The Rise in Prices in Colorado’s Real Estate Market is Mostly Due to Lack of Inventory
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Across the country, real estate agents are seeing prices rise. This is the case in Colorado as inventory drops prices will continue to rise. Our demand way exceeds our inventory. Real estate agents in Colorado are feeling the pinch just like all Realtors in the US.
What’s driving the real estate market?
So what’s the problem? Colorado is a net exporter of real estate. In other words, we’re getting more jobs and people are moving here. There’s a good reason for this: the weather is ideal. With a low unemployment rate, our population is growing, along with our job numbers and income. All of this makes it harder to build new homes. This supply/demand imbalance has resulted in increased prices across the state. What does this mean for you? Sellers in Colorado’s marketplace will see price increases in many markets. It is natural and unavoidable, because we don’t have enough houses to satisfy this growing demand. The good news is that you can still sell your house at a reasonable price. What are the factors affecting your property value?
Why is inventory so low in Colorado?
Inventory is down in Colorado due to: Purchases of homes below market value. It’s a big moneymaker for real estate agents. But it’s also frowned upon by the government. This is because prices are rising so fast, it’s lowering the overall value of a home in Colorado. Spouses refinancing mortgages. A lot of home sales are refinancing. This may explain why there are so many foreclosures. Most Buyers are Bankers A lot of bank CEOs have their own “Seller’s Market” The way banks and real estate agents get the highest prices on homes is to sell to people who aren’t looking to buy right now. The mortgages are packaged into a mortgage backed security. This is a security that’s traded and sold to investors. The investor is looking for income from the security.
The importance of inventory
Our inventory is actually fairly low compared to the amount of homes that are for sale in the metro area. The average for an area like Colorado is 25 percent of the inventory is for sale. As you can see from the graphic above, the metro area only has 13 percent of the inventory for sale. This is a pretty low inventory. If the city had an average of 25 percent of the inventory, home sales would go up by an average of 5%. When you look at the median sales price in Denver it is getting close to record levels. In August the median sales price was $439,000. It is hard to ignore the numbers and they are hard to ignore in the housing market. When you look at the metro area of Denver we had 7,602 single family home sales in August.
Why inventory is low
If you’re thinking about buying a home in Colorado, you should know there are more than 7,600 homes on the market in the state of Colorado. That’s a low number for a property the size of the state. As prices rise, the supply drops. Areas experiencing the most homes for sale are in and around Denver, Boulder and Fort Collins. While many homeowners are looking to move, they don’t see much action in these areas. This could lead to a longer wait time before sellers find the right home for them. However, in other areas, such as Grand Junction and Pueblo, there are more than 200 homes on the market. While this doesn’t compare to Denver and Boulder, it’s still a significant amount for the state.
How lack of inventory affects buyers
There is a lack of inventory in Colorado. This issue means buyers can negotiate for the price they want. The buyer wants the house and the seller is willing to meet their price. Because there is no inventory buyers are forced to bid against one another. This means more cash in the bank and little chance of losing their dream home. There are a lot of rules in Colorado. Some of those rules make it difficult for buyers. Not enough listings in your area? Don’t worry there are ways to get in on the action. Here is how you do it: Start searching for houses and apartments online. You can find everything from short sales to luxury homes. You can find everything from short sales to luxury homes. While on line you search for the homes you want to buy.
Why are prices rising?
There is a tremendous amount of demand from buyers on the market. The good news is this demand is being met by a limited number of homes for sale. While the number of homes for sale is at a historic low, the supply of homes in the US is at a historical high. So where is all the inventory? There are only about 5,000 homes for sale in the entire state of Colorado. The demand for these homes is far greater than the number of homes for sale. This supply and demand imbalance will continue to put upward pressure on prices. All signs point to the increasing demand outweighing the supply in Colorado’s real estate market. Without a significant increase in inventory, this trend will continue. Want to know more about the local market? Colorado offers different markets within the state.