Colorado housing markets have a demand problem Double digit appreciation and over-asking price records shattered in this ‘new norm’ http://www.coloradorealtors.com/market-trends/regional-and-statewide-statistics/

Having shrugged off any potential effects of the past year, including COVID-19, massive unemployment, economic uncertainty and the typical seasonal fluctuations, Colorado’s housing market continued an historic run through the month of May, according to the latest data from the Colorado Association of REALTORS^® (CAR). The most fundamental elements of supply and demand – mostly demand – remain entrenched as median pricing for both single-family homes, as well as condo/townhomes, rose 2 – 3.5% in May and have appreciated as much as 25% from this time last year, once again hitting record highs.

While the supply side new inventory held its own in May, the prolonged lack of inventory overall, coupled with extreme competition among buyers, continued through the month and pushed over-asking price contract offers to new highs.

“While new listings have remained stable in comparison to 2020, the real culprit is the demand of buyers ready to pounce when a new property comes to market,” said Glenwood Springs-area REALTOR^® Erin Bassett.

Circumstances have driven the Housing Affordability Index (HAI), by far the most talked about aspect of housing conditions in any corner of the state, to record lows. The CAR HAI, a measure of how affordable a region’s housing is for consumers based on interest rates, median sales price and median income by county, dipped again in May and is down between 15-19% year-over-year for all property types statewide.

In the seven-county Denver metro area, the $573,500 median price of a single-family home is up $115,850 compared to May 2020. Condo/townhomes saw a 2.6% bump from April to May and are up just shy of 20% compared to a year prior at $389,700.

“Are we all just getting used to the ‘new normal?’” asks Boulder/Broomfield area REALTOR^® Kelly Moye. “We aren’t using words like ‘unprecedented’ or ‘insane’ to describe our market anymore. The scramble for buyers to find a home and the prices they are willing to pay for them, are becoming the norm. The public is used to listings selling in 3 days for 10%-15% over list price and almost all conditions in the purchase contracts are now waived.

In Fort Collins, REALTOR^® Chris Hardy said, “…Fort Collins saw its highest median price on record spike 20% in May to $533,718. In spite of all the reporting of low active inventory numbers, the Fort Collins market is selling more homes each month than in each of the past two years. Nearly every home that comes on the market is sold in the same month and there isn’t much left to choose from. As I heard one mortgage lender say the other day, ‘We don’t have a supply problem, we have a demand problem.’”

And the staggering numbers are only magnified in resort communities like Telluride.

“May 2021 broke all historical records for one month of sales coming in at $201 million with 90 transactions,” said Telluride REALTOR^® George Harvey. “…up 591% over May 2020. Yes, that is not a typo.”

This monumental achievement was buoyed by the largest residential sale in San Miguel County history when Tom Cruise’s 10,000-square-foot home on approximately 320 acres about 12 minutes from downtown Telluride sold for $39.5 million.  

“While January to February in years past has shown giant appreciations, this year saw its biggest yet with a $55,000 one-month appreciation for a freestanding Denver house,” said Denver-area REALTOR^® Matthew Leprino. “That number trickled back down to a far more palatable $5,000 increase from April to May. With a staggering $125,000 Denver home appreciation just this year, it’s hard to call anything stable but this indication is finally showing that our market is less and less susceptible to unpredictable pandemic-related factors and is far more navigable and perhaps, dare we say, a little more predictable.”

After breaking the $500,000 median price barrier in April, single-family homes across Colorado also experienced a more palatable 3.6% increase from April to May. The $520,000 median price tag is up $105,000 since May 2020.

METRO DENVER REPORT

STATEWIDE REPORT