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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.
Not As Different
Real Estate in the first part of 2023 along the Front Range is certainly different than the first part of 2022. But, in terms of number of transactions, it is not as different as one might guess.
Yes, higher interest rates and lower inventory has caused the number of transactions to be less than last year.
Generally speaking, the number of homes that have sold so far in 2023 is 20% lower than the same time period last year.
This does vary by region. Larimer County is down 15%, Weld County 29% and Metro Denver 21%.
It is important to keep in mind that the first 110 days of 2022 were unprecedented in terms of activity.
Some of the sensationalized media attention on real estate may imply that activity has come to a screeching halt, but that is simply not true.
There is still plenty of demand in the market for real estate on the Front Range.
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.
High Average
If you watch the weekly statistics that we produce and post on social media, a number that might be jumping off the screen at you is the average price.
Specifically, it is the percentage increase in average price versus last year that is striking.
We are commonly asked ‘how could average prices increase 20% to 30% in one year?’
It is important to note prices haven’t appreciated up to 30%, it’s only the average price that has increased by that amount.
A key reason why average prices have increased by such a significant amount is that there are many more luxury properties selling this year versus last year.
Sales of properties priced over $1,000,000 have seen a substantial increase compared to 2020.
Look at these numbers which show the year over year increase in closed transactions for real estate priced over $1 million:
- Larimer County = 159%
- Weld County = 247%
- Metro Denver = 137%
So, transactions of luxury properties have much more than doubled compared to 2020 which is pulling up the average sales price in a significant way.
Caught Up
We’ve been waiting for June to catch up. It finally happened (almost).
Back in April, real estate activity was significantly limited and the showing of property was restricted which caused the number of closed properties in May and early June to be much lower than last year.
Bottom line, fewer properties going under contract in April caused fewer closings 30 to 45 days later.
Closed properties in May were down compared to 2019 by 44% in Northern Colorado and 43% in Metro Denver.
Then activity jumped significantly in May. The number of properties going under contract was way up compared to last year.
We’ve been wondering when we would see this sales activity reflected in the number of closed properties.
Well, it finally happened (almost).
The number of closings so far in June compared to the same time period through June of 2019 is only down 1.8% in Northern Colorado and 1.6% in Metro Denver.
In both markets, there are only a handful of closings separating activity in June 2020 versus June 2019.
By the end of the month, when all the transactions are tallied up, we expect that June of this year will out pace June of last year in terms of number of transactions.
This is significant not only because of COVID-19, but also because of the reduced inventory compared to last year. Quite simply, there are fewer homes to buy.
All of this speaks to the health and resiliency of the Front Range market.
Vital Signs
Here are the vital signs for the Northern Colorado market.
First, Larimer County:
- Average prices are up 2.4%
- Number of transactions is down 2.5%
- Inventory is up 11.9%
- Days on market is up 4.1%
Now, Weld County:
- Average prices are up 4.3%
- Number of transactions is up 3.6%
- Inventory is up 12.9%
- Days on market is flat (same as last year)
What this means is prices are still going up, just not as fast as they were a couple of years ago. More inventory is coming on the market which is great news for buyers.
83 Miles Per Hour
Pretend you have been driving on the Interstate at 100 miles per hour.
Also, pretend you have been doing that for a long time.
Now pretend you slow down to 83 miles per hour.
How would that feel?
It would probably feel slow, right?
83 miles per hour is a 17% decrease from 100. It may feel slow, but it’s still pretty fast.
How does this relate to real estate?
Well, the market has been moving fast for a long time.
It’s been going 100 miles per hour for at least two years (some would argue even longer).
We’ve recently seen a 17% change in terms of number of transactions that are occurring.
There were 17% fewer sales in October 2018 versus October 2017 in Metro Denver.
It feels slow because we’ve been driving so fast for so long. But, our market is still moving.
For example, prices are still up. So, remember, that it’s all relative.
