Colorado Real Estate Market: Predictions for 2024

The current median home sale price of $592,900 is stable and rising steadily at 1.7% YoY. Moreover, homes spend only 29 days on the market. This indicates that the Colorado real estate market is pretty much competitive.

The average months of home supply are 4 months YoY. A market with fewer months of supply indicates a seller’s market. However, in July, the number of homes sold increased by 2% year-over-year. In July 2024, 6,899 homes were sold, compared to 6,760 homes compared to July 2023.

Despite the competitive nature of the market, recent developments, such as the NAR settlement, have caused some hesitation among sellers, leading to concerns about selling prices and agents’ compensation.

The NAR settlement has removed the buyers’ agent compensation and many MLSs have followed the suit. It will probably reduce the home selling prices. As a result, buyers will have improved affordability along with low mortgage rates. Here are some tips for you to sustain in the market:

• If You Are a Home Buyer: A low inventory of 35K properties makes now a good time to buy your new home. The low mortgage interest rates at 6.0%-6.90% are also in your favor. Consider negotiating for seller concessions to further benefit from the purchase.
• If You Are a Home Seller: The correction in the home prices is long overdue. In the wake of the NAR settlement, home prices may drop a little more. If you’re a seller, you can still profit from home sales before prices drop.

So, How Is The Real Estate Market In Colorado?

Balanced!

The number of homes for sale increased by 25.7% in July 2024 YoY. This is the 9th consecutive month the housing market has witnessed such growth. Single-family homes for sale are up by 20.8%, and condos by 40.5%. Other important factors are:

• Median Days on Market: The median days on the market for homes for sale are 29 days, up by 7 days YoY. This trend suggests a high demand in the Colorado real estate market.
• Housing Inventory and Supply: As a buyer, you have more options now as the housing inventory is up by 25.7%. There are 35,829 homes for sale in Colorado, with an average supply of 4 months.
• Average Home Prices: The median home price in Colorado is $592,900. But, it is expected to decrease due to a rise in inventory in the latter half of 2024. The sale-to-list price ratio is 98.7%, down by 0.62 pt YoY.
• Home Sales: As per July 2024 data, home sales increased by 2% YoY! Only 6,899 homes were sold, compared to 6,760 last year.
• Average Rent Prices: Rental costs vary statewide. The median rent is $2,280 with a month-over-month change is $5.

Why Is Colorado a Seller’s Market Now?

The Colorado real estate market has a balanced inventory of homes for sale. Besides this, a steady increase in median home prices favors home sellers. Homes spend only 29 days on the market which depicts the competitive market. Let’s look at some more facts:

• Fewer Days on the Market: Homes are spending fewer days on the market before going under contract. This is visible in metro cities like Castlewood and Frisco where the average days on the market is between 15 to 18 days.
• Multiple Offers on Homes: Castlewood has got 84 and Steamboat got 72 in Redfin’s Compete Score. It means the housing market in Colorado is very competitive. It shows that many homes get multiple offers, some even sold without contingencies.
• High Sale-To-List Price: The average sale-to-list price ratio in Fairmount is 100.6% and Northglenn is 99.5%. Hot homes in these cities can sell for 4% above the list price and stay on the market only for 2 days.
• Homes Sell Above List Price: On average, 23.1% of homes sell above list prices. However, in July, 38% of homes experienced price drops, compared to 35% last year. This trend indicates a gradual shift toward a buyer’s market.

Colorado Housing Market Predictions 2024

Here are the predictions for Colorado’s housing market in the remaining months of 2024 and 2025:

1. Number of Home Buyers Will Increase: As inventory grows and homes stay on the market, more home shoppers are expected to re-enter the market. The historically high interest rates averted buyers in 2023. But the easing inflation and stabilizing rates will bring back house hunters.
2. Home Prices Will Continue to Rise: Home prices rose steadily in the top metros across CO YoY, reaching $593K in June 2024. Cities like Steamboat and Edwards expect a surge in home prices 4.3% and 3.2% by April 30, 2025.
3. New Home Construction Sales Will Increase: 12.3% of homes purchased in September were new homes, the highest since 2022. Home builders offered $30,000 worth of concessions to attract buyers in 2023. We think builders and sellers will compete for home shoppers in 2024.
4. iBuyers Will Continue to Make Lowball Offers: iBuyers like Opendoor and Offerpad, which once offered 104.1% of market value in 2021, now offer around 70%. Such lowball offers to sellers will increase opportunities for individual buyers.

Bonus Predictions: Buyer Broker Commissions Will Be Zero!

In a shocking turn of events, the NAR settlement has completely eliminated buyer agent fees from the MLS. Let’s understand its impact:

1. Buyer Agents Will Be Affected: With buyers now responsible for directly paying their agents, many may choose to find their homes on their own. This may very soon render buyer agents obsolete.
2. Seller Concession Will Increase: Without the obligation to pay buyer agent commissions, sellers might see increased requests for seller concessions and offline transactions. Additionally, builders are offering significant concessions to attract buyers, further influencing the market dynamics.
3. Builders Will Compete More: Home builders are persuading buyers to buy new construction homes with mortgage buydowns worth $30K!
4. Sellers May Offer Fees for Services: Sellers may offer at least 1%-2% fees to the buyer agents in order to sell their homes quickly. Increasing competition from builders may also cause sellers to pay extra fees to buyer agents.

Is the Housing Market in Colorado Going to Crash?

A housing market crash in the Centennial State is unlikely.

Greeley has grown by more than 30% since 2010, and it is now the 11th largest city in the state. It is home to employees working for companies such as Banner Health, JBS USA, and the University of Northern Colorado.

Colorado’s job market is also strong. The unemployment rate is at 3.9%. Also, Colorado’s private-sector employment is growing. Department of Labor and Employment (CDLE), the private sector added an estimated 188,000 jobs in June 2024.

The average cost of living in Colorado is $53,374. The median household income is $87,598. Living on the mountainous landscape of Colorado is affordable. So it is unlikely that Colorado’s housing market would crash anytime soon.

2024: Is It a Buyers’ or Sellers’ Market Now?

Colorado real estate market favors sellers in 2024. (And buyers, too!). The Colorado real estate market is expected to lean more in favor of the buyers in the latter half of 2024.

Home prices are rising slowly, and the number of homes for sale has increased by 24.5% YoY. Buyers now have more choices. With mortgage rates around 6.63%, buyers also have more purchasing power.

Consequently, more homeowners are likely to list their homes on Colorado MLS. The 5.4% increase in new active home listings in Colorado has brought back home shoppers. So, whether you are looking for a condo in Fairmount or a single-family primary home in Gypsum, you will find your dream home in the coming months.

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Disclaimer: This article is for informational purposes only. It does not constitute an offer, solicitation of an offer, or any advice or recommendation. Houzeo doesn’t provide any legal or financial advice. The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Houzeo Corp., its affiliates, or its employees. However, the author does not make any representation or warranty, express or implied, as to the information’s accuracy or completeness, nor does the author recommend that the attached information serve as the basis of any investment decision.

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