NoCo housing market becomes a tale of 3 cities

One of the best ways to forecast shifts in the local real estate market is to track the fluctuations in housing inventory. And at least for the time being, differences in inventory — the supply of homes for sale — are influencing why we see Northern Colorado’s three largest submarkets moving in three different directions.

Here’s what we mean:

• In the Loveland-Berthoud area, availability of detached homes for sale was up 12.5 percent in May compared with May 2016. And the supply of attached homes, such as townhomes, was up 125 percent. Consequently, the increase in inventory explains in large part why the Loveland-Berthoud market has experienced a 12 percent increase in home sales through the first five months of 2017.

• By comparison, inventory in the Greeley-Evans area is down 46 percent for detached houses and 44 percent for attached units. Understandably, total sales are 21.7 percent behind the same time last year.

• Then there’s the Fort Collins-Wellington-Timnath area, where total inventory is essentially flat, down just 1.1 percent from the previous year. (Specifically, detached-housing inventory is down by 5.5 percent and attached-housing inventory is up by 19.7 percent.)  Total sales are up slightly at 2.3 percent.

The inventory conditions described above tell us that we’re beginning to see a rebalancing of supply and demand in the Loveland-Berthoud area, which is a healthy long-term trend. Here’s betting that Fort Collins will be next to move in that direction. For Greeley, on the other hand, diminishing inventory indicates a strong seller’s market for the near future.

These inventory trends also confirm that where inventory exists in Northern Colorado, sales will follow. And just because sales are slipping, with Greeley as an example, it doesn’t mean the market is faltering. This demonstrates a very simple fact:  People can’t buy homes unless there are homes to buy.  Supply is driving home sales, a very unusual market dynamic.

While inventory levels vary across the region, high demand remains a common factor. And it’s why housing prices continue to increase, with the average May sales price across the region  reaching $357,164, up 8 percent. Each of the six submarkets reported climbing prices. Here’s a closer look:

Fort Collins-Wellington-Timnath, $388,707, up 5.8 percent; Greeley-Evans, $269,055, up 8.7 percent; Loveland-Berthoud, $366,315, up 5.8 percent; Windsor-Severance, $417,312, up 4.5 percent; Estes Park, $441,809, up 15.6 percent; Ault-Eaton-Johnstown-Kersey-LaSalle-Mead-Milliken, $327,361, up 4.6 percent.

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.