March sales hold familiar tune for housing market

March housing sales across Northern Colorado continued some now-familiar patterns for 2016. Sales were flat or slightly down from the same month last year, prices surged — all but one of the region’s communities experienced a hike in average prices over March 2015 — and the supply of homes for sale remains thin.

We’ll share more details about each of these trends in a moment. First, we’d like to ponder one of the positive ramifications these market forces are generating for many current homeowners. 

Ask yourself if you’ve ever made an investment from which you doubled your money within 24 months. The answer is yes for a number of people who purchased homes in Northern Colorado two years ago.

Here’s how: Consider if a buyer purchased an average-priced home in March 2014 — that regional average price was $268,461 just two years ago — and put down a 25 percent down payment ($67,115). Two years later, the average-priced home in Northern Colorado has increased to $341,428, meaning the average gain in value is $72,967. Consequently, the $67,115 down payment from March 2014 is now worth $140,082.

Back to the prevailing trends we mentioned at the outset:

Regionwide, home prices jumped an average of 12.7 percent from March 2015 to March 2016.

Over the two-year period from March 2014 to March 2016, the average increase in sales prices across Northern Colorado was 27.1 percent.

The total number of sales actually is down from the previous year, from 1,015 closings to 990, a decline of 2.5 percent. But at the same time, total dollar volume is up 9.9 percent.

All but one community in the region — Estes Park — experienced price gains. But that price decline was less than 1 percent.

Average home prices in Windsor/Severance have increased nearly $100,000 — $95,342, to be exact — between March 2014 and March 2016.

We attribute the slip in sales to supply, not demand. Supply of available homes was down 8.5 percent, year over year. But considering recent trends in job growth, and seeing that both the Fort Collins-Loveland and Greeley areas were each among the 10 fastest-growing metro areas in the country last year, demand for housing is robust.

Let’s take a closer look at how Northern Colorado’s different sub-markets performed in March:

Fort Collins/Wellington/Timnath

For the third straight month, total sales in the region’s largest city dipped, albeit by less than 1 percent. Average prices, meanwhile, ticked up 11 percent from the previous March to $362,474. But the real eye-opener is the price difference from a year ago: 31.7 percent.

Greeley/Evans

A 2.9 percent decline in sales, but a 15.9 percent boom in average prices last month. The average sale in March brought $244,372, which is also up 30.4 percent from March 2014.

Loveland/Berthoud

Sales were flat, up by one from March 2015, while average prices increased 12.3 percent to $307,131.59, almost exactly in step with the regional average of 12.7. Similar to both Fort Collins and Greeley, the two-year increase was 29.1 percent.

Windsor/Severance

Average prices in the region’s most expensive market reached $415,371, an increase of 10.4 percent over last year, and 29.7 percent over two years ago. Windsor/Severance was the only market to experience an appreciable bump in sales, with 73 closings compared to 59 last year, an increase of 23.7 percent.

Estes Park

As the smallest market in the region, Estes Park is more subject to vast swings in percentages. But last month’s average price of $359,072 was almost identical to the average of March 2015, $359,158.

Ault/Eaton/Johnstown/Kersey/La Salle/Mead/Milliken

Collectively, Weld County’s outlying communities registered a modest average price gain of 4.6 percent to $292,218 while the number of sales fell by 11.7 percent.

Longmont

The Longmont area, which spans the Boulder-Weld county line, experienced the highest average price increase in the region, rising 20.9 percent to $412,681. The one-year difference in dollars? $71,534.

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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