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The Nation’s real estate market is significantly under-supplied.According to the most recent research from Freddie Mac, the United States has a housing supply deficit of 3.8 million units.The available inventory today is lower than it has ever been in the last 40 years and is 3.5x lower than the peak of 2008.The reason why available inventory is so low, is the low amount of new home starts that have occurred over the last 15 years.Builders have faced many obstacles trying to keep up with housing demand including supply chain issues, labor supply, land availability, water availability, and stricter approval processes.Fewer new homes were built in the decade ending 2018 than any other decade since the 1960’s.The reality is, the obstacles builders face are unlikely to change significantly in the foreseeable future.Low inventory is likely to persist.An under-supplied market is a key reason leading economists do not expect home prices to crash even while the market cools off.
Perfect Ranch Home in Hunter’s Crossing
964 Mouflan Drive is a perfect Ranch Home in Hunter’s Crossing. This 3 bedroom 2 bathroom home is only 2 years old and move in ready! Home boasts an open concept floor plan and vaulted ceilings in the main living area with a decorative wall as an added special touch. The back yard is fully fenced and landscaped with a wood deck from the house. The 2 car garage is finished with drywall and painted. Seller has installed a radon mitigation system, humidifier and air purifier. Metro District fee includes the non-potable water and trash. Wonderful community parks throughout the neighborhood. Come see this home!! Call (970) 401-0123 to schedule a private tour or click here for more information.
Mis-Led
The most misleading stat about the housing market is increase in inventory. The number of properties for sale is up significantly compared to last year. In most locations along the Front Range, inventory has doubled.This is obviously great news for buyers because they now have more choice.This is obviously meaningful for sellers because they now have more competition.But, it does not mean there is a glut of inventory. It does not mean that we are now, all of a sudden, over-supplied.Quite the contrary. The market is still undersupplied. There would need to be at least double the amount of homes for sale for Front Range real estate to begin to be balanced.The increase in inventory, being so large, gets a lot of attention in the media and can sometimes be taken the wrong way.Yes, inventory has doubled. But, it has doubled compared to all time lows.Freddie Mac reports that Nationally, the market is undersupplied by 3.8 million housing units.So, the increase in homes for sale is a good thing for the market and is nothing like a glut of inventory.
Bargaining Power
Buyers (finally) have more bargaining power. For many, many months sellers had the distinct upper-hand and commanded above-list price offers. Bidding wars were the norm. Buyers had virtually no negotiating power.The numbers show that the dynamic has absolutely changed.The ratio of the final sales price to the list price is now at 98.1%.From April 2020 to July 2022, the ratio was at or higher than 100%.The peak was in April 2022 at 104.3%.In the span of just a few months, sellers have gone from multiple, over-list price offers to expecting to come off their list price.
Open Floor Plan + Beautiful Garden Beds
Looking for a home in a great location with a little extra elbow room? This is it! 6739 Brittany Drive is a beautiful 3 bedroom 2 bathroom home located in Provincetown. Situated on a approximately 1/4 acre corner lot and mature landscaping, the back yard boasts built in garden beds with irrigation, a compost bin and storage shed perfect for the gardener in the home! The home has an open floor plan and LVP flooring on the main floor ideal for entertaining. The primary bedroom has a full bathroom and a walk in closet. The one car attached garage has a loft and work bench included for the owner that likes to tinker! Seller is offering a $5000 credit to help with rate buy down and a First American 1 year home warranty. Call (970) 401-0123 to schedule a private tour or click here for more information.
Luxury is Stronger
- Closed transactions are down 41% in the overall market and 26% in the luxury market over $1,000,000
- Pending transactions are down 44% overall and only 13% in the luxury market
- Closed transactions are down 40% overall and only 13% over $1,000,000
- Pending transactions are down 41% overall and only 17% in the luxury market
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.
Toward Balance
Our market is moving toward a balanced market, but it is still unbalanced.
By definition, a balanced market has between 4 and 6 months of inventory for sale.
Today there is essentially two months. One year ago, there was only 3 weeks of inventory.
It has actually been 16 years since the market has been in balance.
So, while we still have a ways to go before it is balanced, it is moving that way.
River Run Ranch Style Patio Home
8225 River Run Drive, a better than new Ranch Style Patio Home in River Run, awaits. The open floor plan welcomes you as soon as you enter. You will notice the enticing fireplace and kitchen perfect for entertaining! The main level and basement living area have been upgraded with LVP for a beautiful look and easy cleaning. The basement boasts extra room to spread out and entertain including, two additional bedrooms, a bathroom and a wetbar. The home backs to the Poudre Trail, giving the owner more privacy and elbow room. On sunny days, you can choose to relax on the front covered porch or the back covered deck. The two car garage is impeccable with built in shelving for extra storage. HOA takes care of the snow removal, lawn care and trash. This home has been exceptionally cared for inside and outside! Don’t pass this home up! Call (970) 401-0123 to schedule a private tour or click here for more information.
Most Multi
There are more multi-family residential properties under construction than at any time since 1974.
890,000 properties with 2+ units are currently being built across the United States. This includes both for-sale product, and for-rent product.
Additional supply is clearly beneficial for both buyers and renters and will hopefully relieve some of the housing affordability issues.
So, why are there so many multi-family units under construction? There seem to be three key reasons.
1. The rental market is especially undersupplied with product and developers see this opportunity.
2. With the increase in residential prices, multi-family becomes the only option for many first-time buyers.
3. Supply chain constraints are causing extended construction timelines.
