History repeating: Inventory down, prices up early in 2017

One month does not a pattern make. But if it’s one month that looks a lot like the previous 12? That’s an indication that this year’s housing market could be shaping up to look a lot like last year’s.

That’s what we can determine after the first month of housing sales in 2017. As throughout 2016, buyers in January continued to be squeezed by tight inventory across much of Northern Colorado, which fueled the continuing increase in home prices.

Adding up inventory for our six submarkets, housing supply for the month totaled 1,054 — down 17.9 percent from January 2016, and off by a whopping 28 percent from January 2015. And with homebuyer demand holding steady, average prices from January to January increased at double-digit rates — 12.1 percent — regionwide.

The most telling example can be found in the Greeley-Evans area, where supply plunged by 45 percent compared with the previous January — from 246 homes to 135. At the same time, average prices jumped 15.7 percent. The Fort Collins-Wellington-Timnath area reported a 12.5 percent increase in average prices in January, while supply dipped by 13 percent.

Here’s a look at some other notable developments from January:

• Even with inventory down in Northern Colorado, the number of homes sold picked up — reinforcing our earlier observation about demand remaining strong.  A total of 582 transactions in January reflected a 7.9 percent increase in homes sold over January 2016.

• A key factor driving the growth of home sales is the momentum that’s building in the Loveland-Berthoud area. While sales in the Fort Collins and Greeley submarkets were slightly down in January, Loveland-Berthoud was the only large submarket to experience an increase — up 16.2 percent. It’s important to note that unlike Fort Collins and Greeley, the Loveland-Berthoud market managed to maintain a similar level of housing inventory — down just 1.5 percent from last January.

• Growth in Berthoud has a lot to do with the relatively healthy supply in the Loveland-Berthoud submarket. Thanks in large part to new construction, Berthoud’s inventory totaled 73 in January, nearly doubling the 41 homes that were on the market there in January 2016.  And as we said in our annual Real Estate Forecast in January, keep an eye on Berthoud this year.  January sales were up 50 percent over last year, for starters. And with its increasing inventory and its geographic advantages — situated ideally for dual-income families that work in both Boulder and Larimer counties — Berthoud is poised to become the region’s next hot market.

• Taking a closer look at prices in January, the regional average was $344,524 in January, up from $307,347 last year. Estes Park reported the highest average price of $470,576, followed by Windsor-Severance, $402,000; Fort Collins-Wellington-Timnath, $384,431; and Loveland-Berthoud, $352,347. The submarket consisting of seven Weld County towns — Ault, Eaton, Johnstown, Kersey, LaSalle, Mead and Milliken — averaged $320,442, while Greeley-Evans registered the lowest average price at $262,719.

Larry Kendall co-founded associate-owned The Group Inc. Real Estate in 1976 and is creator of Ninja Selling. Contact him at 970-229-0700 or via www.thegroupinc.com.