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CAR: Statewide housing strong

Highlights:

  • CAR releases 3rd Q market report.
  • Just about every metric showed YOY improvement.
  • Homes are still affordable, but rising prices are impacting affordability.
Market Snapshot

Market Snapshot

The statewide housing market showed significant improvement on a year-over-year basis by almost every common measure of market performance  – sales, new listings, median price and days on the market – according to a third-quarter report released by the Colorado Association of Realtors.

In addition, the third quarter was at least the fourth consecutive quarter of housing market improvement on these same measures in most regions of Colorado.

Sales of single-family homes, condominiums and townhouses increased 19 percent statewide to 28,287 units during third quarter 2013 compared to third quarter 2012, according to the Quarterly Market Statistical Reports released by CAR. CAR has about 19,000 members, statewide.

Year to date sales rose just over 18 percent.

Although inventory statewide continued at low levels, new listings increased about 15 percent to 35,305 from the third quarter of 2012.

The supply of unsold single family homes rose by 14 percent, while the townhome-condo supply was up 21 percent.

Median sales prices statewide rose 9 percent to $260,000 for single family home and to $171,000 for condos and townhomes, a 10 percent gain on a year-over-year basis.

Days on the market continued a downward trend, dropping 25 percent for single-family homes and 30 percent for townhomes and condos.

Median Sale Price Snapshot.

Median Sale Price Snapshot.

Listings up 6%

There were a total of 35,388 listing statewide at the end of the third quarter, up more than 6 percent from the second quarter of 2012.

This represents a 4.5-month inventory for single-family homes and a 3.8-month inventory for townhouses-condos.

Lender-mediated properties (foreclosures, short sales, REO or other distressed property sales) represented 9 percent of all sales during the quarter, continuing a downward trend of more than six quarters.

New normal?

“The main story in these new numbers is that in most places around our state the real estate markets have been steadily improving, creating what many analysts would call ‘normal market’ conditions,” said CAR spokesperson, Anthony Rael.

“Overall, the news is very good for both buyers and sellers,” Rael said.

“Better inventory will provide buyers with more choices and improving prices should attract more sellers into the marketplace,” he continued.

However, “one area of concern is the long-term impact that recent flooding and wildfires earlier this year may have on certain markets going forward,” Rael noted.

Affordability

Meanwhile, homes were still affordable, according to the CAR Housing Affordability Index, despite rising prices.

The index uses the median sales price, prevailing interest rates and average income to measure local housing affordability.

Housing Affordability Snapshot

Housing Affordability Snapshot

The combined statewide affordability index during the third quarter of 2013 was at 142, which means a typical consumer had 42 percent more than the needed income to buy a typical home.

For the townhome-condo market, the affordability index was 192.

Still, as housing prices rise, affordability tends to go down unless median income rises to keep pace with the increased cost of real estate. All areas of Colorado are seeing decreasing affordability.

As far as regions, CAR experts provided their snapshots, below:

Metro Denver Region (Denver, Jefferson, Adams, Arapahoe, Broomfield, Douglas–

The third quarter of this year produced sales figures for this region that are a significant improvement over the same period in 2012 and over the second quarter of this year. Sales of single-family homes rose 20 percent compared to the same period last year, nearly seven times the growth rate for the 3 percent increase in the second quarter.

Townhouse-condo sales showed comparable gains of 27 percent, quarter-to-quarter.

The median sales price jumped 10 percent for both single-family, to $285,000, and townhouses-condos, to $165,000.

However, one of the consequences of improved prices is that affordability decreased by 15 percent, although condominiums and townhomes have one of the highest affordability indices in the state at 198.

This area of the state continues to enjoy properties having the fewest days on the market, down to 39 for single-family and 37 for townhouses-condominiums. The quarter closed with 13,233 active listings representing slightly less than a three-month supply.

Mountain Region (Garfield, Grand, Gunnison, Jackson, Pitkin, Routt, San Miguel, Summit) –

The number of new listings for both single-family homes and townhouses-condos increased modestly during this quarter; 2 percent for single-family and 4 percent for townhouses-condos.

Year-to date, both categories are down about 2 percent compared to 2012.

Sales for townhouses-condos rose by 9 percent, about twice the growth rate for single-family homes. Median sales prices show a healthy increase of 11 percent to $414,750 for single-family and 24 percent to $339,500 for townhouses-condos in this region, which includes Colorado’s ski resort communities.

With 4,382 active listings, this region has approximately 13 months’ supply of inventory which in these areas of the state is not unusual.

Lender-mediated property sales as a proportion of all sales declined once again to 11 percent.

The Mountain Region was the only one to show an increase in number of days on the market compared to the same period last year – for single-family the figure rose by 4 percent to 148 days and for townhouses-condos, by 2 percent to 158 days.

Northeast Region (Boulder, Larimer, Logan, Morgan, Weld) –

This region of Colorado enjoys the second lowest number of days on the market at 75, and the smallest percentage of lender-mediated sales, at 6 percent.

Most measures have seen five or more consecutive quarters of improvement.

Sales were up 18 and 21 percent respectively for single-family homes and townhouses-condos.

Median pricing rose nearly 10 percent in both categories. There were 5,722 new listings during the quarter, representing a 12 percent increase over the same time last year.

The region ended the quarter with 5,500 homes available, representing a 3-4 month supply. Affordability declined about 14 percent, with townhouses-condos about one-third more affordable than single-family homes.

Northwest Region (Delta, Hinsdale, Mesa, Moffat, Montrose, Pitkin, Rio Blanca) –

This region has now enjoyed seven consecutive quarters of increased new listings, up 20 percent to 1,795, compared to the third quarter 2012.

Single-family sales rose by 5 percent and the median price on those homes increased 3 percent to $181,100.

The townhouse-condo market fared better on sales, up 7 percent with median prices on those 80 properties rising 5 percent to $135,000 compared to the same quarter last year.

Affordability remains very high in this region at 232 for townhouses-condos and183 for single-family homes. Lender-mediated properties represent 23 percent of sales, the highest in the state.

At the end of the quarter there were 2,700 properties available representing about an eight-month supply.

Southeast Region (Baca, Chaffee, Crowley, Custer, El Paso, Freemont, Huerfano, Las Animas, Otero, Pueblo, Teller)

Southeast Colorado experienced additional improvement in both home sales and pricing during the third quarter.

Sales of single-family homes increased 20 percent to 3,896 and townhouse-condos by 37 percent to 439 on a year-over-year basis.

The median price for single-family homes rose to $197, 500 and for townhouses-condos, to $144,636, both up 7 percent.

New listings increased 9 percent for single-family and 25 percent for townhouses-condos with 6,140 properties coming onto the market.

Lender-mediated sales were only about 6 percent of the total during the period, continuing a downward trend of more than six quarters.

Days on the market are third best in the state with drops of 12 percent to 79 days for single-family homes and 30 percent to 76 days for townhouses-condos.

There were 8,200 properties available in this region at the end of the quarter representing a 6-7 month supply.

Southwest Region (Alamosa, Archuleta, Conejos, Costilla, Dolores, Hinsdale, La Plata, Mineral, Montezuma, Saguache, San Juan)

Townhouse-condo sales in the Southwest Region experienced a 39 percent jump, the largest increase in the state.

However, the median price on those 122 properties declined 12 percent to 174,950 compared to the third quarter of 2012.

Single-family home sales in this area rose 19 percent with median pricing increasing 10 percent to $240,000.

Lender-mediated properties represented 12 percent of all sales, second highest in the state.

Days on the market dropped 13 percent for both categories, reversing a slight trend of increased days for townhouses-condos.

Affordability is slightly above the state average with townhouse-condos more affordable and improving in affordability, the only area in the state where that is the case.

There were more than 2,600 properties available at the end of the third quarter, which equates to 6 months for single-family listings and 11 months for townhouse-condo listings.

The quarterly report was prepared for CAR by 10K Research and Marketing, a Minneapolis-based real estate technology company. It is based on data provided by Multiple Listing Services in Colorado.

Have a story idea or real estate tip? Contact John Rebchook at  JRCHOOK@gmail.com. InsideRealEstateNews.com is sponsored by Universal Lending, Land Title Guarantee and 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.