for the month of March 2019
At some point this month you may hear a reference to the term “The Ides of March”. Vaguely familiar, are you aware of what it actually means? Without getting bogged down in historical detail, it is the concept of “a turning point”. Indeed, this March may prove to be a favorable turning point for potential new homeowners as they head into the spring real estate season. While recent market conditions have tended to favor home sellers, the wind is shifting in the buyer’s direction. For example, new data shows that the number of home buyers willing to pay above asking price for a house has declined significantly. Although competition for homes available has begun to slow down, don’t call this a buyers market just yet. If you're looking to buy a home in the near future it is still best to be prepared, prequalified, and ready to move fast.
A buyer should be concerned about more than just home prices though. The cost of financing a home purchase is just as important to consider. Speaking to the affordability issue, the good news is that expectations of rate increases for all of 2019 appear to be a non-issue at this point. Even if the Federal Reserve does an interest rate hike, the strong economic growth nationwide and our stable job market here should counteract any impact, rendering it insignificant at best, a minor distraction at most.
Homeowners seeking to sell their home have reason to be pleasantly optimistic. Uncovering the actual market value of the home remains a vital element to success and is easier than ever to pinpoint with the technology most agents are utilizing. As a potential home seller, knowing how much equity exists between the debt owed and market value of a house can be especially useful when weighing options about list price and later, when negotiating with a buyer. Setting a fair price will make a big difference in how a home offered in this changing market will be received by potential buyers. It can also save some disappointment when it comes time for an official appraisal. Since appraisers base value on what similar homes in the area have recently sold for, their estimation will reflect changes that are taking place at different rates in different market areas. For this reason, appraised value fluctuations may be rather wild while we are in the midst of this transition period.
Monthly statistics in Northern Colorado for February continue to reflect these shifts, as evidenced by the 1252 new listings this past February. While the average sales price of $400,220 continues to show those upwardly mobile sales prices sellers have been enjoying year over year, the average Days on Market of 69 are indicative of buyers taking more time to compare and consider before pulling the trigger on offers to purchase. However, buyers are pulling the trigger to the tune of 786 homes sold and closed in February.
So many factors play a role in the health of our Front Range housing market, and although we need to always keep our eye on mortgage rates, we also need to keep close tabs on new homes being built. This will directly affect inventory levels month to month and indicate how pricing and demand are influencing the market as a whole. Additionally, we are looking at economic concerns, including the strength of our job market in Colorado and consumer confidence indexes. Knowing how many homes sold and how much they sold for certainly helps in understanding the immediate market, but without the context of all the other factors, they don’t tell the full story. It is a complicated mix of facts and guesstimates, but it does give a fairly accurate view of where home prices are heading. Numbers and statistics today may be a little disappointing overall, but put into perspective and considering we are experiencing a turning point in our housing market signals, we are poised for continued growth through 2019.