Sales:

Greeley CO home sales declined in June 2023. There were 75 homes sold, a drop of 14.8% from the 88 homes sold in May 2023, and a drop of 48.3% from the 145 homes sold in June 2022. 2023 year-to-date sales of 477 homes were down 37.5% from 2022’s 762 sales for the same period.

Prices:

Home prices fell in June 2023. The median price dropped 3.5% to $416K from $431K in May 2023, while the average price dropped 6.8% to $459K from the previous month’s $492K. These numbers reflect only those homes sold during the month and show a generally flat trend line for the last year.

Inventory:

The inventory of homes for sale in Greeley CO rose in June 2023. There were 122 homes available for sale at the end of the month, up 9.9% from the 111 homes on the market at the end of May 2023. The month’s supply of inventory (MSI) rose to 1.6 months from the previous month’s 0.9, as inventory gained and sales declined.

Sales Price vs. List Price:

In April 2023, homes sold for an average of 99.9% of listing price, down a bit from the previous month’s 100.2%.

Summary:

Sales were down, inventory up, and prices essentially unchanged, and this during what is normally the best month on the calendar for real estate sales. Here’s what we think is happening:

First of all, uncertainty about the overall economy seems to be affecting home-buying decisions, as potential home buyers are less willing to make big investment decisions. Interest rate increases have taken a toll on the pool of qualified buyers, inflation has not yet been tamed, and job stability concerns remain.

But of more concern is the shift in the structure of our local real estate market. The above-mentioned issues have been magnified by our own recent home price increases, which have moved home ownership beyond the reach of a significant number of area residents who in the past would have been able to afford a home.

While the charts above illustrate the current situation in Fort Collins, they are indicative of all of the Northern Colorado real estate markets. On the one hand, the percentage of homes for sale in the more expensive price range has increased, and last month accounted for a great majority of those homes sold. But the second chart, which shows household income distribution estimates for Fort Collins, shows how little of our population can afford even “inexpensive” homes. For example, to afford a $400K home, a family with a minimum down payment, limited debt and decent credit would need an annual income of around $75K.

What’s happened is simply that a decrease in the number of qualified buyers, combined with increasing prices, has shrunk the real estate market. We’re most likely going to see fewer homes sold, more inventory available, and longer times on market. And it’s unlikely to change significantly until the economy begins improving for everyone.