When mortgage rates started to trend upward in the third and fourth quarters of 2018, the focus of those who examine real estate trends turned to first-time home buyers. With their own unique set of challenges already in place, it was expected that the increasing rates would cause greater difficulty. However, new numbers from Ellie Mae's Millennial Tracker™ show that changing affordability factors haven't deterred first timers significantly. Owing to better financial information available, more first time buyers are taking advantage of FHA and similar type loans that allow lower down payments and the ability to stretch their dollars a little further despite rising interest rates.
In other words, in spite of the last several weeks which have seen the market across the Front Range sitting at a stasis point in terms of sales to inventory, buyer demand remains strong. Supply levels indicate a seller’s market so any downward pricing will be slight, but that same price slow-down hints at a shifting marketplace with buyer leverage increasing. There are so many factors to consider in the value of any individual home that variances even within neighborhoods are being seen regularly.
Although the Colorado front range is experiencing an average sales price of $471,010, particular sale prices differ based on the condition of the home, school district, location, and convenience of amenities. Taking that into account, of the 7,285 new listing inventory for the month of January, 3,933 sold during this period.
The best houses are going to attract a lot of attention the moment they hit the marketplace. With fewer existing homes to choose from, sales have been happening at a quicker pace. That trend appears to be slowing, giving everyone, buyers and sellers alike, a chance to catch their breath. Past average Days on Market as short as 29 are giving way to longer time frames, as seen in the average Days on Market for January of 51. The biggest differences are at the different price points. Lower price point inventory remains at too low levels for the demand while higher price point inventory levels show healthy increases.
No decisions should be made hastily to sell or to buy a home. Impulsive actions lead to regrets. Understanding the current real estate trends and the direction those trends are heading, assist buyer and seller in making the choices to best fit their needs and wish lists.
Recent analysis pinpoints some less obvious factors to consider. In some areas, land-use regulations such as density laws and permit review times are helping push home prices upward. Areas with less restrictive regulations are not seeing those same increases. What does this mean for the average buyer and seller?
When home builders have more hoops to jump through that cost more up front and take additional time to complete, fewer new homes are built. Housing developments may not move forward, leaving inventory strictly made up of existing home sales and therefore, fewer choices for the home buyer to consider. Fewer choices cause prices to trend upward.
Pricing a home for sale or deciding on how much to offer to buy requires a lot of data be factored into the equation. This is where the counsel of an experienced real estate professional is vital in recognizing how a home is priced and the rate at which its value may rise or fall based on the most current market conditions.
If you are thinking of buying or selling home, give me a call, I would be happy to assist with the process.