New Year Brings Increased Housing Inventory, Slowdown in Sales
Most areas of Colorado saw an increase in housing inventory (properties available for purchase) during the first quarter of 2014 compared to the previous quarter (Q4 2013). New listings increased 35 percent statewide from Q4 2013 to Q1 2014 and 5 percent compared to Q1 2013. At the same time, overall sales slowed down 19 percent in Q1 2014 compared to Q4 2013 and slightly less than 1 percent compared to Q1 2013.
A total of 28,208 new listings (single-family, condominiums and townhouses) came on the market statewide during the first quarter of this year according to Quarterly Market Statistical Reports released today by the Colorado Association of REALTORS® (CAR). Sales during the first quarter included 13,307 single-family homes (down 4 percent compared to Q1 2013) and 3653 condominiums and townhouses (up 17 percent compared to Q1 2013). When compared to sales in the fourth quarter of 2013, however, single-family dropped 17 percent and condominiums-townhouses were down 8 percent.
The median price for homes continued to rise statewide, up slightly more than 4 percent overall. Prices increased 8 percent to $173,725 for condominiums-townhouses and 6 percent to $253,925 for single-family homes when compared to the first quarter of 2013. However, compared to the last quarter of 2014, prices rose only modestly statewide (1 percent). Some parts of the market (e.g. single-family homes in the Metro Denver Region and condominiums-townhouses in the Mountain Region) saw significant price increases during the first quarter compared to the end of 2013, though the rest of the state saw only modest (less than 5 percent) increases. A few market segments (e.g. condominiums-townhouses in the Northwest and Southwest Regions) actually saw prices decline during the first quarter of 2014.
Days on the market continued a downward trend (-7 percent for single-family and -26 percent for condominiums-townhouses) and the statewide number of total active listings at the end of the first quarter of 27,390 represents about a 3.5-month supply.
Lender-mediated properties (foreclosures, short sales, REO or other distressed property sales) represented 9 percent of all sales during the quarter, the same as during Q4 2013.
“The lesson of the first quarter of 2014 may be how good the market was in many places in Colorado last year,” said CAR spokesperson, Michael Welk. “Prices continue to rise which is very good news for homeowners and sellers and an increasing inventory will eventually be beneficial to buyers many of whom found themselves on the losing end of bidding wars during much of 2013. We still need more inventory to meet demand. Hopefully sellers who have been waiting for just the right time to put their home on the market will seize the opportunity that strong prices offer combined with relatively low interest rates.”
One of the consequences of rising prices is decreasing affordability for some buyers. The CAR Housing Affordability Index uses median sales price, prevailing interest rates and av
erage income to measure local housing affordability. An index of 120, for example, means that the median household income in that area was 120 percent of what was necessary to qualify for the median-priced home under prevailing interest rates. A higher number is usually interpreted as greater housing affordability. Higher values generally benefit buyers whereas lower values help sellers.
The combined statewide affordability index during the first quarter of 2014 was 145 with the condominium-townhouse market enjoying more affordability (188) than for single-family homes (137). Many Colorado housing markets continue to see affordability decreasing.
The Colorado Association of REALTORS® Quarterly Market Statistical Reports are prepared by 10K Research and Marketing, a Minneapolis-based real estate technology company, and are based on data provided by Multiple Listing Services (MLS) in Colorado. The current Q 2014 reports represent approximately 86 percent of all MLS-listed residential real estate transactions in the state. The metrics do not include “For Sale by Owner” transactions or all new construction.
Spokespersons throughout Colorado are available for interviews or to answer specific regional questions. The reports cited in this press release are available online at www.ColoradoREALTORS.com/HousingStatistics.