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Staying Steady
Because mortgage rates have not decreased yet this year, many are wondering what that means for Northern Colorado home sales.
Transaction count is staying relatively steady compared to 2023.
Total sales year to date are down slightly (6%) versus last year.
At this point in 2023, there were a total of 1434 closings in Northern Colorado. This year there have been 1350 – 84 fewer.
Five by Five
Here’s a fun fact about the current inventory along the Front Range.
The number of properties for sale is five times as many versus the all-time low in 2022.
And, it is one-fifth as many compared to the all-time high in 2006.
Also, it is half of the long-term average.
So, selection is much higher than the frenzied 2021/2022 market.
However, inventory is still very low relatively speaking.
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.
Inventory Jump
The most significant trend we notice 45 days into the new year is the jump in inventory.
There are many more properties for sale along the Front Range compared to one year ago.
- Larimer County is up 40%
- Weld County is up 39%
- Metro Denver is up 35%
This comes as welcome news for buyers as we near the Spring buying season.
Inventory in Perspective
A significant dynamic in the Front Range market is the relatively low inventory. This is the main reason why prices are stable despite higher rates.
Here is some perspective on the inventory of homes for sale to help give some context.
Today’s inventory is:
- Half of the long-term average going back 30 years
- ¼ of the all-time high in 2006
- 3 times the all-time low of 2021
Increasing Reductions
More and more sellers are having to reduce their listing price.
Nationally, 37% of all home sellers have recently had a listing price reduction. This is according to a recent report from Altos Research.
This is up from 30% in May and is now at the second-highest level since 2018. The highest it has been in the last five years is November 2022 when it stood at 41%.
A “normal” range is between 25% and 30%. Today’s number is a result of softening demand based on higher interest rates.
Proper pricing is always important for a seller and is especially so now as we enter a typically slower time of the year with added challenges related to interest rates.
UPS AND DOWNS
Here is a look at how the market performed in August versus August 2022
Prices:
Larimer County Up 4%
Weld County Up 8%
Metro Denver Up 6%
Transactions:
Larimer County Down 18%
Weld County Down 31%
Metro Denver Down 15%
Inventory:
Larimer County Up 18%
Weld County No Change
Metro Denver Down 4%
Year to Date
Here is an interesting look at the market year to date versus the same time period in 2022.
Bottom line, the number of transactions is down considerably, and prices are flat to slightly down.
Larimer County = Sales down 17.5%, prices up 0.7%
Weld County = Sales down 29.6%, prices down 2.2%
Metro Denver = Sales down 22.4%, prices down 2.9%
New Opportunity
One of the many opportunities for buyers today is new construction.
In Northern Colorado, just under 25% of all available homes for sale are brand new homes.
That percentage is roughly 50% more than normal.
Buyers who are looking for a greater selection can consider new homes.
New homes offer obvious advantages like trendy finishes and new appliances.
They also often offer attractive incentives like lower mortgage rates.
So, in a time when it feels like there is less to choose from, new homes are a great option.
A New Change
There is a new type of change to be prepared for.
One interesting way to track the market is to measure the year-over-year difference in inventory.
Quite simply, this looks at how many homes are available today versus the same time one year ago.
For the past several months in a row, the difference as measured by percentage change, has been significant.
That is because inventory levels between May of 2020 and May of 2022 were rock-bottom low.
For example, inventory in March of this year was up over 120% compared to March 2022.
When measured against historical numbers, inventory in the first half of this year is incredibly low. But, when measured against the first half of 2022, inventory is significantly higher.
Well, that is about to change because inventory increased in June and July of 2022.
So, now when we look at inventory levels versus a year ago, the percentage change will be more modest.
For example, Northern Colorado inventory today is up only 8% compared to one year ago.
