real estate summit: low inventories, price appreciation to continue
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via Greeley Tribune
By Christopher Wood | Published on April 1, 2022
LOVELAND — Northern Colorado’s residential real estate market continues to suffer from record-low inventories, helping to drive up prices at dramatic rates.
That trend is expected to continue through 2022, Dennis Schick, broker/owner of Re/Max Alliance, told a crowd Wednesday at the Northern Colorado Real Estate Summit. Schick delivered a residential forecast at the conference at The Ranch event complex in Loveland, attended by more than 350 people.
“We are nervous,” Schick said, noting low inventories and high inflation, including for products such as lumber, which has increased in price by 254% since the onset of the COVID-19 pandemic.
Comparisons between February 2022 and February 2021 illustrate what’s been happening in the market:
Weld County’s decline in new single-family listings was less dramatic, dropping from 603 in February 2021 to 552 this year, down 8.5%. Pending sales declined 9%, from 611 to 556.
Larimer County had 516 new single-family listings in February 2021, but that number plummeted in February 2022 to 341, down 34%. Pending sales declined 35.8%, to 327 from 509.
Low inventories have fueled surging home prices, Schick noted.
Greeley also recorded a dramatic increase in median single-family sales price, from $358,000 to $440,000, up 22.9%.
Fort Collins’ median single-family sales price jumped 15% from February 2021 to February 2022, from $519,250 to $597,500.
Loveland’s median sales price jumped 31.7%, from $405,000 a year ago to $533,000 in February 2022.
Schick noted that every home typically has 14 potential buyers, with some properties attracting even more would-be purchasers.
“Some of them have been absolutely astonishing,” he said, referring to the number of potential buyers.
But he countered the impression that every home is selling for above asking price, or for cash.
Larimer County recorded 5,016 detached homes sold last year, with 24% selling for below asking price and 21% selling for full asking price. Homes selling for more than asking price amounted to 55% of the market, he said. Only 19% of homes sold were for cash.
Weld County recorded 4,214 detached home sales in 2021, with 19% selling for below asking price and 21% at full asking price. Homes selling for above asking price amounted to 60% of the market. Only 13% of homes sold were for cash.
Schick said that although “builders are doing a phenomenal job” in bringing new product to the market, “inventory is not keeping pace.”
Building activity in Greeley, has helped, with new product helping the city to record an increase in new single-family listings in February 2022, to 168 from 102 the prior year.
Looking at the market overall, Schick expressed hope that the trend of lower inventories “can be erased because there’s lots and lots of people who want to live here, and we are losing the ability to provide them with housing.”