Traditionally, real estate is a market with predictable seasonal trends. In the spring, the market blooms with an influx of new listings and homebuyers. Then as the year goes on and the weather cools down, so does the housing market. Historically, you can rely on this seasonality like clockwork - then COVID happened…
As we all know, the pandemic disrupted industries across the globe, and real estate was no exception. Our time-tested market seasonality was thrown out the window, and what we saw was a housing frenzy like never before, aided by record-low interest rates. The disruption was so extreme that the ripple effects lasted for two whole years, creating what many thought was a new normal. But the data doesn’t lie – it seems that we are now back to the real normal: our tried and true seasonality.
Let’s first look at active listings. On a rolling 12-month average, the Denver Metro had 5,670 single-family homes for sale in April, an 88.5% increase over last year. We see the same trend in Boulder County with a 107.4% increase, Colorado Springs with a 77.8% increase, Northern Colorado with a 82.7% increase, and Eagle County with a 102.4% increase. Throughout Colorado, it’s clear that active inventory is returning to pre-pandemic levels. The same is true for months supply of inventory - how long it would take for the current inventory to sell at the current market pace. Looking again at rolling 12-month averages, the Denver Metro saw 1.7 months supply in April, up from 0.8 in 2022. Boulder County sprung up to 1.8 up from 0.7, Colorado Springs up to 1.3 from 0.5, Northern Colorado up to 1.6 from 0.7, and Eagle County up to 5.0 from 1.2. While these data points are clear signs of a return to normalcy, the amount of closed listings this spring tells a slightly different story.
Again, there are many signs that the housing market is returning to its normal trends. However, it may be fair to say that the aggressive climb of mortgage rates last year has suppressed some of that normal activity. From Colorado Springs to Fort Collins, home sales have dropped anywhere from 22-28% year over year, when spring is typically a time of increased activity. For the most part, buyers have come to terms with the current rates. However, with more inventory to choose from than recent years, buyers are also taking more time to find a home they truly love. Also, many homeowners who purchased at a lower rate over the past couple of years, or those that refinanced in the last couple of years, don’t want to sell just to turn around and start a new loan at 6-7% - they’re staying put. This contributes to the continued imbalance of inventory to overall demand, which keeps upward pressure on housing prices, as well as the challenge of affordability in many areas of Colorado. There’s plenty of uncertainty in the economy right now, but if mortgage rates come down in the near future, that could bring some balance back to the market and help with affordability.
2023 Property Tax Assessments
You’ve likely received a letter in the mail recently regarding your property tax assessment. There tends to be a lot of confusion around this. Your home value may have increased, which obviously can be a good thing, but it’s important to understand how the change in value affects your monthly payment when it comes to property taxes.
For this year’s assessment in particular, there are many homeowners that may want to dispute the new valuation. A large reason for this is that the valuation is based on home prices as of June 2022, which was a local peak while interest rates were still low, and homes were selling over asking price in many areas. If you’d like to discuss your 2023 tax assessment, or you’re interested in disputing the valuation, please contact your 8z agent. They can help you understand your valuation, or even assist you in disputing.
