It Doesn't Pay to Generalize: Contrasts in the Colorado Real Estate Market

By Richard Barrington
Local Lender Columnist
Sep 3, 2007
Housing price increases in Colorado have fallen behind the national average for a extended time periods: for one quarter, one year, five years, and overall since 1980. This might seem like good news for buyers trying to get the most out of a new mortgage, and bad news for existing home owners interested in maximizing home equity. However, the pattern is not quite as clear-cut as that.

Colorado Exceptions to the Rule

According to the Office of Federal Housing Enterprise Oversight, Colorado ranked 38th in housing price increases out of 51 regions (all states plus the District of Columbia) for the year ending March 31, 2007. Colorado trails the national average both over the short term (latest quarter) and over the longest period covered by the study (reaching back to 1980).

This may seem to make Colorado real estate a relative bargain, but keep in mind there are exceptions. For example, the city of Grand Junction, Colorado bucked the trend by exceeding the national average for the quarter, one-year, and five-year periods. In fact, Grand Junction's 1-year housing price increase of 16.82% ranked 4th among metropolitan areas nationally.

New Mortgage vs. Home Equity Borrower

What this means to you depends on where you are and whether you are a new mortgage or a home equity borrower. For most new mortgage borrowers, Colorado is a state where real estate prices have remained moderate--but hot areas like Grand Junction can be notable exceptions.

On the other hand, if you are a potential home equity borrower, life in Grand Junction is especially sweet--you've probably seen a healthy increase in your home equity over the past year, an increase which expands both your borrowing potential and your overall net worth.

Source
Office of Federal Housing Enterprise Oversight

About the Author
Richard Barrington is a freelance writer and novelist who previously spent over twenty years as an investment industry executive.