Colorado Realtors have low expectations as Fed is set to meet

While the Federal Reserve prepares for a long-anticipated meeting next week that will likely cut the federal lending rate, Colorado real estate agents are putting a damper on any hopes for coming improvements in the state’s housing market.

“I can’t even buy a showing on my listings right now,” Compass agent Kelly Moye recalls a realtor colleague having told her last week.

Moye, who reports on the Broomfield and Boulder County markets in the monthly Market Trends report issued by the Colorado Association of Realtors, was among numbers of pessimistic voices about the near future in CAR’s newest report published Friday.

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The median sale price of single-family homes in the Pikes Peak region reached a historic high this summer.

Correction overdue

“Buyers are gold and sellers are wishing for the good old days when they have 20 showings in a weekend,” Moye said in the report. “It’s clear that the market is in a long overdue correction phase, and that’s likely to continue into the final months of the year.”

That report shows sold listings continuing to fall year-over-year, as the inventory of homes on the market rises — at 33,145 homes for sale last month, up 12% from a year ago.

Meanwhile, any significant drop in prices that might appeal to buyers waiting on the sidelines remains elusive. The median price of a single-family home statewide last month was up more than a percent from a year ago, to $592,000. Condos and townhomes fell only marginally over the year to $401,650, down 2%.

Mortgage rates crucial

“Buyers have many properties to choose from and more time to make a decision, but sellers have been resistant to lower the price of their precious commodity,” Fort Collins agent-reporter Chris Hardy with Elevations told Trends.

Single-family sales in the northern Front Range town were up this August by 17% over a year ago, despite holding a median price of $650,000, second highest of the year. But Hardy reported that inventory has climbed to the highest level since early in the pandemic, and homes are sitting longer on the market.

Hardy is among agents who see mortgage rates, which were trending in the low-to-mid 6s this week, as a primary factor blocking buyers from exploring the market. But others doubt that any action by the Fed will substantially lower those, fearing that anticipation of a Fed move has already adjusted the mortgage market.

More inventory in Colorado Springs

“By the end of August, everyone was talking about rate cuts in September,” Colorado Springs agent Patrick Muldoon said in the report. A cut by the Fed, he added, would further cheer the stock market, but he doubts homebuyers will be buoyed.

“Despite it appearing to be more in balance, we just don’t have the demand we would like to see,” Muldoon said.

Fellow Colorado Springs agent Jay Gupta added that the 4,139 single-family and patio homes available for sale there marked close to a 25% increase over the year, and a 280% increase over the supply during the height of the pandemic in August 2020. The inventory is now the highest for Colorado Springs since 2014.

The good news, said Gupta, was that at current sales rates, the inventory represents only four months of supply; just 3.5 months for homes priced under $400,000. Higher prices are taking longer to sell — close to six months for homes over $1 million, well into buyer’s market territory.

Pricing correctly

The average price of a single-family home in the Springs during August has climbed every year since 2011, topping this year at $566,443, up almost 30% since August 2020. The median price, however, was off year-over-year by 2%, still up over 26% from five years ago.

Gupta noted in the report that substantial numbers of homes on the market were posting reduced prices last month — some 50% of active listings in El Paso County and around 38% in Teller County with Woodland Park and Cripple Creek.

“With the current record high volume of active listings, sellers must price competitively from the start to avoid repeated price reductions,” Gupta said.

Even in mountain resort markets, which can run contracyclical to the larger population areas, agents were feeling a chill coming into fall.

Evergreen and the foothills

In the foothills markets and closer-in mountain markets west of Denver, median prices were holding steady in spite of the greater number of homes coming to market. The median price along the foothills was running at $713,000, up about a percent from a year ago, despite a 25% climb in homes for sale.

“August data show that buyers have more choices than they’ve had in years, but they are also taking their time,” said Evergreen agent Julia Purrington Paluck with BHHS Elevated Living, who reports on those markets.

However, prices in Evergreen and Conifer were showing significant reductions, Paluck said — with the median down 13% to $859,950.

“Buyers here are showing strong resistance to higher list prices, and properties that need updates or are remotely located are taking longer to move,” she said.

Another standout area was Park County, over the hill from Breckenridge, where sold listings had jumped 39% over last year, even as the average number of days on the market doubled to 65. The median price in the county has dropped over the year to $600,000, down around 9%.

Resort markets

“Typically, September and early October are a busy time for real estate here as people who may have visited with their family and friends earlier in the summer come back to town to take a serious look at property,” said Coldwell Banker agent Molly Eldridge, reporting on Crested Butte.

“This year, we have seen an earlier and sharper decline in showings, offers, and contracts than usual.”

Sales of single-family homes are down 6% in the Crested Butte area, while condo sales are down 19% over the year, Eldridge added. Condos and townhomes were posting a median price up 2.8%, while median prices for single-family homes were down 11%, and average prices were up 8%.

Average prices can be skewed by a relatively small number of homes that sell at extraordinary prices.

Winter Park

“Inventory had been building all summer, and absorption slowed,” said agent Monica Graves with eXp Luxury Division, who reports to CAR’s Trends on Winter Park and other Grand County markets.

Active listings are up 27% year-over-year, with nearly a year’s supply of inventory on the market. While prices were holding flat, Graves said newer homes in the best locations were still selling.

“A-tier listings — newer builds, big views, walk-to-amenities — are still moving quite quickly,” she said.

However, older listings were needing price reductions to sell, Graves said.

Growing condo supply

Steamboat Springs-area agent Marci Valicenti reported a very modest increase in single-family inventory over a year ago, but with cooling sales.

“Sold listings were a bit lackluster,” she said. “So far, there have been 20 less homes sold this year vs. last.”

In the pricey resort market famous for champagne powder, the median sales price was down 8% over the year to $2,042,894. Yet the average price of Steamboat sales has actually climbed by 18%, partially owing to two luxury homes that closed at much higher prices.

Condos and other multifamily listings were up some 35%, with sales failing to keep pace. “There is significantly more inventory than last year,” Valicenti said, pointing up a range from a 295-square-foot condo at $259,000 to a new-built 5,000-foot luxury unit close to the slopes at $9.5 million.

Summit County and Vail

“It does seem like we have tipped toward the buyer’s side in the market,” Summit-area agent Dana Cottrell with Summit Resort Group reported.

“Single-family homes spent about 40% more time on the market compared to last year, and multi-family days on market stretched 87% longer,” Cotrell said. “High-end buyers are still very much in the game, keeping the luxury segment a bright spot even as overall sales soften.”

Edwards agent Mike Budd with Berkshire Hathaway noted some positive results for single-family homes in the Vail and Beaver Creek areas.

“The single family (and) duplex market for August was positive 22.2% in closed sales,” he said.

Meanwhile, the townhome and condo market along the Vail corridor showed a negative 21% in sales.

“Inventory reached levels we haven’t seen since pre-covid days,” Budd said.

The Colorado Association of Realtors represents some 23,000 members statewide.

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