The Housing Market in Colorado
Let’s take a quick look at the main factors determining Colorado’s housing market; Unemployment, Prices, Affordability, Confidence, Interest Rates, Distressed Home Market, Vacancy Rates, and Absorption.
Unemployment in Colorado is at 7.8% compared to the National Average of 8.3%. At this level, Colorado has one of the lowest unemployment rates and is trending down. This is creating greater confidence in the overall market.
Home prices in Colorado have increased slowly, about 2.2% is all, but is expected to continue to increase as this market improves.
Affordability is at an all time high in Colorado. The rental rates are way up and prices are way down, that along with record low interest rates make buying a house in Colorado incredibly affordable.
Colorado’s distressed market is decreasing at a rate that was unexpected. We are now at 2006 levels and dropping continuously. There is the matter of “phantom inventory” of foreclosures that still threatens to increase these numbers and is yet to be determined. This is something to keep an eye on.
The vacancy rates are at a record low in the Metro Denver area. This means that there is real demand for rentals. This makes investment home buying very attractive.
Absorption Ratios deal with the ratio of homes on the market compared to homes sold. It shows, along with other things, how much active inventory we see and how long that inventory of homes will linger on the market. Colorado is seeing low absorption ratios and that means our inventories are dropping faster than expected. Average Days On the Market, DOM, is down 15% over last year!
Another key factor is that there are many buyers and sellers dealing with multiple offers. This means that buyers cannot expect to come in with “low-ball” offers anymore and sellers can expect prices to climb.
There are positives to both side of the transaction, buying and selling. But one thing is clear, these factors all point to one thing, the shift is on from a buyer market to a seller market. Hold on and happy buying… and selling!