Now that summer is mostly behind us, the yearly market trends should kick right back in, well, at least we hope. While the past few months have been anything but normal, they did give us the opportunity to evaluate the trends the market should be following or perhaps the new trajectory that could be with us for the foreseeable future.

With so much volatility in the real estate market and the overall economy, it's no wonder that buyers have taken the back seat on home purchases over the past couple of months. With mortgage rates continuing in the 5%+ range, inflation remaining at an all-time high, and the talk of a looming recession, we are left wondering if the housing market will get back to the seasonal norms we've grown accustomed to.

August is usually a great opportunity for things to slow down. Kids are going back to school and the housing market is supposed to be predictable, right? Well, let's dig into the numbers and see what's been happening in the housing market in Northern Colorado.

Home Prices

Although the average sales price in August was up 1.5% and 1% year over year for single-family homes and townhomes/condos respectively, these numbers paled in comparison to the double-digit increases we've seen throughout 2022. The days of 20-30% increases in home values could be behind us, but we will continue to evaluate the numbers each month.

The other factors showing a slowdown in the market are new listings, pending sales, and total number of homes sold, all decreasing year over year.

While we saw a slight decrease in the number of days on market, dropping to 47 for single-family homes and 43 for townhomes/condos, we didn't see an increase in list price vs. sold price. Typically there is a direct correlation between less days on market and higher sold prices. However, in August the list to sold price dipped below 100% for the first time in 2022 for single-family homes and came in right at 100% for townhomes/condos.

While the market has certainly slowed down, we continue to see a shortage in available inventory which means we are still in a seller's market. Northern Colorado would need closer to 4-6 months of inventory to reach a balanced market, but currently there is only 1.7 months of inventory for single family homes and 1.1 months of inventory for townhomes/condos.

Buy Now or Wait?

That's the million-dollar question, right? Should buyers get out there and make a home purchase this fall, or wait until spring of next year? Since nobody has a crystal ball that will predict what could happen in the next few months, we can look to historical numbers to help us get a better idea of what may occur in the future. Historic data shows home prices have consistently increased yearly between 3-5% on average for decades. The one exception being after the 2008-09 recession, when home prices took a slight dive or stayed stagnant for a couple of years.

Prices have certainly leveled out in Northern Colorado in recent months, but are not predicted to decrease. According to a recent article in Forbes Advisor, the Mortgage Bankers Association (MBA) predicts an overall 9.9% increase in home values nationally in 2022 compared to 2021 and a 3.1% increase nationally in 2023.

While things are slowing down and softening some, don't forget that we are still in a seller's market. The difference now is that some strategies we saw buyers bringing to the table earlier this year are no longer at play.

Be sure to reach out to your trusted Corcoran Perry & Co. agent to help you with the various options you have going into the negotiation process! Stay tuned next month as we get closer to the midterm elections when we'll explore how they could affect the Northern Colorado real estate market heading into the fall and winter months.