, build and sell condominiums, say critics who have tried repeatedly and failed to see the law changed. That means many builders are shying away from condos. Legislative efforts to change the law have failed repeatedly, but the state legislature is expected to take another shot at a bill when it convenes in January. Other factors, including high land and water costs and city fees, are discouraging builders from the condo market, Skutchan said. "If we do get condos, we won’t get condos that we need," he said. They will be at the high end to recoup a builder’s investment. "That’s why FCBR® is so heavily emphasizing housing affordability and what we can do to encourage entry-level housing and housing overall." Price appreciation is good news for homeowners as long as they plan to remain in the home or move to less expensive markets. "This is such a great market ... there’s a reason people love Fort Collins," Skutchan said. "We are just trying to figure out where the balance is to see the community grow in a way that allows everyone to live here, not just the highest wage earners." Todd Spiller of Spiller Realty Services said rising interest rates and a flood of new apartments in the development pipeline might ease vacancy rates and push rents down. That could force some investors out of the market, which could lessen competition, especially at the lower price points, he said. But with every interest rate hike, "you lose a few buyers," he said. "Eventually that will erode that bottom end."

Source: The Coloradoan