Interest rates dampen residential RE market

It’s like the old saying, “if it’s not one thing, it’s another.”

And that can’t be more true for Northern Colorado residential real-estate agents, who after years of darn near no inventory, are dealing with the ebbs and flows of a market tinged with higher (but fluctuating) interest rates and buyers and sellers both unsure of what lies in the future.

“I’ve always said that being a Realtor requires a lot of work and effort,” said Ben Woodrum, sales associate at Coldwell Banker Realty in Fort Collins. “It’s just where you put that work and effort.”

In Larimer County, new listings for single-family homes at the end of June were down 12.6% for the year to date, compared to last year. The medium home price was also down about 1.2%, compared to last year, although the average home price actually rose 0.5% to $676,435.

But all in all, it’s just a pretty flat market.

Woodrum said the smaller bedroom communities, with less commerce, were taking a larger hit in home price than those in the Fort Collins and Greeley areas. “Typically, the bedroom communities in any real estate downturn dry up the fastest,” he added. 

But even in Fort Collins, overall listings were down from 1,600 last year to 1,450 this year, Woodrum said. 

“Even though it feels like there is more inventory, it depends on location and price point,” he said. “A healthy supply would be five or six months; most areas and price points do not have that.”

In Boulder County, Re/Max agent Lisa Wade said she certainly doesn’t miss the days of escorting buyers to 10 or more properties a week, only to see their offers declined amid a score of others. Now the effort comes with convincing sellers they aren’t necessarily going to get top dollar and drumming up buyers who are hesitant with today’s higher interest rates.

Because while there may be more listings available today, interest rates have tapered the enthusiasm of buyers and sellers resulting in a fairly flat market.

Listings across the Boulder County market have almost doubled over last year for the year to date in June, from 136 to 270, but selling prices have flattened out. The medium sales price actually dropped 5% to $887,675 but the average sales price rose 1.3% to $1,211,738.

“We have a lot of people who bought or re-fide (re-financed with lower interest rates), and that lowers the inventory,” Wade said. Simply put, it’s hard to buy that dream home when you are only paying 3% on your current mortgage.

“The good market slice is single women who aren’t waiting to buy a home,” Wade said. “Properties with big yards are good, because everyone has dogs.”

Before inflation, it didn’t mean much to sellers when they put their home on the market, as there were always buyers waiting. “The prediction is it’s going back to a normal selling season (spring and summer),” Wade said.

In Greeley, Steve Baker, the managing broker at Sears Real Estate, said it’s difficult to judge what he called an “ebb and flow” market. “We were up 29% in June, and we had a terrific June last year,” he said.

“We’re still  the most affordable in the Front Range,” said Baker about the Greeley-Evans market. “I see property in Windsor, and have to trip my brain and add $100,000.”

Baker said the average sales price in Greeley has dipped to about $415,000 from $440,000 last year. The active listings are up, as elsewhere in Northern Colorado, but still is well short of a normal six-month supply.

Baker said that price point has become a big part of sales today.

“Some of the homes that tend to be on the market for some time are taking a price cut,” he said. “There are deals to be had. Seller get more in the mode of ‘It hasn’t sold so we have to do something.’”

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