"How's Real Estate?"
- Crisafulli Team
- Apr 12, 2025
- 3 min read
That’s the question we get more than any other. Which makes sense. Like we might ask our teacher friends, “How’s your class this year?” or the barista, “How’re things at the shop?” or our federal employee friends, “Could you please send us an email outlining five things you accomplished this past week?"
How’s real estate. It’s a tough one to answer right now, but we’d like to invite you into the questions and conversations swirling around these latest market shifts.
Jobs and Income
One of our clients runs a business buying and selling e-commerce companies. He’s on the frontlines of the tariff fallout, and 90% of deals in his pipeline, and thus 90% of his income, is now on hold, indefinitely. Needless to say, his real estate purchase is also on hold, and he’s far from the only one in that boat.
New Construction
How are tariffs affecting new construction? If the tariffs stand, home construction prices will increase. 85% of our lumber comes from Canada, and 70% of our gypsum (drywall) comes from Mexico. New tariffs and exemptions are changing everyday, but if and as new construction gets more expensive, prices also rise in the resale market. Unless there’s a significant change in mortgage rates, affordability is only going to become more of an issue for the average homebuyer. Builders often offer incentives for closing costs or lower rates with in house lenders, and these could become a real win for folks trying to make the numbers work on a purchase.
Entry Level Homes
Many of our clients who are first-time home buyers scraping together 10% or less for a down payment seem to be moving forward. Typically, these buyers don’t have a lot of money in the equities market, so they may not feel an immediate impact from the tariff situation. Of course, there are many exceptions to this. We know people losing jobs in the bike industry, furniture manufacturing, and other more blue collar jobs.
This feels familiar…
Danny bought his first home in 2009 here in Fort Collins, amidst murmurs of a recession. He and his wife scraped together a 3.5% down payment and were outbid on 3 houses, ultimately paying over asking price for the home they settled in. They say history repeats itself, or at least rhymes.
Luxury Buyers
The top end of the market may be a different story. Buyers for $1M+ properties are often pulling money from investments for their next down payment. The swings in the recent market have a bigger impact on this demographic.
Interest Rates
Why isn’t the Fed lowering interest rates? (To our lender friends reading this, we know Fed rates are different than mortgage rates, but they trend together, so you can stop grinding your teeth). They’re trying to strike a tough balance of curbing inflation, and keeping the economy from dipping into a recession. Tariffs will probably exacerbate inflation, why is why the Fed is hesitant to make any cuts until there’s some real data coming in to work with. By the way, what is the Fed anyway and where did it come from?
Certainly Uncertain
The market views uncertainty as risk, and increased risk causes stagnation. Back in 2021, when interest rates were below 3% and inflation was 9%, there was a perceived zero risk in borrowing. Times have changed. Buyers and Sellers are operating with more caution.
Hyperlocal Real Estate View
The latest housing report for our region shows an uptick in housing supply, marking a trend toward a more balanced market. However, Fort Collins supply, specifically, actually decreased year over year. This puts numbers to what we’ve been seeing: It’s still very much a seller’s market, and most of our clients this year have had to compete with other offers. However, up over $850,000, we’re seeing buyers hold more of the cards.
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