I’m seeing some things happening in our market and I’m perplexed and looking for feedback.
Let me set the stage: The Fort Collins/Loveland unemployment rate is 6.1%. For some perspective, Colorado’s unemployment rate is 8.1% and nationally we’re still hanging out at 9%. The vacancy rate in Larimer county (which encompasses all of Fort Collins and Loveland plus some rural and mountain communities) is 2.3%. It is 1.8% 25 miles away in Greeley. 
For all intents and purposes, anything that is rentable is rented. We have 94% of our work force employed (most likely somewhat under employed). Rents have gone up $53 a month on average year-over-year. Developers and builders are cranking out apartment buildings as quickly as they can. In contrast, sales of multi-unit housing has remained relatively flat (still lots of short sales and distressed properties in inventory).
Builders and developers know how to do one thing – build and develop. My concern is that they will build and develop until a glut of apartments consumes every available square foot of shovel-ready and even green field dirt. In the next 3-5 years, when the dearth of short sales and foreclosure properties are finally off the books and the wounded consumer’s credit scores begin to heal, these people will want to move out of the expensive apartment they’re renting and buy a condo or single family home. Sounds great so far, right? My future in sales is bright and then I can retire!
Here’s my fear based on what I saw in the aftermath of the sub-prime credit fiasco and ensuing recession: The apartments will become less attractive, rents will begin to fall, investors who counted on rising rental rates to offset increases in debt service will go underwater and we’ll have housing stock that is over built for the area fall into disrepair with vandalism, vagrancy, and who knows what else. I still want to live here after I retire!
My question is this: How do we avoid the pitfalls that other areas have suffered (Phoenix, Las Vegas, Detroit, California, Florida)? How do we get builders and developers to moderate their building and development? How do we avoid giant pendulum swings in supply and demand? Fort Collins is my home town and enjoys many terrific amenities: awesome weather, beautiful parks and open space, close proximity to the mountains, diverse economic base, a state university, some of the best micro-breweries in the country. I get that we are going to grow – but how do we grow in a sustainable, measured, and prudent fashion so that everyone who comes here will enjoy the same things those of us who grew up here have enjoyed?
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