The Estes Valley Board of Realtors has just released their 2018 report that I use to spot trends in the market. When I get these reports my accounting background comes roaring to the forefront and I pour over the numbers. Based on the report this is my read on the local real estate market.
The median price for single family homes sold in 2018 ended up at $492,000, which is up 13% over 2017 (which ended at $435,000). This in addition to the 16% increase we saw in 2017, and the 6% we saw in 2016. That puts the total appreciation for the last 3 years at 35%. These numbers represent the entire Estes Valley, from Allenspark to Glen Haven. The average price of a home sold in just Estes Park in 2018 was $603,936. While we have seen similar rates of appreciation all over Colorado, historically homes appreciate 3-5% per year. How long can we expect this trend to last?
The number of homes sold in 2018 was up by 14.2%. There was a decrease of 8.9% in the number of homes sold in 2017, due mainly to a decrease of inventory by 30.8%; and 2016 had a 7.6% decrease in sales. The low inventory trend changed course in 2018, but any increases in inventory should slow the number of homes sold.
Industry experts tell us that if we have a 6 months supply of homes available for sale it is a balanced market. In 2016 we had a 3.95-month supply as of the end of the year. 2017 and 2018 ended almost identical with 3 months’ supply of inventory, keeping 2018 a Sellers’ market.
The number of homes available for sale (inventory) as of December 31, 2018 was 84 – up by 12, or 16.7%, from 2017. Using historic inventory trends we can predict the direction of future home prices. With higher inventory, prices trend lower, while lower inventory pushes the price trend higher. Recognizing those trends requires reviewing longer periods of time. In 2016, there were 4 months where inventory increased over the previous year, while 2017 only had 2 months with a higher inventory. During 2018 there were 6 months with an increase in inventory over the previous year. Could a slow-down in the market be coming? What do all these numbers mean?
The increase in the median price of homes sold in 2018 coupled with the 3.1-month supply of homes available for sale would indicate that prices should increase in 2019. Of course, any major changes in interest rates will impact home values. The fluctuations in inventory in 2018 could indicate we are at the early stages of increasing inventory, which would result in a slower appreciation rate in 2019. I would dare to predict that the number of homes sold in 2019 will be at, or slightly higher than, 2018 as the inventory increases. The result will likely be appreciation lower than the 11.6% average we’ve seen over last three years.
What does this mean for your home? The highest priced sale in Estes Park in 2018 was $1,850,000 and the lowest priced sale was $195,000. Generally, the lower priced homes have seen the highest rate of appreciation, while higher priced homes are appreciating at a lower rate. The factors that determine your homes value include the condition, competition, current market and of course location.
The best way to determine your homes value is to have an experienced professional Realtor, like me, prepare a Comparative Market Analysis (CMA) specific to your home. I will study the selling price of similar homes, review the market conditions in your neighborhood, preview your home and making recommendations that will increase your homes value. This no-cost, no-obligation service will result in a color report that we can review together.
Please give me a call at 970-590-9941 or send an email to Scott@EstesParkRealEstate.com with any questions on the market trends or if you would like help in determining your home’s value.