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Here is a quick snapshot of our markets two weeks into July versus the same time last year…
Larimer & Weld Counties:
- Inventory up 61%
- Transaction count down 44%
- Prices up 17%
Metro Denver:
- Inventory up 62%
- Transaction count down 31%
- Prices up 12%
Blog •
July 15, 2022
Two Week Snapshot
Top Three
Here are the top three reasons why prices are unlikely to crash even though the market has cooled off:
- Inventory – Ultimately, prices are driven by supply and demand. Although supply has increased, it still remains relatively low with less than two months’ supply in most areas.
- New Homes – New home construction still lags behind the demand stemming from population growth. New home starts today are roughly 2/3 of what they were in 2005.
- Credit – Home buyers today are highly qualified which protects the market from a glut of ‘distressed’ properties hitting the market in an economic downturn. The average credit score of buyers is now 776 which, by definition, is ‘excellent.’ Only 2% of loans today are given to buyers with scores under 640 whereas in 2001 25% of buyers had that low of a score.
Weeks to Months
For the first time in almost two years, there is more than a month’s worth of inventory on the market.
This means that at the current pace of sales, it would take more than a month to sell all of the homes currently for sale.
This is certainly welcome news for buyers who have been craving a less frenzied market.
Since the market took off in the summer of 2020, inventory levels have been measured in terms of weeks.
Two to three weeks of inventory was the typical measurement for the last two years.
Today, inventory levels look like this:
- Larimer County = 1.1 months
- Weld County = 1.2 months
- Metro Denver = 1.2 months
Still Behind
Single family new housing starts in 2022 will show an increase versus last year, will be the most since 2007, and will still be well behind the peak of 2006.
This year, experts predict that a total of 1.1 million single family homes will be started. In 2021 there were 970 thousand new home starts.
The peak occurred in 2006, when 1.65 new homes were started.
So, this year will finish 33% behind the peak.
When we are asked why today’s market is different from the ‘bubble years’ of 2004 to 2007, the difference in new home starts is one reason we cite.
Even though the market is cooling, we remain significantly undersupplied which insulates prices from any kind of dramatic downturn.
Blog •
June 17, 2022
What the Numbers Say
During a time of varying opinions and heavy speculation about the Front Range real estate market, let’s see what the actual numbers are telling us:
Inventory is up significantly year over year:
- Larimer County = +48%
- Weld County = +52%
- Metro Denver = +74%
However, supply is still low as measured by months of inventory:
- Larimer County = 1.1 Months
- Weld County = 1 Month
- Metro Denver = 1 Month
Transaction count is down as the pace of sales is slowing:
- Larimer County = -24%
- Weld County = -15%
- Metro Denver = -19%
Yet, average prices are still up versus last year:
- Larimer County = +18%
- Weld County = +10%
- Metro Denver = +14%
Blog •
June 13, 2022
The Best News
The best news in a long time has finally arrived for buyers.
Inventory is up, frenzy is down.
Buyers who were frustrated, confused and disappointed by the market a few months ago are now coming back to find a much more reasonable environment.
Demand is still high for sure. However, the intense, frenzied competition has subsided.
There is now room to breathe because there is more selection.
Here is how inventory has increased along the Front Range versus the same time a year ago:
Larimer County = 28%
Weld County = 19%
Metro Denver = 35%
These are significant increases and a trend we expect to continue.
What We Notice
Here is what we notice about the market right now:
- Listings are receiving fewer offers compared to 60 days ago – instead of 10 offers, a listing might have 2.
- There are now several instances of a listing only having one offer.
- Sellers who were overly-aggressive with their list price have to quickly reduce in order to generate activity.
- Inventory is up and in some areas significantly, giving buyers more options and flexibility.
- Home buyers who are under contract with a new home waiting for that new home to be built have been negatively impacted by rising rates.
- More buyers are considering 7 and 10-year mortgage products in order to have a lower interest rate.
- The pendulum is swinging away from the drastic seller’s market we have seen for the last 18 months.
Blog • For Buyers & Sellers • Fun Facts •
May 13, 2022
Inventory Bottom
In Front Range markets, the number of homes for sale has just hit bottom or is about to hit bottom.
This is terrific news for home buyers who have been waiting for more homes to choose from.
The market is shifting, there is no doubt about that.
Prices are still increasing and we expect them to increase, just not at the pace they have been.
The inventory of homes for sale, which has been significantly down for two years, is finally starting to show signs of change.
We have been accustomed to inventory levels being down 30% to 50% compared to the prior year.
That is not the case anymore.
Inventory in Larimer and Weld County is now only down roughly 5% year over year.
Inventory in Metro Denver is now up 13.5% compared to this time in 2021.
We believe this is a legitimate shift in the market, not just a short-term anomaly.
No need to worry about prices crashing or a housing bubble. There is still too little supply and too much demand for that to happen.
However, the pace of price of appreciation will certainly get back to more normal levels of 5% to 6% per year instead of 20% to 25% per year.
Bottom line, this market shift has been a long time coming and is very good news for buyers.
Blog •
April 22, 2022
Half A Month
There is half of a month of inventory on the market. In other words, at the current pace of sales, it would take just two weeks to sell all of the homes currently listed for sale along the Front Range.
By definition, a market is balanced when there is 4 to 6 months of inventory. Anything less than that is a seller’s market.
The current inventory levels give us confidence about the future of price growth along the Front Range.
While we expect the pace of price appreciation to slow, the low supply of properties insulates us against any sort of price decline.
Steady Stream
Despite the extraordinarily low amount of standing inventory, it is important to understand there is still a steady stream of new inventory hitting the market.
Inventory is low. That is a reality.
New inventory is coming on the market at essentially the same pace as compared to the last few years. That is also a reality.
Because demand is so high, the inventory doesn’t stay on the market very long. Residential listings go from ‘Active’ to ‘Pending’ very quickly (assuming they are priced correctly).
Over the course of 2021, there were 66,308 new residential listings that hit the market in Metro Denver. That is only 5% less than 2020.
Larimer County had 8,342 which is 7% less than 2020.
Weld County had 8,499 which is 5% less than 2020.
While standing inventory is near 50% lower than last year, the stream of new inventory is fairly consistent.
It is time to register for our annual Market Forecast with Chief Economist Matthew Gardner. This year the event will be hosted online on Thursday February 3rd from 11:00 to 12:00.
You can register at www.ColoradoForecast.com
