The real estate slowdown started in March when Colorado’s governor gave the close to a 1-month stay-at-home directive. All housing market activities come to a standstill for a few weeks but later resumed with restrictions.
The main priority back then was to fight the global pandemic, and as we grappled with it, the Colorado housing market took a hit.
Even though this local property market seems to have maintained its year-over-year pattern, its inventory is still affected by the coronavirus pandemic. Despite having fewer listings and high priced properties, the market is currently experiencing a spike in home sales.
The Colorado Association of Realtors (CAR) reported that the Colorado housing market had a 40% year over year increase of both pending and closed home contracts as of August. The report further highlighted thatmore than 11,600 single-family houses and about 3,700condominiums and townhouses went under contract, making August set a new high.
Price point being a critical driver for the housing market, Colorado’s local markets just recorded an all-time-high home price value. The median price range for a single-family property now costs 11% more compared to 2019.
Unlike other states whose median home sales value ranged around $450,000, the Colorado housing market prices spiked to an overall average of $492.500.
With a50% reduction in active listings throughout thenation in August, housing experts now suggest that high home prices might continue throughout the year due to very high demands and fewer homes in the market.
The CAR report continues to highlight that the local market recently recorded 15,358 homes available in the market compared to last year’s 29,115.
The record low median-priced homes throughout the state, coupled with very low-interest rates, are the main reasons why the luxury home market, with property price of more than $650,000, seems to be doing very well.
The CAR analysis further points out that this market segment had at least a 20% rise in home sales compared to 2019, while the sub-median market saw a 13% price drop as well as a 70% dip in home listings.
The general lack of homes in the market has led to escalated house prices throwing homebuyers in tight bidding wars that have made these homes to leave the market much sooner. The current waiting time for a house to sell throughout Colorado ranges between 29 days and 46 days.
The report further implies that most homebuyers are very anxious to use the low mortgage interest rates to their advantage. The alarming inventory shortages and the imbalanced home supply and demand curve have fueled the 4% increase in property prices throughout the state.
Predictions for the rest of 2020
Despite the coronavirus pandemic’s adverse effects, the Colorado housing market seems like it will have a more robust finish than it started earlier this year. The recent year-to-year residential data suggested that the statewide median home sales price would be higher than in the previous year.
Colorado’s current median home sales price ranges around $447,500 and is slightly more than last year’s worth of $428,000.
Given the relentless rise in demand for housing throughout the state, prices are predicted to continue increasing through the remaining months. Experts now caution that if this trend continues, Colorado’s median home prices will escalate to an average of $470,000 going into 2021.
A glimpse into 2021 Market activities
The residential market is primarily driven by the current record-low mortgage interest rates throughout the country. The Federal Reserve already implied that the rates would not be rising soon, meaning that everyday market activities will continue following the projected trends.
Despite it being a seller’s market now, a slight change in the interest rates would inevitably affect the housing market, forcing it to shift trends in 2021.
Other variables expected to influence the local real estate market include the overall economy and unemployment levels. The rising national debt and unemployment rates are challenges that need to be resolved to stabilize the housing market throughout the nation.
The Colorado housing market has shown remarkable resilience to both the pandemic and economic downturn. The market currently has an increasing year-over-year home sale rate of 20% and a 12.7% rise in year-over-year property prices. Given its high 1.1% year-over-year home affordability index, this particular market shows notable progress and is predicted to strengthen for the rest of 2020. Real estate forecasts indicate that home-buying competition will continue to rise in the suburban regions compared to major towns in Colorado.For more market insights and any of your Colorado housing needs, feel free to contact any of our certified and reliable property managers.