Because mortgage rates have not decreased yet this year, many are wondering what that means for Northern Colorado home sales.
Transaction count is staying relatively steady compared to 2023.
Total sales year to date are down slightly (6%) versus last year.
At this point in 2023, there were a total of 1434 closings in Northern Colorado. This year there have been 1350 – 84 fewer.
Here’s a fun fact about the current inventory along the Front Range.
The number of properties for sale is five times as many versus the all-time low in 2022.
And, it is one-fifth as many compared to the all-time high in 2006.
Also, it is half of the long-term average.
So, selection is much higher than the frenzied 2021/2022 market.
However, inventory is still very low relatively speaking.
Shakespeare famously wrote, “beware the Ides of March” in reference to March 15th.
However, when it comes to luxury real estate, there doesn’t seem to be any bad news on the horizon.
Instead, properties priced over $1 million are certainly on the upswing.
So far this year, there have been 26% more sales of luxury properties in Larimer County compared to early 2023.
And in Weld County, luxury property sales are up 36%.
Strength in the luxury market is certainly an indicator of the overall confidence in Northern Colorado real estate.
As interest rates have gone up, buyers’ tolerance has gone down.
Generally speaking, the mindset of buyers now is dramatically different from two to three years ago.
Buyers used to be more open-minded and flexible and now that has changed.
Higher rates have caused them to be far less tolerant of:
Essentially, buyers are saying “If I am going to pay a higher interest rate, the property needs to be fairly priced and in very good condition.”
Sellers who are not aware of this dynamic, are the ones who have properties sitting on the market for excessive time.
The statistic that is leaping so far in 2024 is inventory.
Northern Colorado is seeing a big uptick in number of homes for sale.
However, it is not an alarming amount and is still a ‘Seller’s Market’ by definition.
Larimer County inventory is up 39% and Weld County is up 48%.
Months of inventory is up to 2.3 in Larimer County from 1.7 months a year ago.
Weld County is also at 2.3 months today and was only 1.2 months a year ago.
With higher inventory comes more selection for buyers and more importance for sellers to price right.
After three years of abnormally low Days on Market, properties today are settling into a more normal and more reasonable length of time on the market.
Days on Market today stands at:
53 Days in Larimer County
66 Days in Weld County
Back in 2021, for example, Days on Market was roughly half of today’s number.
Buyers today are discerning, and proper pricing is more important than ever in order to meet a Seller’s timing goals.
The most significant trend we notice 45 days into the new year is the jump in inventory.
There are many more properties for sale along the Front Range compared to one year ago.
This comes as welcome news for buyers as we near the Spring buying season.
A dynamic that gives us even more confidence about the housing market is the amount of equity that homeowners have in their property.
Equity is of course the difference between the value of the property and the amount that is owed against it.
In Larimer County, 53% of homeowners have at least 50% equity in their homes. In Weld County, the number is 38%.
It is interesting to note that Nationally, only 1.8% of homeowners are ‘underwater,’ meaning that the value is lower than what is owed against the property.
In 2009, 26% of homeowners were underwater.
Here are some of the big takeaways from our annual Market Forecast with Economist Matthew Gardner:
To receive a copy of the full slide deck from the Forecast, feel free to reach out to us!
The 10th Annual Windermere Real Estate Market Forecast is coming up next week. Go ahead and register now to save your seat.
Back by popular demand as our Keynote Speaker is Economist Matthew Gardner. He will answer the big questions on your mind about interest rates and price appreciation. He will also talk about the impacts of the upcoming election on real estate. The presentation is sure to be interesting and entertaining like it always is.
We will be live on Tuesday, January 30th at the Marriott in Fort Collins from 5:30 pm to 7:00 pm. Register at www.ColoradoForecast.com.
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