While the temperatures plummet and our Colorado real estate market grows colder, would you believe a really “hot” home on the east coast sold for a cool $400k? Why is that a big deal? The sale took place AFTER the interior was totally charred by a fire! (No one was hurt, thank goodness!) That is an extreme example, but it speaks volumes about the state of real estate across the United States.
Location always matters when deciding which house to buy, but the market of our recent past makes it clear options are wide when inventory is so narrow. The current cooldown is definitely due to cold temperatures, however, other factors are beginning to make themselves evident.
While the higher year-over-year number of available homes to choose from in the Colorado front range area, an impressive 6130, is keeping the market from hitting a freezing zone, pricing moderations are also a major factor keeping buyers active in the marketplace. Within 22 Days on Market, 6214 people chose neighborhoods in the Colorado front range to call home, closing their sales this past October.
New affordability concerns are popping up with rising inflation rates affecting everyone’s financial portfolio. While the October the Colorado front range average sold price of $644,691 reflects healthy price gains from the same time period in 2020 of $552,014 average sale prices, there are still a few buyer challenges to overcome thanks to overall lower wage growth.
Homebuilders are feeling a bit squeezed by challenges as well, with material prices, although stabilizing, still at significantly higher amounts than a year ago. Many are slowing down construction while others are building framework only, holding off on finishing a home until it has sold. Building starts and permits are lowering along with the temperatures.
The housing market's ups and downs look a lot like our Rocky Mountain peaks and valleys skyline all along the Front Range. Sales are up, prices are up, interest rates remain in the valley along with inventory levels.
At least for now, the desire to have one’s own space is strong, strong enough to fuel an active market despite so many challenges. The outlook may be a bit cautious, but the projections are for compelling increases in demand come 2022. The forecast is calling for close to 7% increases over 2021. Selling is looking very good now or in the coming year!