Over the past 7 years, selling your home in Northern Colorado has been as easy as ever imagined. Overflow from Denver and Fort Collins has spilled east towards Greeley, giving sellers unprecedented equity in their homes and opportunity for further wealth through real estate. With the lowest inventory we have witnessed, along with incredible buyer demand from bustling industry and the draw to our nature’s incredible beauty, homebuyer contract offers have been anything but sparse.
Proposition 112 has the potential to reverse this trend more rapidly than a healthy market shift. While our flowering market has continued to bloom for the past decade, precedence tells us that winter could be quickly approaching. If we know two things about real estate, it’s that it goes up, and then it comes down. Usually on a seven to nine-year cycle. And slight increases in listings, days on market, and upward trending interest rates over the past year could hint at winter approaching for our own real estate market. Add in banning your largest industry from future production, and before you know it, we will be straining through the cold winter searching for glimpses of warm summer sun.
Many would say that a majority of homeowners have built-in equity as it sits and that they foresee being in their home for an extended period of time. Boulder continued to appreciate with no decreases in value during the recession, and economic foresight also sees the Greeley/Loveland/Windsor area doubling by 2040, so demand should continue to force prices skyward, right? It’s possible. Especially if Proposition 112 is rejected.
Weld county produces 89% of all oil and gas production in the state of Colorado, and many of those workers live and play right here in Greeley. We in Greeley have roughly 4 times the state average concentration of oil and gas workers (State Demographer). These laborers are making great wages (on average $105,000), owning businesses, and believe it or not, own homes. This vote will directly impact our housing value.
Part of my job is to be honest with clients. To be blunt about the position of the real estate market, while helping them make wise decisions that sometimes simply do not revolve around what the market is directly doing. Some move for jobs in other states or may move for family reasons. Regardless of the move, the market plays a part in their eventual home sale. The number of buyers in conjunction with the number of homes for sale will determine the price. Every. Single. Time.
If proposition 112 passes, there will be more homes on the market as workers leave the state for Texas, Wyoming, and Oklahoma. With increased inventory, expect buyers to take their time as there will be more houses to choose from. Expect increased interest rates to decrease a buyer’s ability to afford homes as they are currently priced. Expect more short sales and foreclosures down the street from your listing which will undercut your value. And expect the overflow from Denver and Fort Collins to halt as Colorado’s economic development slows from increasing energy costs. This may not be an overnight occurrence, but as oil and gas dies a slow death over the next 2 years as the oil companies finish out their permits, expect real estate trends to follow.
If you’re a homeowner in Colorado, voting no on Proposition 112 will protect your home value, and continue to give you opportunity to build generational wealth through real estate.