BlogGardner Report April 29, 2021

Q1 2021 Colorado Real Estate Market Update

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.

REGIONAL ECONOMIC OVERVIEW

Following the decline in employment last winter, Colorado has started to add jobs back into its economy. The latest data shows that the state has now recovered more than 219,000 of the 376,000+ jobs that were lost due to COVID-19. This is certainly positive, but there is a long way to go to get back to pre-pandemic employment levels. Denver and Fort Collins continue to have the greatest improvement in employment, but all markets show job levels well below pre-pandemic levels. With total employment levels rising, the unemployment rate stands at 6.6%, down from the pandemic peak of 12.1%. Regionally, unemployment levels range from a low of 5.6% in Fort Collins and Boulder to a high of 6.7% in Greeley. COVID-19 infection rates have started to increase again, and this has the potential to negatively impact the job market. I am hopeful that the state will not be forced to pull back reopening, but this is certainly not assured.

COLORADO HOME SALES

❱ 2021 started off on a bit of a sour note, with total sales down 1.2% compared to the same period in 2020. Sales were 29.2% lower than in the final quarter of 2020 as 8,645 homes sold.

❱ Sales were higher in four of the counties contained in this report, were essentially flat in one, and dropped in seven. It was pleasing to see significant sales growth in the large counties of Denver and Adams.

❱ Another positive was that pending sales, which are an indicator of future closings, were 4.8% higher than in the fourth quarter of 2020 and 5% higher than a year ago.

❱ The disappointing number of home sales overall can primarily be attributed to the woeful lack of inventory. Listings in the quarter were down more than 61% year over year and were 40.6% lower than in the fourth quarter of 2020.

 

COLORADO HOME PRICES

❱ Prices continue to appreciate at a very rapid pace, with the average sale price up 16.5% year over year, to an average of $556,100. Home prices were also 4.4% higher than in the fourth quarter of 2020.

❱ Buyers appear to be out in force, and this demand—in concert with very low levels of inventory—continues to heat the market.

❱ Prices rose over last year across all markets covered by this report, with the exception of the very small Gilpin County. All other counties saw sizeable gains and the trend of double-digit price growth continued unabated.

❱ Affordability levels are becoming a greater concern as prices rise at a far faster pace than wages. Even though mortgage rates have started to rise, they haven’t yet reached the level needed to take some of the heat out of the market.

 

DAYS ON MARKET

❱ The average time it took to sell a home in the markets contained in this report dropped 20 days compared to the first quarter of 2020.

❱ The amount of time it took to sell a home dropped in every county contained in this report compared to the fourth quarter of 2020.

❱ It took an average of 25 days to sell a home in the region, down one day from the fourth quarter of 2020.

❱ The Colorado housing market remains very tight, as demonstrated by the fact that it took less than a month for homes to sell in all but two counties.

 

CONCLUSIONS

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.

The relatively low level of home sales is not a surprise given how few choices there are for buyers. Sellers are certainly benefitting from strong demand, as demonstrated by the significant price growth. I maintain my belief that there will be an increase in inventory as we move through the year, but it is highly unlikely that we will see a balanced market in 2021.

Given these factors, I am moving the needle a little more in favor of sellers, as demand is likely to continue to exceed supply.

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.

BlogEconomics 101Gardner ReportUncategorized March 10, 2021

Q4 2020 Colorado Real Estate Market Update

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 agent.

REGIONAL ECONOMIC OVERVIEW

The job recovery that appeared to be firmly in place in the summer has started to wane. Though Colorado has recovered more than 209,000 of the jobs lost due to COVID-19, employment levels remain almost 210,000 below the level seen last February. Even with employment growth stalling, the unemployment rate stands at a relatively respectable 6.4%, down from a peak of 12.2%. Regionally, unemployment levels range from a low of 5.4% in Boulder to a high of 6.9% in Greeley. Rising COVID-19 infection rates continue to impact the job recovery, and I do not see much in the way of palpable improvement until a vaccine becomes freely available, likely in the second half of this year.

COLORADO HOME SALES

❱ In the final quarter of 2020, 12,207 homes sold. This represents an increase of 21.8% compared to the fourth quarter of 2019, but 19% lower than in the third quarter. I am not concerned, though, because seasonal influences tend to impact sales in the winter.

❱ Sales rose in all markets other than El Paso compared to the fourth quarter of 2019. I believe sales are only limited by the number of homes on the market.

❱ Inventory levels remain well below what I would like to see. The average number of homes on the market in the fourth quarter was down 55% from the same period in 2019.

❱ Pending sales were 34% lower compared to the third quarter. Again, seasonality and a lack of homes to buy impact this figure. Pending sales are still 13% higher than a year ago.

Colorado Counties Graph

COLORADO HOME PRICES

Price appreciation in various Colorado counties.

❱ Home prices rose significantly in the fourth quarter, with the average price increasing 13.7% year-over-year to $532,492. Prices were up 1.8% compared to the third quarter of this year.

❱ Interest rates are unlikely to drop much further and this will lead price growth to slow as we move through 2021.

❱ Year-over-year, prices rose across all markets covered by this report, with significant appreciation in Clear Creek, Gilpin, Park, and El Paso counties. Every county but Arapahoe saw double-digit price gains.

❱ Affordability in many Colorado markets remains a concern as prices continue to rise at well-above-average rates. That said, I anticipate we will see price growth moderate in 2021.

A bar graph showing the annual change in home sale prices in various Colorado counties.

DAYS ON MARKET

❱ The average number of days it took to sell a home in the markets contained in this report dropped 15 days compared to the final quarter of 2019.

❱ The amount of time it took to sell a home dropped in every county contained in this report compared to the fourth quarter of 2019.

❱ It took an average of 26 days to sell a home in the region, down 3 days compared to the third quarter of 2020.

❱ The Colorado housing market continues to demonstrate solid demand, and buyers are clearly competitive as suggested by the short length of time it is taking to sell a home.

A bar graph showing the average days on market for homes in various Colorado counties

CONCLUSIONS

A speedometer graph indicating a seller's market in Colorado.

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.

Home sales and prices are significantly higher than a year ago, and demand for housing is very much in place. Naturally, this favors home sellers who are still in control of the market. I do expect to see some improvement in listing activity this year, which, in concert with modestly rising interest rates, will likely start to take some of the steam out of the market. However, any moderation in the market has yet to appear. Even given the possible headwinds mentioned above, I am moving the needle a little more in favor of sellers, as demand is likely to exceed supply for the time being.

 

ABOUT MATTHEW GARDNER

Matthew Gardner - Chief Economist for Windermere Real Estate

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.

BlogFun FactsGardner Report October 30, 2020

Brand New Market Report

Housing Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The latest quarterly report from our Chief Economist Matthew Gardner is now available.  Here is a quote from the report with his take on the Front Range economy:

What a difference a quarter makes! Following the massive job losses Colorado experienced starting in February—the state shed over 342,000 positions between February and April—the turnaround has been palpable.

Through August, Colorado has recovered 178,000 of the jobs lost due to COVID-19, adding 107,500 jobs over the past three months, an increase of 4.2%.

All regions saw a significant number of jobs returning. The most prominent was in the Denver metropolitan service area (MSA), where 78,800 jobs returned in the quarter.

Although employment in all markets is recovering, there is still a way to go to get back to pre-pandemic employment levels.

The recovery in jobs has naturally led the unemployment rate to drop: the state is now at a respectable 6.7%, down from a peak of 12.2%.

Regionally, all areas continue to see their unemployment rates contract. I would note that the Fort Collins and Boulder MSA unemployment rates are now below 6%.

Cases of COVID-19 continue to rise, which is troubling, but rising rates have only slowed—not stopped—the economic recovery. Moreover, it has had no noticeable impact on the state’s housing market.

To receive a complimentary copy of the latest Gardner Report, simply reach out to me and I will send it to you right away.