A Wild Ride for Fort Collins CO?

The housing market is frequently described as a roller coaster ride, in reference to its widely publicized ups and downs. Looking at the national housing data, that's probably a pretty accurate description. In fact, in the Crash & Bounce infographic from Realestate.com below, we are presented first with the alarming fact that during the past five years, U.S. home values declined by over $9 trillion dollars, and then informed that during the nine months since November, 2011, $3.2 trillion of that loss has been recovered.

That looks like a pretty wild ride. And we've certainly heard all about it on the news - it's been one of the top economic stories for a long time now. But those numbers are so big, and their impact so large, that they're difficult to comprehend in meaningful terms. And I have to say, that as an economist by trade, I have a few quibbles about where the numbers actually come from and what they really mean.

But there can be no mistaking that we have had a rough time and that the housing sector of our economy, and it's participants - which means all of us home owners, renters, institutions and workers in construction and lending, and many, many others - have been affected.

Perhaps the best way to approach these numbers, in an attempt to put them in a perspective that we can comprehend, is to look at them locally. Has the Fort Collins CO real estate market had that same wild roller coaster ride, or have we experienced something different here? Let's take a look at two indicators that we traditionally use to measure how the housing market is doing - average price trends and home sales.

Interesting, isn't it? You can see the impact of the economic crisis very clearly, but the decline in home sales began for us in 2006, became a bit steeper in 2008 & 2009, and has leveled off since, although with yet another quarter left for this year, the totals will show an increase over last year. And average price dropped in 2009, but only by about 5%, and began a slow climb back the next year. 2012, when all data is in, will probably set a 10-year high for average prices. Doesn't seem like such a wild ride locally, does it?

While there are many additional data sets that can be examined, the simple fact is that, in spite of a major economic crisis, our housing market has proven to be remarkably resilient. We can thank a couple of major factors for that. First, our housing market never got over-inflated. While we had some periods of strong appreciation, they were based on value and real growth, and we didn't have a weak foundation set by speculation. And second, we have an extremely well-diversified economic base, so our economy, while damaged by national events, never fell apart.

It's really good to see signs of economic recovery on the national level, and to know we're on the road back. But it's also good to see evidence of the economic strength that we have enjoyed here at home, and to be thankful for it.

Riding the Trillion-Dollar Real Estate Recovery Roller Coaster