We can thank the U.S. Census Bureau and the Department of Housing and Urban Development for tracking new home building permits, which reveal a 12 year high! Year over year permits for new homes to be built are up over 14%. This is excellent news for the average home buyer. New homes add to the strained inventory, giving broader choices to the throngs of buyers seeking to own a home along the Front Range.
Inadequate inventory has been a running theme throughout this year, believed to be contributing to low stats that might have been higher had more homes for sale been available. This has been a challenge in predicting trends and future activities. Where the peaks and valleys would normally sketch out a fairly accurate idea of what’s coming, questionable inventory levels have led to uncertain expectations. Mortgage application numbers would have us believe potential buyer numbers are higher than those sales statistics are letting on.
What we mean by that statement is that the 5166 homes sold and closed in the Colorado Front Range area for November could possibly have been a higher number based on potential buyer numbers, if more homes had been available for sale. Days on Market leading to closing may have been far less than the 42 average we saw, were lenders and appraisers able to process transactions much quicker as well! Mortgage interest rates hover just barely above historic lows. This is most likely the motivation causing prospective buyers to outnumber the number of homes for sale month after month.
Home prices that have been steadily rising month over month have definitely not deterred those determined to purchase. According to current data from industry leader S&P CoreLogic Case-Shiller, price increases are beginning to level off. November 2018, the Colorado Front Range area saw an average sales price of $460,077. This past November that average sales price was $487,648. Continued increases show that equity gains for sellers remain strong, even as we see that the overall economy continues to grow.
Price alone is not the only motivation for selling a home though. While school choice remains a number one priority, living in proximity to where you work is a very close second for choosing where to purchase. In fact, 81% of respondents to the survey said they moved to be closer to their job.
While the winter selling season is usually a much slower real estate market, and relocation for employment is one of the major reasons that trigger a move, the idea of starting fresh and beginning the New Year in a new home is another major motivating factor. This is because owning a home is about more than just a place to live. It’s an investment in your financial health. All available data supports the news that homeowners are overall wealthier and even physically healthier than their renting counterparts.
Many renters are pleasantly surprised to discover that for the same or only slightly more of a financial investment each month, they can make the move from paying someone else’s mortgage to building equity in a home of their own.
As we look toward New Year 2020, you may have been considering the decision to strengthen your financial future. Your local RE/MAX Alliance Associate is a great place to start gathering data to decide when is the best time; where the best place is and what are the best terms to make your move!
HAVE HAPPY NEW YEAR!