What the Numbers Say

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During a time of varying opinions and heavy speculation about the Front Range real estate market, let’s see what the actual numbers are telling us:

Inventory is up significantly year over year:

  • Larimer County = +48%
  • Weld County = +52%
  • Metro Denver = +74%

However, supply is still low as measured by months of inventory:

  • Larimer County = 1.1 Months
  • Weld County = 1 Month
  • Metro Denver = 1 Month

Transaction count is down as the pace of sales is slowing:

  • Larimer County = -24%
  • Weld County = -15%
  • Metro Denver = -19%

Yet, average prices are still up versus last year:

  • Larimer County = +18%
  • Weld County = +10%
  • Metro Denver = +14%

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The Best News

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The best news in a long time has finally arrived for buyers.

Inventory is up, frenzy is down.

Buyers who were frustrated, confused and disappointed by the market a few months ago are now coming back to find a much more reasonable environment.

Demand is still high for sure.  However, the intense, frenzied competition has subsided.

There is now room to breathe because there is more selection.

Here is how inventory has increased along the Front Range versus the same time a year ago:

Larimer County = 28%

Weld County = 19%

Metro Denver = 35%

These are significant increases and a trend we expect to continue.

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Timber!

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A positive outcome of the cooling housing market is lower lumber prices.

Lumber is now priced at $605 per thousand board feet.  This is a new low for 2022.

Prices for lumber are now down 47% for the year and are well below the 2021 peak of $1,733 per thousand board feet.

What’s causing this?  Higher mortgage rates have slowed the pace of new home sales and remodeling projects.

Most experts believe that lumber prices will fall even further during the remainder of the year.

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What We Notice

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Here is what we notice about the market right now:

  • Listings are receiving fewer offers compared to 60 days ago – instead of 10 offers, a listing might have 2.
  • There are now several instances of a listing only having one offer.
  • Sellers who were overly-aggressive with their list price have to quickly reduce in order to generate activity.
  • Inventory is up and in some areas significantly, giving buyers more options and flexibility.
  • Home buyers who are under contract with a new home waiting for that new home to be built have been negatively impacted by rising rates.
  • More buyers are considering 7 and 10-year mortgage products in order to have a lower interest rate.
  • The pendulum is swinging away from the drastic seller’s market we have seen for the last 18 months.

The post What We Notice appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

What We Notice

/in , , , , , , , , , , /by

Here is what we notice about the market right now:

  • Listings are receiving fewer offers compared to 60 days ago – instead of 10 offers, a listing might have 2.
  • There are now several instances of a listing only having one offer.
  • Sellers who were overly-aggressive with their list price have to quickly reduce in order to generate activity.
  • Inventory is up and in some areas significantly, giving buyers more options and flexibility.
  • Home buyers who are under contract with a new home waiting for that new home to be built have been negatively impacted by rising rates.
  • More buyers are considering 7 and 10-year mortgage products in order to have a lower interest rate.
  • The pendulum is swinging away from the drastic seller’s market we have seen for the last 18 months.

The post What We Notice appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

Inventory Bottom

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In Front Range markets, the number of homes for sale has just hit bottom or is about to hit bottom.

This is terrific news for home buyers who have been waiting for more homes to choose from.

The market is shifting, there is no doubt about that.

Prices are still increasing and we expect them to increase, just not at the pace they have been.

The inventory of homes for sale, which has been significantly down for two years, is finally starting to show signs of change.

We have been accustomed to inventory levels being down 30% to 50% compared to the prior year.

That is not the case anymore.

Inventory in Larimer and Weld County is now only down roughly 5% year over year.

Inventory in Metro Denver is now up 13.5% compared to this time in 2021.

We believe this is a legitimate shift in the market, not just a short-term anomaly.

No need to worry about prices crashing or a housing bubble.  There is still too little supply and too much demand for that to happen.

However, the pace of price of appreciation will certainly get back to more normal levels of 5% to 6% per year instead of 20% to 25% per year.

Bottom line, this market shift has been a long time coming and is very good news for buyers.​​​​​​​ 

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Delinquent Indicator

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A leading indicator of the health of any real estate market is Mortgage Delinquencies.

Specifically, the percentage of mortgages which are at least 30 days delinquent can foretell the amount of distressed properties that may hit the market in the future.

The most recent research shows that only 4.11% of all loans are delinquent.

This number has dropped for seven quarters in a row and is now at its lowest level since the fourth quarter of 2019 (which was the lowest ever in 20 years).

It is worth noting that the delinquency rate in the years leading up to the housing bubble hovered between 5.5% to 6.0%.

Based on this data, the likelihood of a foreclosure surge or a glut of distressed properties hitting the market is minimal.

The post Delinquent Indicator appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

Delinquent Indicator

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A leading indicator of the health of any real estate market is Mortgage Delinquencies.

Specifically, the percentage of mortgages which are at least 30 days delinquent can foretell the amount of distressed properties that may hit the market in the future.

The most recent research shows that only 4.11% of all loans are delinquent.

This number has dropped for seven quarters in a row and is now at its lowest level since the fourth quarter of 2019 (which was the lowest ever in 20 years).

It is worth noting that the delinquency rate in the years leading up to the housing bubble hovered between 5.5% to 6.0%.

Based on this data, the likelihood of a foreclosure surge or a glut of distressed properties hitting the market is minimal.

The post Delinquent Indicator appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

War and Interest Rates

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Our clients are curious to know what the conflict in the Ukraine will mean for mortgage rates.

The short answer is down in the near term and up in the long term.

Generally speaking, economic and political uncertainty drive people to invest in bonds rather than stocks, which puts downward pressure on interest rates.

So, in the near term, the conflict in the Ukraine will push rates down slightly.  We have already seen this happen as 30-year rates have dipped in the last few days.

The conflict is likely to push oil prices up which means higher gasoline prices.  This will cause upward pressure on inflation, which ultimately causes upward pressure on interest rates.

So, the longer the war lasts in Europe, the more likely it is to push interest rates even higher.

The post War and Interest Rates appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

War and Interest Rates

/in , , , , , , , , , , , , , , , , /by

Our clients are curious to know what the conflict in the Ukraine will mean for mortgage rates.

The short answer is down in the near term and up in the long term.

Generally speaking, economic and political uncertainty drive people to invest in bonds rather than stocks, which puts downward pressure on interest rates.

So, in the near term, the conflict in the Ukraine will push rates down slightly.  We have already seen this happen as 30-year rates have dipped in the last few days.

The conflict is likely to push oil prices up which means higher gasoline prices.  This will cause upward pressure on inflation, which ultimately causes upward pressure on interest rates.

So, the longer the war lasts in Europe, the more likely it is to push interest rates even higher.

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