SPRING HAS SPRUNG, MINUS THE HOUSES.
Interest rates and market uncertainty pushed the start of selling season back more than a month.
“The most recent sales results from the month of April lack excitement and intrigue – especially compared to last year when interest rates were low, and houses were getting bid up by tens of thousands of dollars over-asking price. This April, the real estate market is a bit like the set-up of Waiting for Godot but instead of waiting for the enigmatic and illusory Godot, the market is waiting for interest rates to come down – and like the play, life trudges onward while we wait and see if what we are waiting for ever shows up.
“The market year-over-year is reflective of the waiting: listings are down – likely because potential sellers don’t want to sell and face higher interest rates for the replacement property purchase. Closed sales are down because a huge chunk of the buyer pool is on the sidelines waiting for interest rates to come down (or prices to come down) so they can afford to purchase a home. Days on the market are up – homes are taking longer to sell as the active buyers have a bit more time to look before deciding on the home to
purchase. This coincides with total active properties for sale being up as is the months’ supply of inventory at nearly two months. With that additional time, we are also seeing homes sell for less than the asking price. The number of homes that sold for less than the listing price represented 42% of the sales in Fort Collins in April. This is as balanced a market as we’ve seen in many, many years given the interplay between demand and supply.
“In broad economic terms, the Fed has perhaps made its last interest rate increase this year, the most recent jobs report shows employers are still hiring at a brisk pace, and many folks are waiting for a recession to show up and mortgage rates to start trickling down. Time will tell – but the summer selling season is just about to get under way and may very well prove to be a summer of sustained activity rather than peaking in June and trickling down to September. Interest rates will be the determining factor in how active the summer real estate market will be.”
Source: Spring has sprung, minus the houses – Colorado Association of REALTORS® (coloradorealtors.com)