Fall is typically a time of year when real estate activity slows a bit. The summer selling season is winding down, most folks with school aged kids worked hard to complete their move during the summer so the sales volume slows once September rolls around. So when our team began to see signs of a cooling market this fall, it was tough to know whether it was the time of year, or an indication that market conditions are changing. Showing activity on listings slowed, price drops became more common and we noticed some listings that we expected to sell in a matter days sit on the market for a few weeks or in some cases months. Is this just a fall flop or has our market peaked? Let’s check the numbers to find out.
The biggest thing we noticed after looking at 3rd quarter 2015 vs the same period in 2014 is that the number of new listings has increased significantly across Northern Colorado. For 3 years we have seen the number of listings plummet so this increase raised our eyebrows. In every major market except Windsor we saw new listings increase by double digit percentages and in many submarkets but not all, the number of closings decreased. While this is significant, it will not flip the market on its head. The market is still out of balance in favor of sellers. It is said that a real estate market balanced between buyers and sellers has a 6 month supply of available homes. In other words, at its current sales pace, a market could sell all of its available homes in 6 months. Our market currently has a 1.85 month’s supply which means homes are still selling rapidly. Despite the bump in new listings, inventory is still very low.
This increase in homes for sale has not yet made an impact on prices because the trend is still very young. We still saw median prices soar over 2014 numbers. There just has not been enough time for it to affect comparable sales data and median prices but it does seem to be having an impact on buyer behavior. The swarms of buyers desperate to be the highest bidder on a new listing seem to have mellowed. But well priced homes still sell almost instantly and for more than asking price. We’ve also seen a trend of contracts failing during inspection. Buyers seem less willing to overlook major inspection issues, especially if a more attractive home becomes available.
So what can we expect moving forward? Our best guess is that we are at or near a price plateau. Appreciation will likely still continue but at a more subdued pace compared to the last 3 years of record increases. We wouldn’t count out some small drops in median price as well. Bargain mortgage rates should continue to fuel the market. If the economy’s tepid growth persists, the fed may continue to postpone a significant rate increase. As I write this the 30 year fixed rate is 3.75%.
I’m so proud of the success my team has had this year. We’re on track to double our sales volume compared to last year which is quite a feat in this competitive market! We averaged a home sale every 1.6 days and our listings sold 13% faster than the market average. I am honored to be a part of such a talented crew!
Grey Rock is not just another real estate company. We are family owned and selectively hire the very best talent in Northern Colorado. If you’re thinking of buying or selling, let me and my team put our expertise to work for you!