Here is a peek at average residential prices along the Front Range through the first half of September and how they have changed versus one year ago:
Even though buyer demand has moderated and housing supply has increased in recent months, the market can still be considered a Seller’s Market because inventory is still low. 📉
According to data from NAR, sellers continue to benefit from competitive offers and serious buyers. In July, for example, the average home received 2.8 offers and 39% actually sold above the asking price. 💰
In other words, while the market is in fact cooling off, you certainly haven’t missed your chance to sell your home. Partner with a real estate professional today to get started on your home selling journey! 🏠
💡 Strategically planning your home search by understanding current mortgage rates, keeping your options open, and working with a knowledgeable local real estate professional can be the key to finding your dream home.
The latest Home Price Index report has just been released by the Federal Housing Finance Authority.
They track home price appreciation for the largest metropolitan areas in the U.S. plus state by state appreciation.
Here is the ranking of the top three states for price growth over the last twelve months:
1. Florida = 29%
2. Arizona = 26%
3. North Carolina = 25%
The bottom three states are:
50. North Dakota = 10%
49. Louisiana = 11%
48. Minnesotta = 11%
Colorado came in at #19 with 18% price growth over the last 12 months.
Here’s a trivia question…
The number of new, single-family homes completed in 2022 will most closely resemble which prior year?
If you guessed 1993, you are correct.
Yes, the number of homes built and completed this year is no more than the number from 30 years ago.
In 2022, there will be just over 1 million single family homes constructed in the U.S. which is the same as 1993.
This is much more than the bottom of construction in 2011 which saw just under 500,000 new homes built.
But it is also much less than the top of 2006 which had almost 1.7 million.
Limited new home construction today is preventing anything close to a glut of inventory on the market which, in turn, insulates us from any sort of major price correction.
For the first time in a long time, the sale to list price ratio is below 100%.
This statistic measures the final sales price versus the listing price.
During the super-active market of the last 24 months, this number averaged over 100%.
This was a result of multiple offers and bidding wars which caused buyers to offer more than list price.
Now, the sale to list price ratio has dropped to below 100% as a result of a more balanced market.
These are the specific numbers in each of our markets:
Larimer County = 98%
Weld County = 99%
Metro Denver = 97%
The following analysis of select counties of the Colorado real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.
Regional Economic Overview
Colorado continues to add jobs, but the pace of growth has slowed, albeit modestly. At the time of writing this report, the state’s employment had increased by 124,600 jobs over the past 12 months, which represents an annual growth rate of 4.6%. The state unemployment rate in May was 3.5%. Regionally, unemployment rates ranged from a low of 2.4% in Boulder to a high of 3.4% in the Grand Junction and Greeley metropolitan areas.
❱ In the second quarter, 12,839 homes sold, a drop of 8% compared to a year ago but 57% higher than in the first quarter of this year.
❱ Year over year, sales rose in only three counties covered by this report and fell in the rest of the region. That said, there was a palpable increase in sales across the board compared to the first quarter of 2022.
❱ The significant jump in sales from the first quarter can likely be attributed to the fact that inventory levels spiked, rising more than 190% from the first quarter.
❱ Pending sales (an indicator of future closings) rose 39% from the first quarter, signifying that the third quarter may show further growth in sales activity.
❱ The average home sale price ($700,369) was 14.1% higher than the same period in 2021. Prices were also 9.8% higher than in the first quarter of this year.
❱ Price growth remains strong even in the face of significantly higher inventory levels and mortgage rates, which is an impressive achievement.
❱ Year over year, prices rose by double digits across all markets except El Paso and Arapahoe counties. Prices rose in all counties other than Gilpin (-10.3%) and Clear Creek (-1%) from the first quarter.
❱ With the increase in mortgage rates and the number of homes for sale, I have started to watch list prices more closely. Compared to the first quarter, median list prices are lower in 9 of the 12 counties included in this report. Although it’s too early to say whether this is a trend we should be worried about, I will be watching how prices move during the summer, as it may be an indicator that the market is starting to soften.
Although mortgage rates did drop in June, the quarterly trend was still moving higher. Inflation—the bane of bonds and, therefore, mortgage rates—has yet to slow, which is putting upward pressure on financing costs.
That said, there are some signs that inflation is starting to soften and if this starts to show in upcoming Consumer Price Index numbers then rates will likely find a ceiling. I am hopeful this will be the case at some point in the third quarter, which is reflected in my forecast.
❱ The average time it took to sell a home in the markets contained in this report fell eight days compared to the same period in 2021.
❱ The length of time it took to sell a home dropped in six counties, remained static in three, and rose in the other three compared to the same quarter a year ago.
❱ It took an average of only 10 days to sell a home in the region, which is down 15 days compared to the first quarter of the year.
❱ Compared to the first quarter of 2022, average market time fell across the board, with significant drops in Gilpin (-41 days), Park (-25 days), and Clear Creek (-23 days) counties.
This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.
The Colorado economy remains robust and continues to grow. As it stands today, I anticipate income growth here will continue to outpace the nation. The 221,000 current job openings in the state are evidence of significant employer demand, which will lead to higher wages. Housing demand is still remarkably strong, even in light of the rapid increase in the number of homes for sale and rising financing costs.
As mentioned earlier, I will be watching movement in list prices through the summer as they are a leading indicator in respect to the health of the market. Although we saw some softening in the pace of regional list price growth during second quarter and median list prices pulling back in some markets, it is too early to state that this is a pattern. As such, I am leaving the needle in the same position as the first quarter. The growing number of homes for sale and lower list prices in some markets should favor buyers, but this is offset for the time being by solid demand.
About Matthew Gardner
As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.
In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.
A stat that we have expected to change is finally changing.
“Days on Market” measures how long it takes for new listings to sell.
Over the last two years this stat plummeted to levels we have never seen before.
In the height of the market frenzy a year ago, properties were taking 7 days or less to sell on average.
Now, with the market cooling, Days on Market is back into double-digits.
Northern Colorado is at 20 days, a 54% increase over last year.
Metro Denver is at 12 days which is a 50% increase.
Now that we’re half way through 2022 we can take a look at our Real Estate Market and what we’re starting to see is transition. This is what we’re seeing consistently throughout Colorado’s Front Range. The fact of the matter is that Northern Colorado consists of many different hyper-local markets though. So with that in mind let’s take a look at how our local market right here in Troutman Park compares to previous years.
Here is what Troutman Park’s Real Estate market has done through the 1st half of 2022 and compare it to the same time during other recent years. Here are the numbers:
2022 Q1-Q2 – 24 homes sold for $12,775,100. They ranged from $407,500 – $752,00 at an average of $532,295
2021 Q1-Q2 – 31 homes sold for $14,614,420. They ranged from $371,000 – $630,000 at an average of $471,432
2020 Q1-Q2 – 30 homes sold for $11,727,425. They ranged from $325,000-$507,000 at an average of $390,914
2019 Q1-Q2 – 33 homes sold for $12,724,583. They ranged from $320,000-$477,900 at an average of $385,593
2018 Q1-Q2 – 24 homes sold for $8,813,900. They ranged from $290,000-$465,000 at an average of $367,245
2017 Q1-Q2 – 25 homes sold for $8,594,519. They ranged from $257,500-$443,000 at an average of $343,780
2016 Q1-Q2 – 27 homes sold for $8,645,100. They ranged from $205,000-$436,000 at an average of $327,000
2015 Q1-Q2 – 36 homes sold for $10,185,745. They ranged from $218,325-$355,000 at an average of $282,937
Last year at this time there were 10 homes in the neighborhood that sold at $500,000 or more (3 of those were between $601,000 and $630,000). In the 1st half of 2022 there were 16 homes in Troutman Park that sold for more than half a million. Our neighborhood also saw a new all time high in value when 319 Mapleton Ct sold for $752,000 on June 16. The average price in Troutman Park is up 13% over the 1st half of last year’s average.
The average days on the market before going under contract for Troutman Park properties is 8 days for the 1st half of 2022. That’s up just one day from last year at this time. We’ll likely see that number go up a few days in the 2nd half of the year however.
What we’re seeing across all Colorado’s Front Range is a transition in our real estate market. We have gone from an all time low of inventory (2 weeks supply) in the 1st quarter of the year to what we see as 1.5 months supply now. When the interest rates started to rise in March some buyers started to head to the sidelines. When May and June rolled around we also started to notice a significantly higher number of homes for sale on the market.
For those who worry that we’re on the edge of a bubble keep in mind that economist say there is not a chance of values dropping until there are 6 or months of inventory on the market. Right now we are at 1.5 months supply of inventory. The tides are starting to change though and sellers don’t have nearly as much leverage in negotiations right now compared to last year or the beginning of 2022. The nicely remodeled “Move In Ready” homes may still have more than 1 offer competing for them. It will probably be more like a 2-4 offer situation now though compared to places that were seeing somewhere in the neighborhood of up to 20 offers earlier in the year.
The other factor we notice right now is something we see most every year. That’s the seasonal slow down in buyer activity from July through early September. One reason we see this is the families that are putting their search on the back burner while on vacation and then getting ready for back to school.
The end result means sellers are still in demand but there is a lot more opportunity for buyers now as there isn’t nearly as much competition as there was at the beginning of the year. Some buyers may be able to negotiate having sellers pay concessions towards buying down the interest rate which can be a big Win/Win situation.
If you have questions about anything or if you’re curious about what your home might be worth, just let me know. I grew up here in Fort Collins, I’ve worked in Real Estate since 2002. I live right here in Troutman Park and I’m always happy to share.
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