Starting the New Year right! The Northern Colorado Housing Market is STRONG!
With 2020 in full swing, the market is poised and ready for a busy year in Northern Colorado. With home equity steadily increasing at 2.6% to 4% over past 2 years on average. Let’s take a look at some of the contributing factors for the state of the housing market.
Interest rates are still LOW**.
Today the APR for a 30 Year is at 3.64%, compared to 3.72% last week and 4.51% last year. This is considerably lower than the long-term average of 8.00%. This is important to our Real Estate market because the rates have a direct impact of how much buying power a prospective buyer has. For example, if someone is approved for a mortgage payment of $2000 per month, they will be able to purchase at a higher price point the lower the rate, as you can see in the chart below. The Federal Housing Finance Agency announced that it is raising the conforming loan limits for Fannie Mae and Freddie Mac to $510,400. up from 2019’s level to $484,350. More information can be found on Fannie Mae’s website.
**For informational purposes only, rates subject to change. Rates and Terms of mortgage loans are subject to lender credit approval and other financial criteria. This is not a promise of rate or loan terms, but a reflection of data collected from multiple sources, including but not limited to: Colorado Association of Realtors, Colorado Department of Labor, bankrate.com, and other online sources.
Inventory is low.
According to Colorado Association of Realtors, Colorado has seen a 10 percent decline in new single-family listings between September and December as the inventory of active listings dipped more than 15 percent month-over-month and is down 20.2 percent from this time last year. Statewide, new listings for single-family homes were down 9.3 percent from September to October and the inventory of actives dropped more than 13 percent month-over-month and -17 percent year-over-year. Lower inventory will typically contribute to a more efficient selling timeframe and on average a higher sales price. Before the spring market gets fully ramped up, it’s an excellent to find a home now, as the spring can bring more inventory, but also typically more competition on the buying side.
More people have jobs.
Unemployment rates at all-time lows; Colorado’s unemployment rate fell below the national 3.7% average, coming in at 2.6%. Job growth has been on a steady path in Colorado adding an average of 1350 new jobs a month in 2019 and annual wage growth has stayed at or above 3 percent since October 2018, according to the Denver Post. Click Here for a great article by Pat Ferrier, published January 7th, 2020 in the Coloradoan, that goes more in-depth the growing job market in Colorado.
Consumer Confidence is UP
Stocks are up, and consumer’s opinions have been continually moving in a positive direction- with regard to prevailing business conditions, job markets, developments, new construction, there are many variables. 2020, “the beginning of the roaring 20’s” paves the way to a new decade with new beginnings, new ideas and new breakthroughs – predicted in 2020, in a wide range of business sectors.
So, what does all this mean? In a nutshell, it’s a great time to buy OR sell! With limited inventory on the market it increases the likelihood of multiple offers for a seller. The low interest rates present a great opportunity for a buyer to purchase a home they otherwise would not be able to afford, giving them more buying power for their dollar. Because more people have employment, they have more money to spend. If you would like to see how all of this information pertains to your specific housing needs, give me a call! I am happy to help you reach your Real Estate goals in 2020!