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Demand for Affordable Housing in the Rocky Mountain Region

Why is it becoming increasingly more difficult for prospective homeowners to find affordable housing? What exactly is “affordable” housing? It is defined as costing one-third or less of household income. A perfect storm of contributing factors is causing rapid increases in home prices across the country, leaving affordable home ownership out of reach for many. Despite these challenges, Fort + Hom is committed to being part of the solution and making the dream of home ownership a reality in the Rocky Mountain region



Impact of the Pandemic

The pandemic has changed the landscape of real estate. Homes became not just houses, but also schools and offices. Quarantine forced families to spend more time at home than ever before. Many households found they needed more space and wanted more amenities, such as outdoor entertaining areas. Demand for home ownership has skyrocketed and the inventory of home simply can’t keep up. This, of course, means higher prices for homes. In addition, increased demand for building materials, coupled with lower supplies of lumber due to the wildfires led to rapidly rising material costs. Higher costs exacerbated the supply-demand imbalance, driving home prices even higher.


Another huge consequence of the pandemic is the shift to teleworking. Many employees, particularly at tech companies, are no longer tied to living in a specific city. Facebook, Twitter, Stripe, and others have implemented permanent remote work policies for many employees. Families living in high-cost cities like San Francisco, Chicago, and New York, are gravitating towards lower-cost locations. The result – rapidly increasing home prices in locations attracting transplants, such as western mountain cities. Re-locating tech workers with higher salaries can afford to bid up home prices, leaving many trying to buy homes frustrated and unable to compete.


Colorado Housing Prices Soaring

The impact on Colorado housing prices has been tremendous. In the midst of the pandemic, the average price of a single-family home in Denver reached $600,000 for the first time. And prices continue to climb with the average price reaching over $623,000 in April of 2021. The Denver “real estate marketing is in a frenzy” according to Metro Real Estate Market Trends Reports.

Realtors are encouraging buyers to make decisions and bid quickly as houses are selling in just a few days. One agent described it this way, “Inventory in this market is like a bathtub with an open drain.” Increasing prices are pushing more and more detached houses out of the classic $300-499K market. With hyperactive buyer demand, realtors are often pushing prospective buyers to homes above their price


And it’s not just Denver

In Colorado Springs, appreciation has been high across all zip codes, ranging from 31% to 91% over the last five years. Just how “hot” are the real estate markets in Colorado? RedFin’s Compete Score rates a city on a scale from 0 – 100 on competitiveness. A score over 70 indicates that many or most homes received multiple offers, often with waived contingencies.

  • Colorado Springs: 90 Redfin Compete Scale, 24% yearly increase in median sale price

  • Denver: 86 Redfin Compete Score, 17% year yearly increase in median sale price

  • Fort Collins: 76 Redfin Compete Score, 26% yearly increase in median sale price

4.8 million millennials are turning 30 in 2021 and may enter homebuying market. Interest rates continue to remain low. Demand for housing will continue to remain high. However, higher construction costs, shortage of labor, and limited new lot space will limit the construction of new homes. New home sales are still higher than before the pandemic, but uncertainty around lumber prices and materials are creating challenges. Builders are beginning to pause on new construction despite the high demand, creating yet another strain on affordable housing.


Renovation More Cost Effective than New Home Construction


As lumber prices remain high, it’s clear that renovating an existing home in disrepair is a more cost-effective solution to increasing inventory than new home construction. While starting to decline, lumber commodities were still trading 3.5 times higher in May than the same time period last year.

Fort + Hom’s mission to revitalize homes in need and create quality, affordable homes in desirable neighborhoods is more relevant than ever. Market trends all point to the demand for attainable homes and the efficiencies of renovation over new construction, particularly in the Rocky Mountain region.



 
 
 

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By accessing this website or any page thereof, you agree to be bound by the Terms of Use, as amended from time to time and in effect at the most recent time you access this website or any page thereof. Fort + Home LLC, Fort + Home Capital, LLC (the "Company") is not registered as a broker-dealer or financial or investment advisor and does not provide any services requiring such registration. The information on our website or any related report regarding any company is based on publicly available information or directly from the company.  The company makes no representation or warranty regarding the adequacy, accuracy, or completeness of such information. Any opinions or forecasts expressed herein are not intended as investment advice and are subject to change without notice.  Information on this website has been prepared solely for informative purposes and is not a solicitation of an offer to buy or an offer to sell any security.

The posting of information on our website regarding any company, including any links to information on our website, should not be construed as an endorsement or recommendation of that company for any purpose whatsoever.  Each investor should consider whether any investment opportunity is appropriate given their investment objectives and financial circumstances and is encouraged to consult with their own investment or financial advisor, tax advisor, and attorney beforehand.

All investments entail risk. In addition, securities of investments discussed herein may be highly illiquid, requiring that they be held indefinitely or have a limited resale market. Therefore, no one accessing our website should invest in any of these companies unless they have no need for liquidity of their investment and can sustain a loss of their investment.  You should only invest an amount of money that you can afford to lose without changing your lifestyle.

Before investing in any offering, you should thoroughly review the complete offering materials for any investments being considered, particularly all risk factors, before investing in any offering and become familiar with the investor requirements, investment limits, and your ability to resell the investment.

You should be aware that the company earns fees from its management, real estate, and other services to the investments, their management, or affiliated companies.

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Disclaimer:

By accessing this website or any page thereof, you agree to be bound by the Terms of Use, as amended from time to time and in effect at the most recent time you access this website or any page thereof. Fort + Home LLC, Fort + Home Capital, LLC (the "Company") is not registered as a broker-dealer or financial or investment advisor and does not provide any services requiring such registration. The information on our website or any related report regarding any company is based on publicly available information or directly from the company.  The company makes no representation or warranty regarding the adequacy, accuracy, or completeness of such information. Any opinions or forecasts expressed herein are not intended as investment advice and are subject to change without notice.  Information on this website has been prepared solely for informative purposes and is not a solicitation of an offer to buy or an offer to sell any security.

The posting of information on our website regarding any company, including any links to information on our website, should not be construed as an endorsement or recommendation of that company for any purpose whatsoever.  Each investor should consider whether any investment opportunity is appropriate given their investment objectives and financial circumstances and is encouraged to consult with their own investment or financial advisor, tax advisor, and attorney beforehand.

All investments entail risk. In addition, securities of investments discussed herein may be highly illiquid, requiring that they be held indefinitely or have a limited resale market. Therefore, no one accessing our website should invest in any of these companies unless they have no need for liquidity of their investment and can sustain a loss of their investment.  You should only invest an amount of money that you can afford to lose without changing your lifestyle.

Before investing in any offering, you should thoroughly review the complete offering materials for any investments being considered, particularly all risk factors, before investing in any offering and become familiar with the investor requirements, investment limits, and your ability to resell the investment.

You should be aware that the company earns fees from its management, real estate, and other services to the investments, their management, or affiliated companies.

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