The journalists sure do sensationalize our industry! The sky IS NOT falling, and our market is still very strong. The journalists like to create headlines and cause the public to panic, and there is no reason to, at least not yet.
Colorado's unemployment for July was 2.9%, compared to the national average of 3.7%. We have been lower than the national average for quite some time. The GDP in 2016 was 2.4, and in 2019 is 3.5, which is the largest increase in several years.
Colorado relies on several industries for our good economy -
1. High technology
2. Food processing
3. Transportation equipment
5. Chemical production
Our ski areas do pray for abundant snowfall to have the tourists flock to Colorado every year, and also for camping, hiking and simply to enjoy everything Colorado has to offer.
I had a potential buyer come into town from Texas a few months ago, and they said they would buy next year, as they expect prices to decrease significantly next year. I pointed out several factors that indicate Colorado is not going to see a significant drop in home values.
This month's data shows the inventory is up 11%, which is finally good for the buyers, sales are down 2.2% over last year, under contracts increased 9.2% over last year, and our average sales price is up 3.4% over last year. We did see a 10% average home increase each year for SEVEN YEARS. That increase cannot be sustained for long term. If rates drop again, I expect we shall see another spur of activity from buyers!
Here is a chart indicating some facets of Colorado's fiscal ability -
The financial researcher that did this chart indicated Colorado is #28 for the fiscal condition. She went on to say - "On the basis of its solvency in five separate categories, Colorado ranks 28th among the US states for fiscal health. Colorado has between 1.32 and 2.11 times the cash needed to cover short-term obligations. Revenues exceed expenses by 1 percent, with an improving net position of $40 per capita. In the long run, a net asset ratio of –0.02 indicates that Colorado does not have any assets remaining after debts have been paid. Long-term liabilities are lower than the national average, at 48 percent of total assets, or $3,175 per capita. Total unfunded pension liabilities that are guaranteed to be paid are $122.81 billion, or 43 percent of state personal income. OPEB are $1.85 billion, or 1 percent of state personal income." By Eileen Norcross This report was completed in 4th quarter 2018.
To answer the question Buyers & Sellers want to know --- our market has slowed (started in June 2018). Homes are taking a bit longer to sell now, but if clean, shows well and above all, priced correctly, it will sell. We are seeing more Sellers contributing to Buyer's closing costs too. Buyers have more inventory to view and do not need to make immediate offers without thinking it through, even overnight. There is no need to "fire sell" a home, unless foreclosure is imminent, or some other personal reason.
I have been educating my Sellers on the increased days on market, and their home won't necessarily sell in a weekend, but it will sell! Extra advertising may need to be done, but I do that anyway for all my listings! They may also see Buyers asking for closing costs, which we have not seen in a decade.
I don't have a crystal ball to foresee what the future holds for our real estate market, but know our lending practices have changed since the housing debacle in 2008, so would hope we never see our market fall as it did back then.
For the upcoming year, I will continue to market to buyers and sellers through my web site and other social media, and keep them educated if the market should shift in Denver.