Annual employment growth in Colorado was measured at a respectable 2.2% in November and will likely finish the year having created around 55,000 new jobs. Within the metropolitan market areas included in this report, we are seeing employment growth at or above the state level and I anticipate that this will continue to be the case in 2017.
Unemployment rates continue to drop, and with rates now below three percent, all of Colorado’s metro areas are at full employment. Because of this robust level of growth—in concert with very low unemployment levels—I anticipate that we will see some fairly substantial income growth as companies look to recruit new talent and keep existing employees happy.
HOME SALE ACTIVITY
- There were 14,614 home sales during the fourth quarter of 2016—up by a marginal 0.7% from the same period in 2015.
- Jefferson County saw sales grow at the fastest rate over the past 12 months, with a 5.9% increase. Sales activity fell in three counties, but this was a function of short supply rather than slowing demand.
- Listing activity continues to remain well below historic averages, with the total number of homes for sale in the fourth quarter 12.8% below that seen a year ago.
- The key takeaway from this data is that 2017 is shaping up to be one which will still substantially favor home sellers. I do anticipate that we will see some improvement in listing activity, but it is almost a certainty that demand will exceed supply for another year.
- Demand continued to exceed supply in the final three months of 2016 and this caused home prices to continue to rise. In the fourth quarter, average prices rose by 9% when compared to the fourth quarter of 2015. The average sales price across the region is now $393,969.
- In many parts of the region, prices are well above historic highs and continue to trend upward. With double-digit price increases over the past year, the market remains very hot.
- Annual price growth was strongest in Larimer and Jefferson Counties, where prices rose by 11.8% and 10.9% respectively.
- While we will likely see some modest softening in home price growth in 2017, we can still expect a very strong market.
DAYS ON MARKET
- The average number of days it took to sell a home dropped by one day when compared to the fourth quarter of 2015.
- Homes in a majority of the counties took less than a month to sell.
- In the final quarter of the year, it took an average of just 27 days to sell a home. This is down from the 28 days it took in the fourth quarter of 2015.
- The Northern Colorado housing market is still firing on all cylinders. The only missing piece is listings, which remain well below the historic average.
This speedometer reflects the state of the region’s housing market using housing inventory, price gains, sales velocities, interest rates, and larger economic factors.
For the fourth quarter of 2016, the needle remains firmly in the seller’s territory. It will be interesting to see if the recent increase in mortgage rates has any effect at all on the housing market. I believe that it will; however, I expect that it will likely cause a slowdown in home price growth rather than any collapse in home prices.
Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has over 25 years of professional experience both in the U.S. and U.K.
Windermere Real Estate, the largest regional brokerage in the Western U.S. is celebrating its second year in the Denver market this month. After just two years, the Seattle-based company now ranks in the top 3% of all real estate brokerage companies in the metropolitan area.
Thank you to everyone who joined us for our 2017 Annual Real Estate Market Forecast Event last month! In case you missed it, here is a quick recap video of the incredible information that was shared. If you would like to receive a PDF of all of the slides, send us an email at firstname.lastname@example.org as we would be happy to send them to you!
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With the home inventory at all time lows our team is constantly monitoring the listing activity in the local MLS – REcolorado, and some interesting observations can be made on reviewing the data over this past week.
This first graph takes a look at how new listing numbers (homes just placed on the market for the first time) compare with price reductions and failed sale attempts (withdrawn & expired listings) over the last 7 days.
The standouts from this chart —
- Only 674 new listings came on the market.
- Relative to the number of new listings, nearly half of that number reduced their price.
- 229 listings were takes off the market because they failed to sell (roughly 1/3 the number of new listings)!
The listings that are priced well are moving very quickly and often choosing between multiple offers, but the impact of this lessens as price increases.
Once a listing goes under contract as it will either successfully close or go back on the market for some reason.
The data here shows that relative to the Sold listing numbers roughly 9 out of 10 are successfully closing which leaves 1 out of 10 coming back on the market.
We’ve seen this number fluctuate over the last 6 months, with the current numbers actually on the lower end. This could be due to the fact that we are near month end, but some would still find it surprising given the low inventory market we find ourselves in.
Properly positioning a property within the market not only with the right price, but also an effective marketing plan and the benefits of the Windermere Certified Listing program have lowered our price reductions and expiration rate to nearly zero, while still maximizing the bottom-line return for our sellers. To learn more, connect with one of the amazing Brokers on our team!
Getting your home ready to sell may seem like a challenge, but you know that the more appealing the house is, the more likely it is to sell quickly. Windermere Real Estate 5280 serves Denver and the south metro suburbs down to Castle Rock. We can help you with pricing, showings, and connecting with potential buyers, but what about the steps leading up to that first showing or open house? Many things, like cleaning the house and maintaining the lawn may seem obvious, but there are some more in-depth measures that you can take
Make Sure the Light is Right
Go through your home and make sure there are no missing or burned out light bulbs. You may even want to swap out bright bulbs for softer, warmer light, so that the home feels more inviting. For natural light, make sure your windows, blinds, and shades are clean so the light isn't diffused too much or reveal layers of dust.
Clean Out Your Closets
It's a fairly well-known fact that potential buyers will look in closets and cabinets to gain a better idea of how much storage space the house has. If your closets are overflowing or unorganized, the space can seem cramped, and buyers may think that you haven't taken the time to get the house ready. By removing a portion of the clothes in a closet or dishes in a cupboard (and cleaning and dusting them thoroughly) the buyer can truly see the entire storage space.
Remove Those Pet Items
It's possible that the buyers will be pet-lovers themselves, but leaving dog food sitting out or the kitty litter tray in plain view can quickly change a buyer's mind. Take the time to clean the house thoroughly and remove any traces of your pets, and arrange care for them during the showing.
A majority of potential buyers will make up their mind about your house from the moment they set foot inside, and you only have once chance to make a good first impression. By following these steps and a few others, you can get your home ready to sell, and we can make sure that it sells quickly. Contact us today!