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Tracking Change
The market is changing. The change is slight, not drastic.
Both potential sellers and potential buyers need to know that the pace of the market has slowed since the Spring.
Here is one way we track this change…
A review of the August numbers shows the pace of sales in each of our Front Range markets:
- Larimer County = 18 closings per day
- Weld County = 16 closings per day
- Metro Denver = 165 closings per day
Based on the pace of sales, we can determine the inventory of current homes for sale measured in days:
- Larimer County = 24 days of inventory
- Weld County = 23 days of inventory
- Metro Denver = 18 days of inventory
Then we can measure the increase in days of inventory versus April of this year:
- Larimer County = 26% increase
- Weld County = 15% increase
- Metro Denver = 20% increase
Population Math
The brand new Census data has just been released and it is fascinating!
Colorado’s population now sits just below 6 million people at 5.773 million. Just 20 years ago it was 4.301 million.
Northern Colorado is booming and now has 688,047 in Larimer and Weld Counties. It grew by 135,592 people in just ten years. If Northern Colorado grows at just 2% per year, it will have 838,725 people by 2030 and 1,022,402 by 2040.
For several years we have been predicting that Northern Colorado would exceed by 1 million people by 2040 and it looks like that will come true.
Metro Denver is also booming. For reference, we define ‘Metro Denver’ as Adams, Arapahoe, Denver, Douglas, and Jefferson Counties.
Population in Metro Denver is now 2.831 million and was 2.109 million in the year 2000. It has grown by 722,000 people in 20 years.
If Metro Denver grows at 2% per year, it will hit 3.451 million in 10 years and 4.206 million in 20 years.
100 / 90 / 60
As you’ve probably heard, prices have gone up quite a bit along the Front Range.
Low interest rates, strong demand, lower supply, and a healthy local economy are all contributing to increased prices.
It may interest you to see exactly how much prices have increased since one year ago in the markets where we have the most activity.
Over the last year, Weld County has increased roughly $100,000, Metro Denver $90,000 and Larimer County $60,000.
Specifically, here are the average prices one year ago vs. today:
- Weld County = $426,000 vs. $523,000
- Metro Denver = $523,000 vs. $612,000
- Larimer County = $532,000 vs. $592,000
Listing Averages
While a lot of attention has been paid to increasing sales prices along the Front Range, it is also interesting to look at the average price of properties currently listed for sale.
Did you know, for instance, that the average list price of all the properties currently for sale in Metro Denver is $887,000. Meanwhile, the average closed sales price is $613,000.
In Larimer County it is $793,000 versus an average closed sales price of $601,000.
In Weld County it is $669,000 versus $488,000.
What is causing this? The high number of high-end properties currently for sale pulling up the average.
You might be surprised to hear the number of $1,000,000-plus listings active listings in our market looks like this:
- Metro Denver = 527
- Larimer County = 75
- Weld County = 44
2 to 3
Along the Front Range we have gone from two weeks of inventory to three weeks.
For much of the Spring, there was only two weeks of inventory on the market in most areas. Meaning, it would only take 14 days to sell all of the homes currently for sale.
Now, because the pace of sales has slightly slowed down and there is a bit more inventory, there is roughly three weeks.
We can actually measure inventory in number of days based on the pace of sales in July so far:
- Metro Denver = 23 Days
- Larimer County = 22 Days
- Weld County = 22 Days
This is obviously good news for buyers as they have better selection and slightly less competition.
Inventory Uptick
We are noticing a trend that is very good news for buyers.
Inventory has been increasing over the last month which means that buyers now have more properties to consider.
Just in the last week, the number of homes for sale has increased:
13% in Larimer County
12% in Weld County
11% in Metro Denver
If you are a buyer who has been waiting for home properties to look at, now is the time!
Local Nuances
“All markets are local” is a commonly used phrase in real estate.
This adage is proving to be true as we notice slight changes recently in the market.
Bottom line, the market, in some locations, is not behaving exactly like it did even 30 days ago. Properties that perhaps would have received 10 or more offers last month, are now receiving only one.
It is as important as ever to examine not only the general market area, but also hyper-local markets in order to understand the nuances that exist in specific locations.
A common activity we perform with our clients is to research the months of supply in their own neighborhood. We will frequently find that this stat varies considerably from the market as a whole.
To illustrate how ‘all markets are local,’ take a look at the days of inventory statistic for the following markets:
Larimer County = 18 days
Fort Collins = 15 days
80521 Zip Code = 24 days
80525 Zip Code = 9 days
While data on the overall market clarifies overall trends, it is the hyper-local research that is incredibly valuable when pricing property.
High Average
If you watch the weekly statistics that we produce and post on social media, a number that might be jumping off the screen at you is the average price.
Specifically, it is the percentage increase in average price versus last year that is striking.
We are commonly asked ‘how could average prices increase 20% to 30% in one year?’
It is important to note prices haven’t appreciated up to 30%, it’s only the average price that has increased by that amount.
A key reason why average prices have increased by such a significant amount is that there are many more luxury properties selling this year versus last year.
Sales of properties priced over $1,000,000 have seen a substantial increase compared to 2020.
Look at these numbers which show the year over year increase in closed transactions for real estate priced over $1 million:
- Larimer County = 159%
- Weld County = 247%
- Metro Denver = 137%
So, transactions of luxury properties have much more than doubled compared to 2020 which is pulling up the average sales price in a significant way.
A Little Perspective
Here’s a little perspective on the inventory of homes for sale in today’s market…
First we’ll look at Metro Denver:
- The average number of residential listings for sale at this time of year is 15,577
- The highest-ever for this time of year is 29,722 which occurred in 2006
- The number of listings right now is 4,821
- So, inventory in Metro Denver is roughly one-third of the average and 25,000 fewer than the highest-ever.
- DMAR is the source of the stats listed above
Now, Northern Colorado:
- Larimer County has 802 active listings today
- Based on 10 years of data, this is the lowest it has ever been
- The high in Larimer County occurred in 2010 with 2608 listings so today’s inventory is one-third of what it was 10 years ago.
- Inventory today in Weld County is 727 which isn’t the lowest-ever.
- The lowest during the last 10 years was 2017.
The highest was 2010 with 1791 properties so today there are roughly 1,000 fewer properties to choose from.
Pendings are Popping
Temperatures may be cooling off but the Front Range real estate market is not.
Typically the market starts to slow down a bit in the Fall after a hot Spring and Summer.
Not this year.
The indicator we use to measure future closed sales is current pending sales.
Simply, we look at the number of properties under contract and scheduled to close versus the same time last year.
Current pending sales are way up along the Front Range when measured against 2019:
Metro Denver up 34.1%
Larimer County up 48.6%
Weld County up 50.2%
Based on these numbers, closed sales numbers over the next 60 days will be very strong.
