As we take the temperature of the Northern Colorado housing market after the first quarter of 2018, we can report a steady simmer, as reflected by the nearly 10 percent climb across the region in average sales prices. But the local community that’s really cooking is the one where average prices actually declined in the first three months of the year.
That’s not a misprint.
Sales in the Windsor-Severance sub-market surged during the first quarter by almost 51 percent over the first quarter of 2017. At the same, average sales prices for the quarter slipped by just under 1 percent (0.74), from $406,640 to $403,605.
To a degree, the moderation in prices for Windsor-Severance can be explained by an increased availability of mid-priced homes, which can keep a check on the average overall price. Windsor-Severance was the only sub-market where the supply of attached homes, such as townhomes and duplexes, increased over last year’s first quarter. Specifically, the inventory of attached homes increased from 16 in the first quarter of 2017 to 28 this year — up 75 percent.
Overall inventory for Windsor-Severance was flat — 238 compared to 236 at the same time last year. But once again, that’s an advantage over the rest of the region, where total inventory was down 14.7 percent at the close of the first quarter.
The takeaway from this data: Builders are working hard to bring enough new homes to the market in the Windsor-Severance area to address demand. If that continues to be the case, buyers looking for opportunity will find it here.
While Windsor-Severance may be the most intriguing sub-market in Northern Colorado, there are plenty of additional story lines that warrant attention:
More than any other community, Greeley-Evans has felt the pinch of tight inventory over the past two years. After an 18 percent decline in first-quarter supply from 2016 to 2017, supply was down another 12 percent this year. Consequently, average prices have increased $63,535 per home over the two-year period, increased 15.7 percent over the first quarter of 2017, and even eclipsed the $300,000 threshold for the latest quarter. Yes, Greeley remains an affordable option for a region where overall average prices are pushing $400,000, but that price gap is starting to close as availability dwindles.
Berthoud was the big story over the last two years due to a burst of new construction. But as builders are transitioning — finishing projects and starting in new developments — both inventory and sales have slowed in the Loveland-Berthoud market. First quarter sales declined 10.3 percent for the quarter while supply declined 24.6 percent.
Prices in the Fort Collins-Timnath-Wellington area increased 8.8 percent over the first quarter of 2017. While that’s in step with the region as a whole (9.9 percent), it’s worth noting that last year’s first quarter prices increased by just 5.7 percent. Once again, we see the influence of continuing demand — sales up 3 percent — with less inventory to choose from — down 12.5 percent.
On balance, the first quarter results reinforce what we suspected at the start of the year. The local housing market remains hot and shows no signs of cooling off. As we enter the height of the selling season, keep a close eye on supply. That’s the determining factor for how we will be assessing the second quarter.
Brandon Wells is president of The Group Inc. Real Estate, founded in Fort Collins in 1976 with six locations in Northern Colorado.