Market Data • July 25, 2022

How many days on the market?

by Brandon Bidwell

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.

Market Data • May 13, 2022

Home Inventory Increasing?

by Brandon Bidwell

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.

Market Data • April 23, 2022

Current Supply and Demand

by Brandon Bidwell

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.

Market Data • January 21, 2022

How low is Inventory?

by Brandon Bidwell

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

Market Data • October 20, 2021

Is Housing Inventory Increasing?

by Brandon Bidwell

A review of the September market stats shows a slight increase in inventory along the Front Range.

The way we currently measure inventory is in days.

Meaning, at the current pace of sales, how many days would it take to sell all of the inventory currently for sale.

The results, based on September’s activity, shows only a slight increase compared to August. This increase can be tied to seasonality as we always experience a slight cooling off of the market heading into the Fall.

Here is what the residential inventory looks like in each of our markets:

Larimer County = 25 days
Weld County = 23 days
Metro Denver = 21 days

Bottom line, the residential market is still very healthy.

Market Data • September 15, 2021

Staggering Stat

by Brandon Bidwell

By definition, a real estate market is balanced when there is 4 to 6 months of inventory currently for sale.

Anything less than 4 to 6 months means a Sellers’ market, anything more means a Buyers’ market.

For example, if there are 1,000 closings per month in a market, the market would be balanced if 4,000 to 6,000 homes were available for sale.

Here is a staggering stat for you…

At the current pace of sales, the Front Range market would need 6 to 7 times more inventory for the market to be balanced.

This is why we don’t see any sort of significant market correction or anything resembling ‘the market crashing.’ Bottom line, the market is still undersupplied.

Here are the numbers:

• Larimer County has 441 properties for sale and would need 2,200 to be balanced.
• Weld County has 322 properties for sale and would need 2,000 to be balanced.
• Metro Denver has 3,023 properties for sale and would need 20,000 to be balanced.

Market Data • June 7, 2021

Is there really “No Inventory”?

by Brandon Bidwell

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.

Economic • May 8, 2021

Different Era, Different Market

by Brandon Bidwell

Recently it seems there are many attempted comparisons being made between today’s real estate market and the 2006-2007 market.

It seems that people fear a repeat of what happened to the market in 2008 and 2009.

Buyers, understandably, want to make smart decisions and don’t want to buy in advance of any downturn.

The reality is this. There are some similarities between now and the pre-bubble market of 15 years ago. Namely, prices are appreciating quickly.

However, there is one massive difference.

The inventory of homes for sale right now is drastically different than 15 years ago.

The rules of economics tell us that, in order for prices to crash, demand needs to diminish, supply needs to swell, or some combination of the two.

Here’s the deal. Supply today is a fraction of what is was 15 years ago.

Homes for sale today:

Larimer County = 238
Weld County = 226
Metro Denver = 2,594

Homes for sale 15 years ago:

Larimer County = 2,998
Weld County = 1,113
Metro Denver = 29,045

The reason why prices flattened and decreased slightly along the Front Range in 2009 is because the National economy had a meltdown and there was a glut of supply.

We do not have anything similar to those same dynamics today.

We are watching the market closely every single day. While we don’t expect the current pace of appreciation to keep up, we believe inventory levels keep us insulated from any kind of crash.

Market Data • February 18, 2021

Questions we get about market activity right now!

by Brandon Bidwell

Do you think more properties will come on the market this Spring? Yes, the normal pattern in our market is for new listings to be 40% to 70% higher in April versus January. The peak month for new listings is typically June.

Do you think buyer demand will grow even more as time goes on? Yes, for two main reasons. Buyer activity, just like listing activity, increases significantly in the Spring and Early Summer. Plus, we expect the economy to open up even more as the COVID vaccine gets rolled out over the course of the year. Although in previous years prior to Covid-19 we’ve noticed that buyer activity really dies down in July/August. It will be interesting to see if there is enough pent up demand to break that trend this year.

Do you think interest rates will go up? Yes, all of the trusted forecasters and economists expect rates to be slightly higher by the end of the year. Our own Chief Economist sees rates at 3.07% by year-end.

Do you think prices will keep rising? Yes, because of the simple economic forces of supply and demand. Supply is at historic lows. The number of properties for sale today is roughly 80% below the average. Demand is being fueled not only by the low-interest rates, but also a rebounding local job market that is poised to rebound even more. Plus, the new work-from-home dynamic positions the Front Range as a sought after place to live.

Market Data • February 24, 2020

What causes Real Estate Bubbles to Burst?

by Brandon Bidwell

Every so often we will hear a concern that another housing bubble is forming.

To help answer that question it’s valuable to look at the reasons that caused the last one.

There were three main drivers of the bubble that burst in 2008:

Easy Credit – loans were very easy to attain
Over-Leverage – people were using their homes at ATM’s
Over-Supply – too many new homes were being built

Now, let’s compare that to today:

Stricter Credit – the average home buyer today has a FICO score of 755
High Equity – collectively, U.S. homeowners have $19 Trillion of equity in their homes and collective mortgage debt has not increased for 13 years
Under-Supply – today we are building only two-thirds of the new homes being built in 2004 yet the population is much higher

Given this healthy information, we don’t see another housing bubble forming right now.

If you would like to see a video recap of our annual Market Forecast you can watch that HERE.