Colorado Real Estate Market Update

The following analysis of the Metro Denver & Northern Colorado real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact me.

 

A MESSAGE FROM MATTHEW GARDNER

Needless to say, any discussion about the U.S. economy, state economy, or housing markets in the first quarter of this year is almost meaningless given events surrounding the COVID-19 virus.

Although you will see below data regarding housing activity in the region, many markets came close to halting transactions in March and many remain in some level of paralysis. As such, drawing conclusions from the data is almost a futile effort. I would say, though, it is my belief that the national and state housing markets were in good shape before the virus hit and will be in good shape again, once we come out on the other side. In a similar fashion, I anticipate the national and regional economies will start to thaw, and that many of the jobs lost will return with relative speed. Of course, all of these statements are wholly dependent on the country seeing a peak in new infections in the relatively near future. I stand by my contention that the housing market will survive the current economic crisis and it is likely we will resume a more normalized pattern of home sales in the second half of the year.

 

HOME SALES

  • In the first quarter of 2020, 9,189 homes sold. This is an increase of 9.5% compared to the first quarter of 2019. ​
  • Ten counties contained in this report saw sales grow, one remained static, and one saw fewer transactions. Sales rose most in the small Park County area. There was a small drop in sales in El Paso County.
  • The average number of homes for sale in the quarter was down 12.9% from the same period in 2019.
  • Inventory levels have not improved and, given the fallout from COVID-19, it is hard to put a date on when we will see a resumption of normal activity in the housing market. Though sales are sure to return, we may well see a gradual increase in listings rather than a surge.

 

 

HOME PRICES

  • Home prices continue to trend higher, with the average home price in the region rising 6.7% year-over-year to $477,495.
  • Interest rates remain at very competitive levels and are certain to remain well below 4% for the balance of the year. This can allow prices to continue to rise but much will be dependent on the fallout of COVID-19.
  • Appreciation was again strongest in Clear Creek County, where prices rose a remarkable 27.1%. This market is small though and subject to wild swings, so this jump is not surprising. We also saw strong growth in Park County, which rose 21.8%. Home prices rose by double digits in an additional three counties.
  • Affordability remains an issue in many Colorado markets, which could act as a modest headwind to ongoing price growth.

 

 

 

 

 

 

 

DAYS ON MARKET

  • The average number of days it took to sell a home in the markets contained in this report rose by only one day compared to the first quarter of 2019.
  • It took an average of 46 days to sell a home in the region.
  • The amount of time it took to sell a home dropped in six counties and rose in six counties compared to the first quarter of 2019.
  • The Colorado housing market was performing well before the onset of the pandemic and is likely to resume reasonable performance once we resume normal operations. That said, it will be interesting to see if home sellers or buyers are the first to reengage.

 

CONCLUSIONS

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

Given the current economic environment, I have decided to freeze the needle in place until we see
a restart in the economy. Once we have resumed “normal” economic activity, there will be a period of adjustment with regard to housing. Therefore, it is appropriate to wait until later in the year to offer my opinions about any quantitative impact the pandemic will have on the housing market.

 

 

 

 

ABOUT MATTHEW GARDNER

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

Posted on April 24, 2020 at 6:11 pm
Windermere Colorado | Category: Colorado Real Estate, Colorado Real Estate Market Update | Tagged , , , ,

Colorado Real Estate Market Update

 

The following analysis of the Metro Denver & Northern Colorado real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact me.

 

ECONOMIC OVERVIEW

Colorado’s economy added 57,100 new non-agricultural jobs over the past 12 months, a growth rate of 2.1%. The pace of job growth has been moderating and I anticipate this trend will continue as we move through 2020. My current forecast is for Colorado to add around 57,000 new jobs in 2020, a growth rate of 2.1%.

In November, the state unemployment rate was 2.6%, down a full percentage point from the same month in 2018. Unemployment rates in all the counties contained in this report were lower than a year ago and it is fair to state that all markets are now at full employment.

 

HOME SALES

  • In the final quarter of 2019, 14,279 homes sold, representing an impressive increase of 9.2% compared to the final quarter of 2018. However, sales were 18.7% lower than the third quarter, which I attribute to seasonality. Pending sales — a sign of future closings — dropped 26.7% compared to the third quarter, suggesting that closings in the first quarter of 2019 are likely to come in below current levels.
  • It is notable that all counties contained in this report saw sales growth compared to the same period a year ago.
  • Listing activity in the quarter essentially matched the same period in 2018 but the number of homes for sale was 26% lower than in the third quarter of the year. Again, this is a function of seasonality.
  • Inventory levels are holding steady, and demand for housing continues to be strong. I would certainly like to see inventory levels rise and I remain modestly hopeful that this will be the case, but likely not until the second half of 2020.

 

 

HOME PRICES

  • Home prices continue to trend higher, with the average home price in the region rising 4.3% year-over-year to $473,264.
  • Interest rates remain at very competitive levels and are likely to stay below 4% through 2020. This will allow prices to continue to rise, though I expect more modest price growth if there is an increase in the number of homes for sale.
  • Appreciation was strongest in Boulder County, where prices rose 7.4%. Home prices dropped in Clear Creek, Park, and Gilpin counties, but these are small markets so I don’t believe it’s indicative of an ongoing trend.
  • Affordability remains an issue in many Colorado markets and this will act as a modest headwind to ongoing price growth.

 

 

 

DAYS ON MARKET

  • The average number of days it took to sell a home in the markets contained in this report rose three days compared to the final quarter of 2018.
  • The amount of time it took to sell a home rose in all counties other than Clear Creek when compared to the fourth quarter of 2018.
  • It took an average of 41 days to sell a home in the region, an increase of 11 days compared to the third quarter of this year.
  • The Colorado housing market is still performing well and the modest increase in the length of time it took to sell a home is not a concern at the present time.

 

 

CONCLUSIONS

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

For the fourth quarter of 2019, I am leaving the needle at the same level as in the third quarter. Listing activity has not grown, and this has led to higher prices in general. Although market time has risen, the market still favors home sellers.

 

 

ABOUT MATTHEW GARDNER

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

Posted on January 29, 2020 at 5:56 pm
Windermere Colorado | Category: Colorado Real Estate, Colorado Real Estate Market Update | Tagged , , , ,