No Drop

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The numbers are in and it turns out that not even 8% rates could make prices drop in 2023.

When mortgage rates jumped this last year, many people believed that home values would fall as a result.

The fact that prices stayed flat in 2023 even though interest rates doubled between March 2022 and October 2023, shows that values along the Front Range are incredibly resilient.

Here are the 2023 average prices along the Front Range and their change compared to 2022:

Larimer County:  $621,538 / 1%

Weld County:  $527,600 / 1%

Metro Denver:  $679,710 / 0%

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Price Plummet

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For anyone waiting for home prices to drop before making a buying decision, there is good news.

The recent plummet in mortgage rates means that home prices, effectively, just took a big dip.

Rates have gone down by 1% in the last 45 days which means that a prospective home buyer’s payment is 10% less today than what it would have been at the end of October.

For example, the Principal and Interest payment for a $500,000 loan is $341 less today than what it was 45 days ago.

So, from a buyer’s perspective, prices have gone down by 10% in a very short time.

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

Price Plummet

/in , , , , /by

For anyone waiting for home prices to drop before making a buying decision, there is good news.

The recent plummet in mortgage rates means that home prices, effectively, just took a big dip.

Rates have gone down by 1% in the last 45 days which means that a prospective home buyer’s payment is 10% less today than what it would have been at the end of October.

For example, the Principal and Interest payment for a $500,000 loan is $341 less today than what it was 45 days ago.

So, from a buyer’s perspective, prices have gone down by 10% in a very short time.

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

Inventory in Perspective

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A significant dynamic in the Front Range market is the relatively low inventory. This is the main reason why prices are stable despite higher rates.

Here is some perspective on the inventory of homes for sale to help give some context.

Today’s inventory is:

  • Half of the long-term average going back 30 years
  • ¼ of the all-time high in 2006
  • 3 times the all-time low of 2021

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Most Surprising News

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The most surprising piece of news for our friends and clients is that prices are essentially flat compared to last year.  People find that surprising given what interest rates have done over the last 18 months.  They wonder, how could prices not fall significantly after interest rates jumped considerably? 

The answer is the fundamental economic lesson of supply and demand.

There is enough demand in the market for the current supply to keep prices stable even in an environment of higher rates.

Now that rates are (finally) trending down, it gives us even more confidence about the continued growth of real estate prices along the Front Range.

Here is a look at how home prices compare to one year ago:

Larimer County = Down 0.8%

Weld County = Up 3.4%

Metro Denver = Up 0.8%

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Highly Active

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In addition to tracking the average price for sold properties, it is also interesting to track the average price for active properties.

Asking prices are up across all markets when compared to the same time last year.

Here are the average list prices for residential properties along the Front Range:

  • Larimer County = $893,000 (8% higher than last year)
  • Weld County = $702,000 (6% higher than last year)
  • Metro Denver = $847,000 (5% higher than last year)

These asking prices are higher than average sales prices by approximately 30%. This is because there are many high-end properties on the market which take longer to sell and which pull up the average.

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A Rate-Induced Pop

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The recent drop in mortgage rates triggered a measurable uptick in sales activity.

So far through the first 10 days of November, pending activity in Northern Colorado is up versus the same 10 days last year.

This is despite interest rates being higher than they were last year.

Mortgage rates just had their biggest one-week drop in over a year and buyers clearly responded.

Pending sales through November so far are up versus last year:

48% in Larimer County

20% in Weld County

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MOI is Still LOW

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Despite decreased buyer activity driven by normal seasonal patterns plus higher interest rates, the key stat of Months of Inventory continues to stay relatively low.

Months of Inventory (MOI) is the simple measurement of how long it would take to sell the current inventory of homes for sale at the current pace of sales.

Along the Front Range, this stat ranges from roughly 2 ½ months to just over 3. A market is considered ‘balanced’ when there is 4 to 6 months of inventory for sale.

Here are the specific numbers for Front Range markets:

Larimer County = 3.1 Months

Weld County = 2.7 Months

Metro Denver = 2.4 Months

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Holding Steady

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Despite a significant increase in the supply of apartments, rental rates are holding steady.

New research from Realtor.com shows that lease rates in the largest U.S. cities are down just 0.7% even though completions of apartment buildings are up 15% since 2022.

Denver’s average apartment lease rate decreased only 1.0% year over year and now stands at $1957 per month.

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

Holding Steady

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Despite a significant increase in the supply of apartments, rental rates are holding steady.

New research from Realtor.com shows that lease rates in the largest U.S. cities are down just 0.7% even though completions of apartment buildings are up 15% since 2022.

Denver’s average apartment lease rate decreased only 1.0% year over year and now stands at $1957 per month.

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