September Northern Colorado Market Report Podcast

Ryan Jenkins

New podcast discussing the current state of the market. As we move into fall we continue to see the market form an upward plateau with our higher-priced markets such as Fort Collins, Windsor and Longmont posting small gains or losses, depending on what data set you use. While our more moderately priced areas such as Loveland and Greeley are still making significant price gains. Inventory has increased but remains low with the absorption rate sitting at 2 months. That means the market can absorb or sell its current supply of homes in about 2 months. A market balanced between buyers and sellers is said to have an absorption rate of 6 months. This tells us that demand is still high and the market is still gobbling up its available inventory at a rapid clip. Average days on market is 46 which means a typical home sells in about 2 weeks considering a 30 day escrow period. Multiple offers and over list price sales still occur but we are seeing fewer of those situations especially as we move into fall which is notoriously slow and a great time for buyers to pick up deals. In November and December, we see the market pick back up slightly and then it typically softens again in the first quarter of the new year.

The following is a transcript of the podcast…

Hey friends, thanks for tuning in. Today we’re going to talk about the most recent market report. It is September 20th, and we’re looking back at the numbers from August to see what our market’s doing. This is kind of a notorious time of the year when the market seems to slow down quite a bit in the fall. It seems like every year my agents come to me and they’re like, Oh my gosh, the market is falling, it’s crashing. I’ve got a listing that I can’t sell. Um, but really that’s just a function of you. Most of the folks that are going to buy and sell already did during the summer. And uh, August and September we see a pretty good slow down. And then usually by November, December, um, it can start to pick back up quite a bit in November and December have been really good months for us, um, in years past and good months for the market.

Uh, but let’s talk about actually what happened. Um, Fort Collins is up about 2%, and we’re talking about residential detached homes. Um, that’s the, the data that we typically pull from just to kind of give people a ballpark for what’s going on. So Fort Collins, the median price is $430,000. Right now. That’s up about 2% from the same month of August. Um, in 2018, um, Loveland is up about 5% to three. 80. Greeley is up, uh, 5% to three 20 wins or actually dropped a 2% down to four 15. And Longmont, uh, basically stayed the same at four 48 is the median price in Longmont. Uh, you might hear some people talking about the market slowing down and we are definitely feeling that. Um, but I also want to kind of put that into context. Um, you’ll, you know, you’ll hear folks saying, Oh, the market’s slowing down. Like, you know, here we go.

The market is crashing. Um, we are very, very far from any sort of a, a market crash. What we, what is happening is the market is slowing down from what was, you know, an absolutely red hot, bonkers, low inventory sellers market into what is still a very strong seller’s market. Um, but just not as crazy as it was. So just to kind of put some things into perspective for you, the average home is selling in about two weeks. Um, whereas, uh, two years ago it kind of at the peak of the sellers market, our average home was selling and less than a week. And this is like average across the board. So you can imagine there’s some homes that are overpriced and it takes them two or three months to sell. And then there’s some homes that sell in two days, but you average out altogether and you get a right now an average of about two weeks, um, which is still an incredibly, uh, out of balance market.

So there’s a couple of ways that we can kind of talk about this. We talk about, um, something called the absorption rate and that’s what you don’t know, economists or whatever you want to say is a term that they use, uh, to figure out how fast a real estate market can absorb or sell all of its inventory. So when you have an absorption rate of six months, that is kind of a marker that people say that the market is balanced between buyers and sellers. When it takes a half a year for a market to completely sell all of its inventory, that’s a balanced market. So neither the seller or buyer really has the upper hand. Right now our market is sitting at about two months, so it’s actually just under two months that it takes. Um, so what that tells us is that the market is still very robust.

It’s still absorbing inventory at a very rapid rate. Um, you know, two weeks as a average days on market is very fast. Um, and so I just kind of want to put into context what you might be hearing from people as far as like the market’s slowing down. Uh, but it absolutely is. I mean we, we’ve definitely felt a significant change. We’re seeing, you know, we are still seeing some multiple offers situations. Um, but it’s less and less, you know, that’s just not happening as much as it has been in the past. So we certainly are seeing a slow down. I think, um, you know, interest rates have pulled back significantly. They, they were up, you know, almost to five and they’ve pulled way back down. You know, the fed has cut interest rates a couple of times and so another down below 4% again.

And so considering how low the interest rates are and the fact that the market is still slowing down, I think is indicative of the fact that we are, you know, moving into a period of, you know, we’re not sure, obviously nobody knows what prices are going to do. I tend to think that they’re going to flat line. I think we’re going to start to see some, um, some small drops in prices. But, but over time I think it’ll be a flat line. I just, um, I’m still, you know, fairly bullish on this market, you know, relatively speaking as far as our price point compared to, to other markets. Um, you know, in the country as far as like places that people are, are destinations that people are moving to. We are a relatively affordable price point and I, you guys have probably heard me talk about taxes a lot on this, on the podcast as far as how low our taxes are compared to the national average.
Our property taxes are one half of the national average.

We regularly are having clients move here who have jobs in other parts of the country. Uh, a couple of clients from Chicago moved here this year, clients from the Pacific Northwest, clients from California who are still working in the jobs that they had in those places, but they’re able to work remotely. And so you do hear a lot of people in Fort Collins saying, I don’t understand why, how are all these people are moving here? Where are these jobs coming from? Well, a lot of folks are working remotely, so it’ll definitely be interesting to see what the market does in the next couple of years. You know, I think a lot of people are saying that Mark the, you know, overall the economy has been so hot for so long. How long can that be sustained? Um, and that’s obviously a question that I cannot answer.

I do think that the Fort Collins market has weathered the storm, the recession storm very well in the past. Um, in 2008, our biggest median price drop was 4%. Um, you know, obviously, you know, past results are no guarantee of a future returns, but, um, still a lot of, a lot of reason to, to like the Fort Collins market. I think if you’re going to be, if you’re looking to buy a home for the longterm, it’s still a great bet. You know, if you’re looking to buy a home for, you know, two or three years, I might try to talk you out of it. But, um, you know, people do, do whatever they’re going to do. A lot of times they don’t listen to me, but anyway, um, that’s just kind of a quick rundown of what the market is doing right now.

I do think it’s going to be a great season for buyers this fall. I think they’re going to start to be able to, uh, you know, have a little bit more time to look at homes a little bit more decision making time, whereas in the past they’ve had to move so quickly at, you know, drives people a little bit crazy to have to make decision, big decision like that so fast. Um, I think we’re gonna see fewer, multiple offers situations, but I still, you know, my prediction is that the market is not, is not by any means going to tank. I think we’re going to start to see like an upward sloping plateau. I think we’re going to have moderate, you know, one to 2% appreciation per year, um, over the foreseeable future. In the next five years maybe, we’ll probably have some price corrections built in there as well. Um, but ultimately I think, uh, there’s still, you know, five to 7,000 people move into Larimer County every year. I’m still a lot to love about, about this place and a lot of people that, um, you know, are retiring here, and I think that’s going to be continued to be a significant section of the market.

So thanks for listening guys. Let us know if you have any questions, check us out on the web, gray rock and I think that’s the shortest podcast we’ve ever done. So thanks for listening. Bye bye.

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