What’s hot, what’s not in 2019 home sales

We’re past the point of prognostication for 2019. It’s time to dig into some real market data. While it may be too soon to identify any full-blown trends for Northern Colorado real estate this year, an early check into sales statistics is giving us four noteworthy indicators of what could be in store for this year.

Let’s take a closer look:

Home Supply Is Up. As we’ve discussed in this space before, the continuing struggle with slim housing supply in Northern Colorado means we keep a keen eye out for inventory relief. And so far this year, relief is arriving to homebuyers in Greeley. In February, the number of homes for sale in Greeley was up 24.2 percent over February 2018 (after being up 37.6 percent in January). It’s no coincidence, then, that homes under contract increased 11.6 percent in February compared to a year ago, and closed sales increased 38.1 percent.

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Berthoud is HOT – Again! Remember how Berthoud grabbed headlines a couple of years ago? It was Northern Colorado’s hottest market for new home construction and sales growth in 2017. But as builders wrapped up their work and the new neighborhoods filled up, activity in Berthoud slowed down in 2018. It appears to have been a temporary hiatus. The number of homes for sale in Berthoud were up 46.4 percent this February over last February, with homes under contract up 70.8 percent and closed sales up 20 percent.

Wellington is Hotter! Like Berthoud, Wellington was a hot market in recent years that turned cool in 2018 as builders shifted their focus to new hotspots such as Severance. The early returns tell us the builders — and the buyers — are coming back to Wellington in 2019. New listings are up an astounding 88.2 percent in February, while total homes for sale in February nearly doubled from the year before (up 95.8 percent).  Homes under contract grew by 91.8 percent, and closed sales increased 26.3 percent.

Severance Exhales. We see Severance — Northern Colorado’s boomtown for 2018 — exhaling in the new year after builders closed the books on some of that town’s new developments. New listings were down 54.4 percent from February 2018. Similarly, homes under contract declined 53.2 percent, and closed sales fell 38.1 percent.

Pulling back from the focus on individual communities, we can also see a handful of marketplace factors that bear watching as the year unfolds.

Sales to List Prices. In recent years it was not unusual to see closed sales come in at 100 percent of the list price, or even more in certain neighborhoods. In February, we saw the percentage of list price received decline slightly in all four of the region’s largest markets — Fort Collins (97.3), Greeley (98.1), Loveland (97.9) and Windsor (96.1) — compared to last year.

Inventory spikes. Greeley, Berthoud and Wellington are not the only towns enjoying an upswing in housing supply. Inventory for the entire region was up 16.5 percent in February, including a 29 percent increase in attached housing (townhomes and condominiums).

Interest rates drop. Some credit for the resurgence in places like Berthoud and Wellington should be given to interest rates. Counter to expectations, rates on 30-year fixed mortgages recently dropped to 4.31 percent in mid-March, a 13-month low.

Prices rise at slower pace. Home prices are still growing, but the rate of growth is slowing down. Regional appreciation based on average sales prices was 4.48 percent in February, less than half the rate experienced in February 2018.

Brandon Wells is president of The Group Inc. Real Estate, founded in Fort Collins in 1976 with six locations in Northern Colorado