Still Behind

Single family new housing starts in 2022 will show an increase versus last year, will be the most since 2007, and will still be well behind the peak of 2006.

This year, experts predict that a total of 1.1 million single family homes will be started. In 2021 there were 970 thousand new home starts.

The peak occurred in 2006, when 1.65 new homes were started.

So, this year will finish 33% behind the peak.

When we are asked why today’s market is different from the ‘bubble years’ of 2004 to 2007, the difference in new home starts is one reason we cite.

Even though the market is cooling, we remain significantly undersupplied which insulates prices from any kind of dramatic downturn.

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What the Numbers Say

During a time of varying opinions and heavy speculation about the Front Range real estate market, let’s see what the actual numbers are telling us:

Inventory is up significantly year over year:

  • Larimer County = +48%
  • Weld County = +52%
  • Metro Denver = +74%

However, supply is still low as measured by months of inventory:

  • Larimer County = 1.1 Months
  • Weld County = 1 Month
  • Metro Denver = 1 Month

Transaction count is down as the pace of sales is slowing:

  • Larimer County = -24%
  • Weld County = -15%
  • Metro Denver = -19%

Yet, average prices are still up versus last year:

  • Larimer County = +18%
  • Weld County = +10%
  • Metro Denver = +14%

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The Best News

The best news in a long time has finally arrived for buyers.

Inventory is up, frenzy is down.

Buyers who were frustrated, confused and disappointed by the market a few months ago are now coming back to find a much more reasonable environment.

Demand is still high for sure.  However, the intense, frenzied competition has subsided.

There is now room to breathe because there is more selection.

Here is how inventory has increased along the Front Range versus the same time a year ago:

Larimer County = 28%

Weld County = 19%

Metro Denver = 35%

These are significant increases and a trend we expect to continue.

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A positive outcome of the cooling housing market is lower lumber prices.

Lumber is now priced at $605 per thousand board feet.  This is a new low for 2022.

Prices for lumber are now down 47% for the year and are well below the 2021 peak of $1,733 per thousand board feet.

What’s causing this?  Higher mortgage rates have slowed the pace of new home sales and remodeling projects.

Most experts believe that lumber prices will fall even further during the remainder of the year.

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What We Notice

Here is what we notice about the market right now:

  • Listings are receiving fewer offers compared to 60 days ago – instead of 10 offers, a listing might have 2.
  • There are now several instances of a listing only having one offer.
  • Sellers who were overly-aggressive with their list price have to quickly reduce in order to generate activity.
  • Inventory is up and in some areas significantly, giving buyers more options and flexibility.
  • Home buyers who are under contract with a new home waiting for that new home to be built have been negatively impacted by rising rates.
  • More buyers are considering 7 and 10-year mortgage products in order to have a lower interest rate.
  • The pendulum is swinging away from the drastic seller’s market we have seen for the last 18 months.

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Inventory Bottom

In Front Range markets, the number of homes for sale has just hit bottom or is about to hit bottom.

This is terrific news for home buyers who have been waiting for more homes to choose from.

The market is shifting, there is no doubt about that.

Prices are still increasing and we expect them to increase, just not at the pace they have been.

The inventory of homes for sale, which has been significantly down for two years, is finally starting to show signs of change.

We have been accustomed to inventory levels being down 30% to 50% compared to the prior year.

That is not the case anymore.

Inventory in Larimer and Weld County is now only down roughly 5% year over year.

Inventory in Metro Denver is now up 13.5% compared to this time in 2021.

We believe this is a legitimate shift in the market, not just a short-term anomaly.

No need to worry about prices crashing or a housing bubble.  There is still too little supply and too much demand for that to happen.

However, the pace of price of appreciation will certainly get back to more normal levels of 5% to 6% per year instead of 20% to 25% per year.

Bottom line, this market shift has been a long time coming and is very good news for buyers.​​​​​​​ 

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Before You Sell: Affordable Curb Appeal Tips

You know that saying, “don’t judge a book by its cover?” Unfortunately for home sellers, most home buyers are quick to judge a house by its exterior. It’s can be one of the quickest ways to weed out homes that are less desirable in the sea of for-sale signs. We don’t want your home to end up on that list, so we have come up with the top tips for upping your curb appeal game, on a budget!

Keep a Well-Maintained Yard

  • Mowing: the first step to a well-manicured lawn is to mow it regularly. Make sure to not cut it too short, and keep your blade sharp to give it the healthiest appearance.
  • Weeds: always pull weeds from their roots. After that, mulch over where they used to be to prevent light from getting to the seeds.
  • Feeding: Without extra nutrients, grass turns pale and thin. Weed seeds and moss thrive in these low nutrient conditions.
  • Watering: Be careful not to overwater! Most lawns need to be watered once a week.
  • Flowers: You can quickly and affordably dress up your yard with colorful pre-made flower pots and containers.

Dress Up the Front Porch

  • Paint: A fresh coat of paint can give your home a well-deserved facelift. Try a bold color to really make it stand out!
  • House Number: Update your number(s) to something bigger and more creative. Explore options or mix-and-match.
  • Decor: Windchimes and/or market lights across your front porch give the front of your home an inviting and warm look.
  • Hardware: Replace any hardware that is outdated or remove rust with a polisher.
  • Plants: Hanging plants in planters or having them stagger your front steps will make your porch look and feel lively and well-maintained.

Make sprucing up the front of your home a weekend project right before you sell. With a few of these quick and inexpensive changes, the exterior of your home will stand out among the rest.

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Delinquent Indicator

A leading indicator of the health of any real estate market is Mortgage Delinquencies.

Specifically, the percentage of mortgages which are at least 30 days delinquent can foretell the amount of distressed properties that may hit the market in the future.

The most recent research shows that only 4.11% of all loans are delinquent.

This number has dropped for seven quarters in a row and is now at its lowest level since the fourth quarter of 2019 (which was the lowest ever in 20 years).

It is worth noting that the delinquency rate in the years leading up to the housing bubble hovered between 5.5% to 6.0%.

Based on this data, the likelihood of a foreclosure surge or a glut of distressed properties hitting the market is minimal.

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Q1 2022 Colorado Real Estate Market Update

The following analysis of select counties of the 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 Real Estate agent.


Regional Economic Overview

The most recent jobs data showed that by February of this year Colorado had recouped all of the more than 375,000 jobs that were shed due to the pandemic and had added an additional 6,000 positions. The recovery in employment was faster than I had expected, which has led me to revise my 2022 forecast: I now predict that the Colorado job market will increase by 4% this year and will add more than 112,000 new jobs. The state unemployment rate in February was 4%, which is well below the pandemic peak of 11.8% but still above the 2.6% average in 2019. Regionally, unemployment rates ranged from a low of 3.1% in Boulder to a high of 4% in the Colorado Springs and Greeley metropolitan areas.

Colorado Home Sales

❱ In the first quarter of the year, 8,178 homes sold, representing a drop of 6.3% compared to the same period a year ago and 30% lower than in the fourth quarter of 2021.

❱ Sales increased in 4 of the 12 counties covered by this report but fell in the balance of the market areas.

❱ Similar to last quarter, low inventory levels continue to constrict sales. Listing activity was 17.3% lower than the same period in 2021 and 29.5% lower than in the fourth quarter of 2021.

❱ Pending sales, which are an indicator of future closings, also declined, though the drop of 4.3% is not that significant. That said, unless we see a surge in inventory levels in the spring, second quarter sales may also be light.

A bar graph showing the annual change in home sales for various counties in Colorado between Q1 2021 and Q1 2022.

Colorado Home Prices

❱ With limited inventory and rising mortgage rates, buyers were motivated, as demonstrated by the 14.9% increase in average prices compared to a year ago. Home prices in first quarter averaged $637,963, which is 4.5% higher than last quarter.

❱ Boulder County continues to see average sale prices holding above $1 million. Although we have seen some softening in list prices, I expect this market to remain above the $1 million mark as we move through the year.

❱ Year over year, prices rose by double-digits across all markets covered by this report, with a huge jump in the small Gilpin market.

❱ With little in the way of choice for buyers—as well as a “fear of missing out” given rising mortgage rates—it’s no surprise there was such solid price appreciation. That said, there is normally a lag between rising rates and any impact on home prices. The second quarter should indicate if the jump in rates has had a softening effect on price growth.

A map showing the year-over-year real estate market percentage changes in various counties in Colorado for Q1 2022.

A bar graph showing the annual change in home sale prices for various counties in Colorado from Q1 2021 to Q1 2022.

Mortgage Rates

Average rates for a 30-year conforming mortgage were 3.11% at the end of 2021, but since then have jumped over 1.5%—the largest increase since 1987. The surge in rates is because the market is anticipating a seven- to eight-point increase from the Federal Reserve later this year.

Because the mortgage market has priced this into the rates they are offering today, my forecast suggests that we are getting close to a ceiling in rates, and it is my belief that they will rise modestly in the second quarter before stabilizing for the balance of the year.

A bar graph showing the average rates for a 30-year conforming mortgage, plus Matthew Gardner's mortgage rate forecasts for Q2 2022 through Q1 2023.

Colorado Days on Market

❱ The average number of days it took to sell a home in the markets contained in this report fell four days compared to the first quarter of 2021.

❱ The length of time it took to sell a home dropped in every county other than Gilpin compared to the same quarter a year ago.

❱ It took an average of only 21 days to sell a home in the region, matching the previous quarter.

❱ Compared to the final quarter of 2021, average market time fell in Clear Creek, Adams, Denver, Jefferson, and Arapahoe counties, but rose in the balance of the markets contained in this report.

A bar graph showing the average days on market for homes in various counties in Colorado during Q1 2022.


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.

With Colorado on solid economic footing, I expect housing demand to remain strong even in the face of rising financing costs. Inventory levels remain very low, and new home construction has not expanded enough to meet demand, which continues to put upward price pressure on resale homes. The market appears to have shrugged off the jump in mortgage rates in the first quarter, but the full effects won’t be felt until later this spring. We’ll have to wait and see what impact, if any, there will be, but data on listing prices shows that home sellers remain bullish.

A speedometer graph indicating a seller's market in Colorado during Q1 2022.

Given all these factors, I am leaving the needle in the same position as last quarter. The market clearly still favors sellers, but we need a few more months of information to determine how rising mortgage rates may impact home sales and/ or prices.

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

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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Expert Opinion

This week, take a listen to Matthew Gardner, Windermere’s Chief Economist as he discusses the current state of the housing market.​​​​​​​


He takes a deep dive into interest rates, price appreciation and where the market is headed.


You can watch his video HERE

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