The following analysis of the real estate market in Metro Denver and Northern Colorado is provided by Matthew Gardner, chief economist at Windermere Real Estate. We hope this information can help you make more informed real estate decisions. For more information about the housing market in your area, please contact your Windermere real estate agent.
Regional economic overview
The increase in COVID-19 infections due to the Delta variant slowed runway recovery in Colorado, but not as much as in many other states. Latest data (for August) shows that more than 293,000 of the 376,000+ jobs cut due to COVID-19 have returned. This is good news, with only 83,000 jobs needed to return to pre-pandemic employment levels. The metropolitan areas in this report have restored 243,700 of the 310,000 jobs lost, and I expect the state to restore the remaining jobs next summer. With employment improving, the unemployment rate in the state currently stands at 5.9%, down from its pandemic peak of 12.1%. Regionally, unemployment levels range from a low of 4.4% in Boulder to a high of 6.1% in Grand Junction.
Colorado Home Sales
❱ In the third quarter, 14,209 homes were sold. That was 6.8% lower than a year ago, but 5.8% higher than in the second quarter of 2021.
❱ Compared to a year ago, listing activity was down more than 30%. However, inventory levels were up 38.3% compared to the second quarter of this year, suggesting buyers now have more choice than they’ve seen in some time.
❱ While comparing current sales activity to a year ago isn’t all that informative — as the country experienced a massive rebound in housing demand following the COVID-19 outbreak — it was gratifying to see sales in every county except Denver and Douglas compared to the second quarter of this year.
❱ Pending sales (an indicator of future closures) were down 5.4% compared to the second quarter of the year, suggesting that the closings in the final quarter may be a bit soft.
Colorado House Prices
❱ Prices continue to rise at a very fast pace with the average sales price increasing 15.8% year over year to an average of $605,576. Selling prices were 1.6% lower than in the second quarter of 2021.
❱ Four counties—Arapahoe, Douglas, Weld, and Park—saw average home sales declines between Q2 and Q3, but I’m not too concerned about that right now.
❱ Year-over-year prices increased in all markets covered in this report. All counties except Arapahoe saw double-digit profits, but even that market saw a rise in sales prices.
❱ Several provinces are experiencing a decline in average list prices, which is a leading indicator of future activity. As such, I expect the increase in selling prices to slow down, which will be a welcome sight for many buyers.
Days at the market
❱ The average number of days it took to sell a home in the markets featured in this report is down 17 days from Q3 2020.
❱ The time it took to sell a home declined in each province in this report compared to both the same quarter a year ago and the second quarter of this year.
❱ It took an average of only 12 days to sell a home in the region, which is 2 days less than in the second quarter of 2021.
❱ Colorado’s housing market remains very tight, as evidenced by the fact that it took less than three weeks for homes to sell in all counties listed in this report.
This speedometer displays the state of the real estate market in the region using housing stock, price increases, home sales, interest rates and larger economic factors.
The job market continues to improve, which is always an incentive when it comes to buying a home. Inventory levels have improved and lower current sales suggest buyers are taking a little longer to choose a home. That said, the market is still bullish as evidenced by the short time it took to sell a home in the quarter. Mortgage rates will creep up as we head into the winter months, and this could encourage additional buying activity. In the latest edition of The Gardner Report, I suggested that we see more houses on the market and that has proven to be the case. Given these factors, I’m shifting the needle a bit to buyers, but it remains a loyal seller’s market.
About Matthew Gardner
As chief economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market at both the local and national levels. Matthew has over 30 years of professional experience in both the US and UK
In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees of the Washington Center for Real Estate Research at the University of Washington; and serves on the Advisory Board at the Runstad Center for Real Estate Studies at the University of Washington, where he also teaches real estate economics.