Colorado Market Insights

for the month of September 2017

View individual Market Insights for regional areas:

Adams County •  Aurora •  Boulder County •  Broomfield/Westminster •  Douglas County •  Jefferson County
Metro Denver •  Mountain Suburbs •  Northern CO •  South Denver

The musical score for our current real estate market might sound familiar, since we’ve been hearing the same tune for a while now. Affordability of a home purchase is high and inventory levels are low, low, low.

While no change is expected in the immediate future this isn’t a sad song of negativity.

Colorado has historically been a major destination of choice for those desiring what they perceive as a healthier lifestyle and the influx of new residents has only increased substantially in the last few years. Although our real estate market may be experiencing an imbalance right now between homes available to purchase and the demand for a home, trends indicate a restored balance may occur as early as 2019.

Taking a closer look at what makes a healthy housing market we see there are many facets. Whether we talk about home prices, mortgage rates, new home construction or any other sector of the housing metrics, all have an effect on buyers and sellers. It’s just that some of those effects are not as obvious as others.

For instance, if you aren’t seeking to purchase a new home, this segment of the market may not seem important to you. Yet, it actually is though, because the demand for new homes results in increased building. That activity boosts the inventory of homes available which in turn affects prices and has an indirect effect on every home buyer and seller.

Currently the most pressing challenge is too few homes for sale, however affordable those homes may be. This atmosphere is why we see fierce competition for the homes on the market, which in turn has pushed prices upwards.

The results can be seen when we look at the 8,394 homes that were actively for sale across the Colorado Front Range market this past month. The statistics for the month of August 2017 show 5,922 homes sold, a decrease from 6,045 in 2016, due to the lower inventory this time last year. The average sale price of $402,975 reflects these effects as well when compared to 2016 average sale price of $368,723. Continued strong buyer demand is evidenced by the low average days on market of 31.

The substantially wider pool of buyers is likely a big part of why most homeowners are experiencing equity growth, which has increased more than previously expected. Recent reports show more than 14 million properties across the country are equity rich, meaning their remaining mortgage amount was 50% or less than the estimated value of the house.

Though home buyers are ready to buy, home owners still appear reluctant to sell, culminating in too few homes available in the current market to accommodate the level of buyer interest. Because of this, home sales numbers may be reflecting an imbalance. For example, the National Association of REALTORS’ most recent Pending Home Sales Index shows the number of contracts to buy homes in recent months was down 0.8%, marking the third consecutive decline. Lawrence Yun, NAR’s chief economist, insists supply is the issue. “Buyer interest is solid, but there is just not enough supply to satisfy demand,” Yun said. “Prospective buyers are being sidelined by both limited choices and home prices that are climbing too fast.”

All that said, housing markets are making gains and Colorado is among the top markets in the country seeing the increasingly beneficial effects of a healthy housing recovery.

Area Active Units Units Sold Median Sales Price Average Days on Market
Adams County 2017 464 411 $307,000 15
2016 395 402 $314,500 18
Aurora 2017 797 782 $305,000 14
2016 927 829 $275,000 16
Boulder County 2017 925 447 $480,000 57
2016 821 464 $453,450 54
Broomfield/Westminster 2017 393 344 $375,250 22
2016 352 296 $328,000 15
Douglas County 2017 809 466 $430,500 26
2016 880 439 $425,000 30
Jefferson County 2017 794 602 $375,812 19
2016 856 671 $350,000 19
Metro Denver 2017 1,991 1,328 389,000 23
2016 2,185 1,371 $358,232 20
Mountain Suburbs 2017 244 84 $590,000 51
2016 268 103 $501,000 26
Northern CO 2017 1,099 709 $334,186 67
2016 1,049 709 $298,050 63
South Denver 2017 878 725 $420,000 20
2016 1,084 761 $384,000 20

Source: REColorado and IRES MLS. Information deemed reliable but not guaranteed.

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