Priced out: Fort Collins home sales slow as prices soar beyond $400,000

Pat Ferrier | The Coloradoan

Show Caption Hide Caption The Group: Price hikes for Northern Colorado homes will begin to slow in 2018 Escalation of home prices will begin to slow in Northern Colorado but affordability remains an issue.

Frustrated by high housing costs in Fort Collins and Larimer County?

You're in good company.

Fort Collins native Jill Harris, 60, wants to move home from Kalispell, Montana, to be closer to her daughter and young grandchildren. But, she's stymied on how to make that happen.

"I'm trying to figure it out," she said. "I'm single, trying to get my house sold (in Kalispell) and figure out how I can get a job down there and with the profits from my house be able to afford one there."

Harris is up against stiff competition to find a home in Fort Collins, something that locals like Cody and Sierra Briggs know. After spending months searching for a home they could afford in Fort Collins, the couple closed in July on a house in nearby Wellington, where the median home price is nearly $100,000 less.

"We make decent money and it's still tight," Sierra said. "We had to get our foot in the door before we had to leave Colorado."

Housing in Kalispell — about 950 miles north of Fort Collins — is more affordable than here, Briggs said.

That's saying something, as Zillow listed the the median sales price for homes in Montana's gateway to picturesque Glacier National Park and Flathead Lake at $365,450 on Tuesday. Zillow listed Fort Collins' median listing price at $378,900.

According to the Colorado Association of Realtors, homes here are selling for even more than those listings reflect. Homes listed in Larimer County this year have sold for a median $405,000 this year, making the county the 16th-most expensive of Colorado's 64 counties in which to buy a home.

However, the number of homes being sold in Larimer County is beginning to slow as prices escalate and potential buyers struggle to navigate Colorado's challenging housing landscape.

This summer, the Coloradoan is exploring the implications of rising home prices in Northern Colorado and across the state. This is the second story in a planned summerlong series.

MORE IN THIS SERIES:

► High housing costs push Front Range home buyers toward Greeley

►Ever wonder what that Fort Collins house sold for? This map gives you all the details.

Home sales drop 9 percent from last May

Through May, 2,045 homes were sold in Larimer County, a 9 percent drop from the same time frame last year, but sale prices increased 10.6 percent, according to the Colorado Association of Realtors. In May alone, the number of homes listed in Fort Collins was up 5 percent from the prior May, but sales were down 10.8 percent.

"We are watching those (sales numbers) start to slow as areas become less affordable," said Kelly Moye, Colorado Association of Realtors spokeswoman.

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The trend of home sales slowing in more expensive areas is playing out across Colorado, Moye said. High home prices in the Denver metro area are driving potential buyers to other locations.

Colorado Springs and El Paso County, where median sales prices were slightly more than $300,000 in May, saw more than 5,520 homes sold in the month. That figure was the most in the state, topping Denver by 2,621 sales.

The reason, Moye said, was the number of people trading Denver's high prices for a commute and more affordable housing in Colorado's second-largest city.

Similar issues are at play in Northern Colorado, as Greeley, which boasts median home prices below $300,000, is among the nation's fastest growing metropolitan areas.

AVERAGE HOME PRICES: Fort Collins' average home prices top $400,000; Wellington, Greeley buck trend

"Affordability is a huge factor in our state right now," Moye said. "People are moving because they can't afford it. Wage growth has not kept up with (home) appreciation."

Fort Collins, where the median home price is nearing $415,000, is no exception.

Price drove Sierra and Cody Briggs, their three kids and dog, Marshmallow, to Wellington.

The couple had been renting a townhouse that's close to family in Fort Collins but recently bought their first home after months of trying.

"We lost out on three other offers in (Fort Collins') hot housing market with the successful buyers offering well over asking price," Sierra said.

Because monthly rent in the city averages $1,200, the couple had trouble saving money for a down payment. But with help from a U.S. Department of Agriculture loan, they found a 1,040-square-foot, three-bedroom house house in Wellington for $240,000 before it went on the market.

They still paid over asking price, and the home is a fixer-upper to be sure, she said. It is smaller than they wanted for their family of five but it's a good start for the price. Her husband can make a lot of the necessary repairs, Sierra said.

"I was so scared the market would continue to climb and if we waited we wouldn't be able to afford anything," she said.

The $240,000 they paid in Wellington "gets us a townhome in Fort Collins," which they were living in as renters. "I could hear my neighbors and smell what they were cooking for dinner," said Sierra, who didn't want to invest in a townhome. "Now, we have a little yard now that's good for Marshmallow," along with their daughters Kiyra, 8, Everleigh, 1, and 4-year-old son, Beau.

Having a home of their own means "a place where I can raise my kids on a more solid foundation," Sierra said. "It's important to me to give the kids something stable."

Now she has her own house and doesn't have to worry about rent increasing every year. "We don't have to worry about being priced out of the community. We love our jobs and it's important to be close to family."

There's no place like home, even if it costs more

As frustrating as housing prices are to would-be home buyers like Harris, Larimer County is nowhere near the most expensive place to live in Colorado.

Housing costs more in 15 other Colorado counties.

The five most expensive counties — Pitkin, San Miguel, Summit, Eagle and Routt — offer some of the best skiing in the world and play host to the rich and famous. Median home prices in Pitkin County, with its county seat of Aspen, neared $3.5 million through May.

At that price point, both the number of homes sold and sales prices have dropped from last year, according to Colorado Association of Realtors.

Boulder County, at No. 6 on the list of Colorado's most expensive counties, is skewed by million-dollar home prices in the city of Boulder.

Even though Larimer County is relatively affordable compared to Colorado's resort and Denver-metro areas, prices here are high enough that Harris is considering moving to Wyoming or Greeley, just a short car ride from her daughter and grandkids in Wellington. "It just depends on what I can get," she said.

She hopes to buy a home for less than $300,000 and prefers a single-family home rather than a less-expensive townhome.

"The thought of living in a condo — it's just a fancy apartment building — and it's not what I like. I like my quiet," Harris said.

But at her price point, Harris may be hard-pressed to find a home, even if one here would have fallen in her price range a few years ago. The median sale price in Fort Collins has jumped more than $100,000 in a matter of years, removing swaths of potential home buyers from contention.

"The entry-level price is so high now, that until wages increase or people bring jobs and income with them, we can't have the same appreciation going forward," said Mike Salza, a Realtor with C3 Real Estate Solutions who specializes in the lower end of the market.

"Our market from April to today has changed. The bottom of the market has priced itself out. We've finally reached that point."

Extreme patience can still land a deal

Here's something you don't see every day.

After a frustrating and lengthy search for a home in Fort Collins, Levi Sanchez and his girlfriend, Jill Arnold, finally got one under contract in June — and paid less than asking price.

They closed Friday on a three-bedroom, three-bathroom home near Rolland Moore Park. It was listed at $347,500.

Typically, a Fort Collins home listed at that mark would have generated multiple offers and sold quickly for $10,000 to $20,000 more than list price.

But the house wasn't getting a lot of interest. Sanchez and Arnold decided to be bold.

They offered significantly less than list price. The seller countered and they compromised at $337,500 — $10,000 less than the seller sought.

Sanchez and Arnold targeted homes listed between $350,000 to $360,000, but preferred to spend less than $330,000. He's a singer/songwriter, a teacher and rides motorcycles. A garage and at least three bedrooms was a big requirement.

After looking at 20 prospects and unsuccessfully bidding on two, they were frustrated by what they could get for the price. "It's like sending hope into the wind," he said.

The couple had saved up a 20 percent down payment, had excellent credit and were approved for a mortgage before they started searching.

"We were told we were doing everything right, except it wasn't paying dividends," Sanchez said.

Now, with a home of their own, "It feels great," Sanchez said. "We are really happy with the location and the house."

The couple had been living in a small bungalow where the living room doubled as a music room — drums in the corner, guitars lined the walls and a keyboard sat against the kitchen island.

"I could live without drums in the living room," Arnold said.

Now, that doesn't have to happen, Sanchez said.

"The house checks all our boxes. It needs some work but they are things we can upgrade as we go along."

Arnold, an interior designer works for a local building company and "knows people" who can lend a hand with remodeling work.

The couple insisted on finding a place in Fort Collins, if possible. "We moved here for a reason: the natural areas, places to play music and proximity to the mountains."

That's something they didn't want to leave, even for a town next door.

"We've made a life in Fort Collins," Arnold said. "We can't imagine living anywhere else," even if it comes with a high price tag.