Low House Inventory Is Driving Higher Prices
Whether you’re buying or selling a house, one of the most critical factors in your success is the number of available houses for sale at any given moment. Over the past year, the number of houses available on the market has been lower than in previous years, making it more challenging for individuals to purchase a house. However, the drive to buy has been high due to low interest rates and the need to find a home that meets a buyer’s needs due to pandemic-related changes. This low inventory is driving up real estate prices in northern Colorado.
A Shift to Suburban Living
With more individuals working from home, families are looking to move from their urban homes to a more laid-back lifestyle in the suburbs. By eliminating long commute times, the suburban market has seen a more significant increase in demand than the urban environments. However, this has led to a lower inventory of suburban homes, which has triggered bidding wars that give sellers more money for their homes, while increasing costs for prospective buyers, particularly in northern Colorado.
An All-Time Low in Inventory
The inventory of available homes in northern Colorado hit an all-time low in the later part of 2021. These numbers haven’t been seen since 1995, creating a sellers’ market that increases the value of homes. The number of available homes in Colorado dropped below 1,000 to 881 in October of 2021. Previously, there were 1,940 homes for sale in October of 2019 and nearly 3,000 homes for sale in October of 2015. As more people are searching for homes to buy, the low inventory means prices will be higher.
Low Interest Rates Fuel Sales
When home prices generally rise, the market usually reverses because many potential home buyers can’t afford the payments. However, with federal interest rates at record lows, the higher housing prices aren’t having as significant of an impact as it has in past years. Buyers can purchase homes with a higher price tag because the interest rates keep their mortgage payments at reasonable levels. Until interest rates return to their previous levels, the drive to buy homes will continue to be strong.
If you’re interested in learning more about how the low house inventory is impacting prices, contact us. We can answer your questions and help you decide if now is the right time to buy or sell your home.