New Listings Drop 30 Percent Statewide; Low Inventory and Affordability Dominate Colorado’s 2019 Housing Market Story
Contact: Marty Schechter for CAR
303-882-4585 cell
marty@schechterpr.com
ENGLEWOOD, CO. – Dec. 11, 2019 – With a 30 percent dip in new listings statewide between October and November, the low inventory story continues to drive nearly every market across the state, according to the latest monthly market data from the Colorado Association of REALTORS® (CAR). The months’ supply of inventory for both single-family homes and townhome/condos has diminished to 12-month lows at 2.1 months and 2.2 months, respectively. Total inventory of active listings statewide sits at just 20,116 properties in November, down more than 20 percent from a year ago.
“Despite all the challenges that low housing inventory has created across Colorado, the conditions continue to support strong median pricing figures for both single-family and townhome/condos,” said Colorado Association of REALTORS® spokesperson Karen Levine.
The statewide median price of a single-family home dipped less than half-a-percent in November to $398,875 but remains up nearly 6 percent over this time last year. Looking at the townhome/condo market, median pricing rose just a fraction (0.2 percent) to $315,000 and is up 5.4 percent from last November. Low inventory and monthly appreciation continue to be the new normal statewide as activity remains robust. “With just a hint of some tightening statewide, sellers must be highly aware of their pricing strategy and not get overconfident. Overpriced properties typically result in a lower net sales price in the end,” added Levine.
The CAR Housing Affordability Index – a measure of how affordable a region’s housing is to its consumers based on interest rates, median sales price, and median income by county – remains approximately10 percent better than where we stood a year ago.
Taking a look at some of the state’s local market conditions, Colorado Association of REALTORS® market trends spokespersons provided the following assessments:
AURORA
“Just as the rest of the year has gone, low Inventory means increasing prices. Aurora and Centennial are ending the year with available active listings down 30-40 percent compared to 2018. Zip code after zip code shows active listings for both homes and condos much lower than we have seen. Of course, it stands to reason that with a shortage of homes comes an increase in median price. Aurora’s median price will end the year near $360,000, and the median price in Centennial at $480,000. Both areas reflecting a 5-7 percent median price increase over 2018.
“Looking at little closer at zip codes, we see 80013 with a 10 percent increase over 2018, and 80015 with a 2.8 percent price increase. Affordability in 80010 and 80011 is about the best in the metro area as they have enjoyed close to a 7.5 percent increase in pricing from last year.
“The suburbs are booming, and affordability is a big issue. Clearly, homes are appreciating while rents are increasing,” said Aurora-area REALTOR® Sunny Banka.
BOULDER/BROOMFIELD
“Boulder County’s homes prices are stuck in
the snow and the wheels are spinning. With literally no appreciation
year-to-date, the challenge for sellers is accurate pricing if they hope
to sell in the typical two-month window. Listings have been hitting the market
at a nice, steady pace and buyers are picking them up under 47 days on market
on average, yet prices have remained stagnant. With only two months of active
listing supply on the market, the inventory is still competitive, but with
winter and economic concerns around the corner, the prices remain at 2018
levels.
“Contrastingly, Boulder’s neighbor, Broomfield, seems to think it’s still spring. With 11 percent more listings than we had on the market in January and 18 percent more sales, the real estate market is moving right along in Broomfield County. We enjoyed a healthy 5.2 percent price appreciation since the beginning of the year and with average days on the market hovering around 30, you’d think the 4th of July was right around the corner. The affordability and active employment opportunities in Broomfield are likely to take the credit for the continued strength in this market,” said Boulder-area REALTOR® Kelly Moye.
COLORADO SPRINGS/PIKES PEAK AREA
“The Pikes Peak region woke up in November to some cold days and a hot real estate market. The winning streak continues for sellers as the market remains tight. And although we ended up with an increase in days on market, we continue to push values up as well. There appears to be no cooling off this winter in our area. Though many agents are starting to say that they are seeing slowing on showings and multiple offers, we are still in a great real estate market, even though buyers are really having problems with affordability.
“Things to look out for as we move forward will be the increasing debt levels that Americans are carrying. Student loan debt hit 10.9 percent delinquency on almost $1.4 trillion. China and the U.S. continue to make no headway on any trade deals. And the FED continues to leave future interest rate drops on the table. One should ponder that if the economy is good, why is the FED looking at future interest rate drops? Overall GDP appears to be stagnant or even pulling back in the fourth quarter which would make one pause as well.
“I believe it is best to deal with the now. So, for now, if you are trying to sell a home in our region you are going to see a slight uptick in days on market and yet still have offers coming in to review. Buyers will have low inventory to choose from but will be able to take advantage of low interest rates. If some of the rumors are true, and Denver along with surrounding areas are starting to see a slowdown, we will likely feel that in the next 6 months. For now, we are still moving homes at a great pace,” said Colorado Springs-area REALTOR® Patrick Muldoon.
“Strong and steady remains the Colorado Springs-area housing market for single-family homes. In November 2019, we recorded the highest level of monthly and year-to-date sales volumes, as well as average and median sales prices compared to any month of November on record.The year-over-year single-family home sales activity saw a more than 8 percent increase in monthly sales, a 15 percent increase in the months’ sales volume, a 8 percent increase in the year-to-date sales volume, a 7 percent increase in the average sale price, ascending to $365,218, and a 7 percent increase in the median sale price rising to $325,000, with an unfortunate 23 percent decline in the active listings.
“The single-family home sales data shows that during the past 5-years, from November 2014 to November 2019, the monthly sales increased by 52 percent, year-to-date sales by 44 percent, monthly sales volume by 126 percent, year-to-date sales volume by 110 percent, average sales price by 49 percent, and median sales price by 50 percent. All of this while, shockingly, active listings declined by 47 percent.
“Last month, 86.3 percent of the single-family homes sold were priced under $500,000, while 11.4 percent were between $500,000 and $800,000, and 2.3 percent were priced over $800,000. Year-over-year, there was a 20 percent drop in the sale of single-family homes priced under $300,000, primarily due to the inventory shortage, while we had a 49 percent increase in homes priced between $300,000 and $400,000, an 18 percent increase in homes priced between $400,000 and $500,000, a 19 percent increase in homes priced between $500,000 and $600,000, a 17 percent increase in homes priced between $600,000 and $1 million, and a 125 percent increase in homes priced over $1 million.
“Buyers generally purchase properties offering competitive values, even in a strong real estate market. Unsurprisingly, 25 percent of the El Paso County, and 26 percent of the Teller county active listings in the Pikes Peak MLS had price reductions. Unequivocally, pathetically low inventory and affordability challenges due to ever-soaring prices continue to be the most problematic aspect of the Colorado Springs area housing market,” said Colorado Springs-area REALTOR® Jay Gupta.
DENVER
“Denver continues to show it’s finished with the latest trends and is starting down a new path. With only 1.3 months’ supply of inventory, the number of new listings coming to the market in November was the lowest of the last 4 years. Continuing the saga of low inventory, what is different this year is that despite the low number of listings, days on market, on average, have continued up – the highest in four years.
“Typically, these numbers do not coincide which points to a lowering demand overall – most likely the product of buyer fatigue. However, the good news is that despite what appears to be unsettling news, the buyer’s-market is just around the corner. From 2016 to 2017, median prices increased by 10 percent for single-family homes, followed by only 6 percent the following year and this year to-date; we have seen only a 5.24 percent median increase. What results is that despite the trend continuing up as far as price is concerned, the rate at which it is going up has nearly been cut in half in only 3, red-hot years.
“The pricing plateau is here; we have reached the summit and are cooling our shoes. Now, the $10 million question, where will it go from here?” said Denver-area REALTOR® Matthew Leprino.
DURANGO
“Mother Nature played a significant role in Durango’s 2019 housing market. The exceptionally long, hard winter delayed seasonal listings as well as sales. One positive result of the long winter and above average snowpack was a large increase in tourist activity that extended well into late fall. Durango experienced above normal sales activity in September and October bringing the year-to- date dollar volume almost exactly even with last year’s numbers. Transactions were stable, down roughly 6 percent compared to Year to date 2018.
“La Plata County and Durango are historically part resort community and urban center, with a strong diverse year-round economy, airport and university, still partially reliant on tourism. Cash makes up 34 percent of home purchases and the single-family median home price is $504,250 in Durango city limits; this speaks to the affluence of some purchasers and residents, whereas lack of affordable housing and few housing starts have crippled the bottom segments of the market. Many first-time purchasers and working class are pushed from Durango into Bayfield, CO and even Aztec, NM. A clear example of this redistribution is Bayfield’s 150 percent one-year rise in home sales. Local purchasers make up 75 percent of our purchases. La Plata County has a quasi-governmental organization called HomesFund that is helping bridge the gap for residents. This organization has given more than $1 million in assistance already in 2019, acting as silent-second mortgages. Second home buyers pull from Texas then New Mexico and Arizona, with 4 percent from the Front Range (all locations within a day’s drive).
“Critical to us are conversations about smart growth and affordable housing. We struggle with the high price of development but need less expensive housing stock. Our tourist industry is also critical to us also as each industry adapts to a climate of uncertainty in weather and with it, the tourist numbers we draw. This year delivered large tourist numbers with above average snowpack, while 2018 was a polar opposite with drought, no snowpack, and a nationally-known fire. Locally, the Durango-Silverton train and Purgatory Resort have each spent millions of dollars adapting to what is likely a new normal of feast and famine in this regards,” said Durango-area REALTOR® Jarrod Nixon.
ESTES PARK
“Estes Park is showing a seasonal slowdown in single-family homes with new listings trailing behind 15.2 percent year-to-date. Closed sales are also down 9 percent and the average number of days on market has lengthened from 84 to 103. Our median sales price dropped 1.8 percent to $540,000.
“Townhouse and condos are dominating the market with notable growth in many categories. New listings are up 9.3 percent. Sales are closing 11.8 percent more than this time last year. Median sales price is climbing 17.1 percent. Average sales price is sitting at 358,125 a 15.3 percent increase year to date. Percent of list price received shows strong demand for this style of home fetching 97.9 percent an increase of 1.6 percent. Days on the market is hardly affected by the chilly season with an increase of 6 days,” said Estes Park-area REALTOR® Abbey Pontius.
FORT COLLINS
“The November housing numbers for Fort Collins appear to be following seasonal trends and, like our average temperatures this time of year, cooling seems a consistent pattern. Monthly median prices year-over-year have improved by barely 2 percent to $412,850. Total homes sold year-to-date are off by 10 percent compared to 2018. Yet, housing inventory, measured in terms of the months’ supply of homes available, remains at a seller-favorable 1.7 months.
“Notably, monthly sales volume is off for the region by 4.3 percent compared to 2018 which seems to say this ‘cooling’ may be more than simply seasonal slowing. Interest rates appear to be hovering around 3.7 percent and many homeowners have opted to refinance rather than sell. According to a recent poll of home buyers and sellers from a 2019 National Association of REALTORS® survey, homeowners are staying in their homes longer; 10 years is a record high. Historically, homeowners sell about every 6 or 7 years. This longevity is one of the contributing factors to our chronically low inventory situation.
“With the advancing holiday season, sales are likely to remain on the lean side and with the New Year, we may see an uptick in homes for sale as sellers look to cash in on earned equity over the last several years to buy something new or different. However, the expectations for ‘cashing in’ must be tempered with the reality of the market. Buyers have become a bit more particular and housing prices in some segments have flattened as homes need to be in tip-top shape to command the best prices,” said Fort Collins-area REALTOR® Chris Hardy.
FREMONT/CUSTER COUNTIES
“Fremont County residential home sales over the past year have remained relatively stable showing only slight increases in numbers and prices. The number of new listings showed an increase of 2.3 percent and the number of sold units was up 1.75 percent showing that the market is absorbing nearly everything that comes into it. We’re not seeing a tremendous amount of appreciation in the average sale price of a home, up just under 3 percent over the past year. There are very few condo/townhome units available in the area.
“The area’s main employer is Colorado Department of Corrections as we have the majority of those facilities located in the area. This steady employment source does provide for a fairly stable economy, although salaries in this industry are below average.
“The area also has a wide variety of recreational and tourist activities available with our many hiking and biking trails, Royal Gorge Bridge and Railroad, and world renowned rafting and fly fishing on the Arkansas River. We are, however, only a pass through as we do not have a resort area that would lend to travelers staying in the area for a few days and participating in all of the activities available,” said Fremont and Custer County-area REALTOR® David Madone.
GOLDEN/ARVADA – JEFFERSON COUNTY
“The Jefferson County housing market has been strong all year. It is still a seller’s market however, moving towards a balanced one with homes sitting on the market longer. Buyers are seeing more inventory hit the market in the last few months and sales prices decreasing. The medium sales price for single-family homes is $475,000. Some homes priced under $400,000 are still experiencing multiple offers. Homes priced over $500,000 need to have a great location and many upgrades to sell quickly. The selling season in Jefferson County now begins earlier in February and does not slow down until October,” said Golden/Arvada-area REALTOR® Barb Ecker.
GLENWOOD SPRINGS
“In the Roaring Fork and Colorado River Valleys, the single-family home inventory for October came in at an all-time low, down 36.5 percent from October of 2018. We have also experienced a 10.6 percent decrease in inventory year-to-date from 2018. Our pending sales are currently up 28 percent compared to October of last year. The lack of inventory in the single-family market seems to have had a positive effect on our townhome/condo market where inventory of new listings has increased 12 percent this year over 2018. It appears the home buyer is looking hard at the inventory in this category as the lack of listings and the increased prices in single family have made this market more appealing. The median sale price for the townhome/condo market has increased 30 percent from October 2018. Days on market has dropped dramatically from 74 to 39 indicating that buyers in this market are concerned about losing out with only 2.7 months of inventory available.
Just like every commodity, prices are controlled by supply and demand. The valleys in this area are in high demand and housing is scarce. We are in need of new construction but the lack of land as you move up the roaring fork river, compounded with the high cost of building, holds the housing market captive. The low inventory and high demand have kept the cost to purchase a home unobtainable for many of our day-to-day workers who mostly commute from the lower Colorado River valley communities of Silt, Rifle and Parachute. In the past, these communities held the most affordable housing but the shrinking inventory and rising prices of their up-valley neighbors have recently affected their inventory and prices as well,” said Glenwood Springs-area REALTOR® Erin Bassett.
GRAND JUNCTION
“The Grand Junction market continues to slow as measured by inventory, under contracts and sold listings. Our median and average prices are up year-over-year, 9 percent and 8 percent, respectively. We have concerns locally with the loss of 600 jobs due to the Halliburton closing, and the last of those employees poised to be gone before year’s end. It remains to be seen if some of those employees will stay locally or have to leave the area to find employment. If the greatest number leaves, which is the current implication, the impact on inventory and even properties that become pre-foreclosures could be a negative, as many of those properties are not in the highest price demand areas. We hope not to see many more energy jobs leave. There is a little encouragement from the BLM, who have announced they are considering hiring about 27 people locally which would be beneficial to the community as they would be better paying positions.
The largest percentage of buyers continue to be focused on the under $300,000 range, and especially under $250,000. Inventory in those price categories is extremely difficult. Year-over-year sales are down 6 percent, inventory is down 2 percent compared to last year and dollar volume is up 2 percent. The employment picture will remain a focus and is going to be a major market factor in 2020,” said Grand Junction-area REALTOR® Ann Hayes.
PAGOSA SPRINGS
“Pagosa Springs is a basecamp for southwest mountain adventures and certainly one of Colorado’s last ground-floor pricing opportunities in mountain real estate. After years of staying on the sidelines, Pagosa continues to experience modest gains in 2019. No surprise the average sales price increased closer to $400,000, as inventory shortages below that number are prominent. Homes under $200,000 in 2019 are far less than the number of units sold in 2018 with near zero inventory. What use to be the popular pricing and comfort level for local and second home buyers have vanished. Its replacement of price points of $300,000 and higher is an unfortunate reality to buyers. This has resulted in buyers looking elsewhere in other neighboring states to achieve their home buying price comfort level. Local buyers are experiencing frustration with the competition of second home buyers spinning all in to multiple-offer scenarios and driving prices higher than list price.
Recognizing the massive housing shortage, Pagosa has at least a decade-long of homes underproduction and we’re in need of more construction. Most of the current new construction is from buyers who purchased land years ago and are now building retirement and second homes. This building scenario does not factor in the current shortage of home inventory. Condo inventory is slim, with little new construction in general and no construction in the average sales price scenario. Condo prices continue to gain due to demand, little inventory and the convenience of the out-of-state buyer, lock-and-leave home convenience.
Land sales are brisk. Speculation builders continue to gobble up the less expensive, desirable building lots. Buyers are forced to consider building as they are finding little inventory. Many buyers believe they can build for less and are finding a completely different realism. With labor shortages, high construction materials costs, highest ever building permitting fees, both builders and building buyers are struggling with authentic challenges,” said Pagosa Springs REALTOR® Wen Saunders.
PUEBLO
“The Pueblo housing market delivered more signs of the season with mostly negative numbers across the board. The low inventory market continues to be the issue and contributed to a 22 percent increase in the median sales price, now sitting at $220,000. New listings were down 8 percent from November 2018 but are down just a little more than 2 percent for the year. New home construction is pushing an average of 40 permits per month for the past year. Pending sales were up 23 percent from November 2018 and are up 1.2 percent for the year. November sold listings were down 4.1 percent from last year and are -3.6 percent year-to-date. Days on market is slowly rising and reached 76 days. Pueblo remains a seller’s market,” said Pueblo-area REALTOR® David Anderson.
TELLURIDE
“Compared to November 2018, the Telluride market was up 87 percent in dollar volume for the month of November. If that isn’t remarkable enough, it was up 103 percent over the 5-year November average sales volume. There were five home sales in the Mountain Village with the average sales price being $5.2 million. The largest sale in the county in November was a vacant 85-acre development parcel that sold for $6.625 million. The average sales price per square foot for a home in the town of Telluride is almost $1,200. With the properties currently under contract, the Telluride regional market is expected to exceed total dollar amount of sales for 2018. Generally, we have the lowest amount of inventory available for homes and condominiums that I ever seen in my 35 years of real estate practice in the overall marketplace,” said Telluride-area REALTOR® George Harvey.
VAIL
“The November Vail housing market maintained the trend that began a few months ago as we were up 40 percent in sales dollars versus November 2018 bringing our year-to-date dollars plus 3 percent compared to 2018. Unit sales were positive 3.5 percent compared to November 2018 and year-to-date were plus 2.3 percent versus 2018. Pending sales continue to be healthy with a 51.6 percent increase for the month and 6.5 up percent year to date. The increase in dollars was driven by a mix of product with the upper price niches showing double-digit growth comparisons.
“The troublesome scenarios are driven by inventory in key price niches with inventory down 22.6 percent for total market and significantly greater in the usual high-volume price points. Looking at inventory by product type we find single family/duplex down 21 percent and townhome/condo negative 22.5 percent for the month. Some of this is due to the strong November sales however, the trend has been consistent throughout the second half of the year. Currently, our months’ supply of single-family/duplex inventory is 6.7 months and for townhome/condos, we’re at 4.9 months,” said Vail-area REALTOR® Mike Budd.
New Listings – Denver Metro area (Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas and Jefferson counties)
New Listings – Statewide
Inventory of Active Listings – Denver Metro area (Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas and Jefferson counties)
Inventory of Active Listings – Statewide
Median Sales Price – Denver Metro area (Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas and Jefferson counties)
Median Sales Price – Statewide
Housing Affordability Index – Denver Metro area (Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas and Jefferson counties)
Housing Affordability Indix – 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 November 2019 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. CAR’s Housing Affordability Index, a measure of how affordable a region’s housing is to its consumers, is based on interest rates, median sales prices and median income by county.
The complete reports cited in this press release, as well as county reports are available online at: https://coloradorealtors.com/market-trends/
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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.
The Colorado Association of REALTORS® is the state’s largest real estate trade association representing more than 26,500 members statewide. The association supports private property rights, equal housing opportunities and is the “Voice of Real Estate” in Colorado. For more information, visit https://coloradorealtors.com.