NoCo Inventory Shortage

Under Contract Sign

The biggest hurdle for Larimer County real estate is the current lack of inventory.  According to the Fort Collins Board of Realtors 2014 End of Year Housing Report, new listings for single family homes decreased 13.1% from 2013, while condo listings increased by 103.1%.  Standing inventory for single family homes remains low, at 1.5 months supply, and 1.3 months for townhomes and condos.  A healthy, balanced market should ideally have a six month supply.

A shortage of inventory amounts to increased buyer demand, more competition, less affordability with increasing home prices, and spikes in rental prices as well.  The average price of single family homes rose by 7.1% from 2013 to 2014, while townhomes and condos saw a 12% increase.  According to broker Eric Thompson’s 2015 forecast, this year could see as much as a 6% increase in single family home prices (Bizwest).  Most homes and condos are selling close to 99% of list price, and bidding wars have resulted in several offers above list price.  Days on market are also steadily decreasing, meaning homes and condos are selling faster than ever before, so it’s important for buyers to be on the ball when searching for homes.

Rising prices could induce more people to sell, and new construction may also raise the number of home sales in the near future. However, decrease in reliable construction companies and rising cost of building materials makes it difficult to build affordable housing. Based on current population growth, Larimer County will need 18,000 new homes by 2020 in order to keep up with demand (Eric Thompson/Bizwest). Until new construction catches up with demand and mortgage rates begin to rise (predictions indicate an increase by June, 2015), buyers are entering into a highly competitive seller’s market, and should prepare accordingly.