The Last few weeks have marked a huge turning point in a few key sectors of our real estate market. I am sure my real estate colleagues would agree with me that we have seen a sizeable increase and recovery of our local market.
For the 1st time in two years we are dealing with a shortage of inventory in the $180,000-250,000 price point. The houses in this area are "flying off the shelf."
One of the hottest areas is "Campus West." This is the area just west of Colorado State University where most of the students that live off campus find a rental property and savy investors prefer to purchase.
Over the past week in this area, there were a total of 16 active listings of which all but six were under contract. The average days on market for this niche area is down to an unbelievalbe six days. We are seeing multiple offers as well as back up offers on most properties.
Now, this doesn't mean that we are out of the slump we have been in for the past two years. But it does mark an improvement and a positive outlook for the future.
The question becomes what is driving the increase in market activity? The answer is a couple of things.
First, we are seeing this kind of activity because of the 1st time home-buyer tax credit. Many college students, young families, and young professionals want to take advantage of this incentive.
Second, we are seeing this increase in market activity due to the time of year. Most Fort Collins leases run from August 1st to July 31st or June 1st to May 31st. This time of year is what we call "rental turn over," this means that the investors who want to get into owning a rental or out of owning a rental can do it during this time of year without facing the concern of having an vacant rental property. Also June -August is the high selling season for most real estate markets in the country. In that respect Fort Collins is no different.
In conclusion, I'm looking forward to seeing what the next few weeks and months bring in our market. We will not know if we are truly moving out of the market slump until we see what the market does after the tax credit expires and we are out of "peak selling season" September-December will be the true test to asses where our market is headed for 2010.