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There are four key questions that our clients have right now:1. What will values do this year and is there any chance of a housing bubble?2. When will mortgage rates drop below 6%?3. Will inflation subside this year?4. Is now a good time to buy or sell? All of these questions will be answered by our Chief Economist Matthew Gardner on February 1st at our annual Market Forecast. Fun Fact, Windermere is the only real estate brokerage in the United States with a Chief Economist. You can RSVP for Matthew’s lively and informative presentation at ColoradoForecast.com.The Windermere Forecast is at 5:30pm on Wednesday, February 1st at the Fort Collins Marriott.
Fun Facts •
December 16, 2022
Incentivized
More than 75% of all new home builders are using interest rate buydowns as a way to attract buyers to their communities.This is according to new research by John Burns Real Estate Consulting.Builders are fronting several thousand dollars on behalf of their buyers so these buyers can have a lower rate for the first few years of the loan, or in some cases the whole life of the 30 year loan. New home builders with completed homes or ‘standing inventory’ are especially motivated as this type of inventory is costly for the builder to carry.This kind of product offers a terrific opportunity for buyers looking to move soon and who desire a lower interest rate.
Fun Facts •
December 9, 2022
Way Under
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.
Fun Facts •
December 2, 2022
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.
Fun Facts •
November 18, 2022
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.
Fun Facts •
November 11, 2022
Inflation and Housing
Yesterday’s Consumer Price Index report for October showed a lower-than-expected increase in inflation. Many believe, based on the numbers, that inflation rates may have peaked. Investors cheered and the stock market showed it’s biggest increase since bouncing back from the pandemic-caused bear market in 2020.So, what does yesterday’s news mean for housing in the short term?
- Higher real estate consumer confidence as fears of inflation will likely subside and people will feel wealthier as their investment accounts rebound
- Lower mortgage rates because they track the yield on the 10-year treasury which has fallen over 8% since Friday
Yesterday’s news certainly is a positive for Front Range real estate.
Fun Facts •
November 4, 2022
A Numbers Game
Here’s a fun fact. Generally speaking, a Seller should expect to have between 8 and 13 showings before receiving an offer.
The exact number of course depends on price point and location.
So, how quickly a property sells depends upon how quickly those showings are generated.
The old adage of ‘it’s just a numbers game’ is true.
A certain number of people need to look at a home before someone makes an offer.
If a home isn’t generating showings, it is usually because the property is priced too aggressively, isn’t being marketed professionally, or both.
For a Seller to have a property sell along the Front Range, their simple mission can be to generate 8 to 13 showings.
Fun Facts •
October 28, 2022
Luxury is Stronger
The market above $1,000,000 is stronger than the market overall.This is true in both Northern Colorado and Metro Denver.The luxury market is not slowing to the same degree as the overall market.In Northern Colorado:
- 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
In Metro Denver:
- 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
This is likely because higher-end buyers are not as sensitive to higher interest rates and there tend to be more cash transactions in the luxury market.
Fun Facts •
October 21, 2022
Big Jump
We are seeing a big jump in properties for sale as measured by months of inventory.
As a reminder, a market is considered balanced when there is between 4 and 6 months of inventory on the market. Meaning, at the current pace of sales, it would take 4 to 6 months to sell all of the properties currently for sale.
Inventory one year ago at this time was:
- 1 month in Northern Colorado
- 0.7 months in Metro Denver (3 weeks)
Today the inventory is:
- 2.3 months in Northern Colorado
- 2.3 months in Metro Denver
This represents a:
- 164% increase in Northern Colorado
- 245% increase in Metro Denver
Blog • Fun Facts • Market News •
October 14, 2022
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.
