WEEKLY MARKET WATCH

Colorado Housing Market Heating up Along with Summer Temps

Maybe we just had a late spring. That’s one possible explanation for what we’re seeing in the Colorado housing market. Normally, the real estate market picks up in March, April and May and then takes a breather over the summer for vacations, graduations, weddings and other activities. But this year it seems like that’s being reversed.

After a modest spring, the local housing market has been heating up this summer with strong sales in June and even into July in many areas. Sales activity has been especially robust in the higher end of our markets.  But even the mid-level market was surprisingly active (more on that below).

As I was combing through last month’s sales figures, I noticed an interesting trend: In most of our Colorado markets in June we saw a higher number of million-dollar home sales, in some cases the highest since 2008. You might recall that was just weeks before the collapse of Lehman Brothers sent the financial markets into a tailspin and pushed our economy into the “Great Recession.” Now, three full years later, we’re seeing a much brighter picture for the local housing market.

The high-end of the market is not the only segment doing well. The entry level and mid-level markets have shown solid signs of improvement as summer rolls along.

The only thing holding back the lower end of the Colorado market in many cases has been a lack of inventory. Inventory remains elusive in many markets. Because of the shortage of good, well-priced homes, multiple offers are picking up in many communities. In nearly every one of our regional markets, you can almost be assured of multiple offers for a well-priced, well-located, and nicely staged home in the entry price level for that market.

Clearly, Colorado’s relatively strong economy, is playing a key role in our housing market.

This all is not to suggest the housing market is completely out of the woods. Real estate is very much a local business. And while many of our markets are on the mend, others are still softer than they were a few years ago. And there still is an overhang of distressed properties that will continue to come on the market as bank owned REO sales in the months ahead.

While we take quite serious the nation’s fragile economy, and most recently the stalled talks to come to terms with our national debt limit, we can be thankful for the Colorado real estate activity that continues to move forward.  We are fortunate to live and work where we do.  The limited housing stock, diverse job base, incredible universities, and great weather are all factors that help homebuyers focus on these terrific home values and low mortgage rates.