Front Range housing markets have entered a standoff. Listing inventory across Colorado fell some 30 percent last fall, far lower than the seasonal norm, but prices are firm.
One tongue-tied analyst said that markets are “stagnant,” which could not be further from the truth. These markets are under strain, reacting to conditions intensifying since 2013: rapid growth in jobs and migrants to Colorado, demand in excess of construction, and land exhausted west of I-25.
One result, of course: higher prices. On the west side of the metro area, prices since 2002 have risen as much as 80 percent—flat from 2002 to 2012, rising fast since. Metro incomes have risen about as much, thus prices have not outrun supporting incomes.
If prices have risen too high, then new for-sale inventory may appear and accumulate. Too-high prices could also discourage new jobs and movers to Colorado. Could be, but even during this standoff, buyer demand has been
insatiable, still producing multiple offers for attractive locations and price points. This demand might also boost the supply of new homes, and we do see that, but mostly attached homes except to the east, where there is land for
detached development. Every last patch of infill land west of I-25 seems under construction right now.
How will the standoff evolve? We’ll see everything above in some way, but there is one market change underway which we’ve seen historically, and the phenomenon presents a strategy to beat the standoff. In every Front Range
market, the price per square foot will rise from the most desirable west to the east, and radiate from centers of jobs or transportation. So, find the minimarkets due to rise because of pressure from a pricier neighborhood nearby.