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Colorado Market Insights
for the month of September 2016
This well-known Winston Churchill quote applies aptly to our current real estate marketplace.
Depending on the perspective from which you are viewing the market, you could find reason to be pessimistic. However, taken as a whole, the picture that’s been painted over the last 8 months is by and large a positive one.
Most of the activity we’ve seen in this almost three quarters of 2016 offers plenty of cause to view the market in an optimistic light. Nationwide, new home sales have risen almost 32% year-over-year and are at the highest peak they’ve seen in the last 9 years. Month-over-month sales are up more than 12% in most areas.
New home builders have responded to consumer demand by picking up the pace and, according to The National Association of Home Builders Chairman, Ed Brady “…conditions have been improving. As existing home inventory remains flat, we should see more consumers turning to new construction.”
While inventory levels aren’t quite where we’d like to see them, flat may be a slight exaggeration.
Most importantly, the biggest building surge we’re seeing has been in lower-end, affordable single family housing as opposed to high-end, condo or multi-family units. This is important to the market because right now, the greatest demand is for single family homes.
That’s great news for the many buyers in this marketplace that are feeling the squeeze of those anemic inventory levels.
While many of these buyers have been creatively resourceful about getting their desire for a home met, the surge in new home builds is a welcome boon to those most interested in move-in ready dwellings.
Speaking of move-in ready properties, resale numbers consisting of residential single family and condominiums surged somewhat in the August selling market.
And speaking of the August market, along Colorado’s Front Range, of the 7,924 active homes offered for sale, 5,770 experienced new ownership. Compared to August 2015 numbers of 8,641 active with 5,674 sales we easily hold onto that optimist outlook.
Happy sellers used the opportunity of a sharp increase in median sale price of $372,075 from August 2015 median of $328,809 to their advantage. Days on market average of 33 compared to last year at this time of 31 isn’t enough of a gap to be concerned over.
We continue to see increases overall in equity, increases in sale price and increases in sale numbers over last year’s figures. Those stable economic forecasts and continuing historic low interest rates positively impact perception of home ownership as an affordable alternative to paying ever increasing rental costs.