Here is a peek at average residential prices along the Front Range through the first half of September and how they have changed versus one year ago:
U.S. News & World Report just released their ‘Best Places to Live’ rankings and two Colorado cities made the top five list.
They rank the 150 most populated metropolitan areas on criteria such as employment, quality of life, and strength of the housing market.
Here are the top 5:
1. Huntsville, AL
2. Colorado Springs, CO
3. Green Bay, WI
4. Boulder, CO
5. San Jose, CA
The latest Home Price Index report has just been released by the Federal Housing Finance Authority.
They track home price appreciation for the largest metropolitan areas in the U.S. plus state by state appreciation.
Here is the ranking of the top three states for price growth over the last twelve months:
1. Florida = 29%
2. Arizona = 26%
3. North Carolina = 25%
The bottom three states are:
50. North Dakota = 10%
49. Louisiana = 11%
48. Minnesota = 11%
Colorado came in at #19 with 18% price growth over the last 12 months.
Here’s a trivia question…
The number of new, single-family homes completed in 2022 will most closely resemble which prior year?
If you guessed 1993, you are correct.
Yes, the number of homes built and completed this year is no more than the number from 30 years ago.
In 2022, there will be just over 1 million single family homes constructed in the U.S. which is the same as 1993.
This is much more than the bottom of construction in 2011 which saw just under 500,000 new homes built.
But it is also much less than the top of 2006 which had almost 1.7 million.
Limited new home construction today is preventing anything close to a glut of inventory on the market which, in turn, insulates us from any sort of major price correction.
For the first time in a long time, the sale to list price ratio is below 100%.
This statistic measures the final sales price versus the listing price.
During the super-active market of the last 24 months, this number averaged over 100%.
This was a result of multiple offers and bidding wars which caused buyers to offer more than list price.
Now, the sale to list price ratio has dropped to below 100% as a result of a more balanced market.
These are the specific numbers in each of our markets:
Larimer County = 98%
Weld County = 99%
Metro Denver = 97%
“I thought the market was cooling off, so why are prices still going up?”
This is a frequent question we hear from our clients.
They are understandably confused by the fact that average prices have continued to rise at a rapid pace even though sales activity is slower than what it was 6 months ago.
Bottom line, they want to know why prices are up along the Front Range anywhere from 12% to 17% compared to last year.
Firstly, we don’t expect this pace of price appreciation to continue. What we foresee is price growth going back to the long term average of 5% to 6% per year.
The reason why we still see double-digit growth comes down to two words. Supply and Demand.
Supply, while higher than a year ago, is still relatively low.
Also, demand, while lower than a year ago, is still relatively high.
The market is still healthy, just not as frantic as it was.
Properties are still selling, but bidding wars and multiple offers have mostly gone away.
Sellers remain in a strong position, but they face more competition than before.
Data just released by Altos Research shows that 35% of all homes on the market have had to reduce their asking price.
This is the highest this number has been since December of 2019.
This is also an indicator of sellers adjusting to the reality of the new market where overly aggressive pricing is not effective.
Extensive research shows the importance of pricing a home correctly on the first day so that the home sells in an appropriate time frame.
A stat that we have expected to change is finally changing.
“Days on Market” measures how long it takes for new listings to sell.
Over the last two years this stat plummeted to levels we have never seen before.
In the height of the market frenzy a year ago, properties were taking 7 days or less to sell on average.
Now, with the market cooling, Days on Market is back into double-digits.
Northern Colorado is at 20 days, a 54% increase over last year.
Metro Denver is at 12 days which is a 50% increase.
Here is a quick snapshot of our markets two weeks into July versus the same time last year…
Larimer & Weld Counties:
Metro Denver:
Here are the top three reasons why prices are unlikely to crash even though the market has cooled off:
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