As we touched on last month, winter is usually the season when real estate slows down but that may not be the case this year. The weather has been unseasonably warm, and the real estate market is looking similar.
Why are sales continuing to stay hot when they would usually be cooling down? In part, it’s due to the trends we saw over the pandemic. Low housing inventory had been an ongoing issue for years, and 2020s uncertainty accelerated that, as many people delayed selling their home. Now, inventory is tighter than ever before. Adams County had just 228 active listings in November, and Boulder only had 151, down from 253 in October. In addition, in many areas along the Front Range, homes are selling faster than ever before. The average days on market around Colorado Springs is 11, and many areas around the Denver Metro are seeing a median days on market of only 5!
Another interesting metric to note is months’ supply of inventory, which refers to the number of months it would take for the current inventory of homes to sell given the current marketplace. From up north in Weld County to down south in Colorado Springs, that number ranges from just 0.2 - 0.6. Using Colorado Springs as an example at 0.4, that means if no new homes came onto the market, the current inventory would be fully sold in about 12 days.
In short, intense buyer demand seems to be continuing, most notably as interest rates begin to rise and people race to lock in current rates. According to Freddie Mac, the 30-year fixed rate mortgage averaged 3.10% the week of Thanksgiving, and the National Association of Realtors is forecasting that number will increase to 3.50% by mid 2022. All of these factors create perfect conditions to keep the real estate market hot this winter.
