In honor of Valentine’s Day, here are some Northern Colorado stats we think you will love:
- Prices are up 3.5% compared to last year
- Inventory is up 10% which means there is more selection for buyers
- We just had the most active January in terms of closings in over 10 years
- Well over 13,000 residential properties representing $5.4 Billion of volume has sold in the last 12 months
If you would like to see a video recap of our annual Market Forecast you can watch that HERE.
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 your Windermere real estate agent.
Colorado’s economy picked up, adding 64,900 new non-agricultural jobs over the past 12 months — a growth rate of 2.4%. Over the past three months, the state added an impressive 28,300 new jobs.
In August, the state unemployment rate was 2.8%, down from 3.4% a year ago. Unemployment rates in all the counties contained in this report were lower than a year ago. It is fair to say that all markets are now at full employment.
- In the third quarter of 2019, 17,562 homes sold. This is an increase of 5.1% compared to the third quarter of 2018 but 1.6% lower than the second quarter (which can be attributed to seasonality). Pending sales — a sign of future closings —rose 9.7%, suggesting that closings in the final quarter of 2019 are likely to show further improvement.
- Seven counties contained in this report saw sales growth, while four saw sales activity drop. I am not concerned about this because all the markets that experienced slowing are relatively small and, therefore, subject to significant swings.
- I was pleased to see an ongoing increase in the number of homes for sale (+16.9%), which means home buyers have more choice and feel less urgency.
- Inventory levels are moving higher, and demand for housing appears to be quite strong. As I predicted last quarter, home sales rose in the third quarter compared to a year ago.
- Home prices continue to trend higher, with the average home price in the region rising 3.8% year-over-year to $477,776.
- Interest rates are at very competitive levels and are likely to remain below 4% for the balance of the year. As a result, prices will continue to rise but at a more modest pace.
- Appreciation was again strongest in Park County, where prices rose 7.8%. We also saw strong growth in Weld County, which rose 7.4%. Home prices dropped in Clear Creek County, but, as mentioned earlier, this is a small market so I don’t believe this is indicative of an ongoing trend.
- Affordability remains an issue in many Colorado markets and this will act as a modest headwind to ongoing price growth.
DAYS ON MARKET
- The average number of days it took to sell a home in the markets contained in this report rose seven days compared to the third quarter of 2018.
- The amount of time it took to sell a home rose in all counties compared to the third quarter of 2018.
- It took an average of 30 days to sell a home in the region — an increase of 1 day compared to the second quarter of this year.
- The Colorado housing market is still performing well, and the modest increase in the length of time it took to sell a home is a function of greater choice in homes for sale and buyers taking a little longer to choose a home.
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.
For the third quarter of 2019, I continue the trend I started last summer and have moved the needle a little more in favor of buyers. I continue to closely monitor listing activity to see if we get any major bumps above the traditional increase because that may further slow home price growth. However, the trend for 2019 will continue to be a move toward a more balanced market.
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.
So how much real estate is sold in Northern Colorado?
As it turns out, a lot!
Last month alone there were 1,099 single family homes that sold in Larimer and Weld Counties
The average price was $429,144 which means the total sales volume for one month was $471,629,129 (almost a half a billion)!
Over the last 12 months, just over $4.5 billion worth of single-family homes have sold.
That’s a lot of real estate!
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A high-level look at the Northern Colorado region shows that the number of residential sales is down 5.4% in Larimer County and up 4.7% in Weld County. This is simply comparing the number of closings from June 2018 to June 2019 versus June 2017 to June 2018.
The high-level look doesn’t tell the whole story. It get’s more interesting when we look at individual Northern Colorado cities and towns:
• Fort Collins = -8.8%
• Loveland = -5.7%
• Greeley = +11.7%
• Windsor = +16%
• Wellington = -16.9%
• Timnath = +44.1%
• Severance = +20.4%
• Johnstown = -18.7%
• Berthoud = +18.1%
• Evans = -14.7%
So, what can we learn from this? The areas with increased sales are where there is an abundance of new construction (Timnath and Severance for example).
The areas with decreased sales don’t have an abundance of new construction (Fort Collins for example).
The exceptions to this would be Wellington and Johnstown. It appears that there is price sensitivity to the new construction product now being built in these areas. Given rising costs, builders are challenged to deliver a product under $350,000 in these places.
For instance, in Wellington, between June 2017 and June 2018 there were 137 sales of new homes priced under $350,000. Today there are only 6 new homes on the market at that price point.
So, which is it? A buyer’s market or a seller’s market?
Well, it depends!
First, let’s define each market. According to research, a buyer’s market exists when there is more than 4-6 months of inventory on the market.
If it would take longer than 4-6 months to sell out all of the inventory currently for sale, then it is a buyer’s market.
This calculation is obviously a function of the amount of inventory on the market and the current pace of sales.
A seller’s market exists if it would take shorter than 4-6 months.
So, which is it?
It depends very much on the price range.
Here are the numbers for Northern Colorado:
• $300,000 to $400,000 = 0.9 months
• $400,000 to $500,000 = 1.9 months
• $500,000 to $750,000 = 2.3 months
• $750,000 and over = 5.8 months
So, most price ranges are a clear seller’s market. It’s not until $750,000 and over that the market starts to approach a more balanced state.
Here’s one more thing that might help you…
You probably don’t need a reminder that this is tax season.
Not only because tax returns are due in two weeks but also because you will soon receive your property tax notification in the mail.
Every two years your County re-assesses the value of your property and then sends that new value to you.
When this happens, many of our clients:
- Don’t agree with the new assessed value
- Aren’t sure what to do
- Are confused by the process
- Want to save money on property taxes
Good news! We have a webinar that will help you. On the webinar we will show you:
- How to read the information from the County
- What it means for you
- How to protest the valuation if you want
- How to get an accurate estimate of your property’s value
You can listen to the webinar live or get the recording. In any case, you can sign up at www.WindermereWorkshop.com
The webinar is April 17th at 10:00. If you can’t join live, go ahead and register so you can automatically receive the recording.
This is a complimentary online workshop for all of our clients. We hope you can join!
This past Wednesday and Thursday evenings we had the pleasure of hosting our annual Market Forecast events in Denver and Fort Collins.
Thank you to the 700 people who attended. We appreciate your support!
In case you missed the events, here are some highlights including our forecast for price appreciation in 2019:
• In 2018 Prices went up:
o 8% in Fort Collins
o 8% in Loveland
o 8.5% in Greeley
o 8% in Metro Denver
• Inventory is (finally) showing signs of increasing:
o Up 25% in Northern Colorado
o Up 45% in Metro Denver
• There are distinct differences in months of inventory across different price ranges = opportunity for the move up buyer.
• There are several reasons why we don’t see a housing bubble forming:
o New home starts along the Front Range are roughly 60% of pre-bubble highs 14 years ago.
o Americans have more equity in their homes than ever, $6 Trillion!
o The average FICO score of home buyers is significantly higher than the long-term average.
o The home ownership rate is back to the long-term average.
• Our 2019 Price Appreciation Forecast:
o 6% in Fort Collins
o 6% in Loveland
o 7% in Greeley
o 6% in Metro Denver
If you would like a copy of the presentation, go ahead and reach out to us. We would be happy to put it in your hands!
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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.