Colorado Real Estate Market Update

Housing Market

The following analysis of the Metro Denver & Northern Colorado real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere agent. 

 

ECONOMIC OVERVIEW

What a difference a quarter makes! Following the massive job losses Colorado experienced starting in February—the state shed over 342,000 positions between February and April—the turnaround has been palpable. Through August, Colorado has recovered 178,000 of the jobs lost due to COVID-19, adding 107,500 jobs over the past three months, an increase of 4.2%. All regions saw a significant number of jobs returning. The most prominent was in the Denver metropolitan service area (MSA), where 78,800 jobs returned in the quarter.

Although employment in all markets is recovering, there is still a way to go to get back to pre-pandemic employment levels. The recovery in jobs has naturally led the unemployment rate to drop: the state is now at a respectable 6.7%, down from a peak of 12.2%. Regionally, all areas continue to see their unemployment rates contract. I would note that the Fort Collins and Boulder MSA unemployment rates are now below 6%. Cases of COVID-19 continue to rise, which is troubling, but rising rates have only slowed—not stopped—the economic recovery. Moreover, it has had no noticeable impact on the state’s housing market.

 

HOME SALES

  • In the third quarter of 2020, 15,065 homes sold. This represents an increase of 20.4% over the third quarter of 2019, and a remarkable 52.7% increase over the second quarter of this year.
  • Home sales rose in all markets other than El Paso compared to the second quarter of 2019. I believe sales are only limited by the number of homes on the market.
  • Inventory levels remain remarkably low, with the average number of homes for sale down 44.5% from the same period in 2019. Listing activity was 17.8% lower than in the second quarter of 2020.
  • Even given the relative lack of inventory, pending sales rose 17.8% from the second quarter, suggesting that closings for the final quarter of the year will be positive.

 

HOME PRICES

  • After taking a pause in the second quarter, home prices rose significantly in the third quarter, with prices up 11.9% year-over-year to an average of $523,193. Prices were up 7.4% compared to the second quarter of this year.
  • Interest rates have been dropping. Although I do not see there being room for them to drop much further, they are unlikely to rise significantly. This is allowing prices to rise at above-average rates.
  • Year-over-year, prices rose across all markets covered by this report. El Paso, Clear Creek, and Gilpin counties saw significant price appreciation. All but four counties saw double-digit price gains.
  • Affordability in many Colorado markets remains a concern, as prices are rising at a faster pace than mortgage rates have been dropping.

DAYS ON MARKET

  • The average number of days it took to sell a home in the markets contained in this report dropped one day compared to the third quarter of 2019.
  • The amount of time it took to sell a home dropped in nine counties, remained static in two, and rose in one compared to the third quarter of 2019.
  • It took an average of 29 days to sell a home in the region.
  • The Colorado housing market continues to demonstrate solid demand, and the short length of time it takes to sell a home suggests buyers are competing fiercely for available inventory.

 

CONCLUSIONS

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

Demand for housing is significant, and sales activity is only limited by the lack of available homes to buy. Prices are rising on the back of very competitive mortgage rates and a job market in recovery. I suggested in my second-quarter report that the area would experience a “brisk summer housing market” and my forecast was accurate. As such, I have moved the needle a little more in favor of home sellers.

 

ABOUT MATTHEW GARDNER

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

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Economic Update with Matthew Gardner

Event Invitation

Exclusive Invitation!!!

Tune in on Tuesday, October 6, 2020 at 9:00am to meet with Matthew Gardner, Windermere Real Estate’s Chief Economist LIVE and get your chance to ask him questions. He’ll be discussing the housing market, employment and the effects of COVID-19 on the local and national economy.

As one of the only real estate companies in the US that has a Chief Economist on staff, we have exclusive insights into the housing market, economy and government happenings. This is a one of a kind event for clients and friends of Windermere Real Estate in Colorado.

To sign up, please contact your Windermere Agent or message us to get the link. Seating is limited in digital meeting room so get your seat!

(If you can’t attend live, you can register to automatically get the recording.)

The post Economic Update with Matthew Gardner appeared first on Windermere Colorado REALTORS.

Colorado Real Estate Market Update

 

The following analysis of the Metro Denver & Northern Colorado real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere agent. 

 

ECONOMIC OVERVIEW

COVID-19 had significant negative impacts on employment in Colorado. The pandemic caused the loss of over 342,000 jobs in March and April as unemployment rose to 12.2%. For comparison, peak unemployment following the Great Recession was 8.9%. However, it appears as if the massive contraction in employment is behind us (at least for now). Employment in Colorado rose in May by 68,800 jobs, a monthly increase of 2.8%, pushing the unemployment rate down to 10.2%. Regionally, the Denver metro area added 18,600 jobs in May and the Fort Collins metro area added 3,500 jobs. It is certainly too early to say that we are out of the woods, but we seem to be headed in a positive direction. Colorado’s COVID-19 infection rates started increasing again in June, which could slow down the economic recovery. However, I do not believe that it is likely to have any substantial impact on the housing market.

 

HOME SALES

  • In the second quarter of 2020, 9,867 homes sold. This represents a drop of 20.7% compared to the second quarter of 2019, but sales were 7.4% higher than in the first quarter of this year.
  • Sales dropped across all markets compared to the second quarter of 2019. I do not find this concerning as the drop can be attributed to limited supply and COVID-19.
  • Inventory levels remain tight, with the average number of homes for sale in the quarter down 21.3% from the same period in 2019. However, listings were up an impressive 15.6% over the first quarter of 2020.
  • I was pleased to see total pending sales in the quarter increase 16.3% compared to the first quarter, suggesting closing data for the third quarter will be better than we are currently experiencing.

 

HOME PRICES

  • Home prices held steady compared to the second quarter of 2019 at an average of $480,831. Prices were up 0.7% compared to the first quarter of this year.
  • Interest rates remain at very low levels and will stay in the low 3% range for the balance of the year, if not longer. This can allow prices to pick back up.
  • Price growth across the region was varied. Seven counties saw price growth and five experienced a drop in average sale price. Clear Creek County again saw prices rise substantially. However, as you are likely aware, it is a very small market and subject to wild swings. Prices dropped most in the equally small Gilpin County.
  • I am still watching affordability in many Colorado markets and will take this temporary “pause” as a good thing.

DAYS ON MARKET

  • The average number of days it took to sell a home in the markets contained in this report dropped by only one day compared to the second quarter of 2019.
  • The amount of time it took to sell a home dropped in eight counties, remained static in one, and rose in three compared to the second quarter of 2019.
  • It took an average of 29 days to sell a home in the region.
  • The Colorado housing market is demonstrating solid demand, and listing activity is trending higher. I expect that the summer market will be brisk.

CONCLUSIONS

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

Demand appears to be returning, which—combined with historically low interest rates—should lead to a brisk summer housing market. Assuming that the state gets new infection rates under control, I do not see why the housing market wouldn’t perform well this summer. As such, I have moved the needle just a little more in favor of home sellers.

 

ABOUT MATTHEW GARDNER

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

 

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Matthew Gardner Weekly COVID-19 Housing & Economic Update: 7/6/2020

On this week’s episode of “Mondays with Matthew”, Matthew Gardner discusses what is needed to motivate more Millennials to buy and the important role they play in the long-term health of the US housing market.

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Matthew Gardner Weekly COVID-19 Housing & Economic Update: 6/29/2020

On this week’s episode of “Mondays with Matthew,” Matthew Gardner discusses housing affordability and how he believes that despite the impact of COVID-19, affordability issues will remain and may actually get worse as we move forward.

The post Matthew Gardner Weekly COVID-19 Housing & Economic Update: 6/29/2020 appeared first on Windermere Colorado REALTORS.

Matthew Gardner Weekly COVID-19 Housing & Economic Update: 6/22/2020

In this week’s episode of “Mondays with Matthew,” Windermere Chief Economist, Matthew Gardner, dives into the high-frequency data sets that he uses to help determine where the US economy is at with emerging from the impacts of COVID-19. Hint: there’s progress, but we aren’t out of the woods yet.

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Matthew Gardner Weekly COVID-19 Housing & Economic Update: 6/1/2020

This week on “Mondays with Matthew”: Now that things have settled down somewhat following the initial impact of COVID-19, Matthew dives into the topic of mortgage rates. Will they go below 3%? Matthew discusses this and the factors that have formed his updated 2020 and 2021 mortgage rate forecast. 

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Matthew Gardner Weekly COVID-19 Housing & Economic Update: 5/18/2020

In this week’s episode of Mondays with Matthew, Windermere Chief Economist Matthew Gardner kicks off a series of episodes in which he answers questions from his followers. The first deals with how COVID-19 will impact buyer behaviors, especially in more urban markets.

The post Matthew Gardner Weekly COVID-19 Housing & Economic Update: 5/18/2020 appeared first on Windermere Colorado REALTORS.

Matthew Gardner Weekly COVID-19 Housing & Economic Update: 5/18/2020

In this week’s episode of Mondays with Matthew, Windermere Chief Economist Matthew Gardner kicks off a series of episodes in which he answers questions from his followers. The first deals with how COVID-19 will impact buyer behaviors, especially in more urban markets.

The post Matthew Gardner Weekly COVID-19 Housing & Economic Update: 5/18/2020 appeared first on Windermere Colorado REALTORS.

Matthew Gardner Weekly COVID-19 Housing & Economic Update: 5/11/2020

Job growth is critical to the health of the housing market, so on this week’s episode of “Mondays with Matthew,”  Windermere Chief Economist Matthew Gardner analyzes the effect of COVID-19 on employment and what we can expect for the duration of the year.

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