• Patrick Soukup

Housing Bubble in Fort Collins, CO | When's This thing going to POP?!?

The housing bubble is about to pop! 60%+ of people are buying houses without ever seeing them, the housing prices are out of control, crazy cash offers, waiving inspections, etc. Today, we’re going to talk about the POTENTIAL housing bubble in Fort Collins, Colorado.


The 4 risks of potential housing bubbles

***Numbers and info updated as of 8/30/2021***


1. Interest rates could spike

Right now, we’re at about a 3% interest rate for about a 30-year fix loan. Is that 4%, 5%? When does that number come to a point where prices have to stabilize because the affordability of a monthly mortgage is no longer affordable? What if it exceeds that number and people cannot afford homes and an inventory glut happens?!


Interest rates spiking could lead to a decrease in buying and people might need to sell their previously purchased homes underwater.


2. Mortgage Forbearance

As of right now, we’re at a fractions of total number of mortgage forbearance loans that we had at the peak of 2020. Those individuals have removed themselves from mortgage forbearance and continue paying their loans. But there are still 1.7 million homes in mortgage forbearance. If all 1.7 million of those homes go through foreclosure, we could see a significant amount of homes hit the market and inventory skyrocket.


3. Major metros open back up and the run for the suburbs subsides

Luckily we’re opening back up after hard months of lockdown but this might mean that people will want to move back to big cities and return to their old lifestyle. Being close to coffee shops, restaurants, work, plays, musicals etc. All things that the suburbs don't necessarily offer. What this could mean as well is that all those newly built houses could suddenly become vacant and we’d be left with a ton of housing we no longer need.


4. Eviction crisis

We’re just starting to go back in the game of evictions. For the last 16 months, we’ve not been able to do evictions. This means that all of the renters who haven't been paying or cannot pay could lead to a wave of evictions and those landlords dumping their properties. This could lead to multi generational living, the age of the 40-year old roommate homes and less demand for "overpriced" homes.


Is there a possibility of a housing crisis?

When considering if there’s a possible housing crisis coming up on the market, we should look at these five important factors:

  1. The population in Northern Colorado is strongly increasing

  2. We’re landlocked

  3. Millennials are entering the market

  4. There’s a lack of supply

  5. Homebuilders can’t keep up

What to do about the potential housing crisis?

To hedge down those insecurities that you might have about the housing market, ask yourself if you can afford the mortgage for the next 3-5+ years. Put as much down as you feel comfortable with, but at least 3% so that you’re going into it with some skin in the game. If your mortgage is going to be attainable for the next 3-5 years, you’ll be at least able to weather the storm if through the housing crisis. Appreciation averages out. Who knows what the future holds, but the above information is to try and help you make the best decision possible for you and yours.


Final thoughts

I hope this article helped you get a better idea of the housing bubble in Fort Collins. No, I don't personally think there is going to be a bubble, but you never know. I am buying property currently and am confident in that decision. If you need any help with any of your real estate needs, feel free to reach out to Soukup Real Estate Services.


For a more detailed analysis of the potential housing bubble in Fort Collins, check out the full YouTube video below where I take you through step by step through my professional insights.






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