The Colorado housing market is slowing down in 2022. Houses for sale lasted somewhat longer in June than in May. June saw fewer house sales compared to the previous month and June of last year. However, sellers continue to list additional homes for sale, as if they are worried buyers will vanish. The good thing for the Colorado housing market is that home prices are not going down in 2022 and 2023.
The average home price in Colorado is $694,989. Not only the Denver metro area but the entire Colorado housing market is a hotspot to buy and sell real estate. Due to the surge in demand for homes, home prices have increased in most regions throughout the state. It has increased the difficulty of finding a home to call your home.
There are more buyers than there are houses, resulting in a seller's market that continues to drive prices up. According to the Colorado Association of Realtors, the median Colorado single-family home price topped $500k for the first time in April of last year and has now reached $580,000.
- In July 2022, the median price in the Colorado housing market (statewide) was $580,000, up +10.5% year-over-year.
- The Average Sales Price in Colorado was $694,989, up 7.1% year-over-year.
- Percent of List Price Received has dropped to 100.1%.
- Days on Market Until Sale = 25, up +13.6%.
- Closed sales of single-family homes were down by 29.7% from last year.
- Months supply was up 53.8% to 2.0 months, which is still a seller's market.
- Inventory of Active Listings increased by 42.5% year-over-year.
- New Listings decreased by 8.1% year-over-year, which shows a slight decrease in seller optimism in July 2022.
Even Colorado Springs is in the strongest seller's market that we have ever seen. Low inventory and ever-soaring prices continue to impact affordability. In August 2022, the median list price of homes in Colorado Springs, CO was $465K, trending up 12% year-over-year, according to Realtor.com. The median sale price was $472.5K. Homes in Colorado Springs, CO sold for approximately the asking price on average. The sale-to-List Price Ratio was 99.71%. On average, homes in Colorado Springs, CO sell after 48 days on the market. The trend for median days on market in Colorado Springs, CO has gone up since last month, and slightly up since last year.
Colorado Housing Market Predictions 2022 and 2023
Colorado is still a seller's real estate market with a positive price forecast for the next twelve months. The market remains anything but average. Despite the increase in the number of properties for sale this year, there is still a lack of homes on the Colorado housing market. Thus, current conditions continue to favor sellers because there are too few homes available for the number of buyers in the market, which gives them all the leverage.
In that situation, buyers will do what they can to compete for the limited number of homes for sale, and prices will rise. The median price in the Colorado housing market (statewide) in July 2022 was $580,000, an increase of 10.5 percent year on year. At the same time, the average home price was $694,989, an increase of 7.1 percent year on year.
Colorado has a track record of being one of the best long-term real estate investments in the U.S. Let us look at the home price appreciation trends recorded by Zillow over the past few years. Colorado's strong economy gives buyers the ability to spend more on housing, consequently increasing real estate prices.
Since the last decade (Sept 2012), Colorado home values have appreciated by nearly 152.7% — Zillow Home Value Index. ZHVI represents the whole housing stock and not just the homes that list or sell in a given month. The typical home value of homes in the Colorado metro is currently $586,317. It indicates that 50 percent of all housing stock in the area is worth more than $586,317 and 50 percent is worth less (adjusting for seasonal fluctuations).
In July 2021, the typical value of homes in Colorado was around $497,000. Home values have gone up 17.8% since then. Colorado is currently the seller's real estate market which means that demand is exceeding the supply, giving sellers an advantage over buyers in price negotiations. There are fewer homes for sale than there are active buyers in the marketplace.
Here's Zillow's forecast for some of the metro areas in Colorado. Rising home values and listing prices, combined with limited inventory, indicate that Colorado's housing market is tilted toward sellers. This trend will likely continue for the foreseeable future unless inventory grows faster than demand or rising interest rates ultimately dampens the demand to that extent. None of these MSAs of Colorado except for Boulder are predicted to see a home price decline in 2023. In Boulder, home prices may see a slight drop of 0.3% in 2023.
| Denver, CO home values are forecasted to rise 1.2% between July 2022 to July 2023. |
| Colorado Springs, CO home values are forecasted to rise 4.5% between July 2022 to July 2023. |
| Fort Collins, CO home values are forecasted to rise 1.1% between July 2022 to July 2023. |
| Boulder, CO home values are forecasted to decline 0.3% between July 2022 to July 2023. |
| Greeley, CO home values are forecasted to rise 1.9% between July 2022 to July 2023. |
| Pueblo, CO home values are forecasted to rise 6.3% between July 2022 to July 2023. |
| Grand Junction, CO home values are forecasted to rise 4.2% between July 2022 to July 2023. |
What's Next for the Colorado Housing Market?
Housing market forecasters predict that home prices will keep rising in Colorado. As a buyer, the longer you wait to purchase a property, the more it will cost you due to continuing home price rise. It also provides you piece of mind that your home's worth will likely increase after you purchase it. This makes it historically a wise investment and an effective inflation hedge. As a seller, price appreciation is great news for your home's worth. Again, rely on a professional to determine the optimal circumstances for selling your home and purchasing your new home.
The number of available homes for sale is expected to increase in Colorado. As a buyer, having more housing inventory for sale on the market is excellent news. Remember that the housing supply is still limited, so be prepared to act quickly and make your best offer. If you're a home seller, you should prepare for more competition as more homeowners enter the housing market.
Inflationary pressures will likely continue to influence mortgage rates. As a buyer, you should consult real estate professionals, including your lender, to discover how rising mortgage rates affect your purchasing power. If you are prepared, it may make sense to purchase now before the price increases. As a seller, rising mortgage rates motivate some homeowners to move up as quickly as possible.
In August 2022, the median sales price in Northern Colorado was $550,000 while the weeks of inventory were 9. The median sales price in Central Colorado was $634,900 while the weeks of inventory were 16, according to the stats released by REcolorado.
Northern Colorado Housing Market Trends
- Homes Sold = 562
- Median Closed Price = $550,000
- New Listings = 792
- Pending Listings = 658
- Weeks of Inventory = 9
- Median Days in MLS = 10
Central Colorado Housing Market Trends
- Homes Sold = 49
- Median Closed Price = $634,900
- New Listings = 57
- Pending Listings = 50
- Weeks of Inventory = 16
- Median Days in MLS = 22
Home prices are directly affected by demand, which, according to real estate experts, isn't going away anytime soon. However, they are not rising as quickly as they once did, and Colorado real estate agents predict that prices will level off or rise slightly this year. Some of this is most likely due to rising interest rates.
Moderate price appreciation has historically been accompanied by a six-month supply. Construction has slowed for much of the pandemic, owing to labor shortages and supply-chain issues that have made certain materials difficult to obtain. Colorado's housing supply is still well short of a balanced real estate market.
Housing Inventory: Active Listing Count 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/
