There is no doubt about it: 2020 was one for the history books. Amid the turmoil of the election, the civil unrest, and the unknown outcome of the pandemic many industries became unstable. One industry that did not falter however is real estate. Here at Legacy Properties West, and indeed throughout Colorado records were broken in number of contracts, days on market, and amount of inventory. Colorado is officially a seller’s market, which means there are more buyers than there are houses. According to the Colorado Association of Realtors, in November, the most recent month tracked Colorado only had 7,235 single-family homes and 3,266 townhomes/condos on the market. According to one publication, the current supply of affordable (under $300,000) homes in LaPlata county is about ten days, while the overall supply is 2.2 months. Active listings are down more than 65% compared to last year.
Inventory Will Continue to Remain Low
2020 saw Colorado’s available housing inventory reach record lows. This trend is largely being driven by low-interest rates. With rates currently hovering in the 2 – 3% range buyers are racing to lock-in a long-term mortgage at a record low rate. Current homeowners are capitalizing on the strong rental market and snapping up investment properties. While first-time homebuyers are seeing an opportunity to enter the market.
What This Means for Buyers:
Work with an agent who will be as aggressive as the market. Search for homes early and often and be prepared (and prequalified*) to put an offer on a house immediately after touring.
What This Means for Sellers:
You’re likely to sell quickly and fetch a good price for your home. In a seller’s market, it’s not unusual to receive multiple bids or receive a price that is above your asking price.
Prices Will Continue to Increase
Last year we saw a 16% sales price increase in Colorado homes compared to the year before. It’s unlikely that with the record-low, inventory-led appreciation in home prices will slow down in 2021. Given the rate of growth in housing prices, it is likely that this year will see the average home price rise higher as the year progresses.
What This Means for Buyers:
Work with an agent who is committed to helping your lower your closing costs and commission fees if possible. If you’re buying at the top of the market, buyer rebates can help soften the blow of the price you are paying.
What This Means for Sellers:
Consider tackling some of those key home improvement projects that will help increase the value of your home. Keep an eye on market fluctuations and be ready to sell before the supply and demand level out.
2020 was a surprising success story for real estate in Durango and Colorado as a whole. And all indicators are that the real estate market will continue to hold strong well into 2021. If you’re looking to buy or sell a home, start planning now and continue to monitor the market as we head into the new year. To help you, we produce a quarterly Market Report. You can view our most current Market Report online to help keep you informed. At Legacy Properties West, we look forward to working with you to make your home buying or selling dreams come true in 2021 and beyond.
