While the oil and gas industry grows on the eastern plains of Weld County, its workers are snatching up housing in and around Greeley.
And builders, the few local ones left from the Great Recession, are starting to count on the steady stream of industry workers buying up new homes.
“It’s exciting to see what it’s doing for people who weren’t making the money they are now,” said Robbie Miner of the first-time homebuyers he’s been able to put into a Baessler Home.
Miner sells exclusively Baessler Homes for Sears Real Estate and reports that so far this year, 75 percent of their clients in new homes are tied to the oil and gas industry. The company will end this year having built 90 units, and owner Jamie Baessler expects to build 115 next year.
“This will be the fourth year in a row of a record for us,” Baessler said. “We squeaked out our biggest year ever in ’11, and ’12, ’13, ’14 continued to build on that. So ’15 will be another 30 percent growth.”
The industry has not only helped put local people to work, and fed business and sales taxes, but it’s helped move the needle on the median sales price in Greeley to its highest ever.
Though it changes weekly, the September median sales price in the Greeley/Evans area was at $195,250, down slightly from a July peak of $206,500, said Chalice Springfield, CEO and managing partner of Sears. Just three years ago, the median price in Greeley was $130,000 after hitting a previous all time high in 2005 of $169,500, she said.
“We’ve had 10 to 20 percent gains every month,” Springfield said. “Our 5 percent gain in September was the lowest, but it’s still good.”
But inventory is still at an unheard-of low, fueling the increase in price and plenty of activity for homebuilders.
“We’re not seeing any slowdown in Greeley. We’re still 16.3 percent ahead in units sold, almost exactly 200 more units sold this year versus last,” Springfield said.
Last year at this time, 1,229 units sold in Greeley and Evans compared 1,429 today. But inventories remain too low for many Realtors’ comfort levels. As of Monday, there were 355 active homes on the market vs. 408 the previous year.
A normal market of this size would be well over 1,000.
“I’ve been in the market for 30 years, and the market has never been like this,” said Jim Dech, owner/broker of Coldwell Banker Plains Real Estate. “There are multiple offers, values are going up rapidly and rentals are out of site now. Economists are saying we probably have five years of good growth now the way the economy is rebounding.”
While summer is the traditional hot selling season, sales have only cooled slightly since, the agents agree.
“It’s only slowed a little bit,” Dech said. “We have a large pool of buyers, and sellers are holding on because values are going up. Toward the end of the year, I think it’ll keep going, depending on how severe the winter is. People are building all over.”
Like home prices in Greeley and Evans, median sales prices are going up in the surrounding areas.
The sales areas of Johnstown, Milliken, Severance and Windsor have seen an almost 2 percent increase in median sales prices to $256,309 through Oct. 11; and median sales prices in Ault, Eaton, Gilcrest, LaSalle, Platteville, Nunn have risen 14 percent to $225,000 from the same time last year.
Baessler Homes has jumped into those markets, as well, cashing in on the demand driven by the oil and gas industry.
The company bought 28 lots in Stark Farms in Ault, and dirt’s moving.
“When we committed to that, everyone thought we were crazy,” Miner said. “But now we’re down to five lots.”
Additionally, Baessler has bought some lots at Pelican Lake Ranch about two miles east of Platteville to build roughly 30 homes on large acreage lots, again with oil and gas in mind.
“We’ve really gotten a lot of interest,” Miner said. “They’re acreage lots, they’re on the way out to the drilling rigs, it will be a good market. It will be a home run this next year.”
All agree the momentum will continue next year.
But prices are only bound to go up as builders work through lots bought at more reasonable prices.
Lot prices are expected to go up immensely.
“The next batch of lots will be developed lots (and they’ll sell for) not less than $65,000, so we’re looking at 50 to 75 percent increase on land alone,” Miner said.
Added Springfield: “Construction will have a different face in the next few years, mainly because of water prices. If we continue at a 16 percent year over year sales rate, it may be sooner rather than later.”