Wine & Beer in Colorado grocery stores, Big changes to CO liquor laws on ballot and impact on real estate
Colorado is an odd state, prior to a few years ago, you were unable to…
Metro Denver’s housing market has been changing in recent weeks, much like a cold front ending record heat, and could provide significant relief for buyers if this continues, local real estate agents say. The market has started moving in the past two to three weeks and has been very noticeable for most brokers within the past seven days. What is causing the shift in Denver real estate? Are the mountains next? Will real estate cool or completely freeze?
“Although traffic is continuing at a historic pace, we’ve seen a significant month-on-month decline from April levels,” said Daniil Cherkasskiy, ShowingTime’s chief analytics officer, in a press release. “As we explained last month, even if demand weakens, we will still be a long way from a buyer’s market as demand for real estate will remain at unprecedented levels.”
Weekly screenings in Colorado, up 50% in April compared to the first week of January, went almost flat in late May. They rebounded in June, but the rate of increase is only about 20%, a fraction of the typical increase in June screenings versus January, according to ShowingTime.
Aside from being easier to get a display space, buyers should also notice a greater variety of homes to choose from and be able to view a property more than once before deciding whether to bid. And they will have less competition when it comes to making an offer.
In many mountain markets, I am seeing a similar “slowing” of the pace. The market has gone from “frenzied” to hot with many properties staying on the market a bit longer. I am starting to see a trend where older residents are deciding to sell as prices have gotten so high and now is viewed as the best seller’s market in a while.
For example, in my neighborhood, a few months ago there was not a single home on the market, now there are five houses that are priced pretty high to try to take advantage of the market. Although I do not see the frenzied pace we have seen over the last 18 months or so returning this summer, I also don’t see much downside in the mountain towns as build costs are so high and inventory very limited.
The trends we are seeing now are merely a respite from the scorching hot market. Years of demand has been pulled forward and appreciation has been off the charts. It was inevitable for the markets to slow to a more measured pace which we are now seeing. Both the mountains and Denver have cooled but that does not mean that we have flipped to a buyers’ market. With inventory still limited it could be a bit before the switch changes from sellers to buyers but for now the market is becoming a bit less frenzied.
Although no freeze is in sight for Denver and mountain real estate a cool down is upon us. This cooling will continue throughout the fall as demand ebbs, more traditional spending patterns emerge, and workers migrate closer to the office. Fortunately I don’t foresee any cliff drops on the horizon as inventory remains constrained due to high build costs and limited availability of land to build on.
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Written by Glen Weinberg, COO/ VP Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine, The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
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