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FRIDAY FUN FACTS – Transitioning into Fall
As we transition from September to October, the real estate market is showing signs of stability and balance. Inventory levels are beginning to flatten out, providing buyers with more options to choose from. Sellers are becoming more flexible, willing to negotiate, make repairs, and offer concessions to close deals.
- Active Listings: The number of active listings has remained consistent compared to the previous week, although inventory levels are notably higher than this time last year.
- New Listings: There has been an increase in new listings both week over week and year over year, indicating growing seller confidence.
- Pending Transactions: The number of pending transactions has remained relatively flat, and the market’s supply of inventory has held steady.
- Odds of Selling: While the Odds of Selling have risen slightly, they remain below historical averages, reflecting the ongoing dynamics of the market.
- Showings: Showings have seen a minor decline from the previous week but are higher compared to the same period last year. Homes are staying on the market longer, giving buyers more time to consider their options.
- Price Reductions: The prevalence of price reductions has increased, with a larger percentage of homes adjusting their prices before entering into contracts. Additionally, the size of these price reductions has also shown an uptick.
Buyers currently have increased negotiating power, as sellers are more willing to engage in negotiations and make concessions. With a stable inventory and a market that offers more time for decision-making, now may be an opportune time for buyers to explore their options.
For personalized insights and guidance tailored to your specific real estate goals, feel free to reach out to our team at Windermere Real Estate. We are here to help you make informed decisions and seize the opportunities presented by the current market conditions.
Best Time to be a Buyer in 10 Years
As we move into the fall, the real estate market is providing a rare opportunity for buyers who have been waiting on the sidelines for years. Inventory levels are higher than they’ve been in a decade, and sellers are increasingly open to negotiations, making repairs, offering concessions, and even accepting contingent offers to close deals. This presents an exceptional chance for buyers to leverage their negotiating power before potential rate drops lead to increased competition in the marketplace.
Inventory Solstice
There is a significant transition that is taking place in the Northern Colorado market.
There is now more inventory on the market at this time of year than at any time since 2020.
2020 marked a turning point in the market where both interest rates and inventory plummeted.
For many years, the market has been working to get back to pre-COVID levels of inventory.
It finally happened.
However, inventory is still well below 2017, 2018, and 2019 levels.
This means there is nothing resembling a ‘glut’ of inventory.
But, this milestone is significant.
Mid-Month Check-In
Here is a look at the Northern Colorado market halfway through June compared to the same time last year.
Inventory is climbing at a healthy rate in both Larimer and Weld County giving more options for buyers.
Larimer County inventory is up 18% and Weld’s is up 13%.
Meanwhile, sales are down slightly which is not surprising because interest rates have been slightly elevated until very recently.
These two factors have caused months of inventory to increase. But, this very important statistic is still measuring below 3 months in both Larimer and Weld Counties, demonstrating there is sufficient demand for the current supply.
Midway Check-In
We are halfway through May. This is how the numbers stack up versus the exact time last year.
Larimer County:
- Inventory up 26%
- Closings down 4%
- Average Prices up 13%
Weld County:
- Inventory up 18%
- Closings up 6%
- Average Prices down 5%
More Powerful
As the saying goes, Superman is more powerful than a steaming locomotive (and able to leap tall buildings in a single bound)!
In real estate, supply and demand is more powerful than interest rates (and able to push price appreciation year after year)!
The fact that prices keep rising in Northern Colorado, even though interest rates are over 7%, is because of one factor- supply and demand.
Supply and demand is most easily measured by months of inventory which considers how long it would take to sell the current inventory at the current pace of sales.
Larimer County has just over two months of supply. Weld County has just under two months.
Fundamentally, while months of inventory stays below four months, prices are pretty much guaranteed to keep going up.
Leap Year
The statistic that is leaping so far in 2024 is inventory.
Northern Colorado is seeing a big uptick in number of homes for sale.
However, it is not an alarming amount and is still a ‘Seller’s Market’ by definition.
Larimer County inventory is up 39% and Weld County is up 48%.
Months of inventory is up to 2.3 in Larimer County from 1.7 months a year ago.
Weld County is also at 2.3 months today and was only 1.2 months a year ago.
With higher inventory comes more selection for buyers and more importance for sellers to price right.
Double, Half, Fifth
Today’s inventory of residential properties along the Front Range is…
Double what it was in 2021 (the all-time low)
Half of the long-term average (going back to 1985)
One-fifth of what it was in 2006 (the all-time high)
Mis-Led
The most misleading stat about the housing market is increase in inventory. The number of properties for sale is up significantly compared to last year. In most locations along the Front Range, inventory has doubled.This is obviously great news for buyers because they now have more choice.This is obviously meaningful for sellers because they now have more competition.But, it does not mean there is a glut of inventory. It does not mean that we are now, all of a sudden, over-supplied.Quite the contrary. The market is still undersupplied. There would need to be at least double the amount of homes for sale for Front Range real estate to begin to be balanced.The increase in inventory, being so large, gets a lot of attention in the media and can sometimes be taken the wrong way.Yes, inventory has doubled. But, it has doubled compared to all time lows.Freddie Mac reports that Nationally, the market is undersupplied by 3.8 million housing units.So, the increase in homes for sale is a good thing for the market and is nothing like a glut of inventory.
Halfway Check
This is a market which is changing quickly. We are studying the numbers every day so we can be clear about where the market is heading.
Here is a check on the market halfway through October.
Compared to last October…
- Available inventory is up 73% in Northern Colorado and up 112% in Metro Denver. This is significant for buyers who, for years, were challenged with limited selection.
- Number of closed transactions is down 50% in Northern Colorado and 41% in Metro Denver. This reflects the fact that fewer buyers are active right now given higher interest rates.
Prices continue to be higher than last year. They are up 12% in Northern Colorado and 13% in Metro Denver. We don’t expect double-digit increases to continue, but don’t expect anything like a price crash.
