Typical fall slowdown or has Colorado housing market reached a plateau?
Answers may not be known until spring season
ENGLEWOOD, Colo. – Oct. 11, 2017 – While the first measurable snowfall of the season just hit Colorado’s front range, experts in Colorado’s real estate industry are already turning their attention to spring 2018 for potential answers to the growing list of questions surrounding the state’s residential real estate market.
Traditional fall slowdowns are in full effect with shrinking numbers for new listings, as well as sold and under contract properties while inventory supply remains well below what is considered a balanced market, according to the September 2017 statewide housing report from the Colorado Association of REALTORS® (CAR). And, based on the insights of REALTORS® working across the state, the next phase of Colorado’s housing market will likely not show itself until the spring of 2018.
Key findings from the September 2017 research report
- Median Sales Price of a single-family home in the Denver metro region dipped to $395,000 in September and is down 3.6 percent from the July high of $410,000.
- Median Sales Price of a single-family home in Colorado dipped in September to $355,000 from $359,000 in August however, it remained 6.6 percent higher than a year ago. Condo/townhouse median prices remained flat at $275,000 across the state – 10 percent higher than September 2016.
- New Listings were down 13 percent statewide from August to September while in the Denver metro area, New Listings were down 10 percent.
- In both the metro area and statewide, Sold Listings were down 10.6 percent.
- Inventory of Active Listings statewide dipped just 1.6 percent however, the 23,552 listings across the state are down nearly 21 percent from a year ago.
- Inventory of Active Listings rose nearly 2 percent in the Denver metro area to 10,246 listings but remain down 20 percent from September 2016.
- Days on the Market until sale increased over the past month in both the Denver metro region (27 vs. 23) and statewide (46 vs. 43).
- Inventory Supply for single-family homes throughout Colorado remained flat at 2.6 months while condo/townhome Inventory Supply stands at 1.9 months. Both remain well below the 4-7 month supply of a balanced market.
- What appears to be occurring is a leveling – a plateau in the Denver market, a growing city possibly reaching its peak after a 9-year recovery to what could have been its natural trajectory without the Great Recession.
- For the first time in four years, the average sales price for condos and townhomes in the city of Boulder decreased. However, the average sale price of a single-family Boulder home topped the $1 million mark for the first time.
INSIGHTS FROM LOCAL EXPERTS
Following are insights about local market conditions from several of the Colorado Association of REALTORS® research spokespersons practicing across the metro area and state:
“The markets in Boulder and Broomfield counties are experiencing what most would call a typical, seasonal slowdown. That being said, many wonder if we’re experiencing a longer-term market shift. Listings are up but sales prices have stalled, with only marginal improvements from this time last year. The markets are still strong with average days on the market still under 60 days, but the bidding wars and list price to sales price numbers have tapered. For the first time in four years, we actually saw the average sales price for condos and townhomes decrease in the city of Boulder. However, the average price of a single-family home in Boulder topped the $1 million mark for the first time. Time will tell if it stays there. Fall slowdown or an indication of a bigger change?” said Boulder-area REALTOR® Kelly Moye.
“We all know the Bavarian Yodeler Cliffhanger game from the old Price is Right show – where the little guy climbs higher and higher on the mountain as the anxious audience begins to gasp. Every notch up it seems like his demise over the cliff seems more and more certain. Very similarly, our Denver Market has gone higher and higher in price, lower and lower in inventory while one key aspect this month jumps out contradictory to those rises; the number of sold listings. The difference between our lederhosen-wearing friend and this Market is that although everyone is expecting the cliff at the end of his rise, what appears to be occurring is a leveling – a plateau. A growing city reaching its peak after a 9-year recovery to what could have been its natural trajectory without the Great Recession.
Between September 2016 and September 2017, we have seen 15.6 percent fewer single-family sales and 8.4 percent less for the condo sector according to data provided by the Colorado Association of REALTORS®. Despite the median prices having risen 7.3 and 12.4 percent respectively, the volume of movement has been decreasing for many months now – suggesting that we are reaching the top of that mountain – demand remaining, just…less. Last month’s data from August shows sales were down 17 and 12 percent for the two property types as well as 12 and 7 percent drops in July. The information suggests that although strong and steady, the Denver-area’s real estate market may have reached it’s summit and our little Bavarian could be setting up camp like so many of our other ‘new natives,’” said Denver-area REALTOR® Matthew Leprino.
“The seasonal pull back in the Vail Valley began in September. The upper end of the market has been driving the dollar volume throughout the year and, we broke the one billion dollar sale milestone with just a slight slowdown in the upper reaches of home pricing. We continue to have a sellers’ market in the opening price points and in down valley locations, a segment of the market which represents 87 percent of transactions and 52 percent of dollar volume. The upper end of the market, which represents only 13 percent of transactions, is 48 percent of dollar volume. It has been and continues to be a mild buyers’ market. Slippage of a handful of units in the upper end has significant impact on the overall market. Inventories are down in both segments along with days on market which is traditional as the summer season winds down and we wait for ski season to arrive,” said Vail Valley REALTOR® Mike Budd.
“The Jefferson county market has also slowed, partially because of the time of the year however, we will see in the spring if the market comes back as strong as it was this year. My guess is that we are coming into a more balanced market and it will not be the hot market that we have seen in the last several years. Buyers are definitely more selective and homes that are not in good shape, have not been updated recently, or have poor locations are staying on the market longer and sellers are having to lower their asking price.
For single-family homes, new listings and sold listings were down a bit in September from a year ago. The median sales price of $420,000 is still up from a year ago and the days on market are relatively unchanged. For condo/townhomes there was an increase in listings and price from a year ago with the median sales price at $267,000. The Golden market remains highly active with low inventory. Only the sufficiently overpriced homes are staying on the market for longer periods of time. Sellers are still under the impression they can get top dollar for their home but are realizing that is not always the case in this slowing market,” said Golden-area REALTOR® Barb Ecker.
“The Pueblo market is still strong with the median sales price up 19.2 percent from a year ago to $180,000 for single-family homes. Listings were down less than a half-of-a percent in September while pending sales were up 12.7 percent. The low inventory continues to hurt sales volume is still hurting sales. Multiple offers are a factor and buyers need to make the offer if they like a home as it may not be there tomorrow. Sold listings were up 14.3 percent in the past month while days on the market dipped to 84 days in Pueblo, 54 in Pueblo West. Appraisals are still coming in conservatively even though the market is moving up,” said Pueblo-West REALTOR® David Anderson.
Statewide – includes data for single family homes and condo/townhomes
Denver Metro – (includes – Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas and Jefferson counties)
Inventory of Active Listings — Statewide
Inventory of Active Listings – Metro Region
Median Sales Price Metro Region
Median Sales Price – Statewide
The Colorado Association of REALTORS® Monthly Market Statistical Reports are prepared by Showing Time, a leading showing software and market stats service provider to the residential real estate industry, and are based upon data provided by Multiple Listing Services (MLS) in Colorado. The September 2017 reports represent all MLS-listed residential real estate transactions in the state. The metrics do not include “For Sale by Owner” transactions or all new construction.
The complete reports cited in this press release, as well as county reports are available online at: http://www.coloradorealtors.com/market-trends/
CAR/SHOWING TIME RESEARCH METHODOLOGY
The Colorado Association of REALTORS® (CAR) Monthly Market Statistical Reports are prepared by Showing Time, a Minneapolis-based real estate technology company, and are based on data provided by Multiple Listing Services (MLS) in Colorado. These reports represent all MLS-listed residential real estate transactions in the state. The metrics do not include “For Sale by Owner” transactions or all new construction. Showing Time uses its extensive resources and experience to scrub and validate the data before producing these reports.
The benefits of using MLS data (rather than Assessor Data or other sources) are:
Accuracy and Timeliness – MLS data are managed and monitored carefully.
Richness – MLS data can be segmented
Comprehensiveness – No sampling is involved; all transactions are included.
Oversight and Governance – MLS providers are accountable for the integrity of their systems.
Trends and changes are reliable due to the large number of records used in each report.
Late entries and status changes are accounted for as the historic record is updated each quarter.
KEY METRICS GLOSSARY
New Listings –This is a measure of how much new supply is coming onto the market from sellers. For example, Q3 New Listings are those listings with a system list date from July 1 through September 30.
Pending/Under Contract – This is the most real-time measure possible for homebuyer activity, as it measures signed contracts on sales rather than the actual closed sale. As such, it is called a “leading indicator” of buyer demand.
Sold Listings – This measures how many home sales were actually closed to completion during the report period.
Median Sales Price – This is a basic measurement of home values in a market area and basically states that 50 percent of the homes sold were either higher or lower than the Median Sales Price.
Average Sales Price – This is another basic measurement of home values in a market.
Percent of List Price Received – The mathematical calculation of the percent difference from the list price and the sold price for those listings sold in the reported period.
Days on Market – A way to measure how long it is taking homes to sell.
Affordability – Uses median sales price, prevailing interest rates and average income to measure local housing affordability. A higher number is usually interpreted as greater housing affordability.
The Colorado Association of REALTORS® is the state’s largest real estate trade association representing more than 24,000 members statewide. The association supports private property rights, equal housing opportunities and is the “Voice of Real Estate” in Colorado. For more information, visit http://www.coloradorealtors.com.