Economy booms, supply drops, prices soar

In a regional real estate market that physically spans more territory than the state of Connecticut, you might assume there is one town where houses still are in ample supply, where demand is moderate or where prices aren’t soaring.

Not so in Northern Colorado.

During May, each of the region’s seven submarkets reported a significant increase in average sale prices from May 2015. At the same time, supply was down in all but one submarket (Windsor-Severance), while demand — reflected by the number of sales — was up across the board. Wherever you look across the northern Front Range, the real estate market is uniformly vigorous as we enter the summer months.

Here are some additional observations from the May results:

• If there’s a surprise to report, you’ll find it in the Greeley/Evans area. Considering the decline in the energy industry over the past two years and the expected consequences for the Weld County economy, housing seems unaffected. Home sales are up 12.5 percent, and average prices were up an astounding 18.7 percent.

• Overall home sales across the region were up 7 percent in May compared with May 2015. At the same time, housing inventory was down 17.4 percent from the previous May.

• With 677 new home sales through the first five months of the year, Weld County is outpacing Larimer County (602) by 12.4 percent. But the average price of new home sales in Larimer County ($433,721) is more that $100,000 higher than in Weld ($331,484)!

• Regionwide, home sales totaled 1,232. While up from last May, it’s still slightly behind the 1,243 sold in May 2014. Average prices across the region reached $349,341, a two-year increase of 20.8 percent.

Sub-market highlights:

Fort Collins/Wellington/Timnath: Home sales were up 13.3 percent over May 2015, but were still down 11.3 percent from May 2014. Total inventory continued to shrink, dwindling to 398 last month compared with 503 in May 2015 and 547 in May 2014.

Greeley/Evans: At $267,617, average sale prices are up 40 percent from May 2014, the largest two-year increase for all submarkets across Northern Colorado. Growth in home sales, at the same time, is up 26.1 percent — also the largest two-year jump in the region.

Loveland/Berthoud: Inventory slipped to 234 homes last month, down 13.3 percent from the year before and a striking 35.1 percent from May 2014. With that squeeze on availability, it’s no surprise that average prices were up 17.4 percent, almost twice the rate of the neighboring Fort Collins sub-market.

Windsor/Severance: The Windsor area was the only submarket to witness an increase in inventory, with availability up 8.8 percent. Still, prices here moved solidly beyond the $400,000 threshold, with an average of $408,044 in May after hitting $406,814 in April.

Estes Park: Estes Park suffered the largest decline in inventory, down 35.7 percent from last May. Accordingly, prices jumped the highest among all submarkets to $401,485.

Ault/Eaton/Johnstown/Kersey/La Salle/Mead/Milliken: The other submarket that we expected to be stung by the energy slump also is holding up well. Average prices across these outlying Weld County towns increased 7.49 percent while total sales inched up 1.9 percent.

Longmont: Longmont is closing on the $400,000 threshold itself. At $386,903, average prices were up 16.62 percent from the previous May and 1.7 percent from April.

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.

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