Is This The Top of the Colorado Real Estate Market?

by Suzanne Ekeler

Am I buying at the top of the Colorado real estate market? Are home prices going to crash? Can this real estate bubble last? These are common questions on the minds of a lot of people right now.

These are all valid concerns — we’ve all seen the activity in the market — how fast prices are going up, the multiple offer situation increase creating bidding wars, and more. Host and current President of Windermere Colorado Professionals, Eric Thompson, is happy to report (in short) with a confident “no” to those — especially buyers — who are asking if this is the top of the Colorado real estate market. Read on to find out why:

It All Comes Down to Supply & Demand
Let’s unpack what this means for the current Colorado real estate market.

Supply – On the supply side (this is true for up and down the Front Range) the number of residential properties for sale (compared to one year ago) is essentially 70% below the number it was last year. Meaning we have 70% fewer houses on the market for sale right now and is 1/10 the long-term average. A big reason for this is new home construction lagging behind market demand and population growth. Another reason is due to COVID — people simply didn’t want to list for a variety of concerns.

Demand – There’s really just one thing that drives demand and influence on housing: jobs. When employment is growing and we’re in a healthy economic market, we typically see an 18-month lag between job growth and its influence on real estate. What we see today, is an economy that has bounced back from COVID very quickly. A year ago (April 2020) unemployment in Colorado spiked to 12%. Today, just a year later (April 2021) it’s half of that, sitting just above 6%.

Work-from-home (WFH) culture is also a new interesting variable for demand to consider. As we begin to enter into a post-pandemic world, people are now far less attached to their place of work’s physical address in terms of where they can live. Companies are much more flexible about remote work which allows people to live wherever they want to — and guess where people want to live? In Colorado.

Those of us in the real estate industry has noticed an uptick in working with transplant or out-of-state buyers who are seeking to move to Colorado now that they aren’t tethered to their jobs. This is also adding to demand in the Colorado real estate market.

Now, let’s forecast what the current supply and demand mean for the future of the Colorado real estate market.

Supply – On behalf of our Colorado real estate professionals, I/we can tell you that we do not see anything in the near term that is going to significantly change the inventory situation. So, what would it take? It would take a massive amount of new construction, and we just don’t see that based on the land availability and building materials inventory needed to create an ideal environment for new housing projects.

Demand – Do we see anything on the horizon that would cause demand to diminish? Not at all. The great economic vitality and quality of life that makes Colorado so attractive to buyers has proven to be a permanent motivator.

For prices to crash, we would need to see a drastic change in either supply or demand
Take 2008 for example. The housing market bubble burst was caused by a significant economic downturn affecting the demand side, paired with an influx in new construction that impacted the supply side of things. Right now, we don’t have anything close to that happening to cause concern of a real estate market crash.

Decades of Data is the Determining Factor
The past 40 years of reporting tell us a lot. What we can tell you is our markets long-term have averaged about 6% per year appreciation. This means that year-over-year throughout the last 40 years, research shows a 6% average annual price increase. For perspective, the last time we saw a price decrease was in 2008 — and even then during a great recession, price depreciation saw a nominal 2% decrease rate.

Research shows steady growth for the Colorado real estate market. What can’t last, however, is the pace. Double-digit appreciation rates will slow down, but prices will not decrease.

The Verdict
The top of the Colorado real estate market will be the day you sell your home — and based on homeowner surveys, people usually list their homes for sale after 10 years. We believe it’s important to think in the long term and it’s not effective to focus on what may happen in the next month. More importantly, think about what’s going to happen over the course of your homeownership. When we look at it from that perspective — knowing how our market performs, the fundamentals that are here today, and new variables coming into play like the WFH dynamic — we confidently believe what’s best for buyers today is to hang in there, even if it means making multiple offers.

Using the metaphor of a train, the Colorado real estate market is going to keep moving no matter what and the best thing for buyers to do is get on board and stay on until they find the perfect stop.

Topics covered in this article are based on a recent episode from the Colorado Living Podcast — hosted by Eric Thompson and produced by Windermere Local — your hub for real, raw, and authentic insights on the Colorado real estate market. Check out the full episode on ‘Is This the Top of the Market?’ at the link HERE or using the player below.

About Colorado Living Podcast
The Colorado Living Podcast features authentic, behind-the-scenes conversations about real estate from Colorado’s top real estate professionals. For more information, visit coloradolivingblog.com/colorado-living-podcast and listen to the Colorado Living Blog Podcast on Breaker, Google Podcasts, Pocket Casts, Radio Public and Spotify.

Blog • Buyers & Sellers • Colorado Real Estate • Economics 101 • Friday Fun Facts • Housing Trends • Sellers • Windsor Real Estate • June 25, 2021

Local Nuances

by Suzanne Ekeler

“All markets are local” is a commonly used phrase in real estate.

This adage is proving to be true as we notice slight changes recently in the market.

Bottom line, the market, in some locations, is not behaving exactly like it did even 30 days ago. Properties that perhaps would have received 10 or more offers last month, are now receiving only one.

It is as important as ever to examine not only the general market area, but also hyper-local markets in order to understand the nuances that exist in specific locations.

A common activity we perform with our clients is to research the months of supply in their own neighborhood. We will frequently find that this stat varies considerably from the market as a whole.

To illustrate how ‘all markets are local,’ take a look at the days of inventory statistic for the following markets:

Larimer County = 18 days
Fort Collins = 15 days
80521 Zip Code = 24 days
80525 Zip Code = 9 days

While data on the overall market clarifies overall trends, it is the hyper-local research that is incredibly valuable when pricing property.

Blog • Buyers • Buyers & Sellers • Sellers • June 24, 2021

National Homeownership Month – First-Time Buyers

by Suzanne Ekeler

A man and a woman hold a set of keys to their new home behind a National Homeownership Month graphic.

In recognition of National Homeownership Month, we’re shining a spotlight on the home buying process. Each home buying journey is unique, as are the challenges that people face en route to becoming a homeowner. These three stories of first-time homebuyers showcase the importance of working closely with an agent to navigate the buying process and find the perfect home.

Maria and Alvaro – Windermere Agent Team: The Brazens

Being first-time homebuyers, Maria and Alvaro knew they would have to adjust to the changes in the market. They were among a large influx of buyers buying during the pandemic, so they were aware that sellers had high expectations when it came to accepting an offer. A confluence of factors, including the pandemic, low interest rates, and many buyers’ desire for homes with more space, were igniting bidding wars left and right, with houses often going well above asking price. This also drove up listing prices on comparable homes in the area. These factors forced Maria and Alvaro to be flexible when it came to location and what they had previously considered “must-haves” for their ideal home at the beginning of their search.

They worked closely with their agents Taylor Brazen Tagge and Randi Brazen of The Brazens—a family-led real estate team based in Bellevue, Washington—to find the right competitive balance in what they were able to offer before hitting the market. This meant, in some cases, adjusting their expectations about what the “perfect” home was for them and having the patience to wait until they found it. They knew that when they time came; they would have to be aggressive in their approach.

Maria and Alvaro relied on Taylor and Randi throughout the buying process. The Brazen team’s knowledge of the Bellevue area provided the guidance and advice they were looking for to help them make informed decisions. The Brazens met with them at several showings, walked them through neighborhoods, and made themselves available to answer any and all questions they had along the way. The trust they formed in the early stages of working together laid a foundation for a friendship that translated to a successful experience navigating the market. They eventually found the home of their dreams, and although Maria and Alvaro miss working with the Brazens, they are grateful for the ultimate success of their home buying journey.

For Maria and Alvaro, homeownership is not just a financial investment; it is the start of a new chapter that will eventually provide the means for them to grow their family. They encourage buyers to be patient in finding their perfect home. It may be challenging at times, but the reward is so worth it.

Jocelyn – Windermere Agent: Nick Odermann

During her yearlong home search, Jocelyn’s expectations were quickly replaced with the reality of the hot housing market amid the pandemic. While touring homes, she realized that many listings were in worse condition than the photos implied, so she adjusted her expectations to remain levelheaded through the process. She experienced the pandemic buying frenzy first-hand when she was outbid multiple times and saw several homes sell for significantly higher prices than what they were listed for.

Luckily, Jocelyn had a trustworthy agent at her side by the name of Nick Odermann, who is one half of the Odermann Brothers team in Lake Oswego, Oregon. Together with his brother Steve, Nick helped Jocelyn navigate the challenges of finding a home in a seller’s market. Jocelyn was living in Southern California at the time, so she relied heavily on Nick’s judgement as he toured homes on her behalf. She had a specific vision of her dream home and Nick stayed true to it, quickly pointing out which homes would not suffice. When Jocelyn began to lose hope, Nick stayed positive. He was sure the perfect home was out there—and he was right.

For Jocelyn, homeownership is her path to adulthood. Now that she has a home, she looks forward to growing her pet care business. Becoming a homeowner was a major life goal of hers, and now that she’s achieved it with the help of her Windermere agent, she couldn’t be happier.

Jake – Windermere Agent: Taylor Hinds

It’s common for first-time homebuyers to learn as they go through the process, and Jake quickly discovered that information was the key to overcoming challenges. For example, he had no idea what earnest money was or that it was something he had to factor in on top of his mortgage. Learning that helped him work with his Seattle-area agent, Taylor Hinds, to form a strategy for making an offer.

Like the buyers above, Jake was buying in a hot seller’s market during the pandemic. He was surprised by how cash-ready sellers expected buyers to be. Luckily, he had a team behind him who were communicative and transparent throughout the whole process. When it came time to write a competitive offer, he leaned on Taylor’s expertise and advice to make the offer as attractive as possible, which eventually made all the difference in securing a home.

To Jake, homeownership means having a place to call your own, a place to be proud of. He looks forward to creating memories in his new home and building equity over time.

To begin your own home buying journey, connect with an experienced Windermere Real Estate agent today:

Blog • Greeley Real Estate • Virtual Tour • June 23, 2021

Greeley Charmer

by Suzanne Ekeler

Welcome home to this quiet neighborhood located just south of the UNC Campus in Greeley. 2512 13th Avenue is a ranch style home with 4 bedrooms, 2 bathrooms, finished basement, 1 car garage, large fenced in back yard with shed and nice deck. Roof and gutters just over a year old with class 4 shingles and furnace around 2 years old. The home can make a great owner occupy or rental. Showings start Thursday 6/17. Call (970) 590-4841 to schedule your private showing or click the link below for more details.

http://windermerewindsor.com/listing/134768615

Blog • Buyers • Buyers & Sellers • Colorado Real Estate • Economics 101 • Friday Fun Facts • Sellers • June 21, 2021

High Average

by Suzanne Ekeler

If you watch the weekly statistics that we produce and post on social media, a number that might be jumping off the screen at you is the average price.

Specifically, it is the percentage increase in average price versus last year that is striking.

We are commonly asked ‘how could average prices increase 20% to 30% in one year?’

It is important to note prices haven’t appreciated up to 30%, it’s only the average price that has increased by that amount.

A key reason why average prices have increased by such a significant amount is that there are many more luxury properties selling this year versus last year.

Sales of properties priced over $1,000,000 have seen a substantial increase compared to 2020.

Look at these numbers which show the year over year increase in closed transactions for real estate priced over $1 million:

Larimer County = 159%
Weld County = 247%
Metro Denver = 137%

So, transactions of luxury properties have much more than doubled compared to 2020 which is pulling up the average sales price in a significant way.

Buyers & Sellers • Sellers • June 14, 2021

Preparing Your Equestrian Property for Sale

by Suzanne Ekeler

Two horses on an equestrian property eating grass.

Selling a horse property is quite different to selling your typical single-family home and can present some unique challenges. Therefore, when marketing a property like this, there are certain things to consider in order to achieve a successful sale. Because equestrian properties aren’t usually located in heavily populated areas, when buyers take the time to visit your property, you need to do everything you can to make a lasting impression. Having an equestrian property is a major responsibility, but if you convey to interested buyers the value and joy it can bring, it will help with getting your property sold. Here are some ways you can prepare your equestrian property for sale.

Sell the Lifestyle

How your property is described and positioned in the marketing assets is key. You are selling a lifestyle, so it’s worthwhile to talk up the experience that comes from owning such a unique property. Elaborate on nearby vets, feed lots, co-ops and grocery stores. Describe the nearby trail rides and point out if there are neighborhood riding clubs. Paint the picture of what a potential buyer’s life could look like when they buy your property. Will they be enjoying the sunset on the patio overlooking the pasture? Does a stream trickle by the patio creating a relaxing ambiance? Can you watch the horses play in the field from the bedroom window? These are the visuals images that can capture a buyer’s imagination.

Organize your Documents

There are certain legal documents and records that come with owning and operating an equestrian property. Make sure you have the title and any land surveys or improvement location certificates ready to go as you prepare the property for sale. In addition to legal documents, make sure your agricultural records are current and updated. This includes plant health analyses, well permits, water or mineral rights, grazing leases or anything relating to natural resources on your property. Many buyers will ask to see records of past water and utility bills as well. This will make the process that much easier when you know the logistics have been taken care of.

Stage for Buyers

More than likely, the buyers who are touring your property either own horses or have been around equestrian properties before. Therefore, you will want to make sure the property appeals to horse owners. This includes making sure your fencing is intact, locks are secure, the barn is clean, and the pastures are mowed to perfection. This will also show buyers that they too can make the property look exactly the way they envision.

The Price is Right

A major factor in attracting buyers is the listing price. It’s important to work closely with an Equestrian Advisor who specializes in selling horse properties to ensure that yours is priced accurately. When potential buyers see that your equestrian property is properly priced, they are more likely to view it as a good investment. If you plan to include any equipment like a tractor, mower or other large items in the sale, price those separately and do not include them in the list price of your home. This will ensure that your property is listed at an appropriate price and that buyers will pay the necessary sales tax on those items outside of closing.

Blog • Buyers • Buyers & Sellers • Colorado Real Estate • Friday Fun Facts • June 12, 2021

Colorado Ranking

by Suzanne Ekeler

Here’s the latest from one of our favorite data sources – the Federal Housing Finance Authority (FHFA).

They track home prices across the Country and produce a quarterly Home Price Index report.

It is not uncommon to find Colorado near the top of the list for year over year price growth.

The latest report has us ranked 13th with only a 13% year over year increase (said with sarcasm).

Idaho is first with a whopping 24% increase. Utah is second at 19%.

Here is our interpretation of these numbers…

Colorado has a history of strong, steady price growth instead of booms and busts.

Our market does not take the big, wild swings in prices that other markets sometimes do.

The fact that Colorado is not at the very top of the list right now is actually good news to us.

We know that our clients appreciate a market that is more steady instead of one that can feel like a rollercoaster.

Blog • Buyers & Sellers • Sellers • June 7, 2021

Selling a Home with Pets

by Suzanne Ekeler

A woman lifts her dog in the air while sitting on the couch.

For pet owners, it’s hard to imagine their home without a furry friend. However, when it comes time to sell, showcasing the qualities of a home should take precedence over the pets that live in it. This creates additional steps in the process of preparing your home for sale, but it makes all the difference in the minds of buyers.

Staging Your Home

A well-staged home makes it appealing to the widest variety of buyers and has significant ROI potential when it hits the market. However, having a pet can complicate the staging process. Buyers may lose interest in the home if they see traces of pets, so it’s a good idea to hide any and all signs of their presence.

It’s especially important to hide evidence of your pet in marketing photos. Prepare for your home’s listing photos by cleaning and vacuuming, making sure all pet stains are gone and any pet-related damage is repaired. Stow any pet carriers, cages, toys, food bowls, and other supplies that may hinder the photographer’s ability to capture the essence of a room.

Showing Your Home

Before inviting potential buyers inside, it’s best to give your home a deep clean to improve your home’s air quality, and to rid your carpets, flooring, and surfaces of pet odors and any dirt they may have tracked in over time. If you’re using your own furniture, vacuum and clean everything to extract as much fur and pet dander as possible. Talk to your agent to see if it’s a better idea to stage your home with rented furniture. If your pets have caused any damage in the home, make repairs or replacements as needed. After tending to your home’s interior, don’t forget to clean up after your pets in your yard as well. Fill in any holes in the lawn, freshen up your flower beds, and tidy up any areas of the landscaping where your pets may have dug.

After you’ve prepared your home for showings, there’s the question of what to do with your pets once buyers actually start taking tours. Ask a family member, friend, pet sitter, or neighbor to watch your pets while the showings take place. If you’re not able to find someone to watch them, form a strategy to temporarily relocate your pets during showings. If they must stay in the home, garage, or backyard during tours, it’s best to give buyers advanced notice that there are pets on the property. Talk to your agent about posting signage communicating their presence so that there are no surprises as guests make their way through the house.

Taking all these precautions will help to present your home in the best light without detracting certain buyers, for whom the signs of a pet may cause them to lose interest. On the other hand, if any buyers inquire about how the home can accommodate their pet, you and your agent will be more than ready to answer any questions they may have.

Selling Your Home

For more information on the process of selling your home, visit the Selling Page on our blog. To get an idea of what your home is worth, try our free home value calculator below:

What’s My Home Worth?

Blog • Colorado Real Estate • Economics 101 • Friday Fun Facts • June 4, 2021

Words Matter

by Suzanne Ekeler

A common phrase that is being used right now to describe the market is ‘no inventory.’

‘There’s no inventory’ is said frequently among those inside and outside of the real estate industry.

The problem with this phrase is that it is untrue.

There is inventory. Meaning, there are a significant number of new listings hitting the market.

However, there is low standing inventory. Meaning, the listings that do hit the market don’t stick around for very long before they are purchased.

Standing inventory, which is the number of active properties on the market, is down roughly 70% along the Front Range.

However, the number of new listings coming on the market is essentially:

Double compared to December 2020
Only 20% to 25% less than this time of year in 2017, 2018, and 2019

So, there is inventory available, it just sells quickly because demand is historically high right now.

Blog • Economics 101 • Friday Fun Facts • May 28, 2021

Calculated Risk

by Suzanne Ekeler

The economic research blog called “Calculated Risk” just completed a fascinating study on home prices.

Specifically, they looked at the correlation between home price growth and inventory.

They used price data from the Case-Shiller Home Price Index and inventory data from the National Association of Realtors.

No surprise, they found that the lower the inventory the higher the home price growth. Also no surprise, as inventory goes up, price growth slows down.

This all correlates with simple economic rules of supply and demand.

The interesting part of their research is this: at a certain level of inventory, prices have the potential to go down.

That level, according to their research, is six months of inventory.

That means, prices don’t have a chance of decreasing in a market until there is at least 6 months of inventory available for sale.

To put that in perspective, today there is two weeks of inventory on the market along the Front Range.

So, there would need to be 12 times the amount of homes for sale on the market for prices to even have a chance to go down.