Home sales flat, median price increases

Local residential real estate sales continue strong posting a 10 percent gain in September coupled with a 7 percent increase in the median price.

For the first nine months of the year home sales are exactly even with last year and the median price is up 4.8 percent. The big difference is between Boulder County where sales are down 7.8 percent and Weld County where sales are up 13.1 percent. All markets are showing increases in the median selling price, ranging from 11.3 percent in Weld County to 6 percent in Larimer County.

The fact that sales are even with last year is amazing given the lack of homes listed for sale. At the end of September there were just 3,583 active listings and with a projected demand of 7,500 homes over the next six months the inventory is equivalent to about a three month supply, well short of the six month supply considered to be a balanced market.

The inventory of homes for sale in the lower price ranges is extremely limited. The median price represents the point where 50 percent of the homes are priced below and 50 percent are priced above that figure. Currently there are 3,563 active listings, but just 763 of them are priced below the median price. This is just 21 percent of the total listings that are priced below the median price in any of the four markets.

Put another way, there is an estimated demand over the next six months for 2,600 homes in the Larimer County market; 1,300 priced below $255,000 and 1,300 priced above $255,000. Currently there are 1,444 active listings but just 283 are priced below the median price. This means the supply of homes priced below the median is just five weeks while the supply of homes priced above is five months. Obviously this makes it tough on buyers in the lower price ranges.

The short supply is evidenced by the ‘Days to Offer.’ The homes that have sold so far this year have averaged 41 days to offer. This compares to 49 last year and 75 the year before. Back in 2005 when there was a similar volume of sales, there was a lot more inventory and the DTO was 87.

With three quarters of the year completed, the sales are on a pace to match the record of 18,690 homes sold last year but combined with the increase in the median price, the total volume should be right around $6 billion which will be a new record.

And, as a reminder, a lot of buyers and sellers think the market dries up over the next few months but almost 40 percent of the annual sales occur from October through March. As an example, in 2013 there were an average of 360 homes sold each week during the year and the average for December was 330.

Pam and Dave Pettigrew are local real estate brokers. Contact them at 2700 S. College Ave., Fort Collins 80525, at FCRealtor@msn.com or 970-282-9305.

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