Continuing our semi-annual series of reports on Northern Colorado* real estate market trends, this report takes a look at the sale price/list price ratio. This is one of our most effective measures of the market's overall health. Numbers clustering closely around 100% would indicate a balance between supply and demand, as well as realistic expectations by sellers in pricing their homes. Numbers that diverge from that range can indicate problems - ratios of over 100% generally suggest that the housing stock is too low to meet demand and that bidding wars are common. (An exception to this is new construction, where homes are typically listed at base price - when upgrades are added, the final price can be well above base) Numbers much lower 100% indicate a strong buyer's market, with too many homes available and sellers forced into bigger price concessions in order to make a sale.
Looking at the range of this indicator over the last two years, we note three things of interest: First, the numbers are close to the 100% mark, comfortably high. Sellers are tending to get close to their asking price, and buyers are getting a slight, but not insignificant, discount. Second, the numbers have tended to vary within a fairly narrow range, from a low of 96.5% in November 2011 to a high of 98.7% in July of 2012. That's a variation of around 2%. And third, the numbers are trending upward, and moving toward increased balance.
These are all good signs, indicative of the relative health and stability of the regional market, and good news for everyone.
If you would like to follow the Northern Colorado real estate market data in more detail, please take a look at Mary & Dick's Blog, where we report regularly and in greater detail on what's happening in each city and county, as well as on specific market segments and neighborhoods. And if you would like specific information that we're not reporting, please give us a call. If the data is available, we'll get it for you.
* We're defining Northern Colorado as all of Larimer & Weld Counties, which include the cities of Fort Collins, Loveland, Estes Park, Berthoud, Wellington, Greeley, Windsor, and Johnstown.