Here’s some good news for buyers who have been waiting for more selection…
No need to wait any more because the numbers show that more new listings are hitting the market compared to the recent past.
In Metro Denver, the number of homes for sale is up 14.42% compared to last year.
That equates to 800 more homes to choose from.
Start spreading the news!
The following analysis of the Metro Denver & Northern 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 me.
It’s good news for the state of Colorado, which saw annual employment grow in all of the metropolitan markets included in this report. The state added 63,400 non-agricultural jobs over the past 12 months, an impressive growth rate of 2.4%. Colorado has been adding an average of 5,300 new jobs per month for the past year, and I anticipate that this growth rate will continue through the balance of 2018.
In February, the unemployment rate in Colorado was 3.0%—a level that has held steady for the past six months. Unemployment has dropped in all the markets contained in this report, with the lowest reported rates in Fort Collins and Denver, where 3.1% of the labor force was actively looking for work. The highest unemployment rate was in Grand Junction, which came in at 4.6%.
HOME SALES ACTIVITY
- In the first quarter of 2018, there were 11,173 home sales—a drop of 5.6% when compared to the first quarter of 2017.
- With an increase of 5.3%, home sales rose the fastest in Boulder County, as compared to first quarter of last year. There was also a modest sales increase of 1.2% in Larimer County. Sales fell in all the other counties contained within this report.
- Home sales continue to slow due to low inventory levels, which were down 5.7% compared to a year ago.
- The takeaway here is that sales growth continues to stagnate due to the lack of homes for sale.
- Strong economic growth, combined with limited inventory, continued to push prices higher. The average home price in the markets covered by this report was up by 11.7% year-over-year to $448,687.
- Arapahoe County saw slower appreciation in home values, but the trend is still positiveand above its long-term average.
- Appreciation was strongest in Boulder County, which saw prices rise 14.8%. Almost all other counties in this report experienced solid gains.
- The ongoing imbalance between supply and demand persists and home prices continue to appreciate at above-average rates.
DAYS ON MARKET
- The average number of days it took to sell a home dropped by three days when compared to the first quarter of 2017.
- Homes in all but two counties contained in this report took less than a month to sell. Adams County continues to stand out where it took an average of just 17 days to sell a home.
- During the first quarter, it took an average of 27 days to sell a home. That rate is down 2 days from the fourth quarter of 2017.
- Housing demand remains strong and would-be buyers should expect to see stiff competition for well-positioned, well-priced homes.
This speedometer reflects the state of the region’s housing market using housing inventory, price gains, home sales, interest rates, and larger economic factors. In the first quarter of 2018, I have left the needle where it was in the fourth quarter of last year. Even as interest rates trend higher, it appears as if demand will continue to outweigh supply. As we head into the spring months, I had hoped to see an increase in the number of homes for sale, but so far that has not happened. As a result, the housing market continues to heavily favor sellers.
Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has more than 30 years of professional experience both in the U.S. and U.K.
Annual employment growth in Colorado was measured at a respectable 2.2% in November and will likely finish the year having created around 55,000 new jobs. Within the metropolitan market areas included in this report, we are seeing employment growth at or above the state level and I anticipate that this will continue to be the case in 2017.
Unemployment rates continue to drop, and with rates now below three percent, all of Colorado’s metro areas are at full employment. Because of this robust level of growth—in concert with very low unemployment levels—I anticipate that we will see some fairly substantial income growth as companies look to recruit new talent and keep existing employees happy.
HOME SALE ACTIVITY
- There were 14,614 home sales during the fourth quarter of 2016—up by a marginal 0.7% from the same period in 2015.
- Jefferson County saw sales grow at the fastest rate over the past 12 months, with a 5.9% increase. Sales activity fell in three counties, but this was a function of short supply rather than slowing demand.
- Listing activity continues to remain well below historic averages, with the total number of homes for sale in the fourth quarter 12.8% below that seen a year ago.
- The key takeaway from this data is that 2017 is shaping up to be one which will still substantially favor home sellers. I do anticipate that we will see some improvement in listing activity, but it is almost a certainty that demand will exceed supply for another year.
- Demand continued to exceed supply in the final three months of 2016 and this caused home prices to continue to rise. In the fourth quarter, average prices rose by 9% when compared to the fourth quarter of 2015. The average sales price across the region is now $393,969.
- In many parts of the region, prices are well above historic highs and continue to trend upward. With double-digit price increases over the past year, the market remains very hot.
- Annual price growth was strongest in Larimer and Jefferson Counties, where prices rose by 11.8% and 10.9% respectively.
- While we will likely see some modest softening in home price growth in 2017, we can still expect a very strong market.
DAYS ON MARKET
- The average number of days it took to sell a home dropped by one day when compared to the fourth quarter of 2015.
- Homes in a majority of the counties took less than a month to sell.
- In the final quarter of the year, it took an average of just 27 days to sell a home. This is down from the 28 days it took in the fourth quarter of 2015.
- The Northern Colorado housing market is still firing on all cylinders. The only missing piece is listings, which remain well below the historic average.
For the fourth quarter of 2016, the needle remains firmly in the seller’s territory. It will be interesting to see if the recent increase in mortgage rates has any effect at all on the housing market. I believe that it will; however, I expect that it will likely cause a slowdown in home price growth rather than any collapse in home prices.
Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has over 25 years of professional experience both in the U.S. and U.K.