The Colorado housing market has been in a state of flux over the past few years due to the surge in demand for homes. This has led to an increase in home prices across most regions of the state, making it difficult for buyers to find their dream homes. On the other hand, it has been a seller's market, with more buyers than houses, resulting in prices being driven up.
According to the Colorado Association of Realtors, the median single-family home price in Colorado topped $500k for the first time in April of last year and has now dropped to $536,000. In February 2023, the median price in the Colorado housing market (statewide) was $536,000, down -3.4% year-over-year. This is good news for buyers who may have been priced out of the market in the past.
- In February 2023, the median price in the Colorado housing market (statewide) was $536,000, down -3.4% year-over-year.
- The Average Sales Price in Colorado was $663,991, down 4.4% year-over-year.
- Percent of List Price Received has dropped to 98.5%.
- Days on Market Until Sale = 65, up 103.1% year-over-year.
- Closed sales of single-family homes were down by almost 19.6% from last year.
- Months supply was up by almost 100% to 1.4 months, which is a sign that Colorado is a seller's real estate market.
- Inventory of Active Listings increased by 59.3% year-over-year.
- New Listings decreased by 19.6% year-over-year, which either shows a decrease in seller optimism.
The Average Sales Price in Colorado was $663,991, down 4.4% year-over-year. This drop in average sales price could be attributed to the increase in inventory of active listings, which increased by 59.3% year-over-year. More houses on the market may have resulted in a decrease in demand, leading to a drop in average sales price.
Another important metric to consider is the Percent of List Price Received, which dropped to 98.5%. This metric indicates that buyers are no longer willing to pay the asking price, and sellers may have to lower their prices to make a sale.
Days on Market Until Sale is another crucial factor to consider, and it is up by 103.1% year-over-year. This could indicate that buyers are taking longer to find the right house, or sellers are being more cautious and waiting for the right offer.
Closed sales of single-family homes were down by almost 19.6% from last year. This could be due to the increase in inventory of active listings, making buyers more selective and taking their time to find the right house.
The months supply was up by almost 100% to 1.4 months, which is a sign that Colorado is a seller's real estate market. The months supply metric is calculated by dividing the number of homes for sale by the number of homes sold in a month. A seller's market means that there are more buyers than houses for sale, and houses sell quickly.
Lastly, new listings decreased by 19.6% year-over-year, which either shows a decrease in seller optimism or a seasonal slowdown. This drop in new listings may indicate that sellers are waiting for a better time to list their homes, or there is a seasonal slowdown in the market.
In conclusion, the Colorado housing market has been a seller's market for the past few years, but the metrics indicate that it may be shifting towards a more balanced market. While home prices have increased, there has been a drop in average sales price and an increase in the inventory of active listings.
Buyers may have more options, and sellers may have to be more flexible with their prices. However, it is important to note that the real estate market is unpredictable, and these metrics can change quickly. It is crucial for buyers and sellers to stay informed and work with experienced professionals to make informed decisions.
Colorado Housing Market Predictions 2023-2024
Based on the data from the Colorado Housing Market in February 2023, it appears that the market is currently in a state of flux. While home prices have risen significantly in recent years, there are signs that the market may be cooling off. The median price of single-family homes has decreased by 3.4% year-over-year, and the average sales price has dropped by 4.4% over the same period. Additionally, the percent of list price received has dropped to 98.5%, indicating that sellers may be willing to accept lower offers.
One of the most significant changes in the market is the increase in the number of days on the market until sale. This metric has gone up by 103.1% year-over-year, suggesting that homes are taking longer to sell than they did in previous years. Another indicator of a cooling market is the decrease in closed sales of single-family homes, which were down by almost 19.6% from the previous year.
However, there are still some signs that the market remains strong for sellers. Months supply, which is a measure of the number of months it would take to sell all available homes at the current rate of sales, has increased by almost 100% to 1.4 months. This suggests that the market is still heavily tilted towards sellers, as there are not enough homes available to meet demand. Additionally, the inventory of active listings has increased by 59.3% year-over-year, indicating that there are still many homes available for sale.
Looking ahead to the rest of 2023 and into 2024, it is difficult to predict with certainty what will happen in the Colorado housing market. However, given the recent trends, it seems likely that the market will continue to cool off somewhat. Home prices may continue to decrease, and it is possible that the number of days on the market will continue to rise. At the same time, the market is still heavily tilted toward sellers, and it is likely that demand for homes will remain strong.
Based on the data provided by Zillow, we can expect a moderate increase in the Colorado housing market in 2023-2024. The average Colorado home value is currently at $530,389, up 1.8% over the past year, and homes go pending in about 29 days. Additionally, the median sale-to-list ratio for January 31, 2023, was 0.989, and 19.2% of sales were over list price, while 58.3% were under list price.
Looking at the MSA level forecast for Colorado, we can see that Denver, Boulder, and Fort Collins are expected to experience a decline in housing prices in 2023-2024, with Denver projected to decrease by 1.6% by February 2024. Other regions, such as Glenwood Springs, Steamboat Springs, and Edwards, are forecasted to experience an increase in home prices, with Edwards having the highest increase at 4.8% by February 2024.
Overall, it seems like the Colorado housing market is going to be somewhat balanced, with some regions experiencing a decrease in home values and others experiencing an increase. However, with the increase in inventory and a slight decrease in demand, buyers may have more opportunities to find homes at a more affordable price point. At the same time, sellers may need to be more flexible with their pricing strategies and be prepared to wait longer for their homes to sell.
Will the Colorado Housing Market Crash?
The Colorado housing market has experienced a significant surge in demand and price appreciation during the past two years, making it a challenging environment for buyers to find affordable homes. However, there are signs that the market may be slowing down, with decreased sales, increased inventory, and longer time on the market. The forecast for the next year predicts a continued slowdown in price appreciation and sales volume, but it is still expected to remain a seller's market.
One significant factor that could impact the Colorado housing market's future is the state's economy. Colorado's economy has been robust, with low unemployment rates and a thriving tech industry, attracting a large number of people to the state. However, if the economy were to take a downturn, it could lead to a decrease in demand for homes and a subsequent drop in prices. Additionally, rising interest rates could also affect the housing market, making it more expensive for buyers to obtain mortgages and leading to a decrease in demand.
While there is always a risk of a market crash, it is unlikely to happen in the current scenario. The Colorado housing market has shown resilience to economic fluctuations in the past, and its diverse economy and job growth make it less vulnerable to sudden changes. Furthermore, the state's population growth is expected to continue, which will keep the demand for homes high.
In conclusion, the Colorado housing market has been a challenging environment for buyers in recent years, with high prices and limited inventory. While the market may be slowing down, it is still a seller's market, and prices are expected to continue appreciating, albeit at a slower pace.
Factors such as the state's robust economy and population growth suggest that the housing market is unlikely to crash in the current scenario, but rising interest rates could lead to a decrease in demand and a subsequent drop in prices. Therefore, it is essential to keep an eye on economic indicators and market trends while making any real estate decisions in Colorado.
References:
- https://www.zillow.com/co/home-values/
- https://www.recolorado.com/buy-sell/market-trends/
- https://fred.stlouisfed.org/series/ACTLISCOUCO#
- https://coloradorealtors.com/market-trends/regional-and-statewide-statistics/
