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Flipping Out
Here are some interesting facts from Attom Data’s report on House Flipping.
- Last year there were just under 309,000 flips of homes or condominiums which represents 8% of all transactions across the U.S.
- 37% of those were financed transactions and 63% were all cash
- The average gross profit for a house flip is $63,000
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.
No Omens
Shakespeare famously wrote, “beware the Ides of March” in reference to March 15th.
However, when it comes to luxury real estate, there doesn’t seem to be any bad news on the horizon.
Instead, properties priced over $1 million are certainly on the upswing.
So far this year, there have been 26% more sales of luxury properties in Larimer County compared to early 2023.
And in Weld County, luxury property sales are up 36%.
Strength in the luxury market is certainly an indicator of the overall confidence in Northern Colorado real estate.
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.
More Normal Range
The length of time that it takes for a property to sell is settling into a more normal range.
“Days on Market” is an insightful statistic that counts how long it takes for a property to go from live on the market to sold.
Today measurement stands at 72 days in Larimer County and 74 days in Weld County.
From January 2021 to November 2022, Days on Market never went above 60. This time period was defined by incredibly high demand and drastically low supply.
The time frame of January 2018 to December 2020, which was more ‘normal,’ had Days on Market between 60 and 90 days.
Out of the Gates
How is the year starting? All of us in the real estate industry are especially curious to see how 2024 is starting off after the first slow real estate year in a long time.
Rates have settled down and are trending down.
Prices have shown resilience and continue to go up.
But, how about transactions? Are they picking up after a year that saw an 18% decline in the number of closed residential properties?
It turns out the year is starting off strong but not unusually strong.
Pending transactions are up in Larimer County 7% year over year and up 3% in Weld County.
So, we are already seeing signs that 2024 will be a year of growth compared to last year.
Price Plummet
For anyone waiting for home prices to drop before making a buying decision, there is good news.
The recent plummet in mortgage rates means that home prices, effectively, just took a big dip.
Rates have gone down by 1% in the last 45 days which means that a prospective home buyer’s payment is 10% less today than what it would have been at the end of October.
For example, the Principal and Interest payment for a $500,000 loan is $341 less today than what it was 45 days ago.
So, from a buyer’s perspective, prices have gone down by 10% in a very short time.
Most Surprising News
The most surprising piece of news for our friends and clients is that prices are essentially flat compared to last year. People find that surprising given what interest rates have done over the last 18 months. They wonder, how could prices not fall significantly after interest rates jumped considerably?
The answer is the fundamental economic lesson of supply and demand.
There is enough demand in the market for the current supply to keep prices stable even in an environment of higher rates.
Now that rates are (finally) trending down, it gives us even more confidence about the continued growth of real estate prices along the Front Range.
Here is a look at how home prices compare to one year ago:
Larimer County = Down 0.8%
Weld County = Up 3.4%
Metro Denver = Up 0.8%
Highly Active
In addition to tracking the average price for sold properties, it is also interesting to track the average price for active properties.
Asking prices are up across all markets when compared to the same time last year.
Here are the average list prices for residential properties along the Front Range:
- Larimer County = $893,000 (8% higher than last year)
- Weld County = $702,000 (6% higher than last year)
- Metro Denver = $847,000 (5% higher than last year)
These asking prices are higher than average sales prices by approximately 30%. This is because there are many high-end properties on the market which take longer to sell and which pull up the average.
