Colorado moving up in home price appreciation

A recent national report that analyzes housing appreciation trends provides some perspective on the northern Colorado housing market.

Although statistics can at best be confusing and at worst downright misleading, third-quarter statistics from the Office of Federal Housing Enterprise Oversight seem to indicate an improving trend with resale appreciation rates in our area compared to other parts of the country.

Colorado ranks 36th in a state-by-state comparison in the past 12 months, with a 2.23 percent appreciation rate. Utah and Wyoming are the top two states, with annual housing appreciation at 12.89 percent and 11.77 percent, respectively. Michigan is last in the state rankings with a negative 3.74 percent rate of appreciation.

Ironically, the states with the highest levels of appreciation just a couple of years ago -- California, Florida and Nevada -- now find themselves in the bottom five of the rankings.

How do we stack up in northern Colorado? In a ranking of 287 metropolitan statistical areas and divisions, Weld County ranks 221st, with a 12-month appreciation rate of negative 0.86 percent. In the last five years, the report shows appreciation in Weld at 4.71 percent.

Larimer County is slightly better with a ranking of 197 and a 12-month appreciation of .22 percent. The five-year appreciation rate is 12.75 percent.

What can we learn from these numbers?

« Real estate is cyclical - High rates of appreciation are not sustainable over the long term. Real estate markets ebb and flow in a fairly predictable pattern. From the early 1990s through 2002, northern Colorado experienced significant price appreciation. The market correction we have dealt with during the past few years is just beginning in other areas of the country.

« A time to buy and a time to sell -- We've all heard the old adage about real estate: "Location, location, location." The new rule is, "Timing, timing, timing." The statistics indicate it is still a good time to be a real estate buyer in northern Colorado.

« Count our blessings -- Our economy is sound and employment growth continues in an upward trend. We live in one of the most desirable areas of our great country.

Merry Christmas!

Don Tennessen is the broker/owner of The Group Inc. and serves on the board of directors of the Greeley Area Realtor Association.