Jump to Three

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The most notable change in the market, in terms of a specific statistic, is months of inventory.

This statistic measures how long it would take to sell all of the current inventory at the current pace of sales.

Months of inventory has jumped to three along the Front Range.

One year ago, it was two months. Two years ago, it was three weeks.

The jump is a result of decreased demand driven by higher interest rates combined with slightly increasing inventory.

We expect months of inventory to continue to increase and imagine it could be at four months by this winter.

The post Jump to Three appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

Jump to Three

/in , , , , /by

The most notable change in the market, in terms of a specific statistic, is months of inventory.

This statistic measures how long it would take to sell all of the current inventory at the current pace of sales.

Months of inventory has jumped to three along the Front Range.

One year ago, it was two months. Two years ago, it was three weeks.

The jump is a result of decreased demand driven by higher interest rates combined with slightly increasing inventory.

We expect months of inventory to continue to increase and imagine it could be at four months by this winter.

The post Jump to Three appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

What Gives?

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“I thought the market was cooling off, so why are prices still going up?”

This is a frequent question we hear from our clients.

They are understandably confused by the fact that average prices have continued to rise at a rapid pace even though sales activity is slower than what it was 6 months ago.

Bottom line, they want to know why prices are up along the Front Range anywhere from 12% to 17% compared to last year.

Firstly, we don’t expect this pace of price appreciation to continue.  What we foresee is price growth going back to the long term average of 5% to 6% per year.

The reason why we still see double-digit growth comes down to two words.  Supply and Demand.

Supply, while higher than a year ago, is still relatively low.

Also, demand, while lower than a year ago, is still relatively high.

The market is still healthy, just not as frantic as it was.

Properties are still selling, but bidding wars and multiple offers have mostly gone away.

Sellers remain in a strong position, but they face more competition than before.

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Half A Month

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There is half of a month of inventory on the market.  In other words, at the current pace of sales, it would take just two weeks to sell all of the homes currently listed for sale along the Front Range.

By definition, a market is balanced when there is 4 to 6 months of inventory.  Anything less than that is a seller’s market.

The current inventory levels give us confidence about the future of price growth along the Front Range.

While we expect the pace of price appreciation to slow, the low supply of properties insulates us against any sort of price decline.

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No Foolin’

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This is not an April Fool’s joke.

 

Average prices in Metro Denver just exceeded $700,000 in Metro Denver.  Larimer County isn’t far behind.

 

For the month of March, the average residential sales price in the 5-county Metro Area was $704,000.  This does not include Boulder County.

 

Larimer County was $691,000 and we expect to see an average exceeding $700,000 in the very near future.

 

It’s also interesting to note the average price for properties currently listed for sale and not sold yet.  In Larimer County it is $848,000 and in Metro Denver it is $1,100,000.

 

You might be asking, why have prices appreciated to this level?  Quite simply, supply and demand.

 

The Front Range has a healthy, growing economy plus an incredibly high quality of life.  Meanwhile, standing inventory is low which results in upward pressure on prices.

The post No Foolin’ appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

No Foolin’

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

This is not an April Fool’s joke.

 

Average prices in Metro Denver just exceeded $700,000 in Metro Denver.  Larimer County isn’t far behind.

 

For the month of March, the average residential sales price in the 5-county Metro Area was $704,000.  This does not include Boulder County.

 

Larimer County was $691,000 and we expect to see an average exceeding $700,000 in the very near future.

 

It’s also interesting to note the average price for properties currently listed for sale and not sold yet.  In Larimer County it is $848,000 and in Metro Denver it is $1,100,000.

 

You might be asking, why have prices appreciated to this level?  Quite simply, supply and demand.

 

The Front Range has a healthy, growing economy plus an incredibly high quality of life.  Meanwhile, standing inventory is low which results in upward pressure on prices.

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Standing Low

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The standing inventory of residential properties currently for sale is staggeringly low.

The number of active properties for sale is almost 90% below the average for this time of year.

In Metro Denver, there are 1,144 residential properties for sale today.

In Larimer County, there are 136 and in Weld County there are 174. 

Current inventory along the Front Range is essentially half of what it was one year ago.

The low standing inventory bolsters our belief that nothing resembling a decline in housing prices is on the horizon.  The low supply will continue to put upward pressure on prices.

It is time to register for our annual Market Forecast with Chief Economist Matthew Gardner.  This year the event will be hosted online on Thursday February 3rd from 11:00 to 12:00.

You can register at www.ColoradoForecast.com

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Housing Inventory

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Many of our clients wonder if the current pace of price growth can continue.  Some even ask if prices will decline this year. 

Based on researching the Case-Shiller Home Price index and the National Association of Realtors home inventory data, there must be at least 6 months of inventory in a market for prices to have any chance of declining. We wrapped up 2021 with about 2 weeks of inventory across Larimer County, Weld County and Metro Denver. This marks a 43%-46% decrease in inventory as compared to December 2020.

The dwindling supply and the rising prices have led to a lot of questions about the future of the housing market. Is there a market crash on the horizon? Is there a housing bubble that’s about the burst? The answer is no. Although it is unlikely that the market can continue at this pace indefinitely, all signs point to a healthy housing market in 2022.

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Construction Openings

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It’s not just the availability of materials impacting home builders today, it’s also the availability of labor.

The market could use more inventory.  Home builders are trying to catch up.

You’ve likely read the stories about the cost and availability of materials making an impact on home builders’ ability to keep pace with demand.

It turns out they have another factor impacting them as well- labor.

There are more construction job openings than ever before in history.

This is according to a new report from the Bureau of Labor Statistics.

There are 410,000 job openings in the Construction Sector.

A year ago there were 253,000.

If you know of anyone looking for work, there is a good chance a home builder could use the help.

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Words Matter

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A common phrase that is being used right now to describe the market is ‘no inventory.’

‘There’s no inventory’ is said frequently among those inside and outside of the real estate industry.

The problem with this phrase is that it is untrue.

There is inventory.  Meaning, there are a significant number of new listings hitting the market.

However, there is low standing inventory.  Meaning, the listings that do hit the market don’t stick around for very long before they are purchased.

Standing inventory, which is the number of active properties on the market, is down roughly 70% along the Front Range.

However, the number of new listings coming on the market is essentially:

  • Double compared to December 2020
  • Only 20% to 25% less than this time of year in 2017, 2018, and 2019

So, there is inventory available, it just sells quickly because demand is historically high right now.

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