Among the many factors that can influence the direction of a local real estate market, lack of supply has been the most forceful in Northern Colorado over the past two years. The consequence in our area has been a “mosh pit” market, in which motivated buyers try to elbow each other aside by bidding up prices for the relatively few homes available.
Now as summer draws to a close, we’re beginning to see indications of calm returning to the market, as some communities in Northern Colorado are reporting an increase in inventory for single-family housing during August. And regionwide, total inventory was essentially flat — up less than 1 percent — from the same time last year, which could be significant after a decline of 7.6 percent between August 2015 and August 2016.
That’s good news for the Northern Colorado market; but as we’ll explore below, we need to wait in see if this a full-fledged trend. Here’s how the housing supply picture is taking shape:
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• The sub-market showing the greatest gains in inventory is the Fort Collins area, where supply of single-family housing was up 23.7 percent in August over the same time last year. Similarly, inventory in the Windsor-Severance market was up 15.3 percent from August 2016 to August 2017.
• On the flip side of the supply story is Greeley, where single-family inventory is off 23.4 percent from the previous year; Loveland-Berthoud, is down 5 percent, and the outlying communities of Weld County were down 27.1 percent.
• A continuing reflection of a tighter supply is increasing home prices. Even in Fort Collins, the sharp increase in inventory coincided with a 7.1 percent jump in prices from the year before. Likewise, Windsor’s additional inventory was accompanied by a 10 percent annual increase in prices. Overall, the Northern Colorado region reported 9.6 percent increase in prices, year over year.
We can be hopeful that Fort Collins is in fact the first of the local submarkets to begin adjusting to a more balanced market, which can mean less competition between buyers and even some price reductions. If a new trend is underway, we can possibly point back to August 2017 as the point of origin.Meanwhile, here are few additional highlights from the August sales data:
• Adding up all sales for the region, homebuyers closed on 1,048 homes in August, up 1.4 percent over the previous August.
• Among the submarkets, Loveland-Berthoud reported a 17.4 percent increase in sales for August, while the outlying Weld County towns — Ault, Eaton, Johnstown, Kersey, LaSalle, Mead, Milliken — collectively experienced a 29.3 percent gain in sales.
• In the Greeley-Evans area, the decline in inventory mentioned earlier was accompanied by a decline in sales, with transactions off by 16.3 percent in August. But the increase in inventory in Fort Collins was not accompanied by an increase in sales, which were down ever so slightly by 1.6 percent.
• Only Estes Park reported a decline in average prices for the month — down 9.7 percent. The greatest increased occurred in the Loveland-Berthoud area, where average prices climbed 13.4 percent.
Total dollar volume for the region neared $400 million, with $390,418,779 total transaction value for the month.
Larry Kendall is co-founder of The Group Inc. Real Estate and is creator of Ninja Selling. Contact him at 970-229-0700 or via www.thegroupinc.com.