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'Average Earners' Priced Out Of Fort Collins Housing Market

Stephanie Paige Ogburn
The duplex that Heidi McCoy found to fit her budget. Homes in Fort Collins are becoming increasingly unaffordable.

On a sunny afternoon in a quiet neighborhood in Fort Collins, school buses are rumbling by and people are out walking their dogs. Heidi McCoy, an energetic redhead in her thirties, is taking a peek over the fence at what will soon be her new home.

"The little yard is enclosed with trees and the yard sets back off from the other street as well," she said. "It just feels nice and quiet."

McCoy, who runs a martial arts school in the south of town, has been looking for a family-friendly home in a quiet neighborhood for a while. In this market, it's not an easy task. From Denver north to Fort Collins, Front Range homes are in high demand. And the market is taking its toll on those seeking a place to live. 

McCoy's first offer was usurped when an investor swooped in and offered cash -- even though she was willing to pay $10,000 over the asking price. Eventually, she ended up compromising on space -- the home she plans to buy is half of a duplex, without the third and fourth bedroom and garden spot she originally wanted.

With two children and a dog, McCoy knows her family will outgrow the duplex at some point.

"It's definitely not where we are going to be in 10 years, but maybe five."

But with a budget of $250,000, there wasn't much else she could afford, unless she was willing to live far outside of town and commute into Fort Collins each day. The median price of a home in the town has increased 25 percent in the past year. As of February, it was $314,850.

That stiff jump in prices is a harsh reality McCoy and many other potential home buyers are facing. And it's a sudden change. McCoy had bought a house here a little over two years ago, but found herself home-shopping again after a divorce.

"It was very, very eye-opening to come back into the market just two years later," she said.

"Even the house that we purchased when I moved here two and a half years ago, that same house, I wouldn't be able to afford it right now."

That's the case for a lot of people. Middle-class workers are now getting priced out of the city, said Paul Hunter, who is chair of the Fort Collins board of Realtors and has been selling real estate here for decade.

"Your average earner making forty or fifty thousand dollars a year, one year or more ago would be able to find a great starter home for under $225,000 in Fort Collins," said Hunter.

"That almost doesn't exist anymore."

The jump in prices is due in part to Colorado's quick economic recovery from the recession, said Phyllis Resnick, the lead economist for the Colorado Futures Center at Colorado State University. People are moving to the area for jobs, but housing hasn't caught up.

"When you put together demand pressure with a somewhat curtailed or restricted supply, you are going to get upward pressure on prices," Resnick said.

On the ground, this leads to buyers steadily escalating the terms of their offers for the limited supply of homes. Many homes end up with five, 10, even as many as 30 offers, said Hunter, of the board of Realtors.

Those offers often go anywhere from $10,000 to $20,000 over asking price for homes in the $300,000 or under price range. Buyers also resort to other measures, like writing love letters of sorts to sellers, telling them how the home is the one of their dreams, even sending flowers.

"Sometimes those things do make a difference…it's not always about the dollar signs," said Hunter.

But cash does matter. In McCoy's case, for the first home she bid on, "we started at the asking price with an acceleration clause to go up, I think, ten grand," she said. That, plus over 30 percent down, made her think she had a good offer.

Then an investor swooped in and offered cash.

"I got pretty discouraged after that," said McCoy. "To find out that the offer was beat out by someone that we couldn't have competed with anyway, that was the tough part."

Real estate agent Paul Hunter says this is pretty normal right now. Whether it's an investor or just someone with a better offer, getting the house you want is no guarantee.

"I'd set the expectation that you may not get your first or second or even third try," he said.

McCoy got lucky on her second try -- kind of. Her offer on the duplex didn't win the pool, but the winning offer dropped out, and her backup offer became first in line.

"[It was] an emotional roller coaster," she said.

McCoy is glad her hunt is over, and hopes the next time she is looking for a home, the market is calmer.

As to whether it will be cheaper -- CSU's Resnick says the days of affordable Front Range homes, at least in a desirable towns like Denver and Fort Collins, may be gone for quite some time.

"It's hard to point to a city that sort of catches fire, that becomes the hot place to be, and find one that has gone through that and hasn't had a housing affordability issue."

Stephanie Paige Ogburn has been reporting from Colorado for more than five years, primarily from the Western Slope.
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