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.
The Colorado housing market has experienced significant changes in 2023, impacting both buyers and sellers. The Colorado housing market in August 2023 continued to be dynamic, with shifting trends. Rising home prices and a competitive environment benefit sellers, while buyers may find more options due to the increased time homes spend on the market.
The decrease in closed and pending sales, along with a drop in new listings, suggests that market conditions are evolving. Here are the key findings from the latest housing report released by the Colorado Association of Realtors.
The median single-family home price in Colorado reached $600k for the first time in April of last year and has now dropped to $579,999. In Aug 2023, the median price in the Colorado housing market (statewide) was up 2.3% year-over-year. This is good news for buyers who may have been priced out of the market in the past. Here's the data for all properties including SFH and Condos.
Colorado Housing Market Report – August 2023
- In August 2023, the median price in the Colorado housing market (statewide) was $579,999.
- The Average Sales Price in Colorado was $772,109, up 11.5% year-over-year.
- Percent of List Price Received has dropped to 99.0%.
- Average Days on Market Until Sale = 41, up 32.3% year-over-year.
- Closed sales were down by almost 15.7% from last year.
- Pending sales were down by 12.5% from last year.
- Months supply was up by almost 17.4% to 2.7 months, which is a sign that Colorado is a seller's real estate market.
- New Listings decreased by 9.9% year-over-year, which shows a decrease in seller optimism.
Median Price and Average Sales Price
In August 2023, the median price for homes in the Colorado housing market, statewide, reached $579,999. This figure reflects the price at which half of the homes sold for more and half for less. Additionally, the average sales price in Colorado was $772,109, representing a significant year-over-year increase of 11.5%. These statistics indicate a market where home values are on the rise, making it an attractive proposition for sellers.
Percent of List Price Received
The percent of list price received has slightly decreased to 99.0%. This means that, on average, homes in Colorado are selling very close to their listed price. While this metric is down slightly, it still indicates a competitive market where buyers are willing to pay close to the asking price.
Average Days on Market Until Sale
One notable change in the Colorado housing market is the increase in the average days on market until sale. In August 2023, homes took an average of 41 days to sell, which represents a substantial year-over-year increase of 32.3%. This longer time on market suggests that buyers may have more options and time to make decisions.
Closed and Pending Sales
Closed sales in Colorado experienced a decline of almost 15.7% compared to the previous year. This decrease in closed sales could be attributed to various factors, including changes in buyer behavior and market dynamics. Similarly, pending sales were down by 12.5% year-over-year, indicating a potentially slower pace of new transactions in the pipeline.
Months Supply – A Seller's Market
The months supply of homes in Colorado increased by almost 17.4% to 2.7 months. A months supply figure under 6 months typically indicates a seller's market, where demand outpaces supply. This suggests that Colorado remains a seller's real estate market, even with the increase in supply.
New Listings
New listings in Colorado decreased by 9.9% year-over-year. This decline in new listings may indicate a decrease in seller optimism or a hesitation to list homes. It's essential to monitor this trend as it can impact the overall market dynamics.
Colorado Housing Market Predictions 2023-2024
The Colorado housing market is always of great interest to both buyers and sellers due to its unique mix of urban and rural areas, stunning landscapes, and a diverse economy. Let's delve into Zillow's predictions and insights regarding the Colorado housing market as of August 2023 and its potential trajectory in the coming months.
Current State of the Colorado Housing Market
As of August 31, 2023, the average home value in Colorado stands at $537,600. This figure represents a slight decrease of 4.1% over the past year, indicating some price adjustments in the market. Additionally, homes in Colorado are moving quickly, with an average of just 12 days on the market until they go pending. This suggests that demand remains strong, despite the decrease in home values.
Market Performance Metrics
- Median Sale to List Ratio: As of July 31, 2023, the median sale to list ratio is 1.000. This means that, on average, homes in Colorado are selling at their listed price, reflecting a balanced market where buyers and sellers find common ground.
- Percent of Sales Over List Price: In July 2023, an impressive 37.6% of sales closed above the list price, indicating that competition among buyers remains fierce in certain segments of the market.
- Percent of Sales Under List Price: Conversely, 38.3% of sales in July 2023 closed under the list price, suggesting that there are still opportunities for buyers to negotiate favorable deals.
- Median Days to Pending: Homes are going pending in just 12 days, underscoring the rapid pace of transactions in the Colorado housing market.
Colorado's Top 10 MSAs for Home Price Growth
Looking ahead, Zillow has provided predictions for the top 10 Metropolitan Statistical Areas (MSAs) in Colorado with the highest expected home price growth by August 2024. Here are the regions, along with their projected price growth percentages:
- Steamboat Springs, CO: Zillow predicts a substantial price growth of 9.2% by August 2024.
- Edwards, CO: Edwards is expected to see a price growth of 8.9% by August 2024.
- Glenwood Springs, CO: Glenwood Springs is forecasted to experience a price growth of 6.6% by August 2024.
- Craig, CO: Craig is also projected to see a price growth of 6.6% by August 2024.
- Durango, CO: Durango is expected to have a price growth of 5.6% by August 2024.
- Montrose, CO: Montrose is forecasted to see a price growth of 5.6% by August 2024.
- Grand Junction, CO: Grand Junction is predicted to experience a price growth of 5.5% by August 2024.
- Pueblo, CO: Pueblo is expected to see a price growth of 5.3% by August 2024.
- Cañon City, CO: Cañon City is forecasted to have a price growth of 5.2% by August 2024.
- Sterling, CO: Sterling is projected to experience a price growth of 4.8% by August 2024.
As we look ahead, the Colorado housing market appears to be experiencing some adjustments in home values, which can provide opportunities for both buyers and sellers. The rapid pace of transactions, as evidenced by the short time to pending, indicates strong demand in the state.
Additionally, Zillow's predictions for price growth in various MSAs highlight potential investment opportunities in specific regions of Colorado. However, real estate markets can be influenced by various factors, and it's essential for buyers and sellers to stay informed and work with experienced professionals to navigate the ever-changing landscape of the Colorado housing market.
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/
