The answer is: “It’s always changing. Why do you ask?” Who can guess the question? I get that not everyone is as optimistic as I am, but I sure am hearing a lot of very negative market talk out there. It’s almost as if everyone read the dismal same script one day and started repeating it. I completely understand that market activity is not the same as it was at the beginning of the year. But please, when someone asks you “How’s the market?” the only answer should be is “It’s always changing. Why do you ask?”
Inventory is rising…so what? This is something we have all been complaining about for several years, and it’s here now… and people are complaining about it still. I don’t get it. Like Megan Aller said “Circle back to your buyers who tapped out earlier this year, negotiating power is up.” This is true. Prices aren’t pulling away from us either. Your buyers won’t have to over-pay for something they aren’t 100% happy with.
When inventory goes up, we should see days on market go up. But we aren’t. Not really. Not yet. Every single area covered in this report shows fewer day on market this July compared to last…except for Loveland and Greeley attached. The crazy 246 DOM average in Loveland is due to the sale of 16 units at the Lakes at Centerra and each has a DOM of between 444 and 664 days. Greeley had a single outlier that if eliminated it’d bring the DOM to 39… just a slight increase.
Additionally, every singe area in the report shows sales as the same or lower percentage of asking price this year compared to last. This fact and the additional days on market will be a nice relief to those tapped out buyers. Maybe they can take a minute to find the home they really want…and not have to over pay for it.
Monthly closings are the only signs, so far, of the impact of the recent interest rate increases. Most areas and home types have seen fewer overall sales this year. These lower YTD totals come from slightly lower sales totals each month, but in July, the YTD totals were substantially impacted by the extremely low single-family closings in Ft Collins (-32.5%), Loveland (-42.0%), Greeley (-43.0%), Johnstown/Milliken (-35.0%, and The Windsor/Highland Meadows area (-58.9%). We haven’t seen anything quite like that before. But this is maybe the results of the second month of higher interest rates. Those houses went on the market in May/June. That was the start of buyers pulling back. We should continue to see this for another couple months when people who need to move realize that 5.5% isn’t such a bad rate.
In the coming months, look for Greeley and Johnstown/Milliken and possibly Loveland to return some somewhat decent results compared to the other areas in the report. Their lower prices will be an additional attractor in a higher interest environment. We know higher interest rates make a home more expensive. That buyer who might have been looking in Ft. Collins may just decide Greeley is a better alternative and spend an average of $227,000 less on a home and tough out the additional drive to work.
The average price in Berthoud seemed a fuzz higher than normal so I took a peek. In July, they had 8 homes close for over $1,000,000. That’s pretty amazing. The most expensive was out at Heron Lakes for $1.7M. Also, of all the homes sold, 27 % of them were on the market for 7 days or less. You can also still buy a classic old farmhouse in Berthoud that needs a lot of work…or just a little for a rental, for $315k
About 10 years ago, when prices started to rise quickly, housing prices started to pull away from [people who wanted to buy in Ft Collins and Loveland. The mantra back then was: “drive until you qualify”. That meant, the further east and south along I-25 you went is where you had to go to find affordability. One of those destinations was the Johnstown/Milliken area. Look how that tiny market has matured. They now sell about half as many single-family homes in a month and year as Loveland. The median sales price is nearly identical to that of Loveland, and it’s about $100k more that Greeley. Currently they have 75 active listings…27 of those are new construction. Take your buyers there… with that much new construction inventory, you’ll definitely have some negotiating power.
If you are in the camp of “the sky is falling because, look, up in the sky, listings are multiplying right before our eyes!” Feast your eyes on this month’s graph of Ft Collins single-family homes. It shows, gasp, listings are increasing. They are so high that we have exactly 33 more than we had last July. I didn’t hear any complaints about inventory rising out of control last July. We currently have our second highest level of inventory since September of 2020. And that blue inventory bar at the far-left side… 842 in June of 2019. Again, no complaints back then. And, if we were to ever cross over the 1,000 mark of active listings, we’d have what is typically called a balanced market with 6 months of inventory. We are still , squarely in a sellers’ market.
I’m going to leave you with one last thing. It’s that annoying commercial I get asked about all the time about title lock. Tell all your peeps not to buy it. It’s a monitoring service. If something has been recorded you get notified. At that point it’s too late. Plus, you have title insurance. Watch this news report and any Lindsay, Julie or Debby know if you have any questions. And please share it with your sphere…it’ll be a good touch point. Title Lock Video