NAHB recently unveiled an index that tracks housing on the mend, the NAHB/First American Improving Markets Index (IMI). The IMI is intended to draw attention to the fact that housing markets are local and that there are metropolitan areas where economic recovery is underway. The index measures three readily available monthly data series that are independently collected and are indicative of improving economic health. The three are employment, house prices and single family housing permit growth.
For the third release, 30 markets are currently classified as improving under a conservative examination of local economic and housing market conditions. Among these areas is the Fort Collins, Colorado metropolitan statistical area (MSA).
The health of the Fort Collins housing market is due to a healthy mix of services and high-tech manufacturing, anchored by Colorado State University and it research facilities. Firms like Hewlett Packard, Intel and LSI all have a presence in Fort Collins. In addition, healthcare and the booming oil and gas industry in neighboring Weld County also play a big part. According to home builder Steve Spanjer, “with NIST, the CDC, the USDA, the US Forest Service and all the new “green” companies setting up shop here, we never laid anyone off because we were always busy enough”. He went on to say that “population growth and economic diversification have been critical. The Poudre Valley Health System makes us a regional healthcare center and their growing staff all needs housing. Lastly, with the student population at CSU growing there is continual demand for new condominiums from parents who want their children to live off campus“.
Comparing assorted data from the 2000 Census to the 2009 American Community Survey confirms what has been going on. The number of those with a B.A. increased from 39,319 to 45,336 and those with graduate degrees climbed dramatically, from 22,509 to 30,968. In addition, the population grew from 251,398 to 298,382; an annual compound growth rate of 1.73%, almost twice as fast as the nation as a whole. This is clearly an area that is growing rapidly, that is focused on higher education and has employers eager to hire newly minted graduates.
According to Chris Jeavons of Advantage Bank, “the high number of those with advanced degrees and our high-tech base is critical. It helped us land NASA’s Aerospace Clean Energy Manufacturing and Innovation Park (ACE) which will create 10,000 new jobs, many of which will be high-paying.” He went on to say that “there is already buzz about ACE and it has been a big help to housing.” As a result house prices have held up well during the downturn. They are up 4.5% since the trough in December 2010 and are less than 2.5% off their all-time high set in August 2007.
Improving economic conditions have resulted in payroll employment being just 1,800 down from its peak in September 2008 and up by 3.8% since the trough in December 2009. Single family permitting activity is up 5.4% on a seasonally adjusted monthly average basis from the trough set in March 2009. While new homes are being built in many parts of the Fort Collins MSA, activity has been primarily centered in the Town of Timnath near the eastern edge of the Fort Collins and the cities of Johnstown and Windsor, both on the eastern edge of Larimer County near both Greeley and Loveland. Recently, however, a noticeable uptick in building activity has been in evidence in other smaller communities too.