Nationally, inventory is growing. According to market expert Walden, “While we’ve made meaningful strides in terms of inventory improvement, there are still roughly 36% fewer listings than normal for this time of year. Likewise, in the face of higher rates and prices, purchase mortgage demand remains about 45% off compared to periods in 2018 and 2019. As we’ve seen in recent years, any substantial move in rates can result in those supply/demand dynamics shifting quickly, either bolstering or softening home prices. These dynamics illustrate that while inventory is improving, the market is still adjusting to the elevated rates and prices.

Here in Southwest Colorado, the market continues to evolve as well, showcasing notable trends in May 2024. Despite high mortgage rates, currently around 7%, inventory levels are on the rise. However, demand hasn't reached the peak levels seen in 2022, when mortgage rates were approximately 5%.

Southwest Colorado Market Overview

In May 2024, the average sales price across the seven counties in Southwest Colorado reached $1,160,865, with 1,037 active listings and an average of 114 days on the market. Sold listings totaled 215 for the month. This data indicates a robust market with substantial inventory growth, offering a broad range of property options for buyers.

While high mortgage rates have certainly influenced buyer behavior, the rise in active listings suggests that more homeowners are choosing to sell, perhaps to take advantage of the appreciated property values. The notable average sales price of $1,160,865 reflects the region's desirability and the continued demand for real estate, even amidst higher borrowing costs.

The increase in average days on market to 114 days signifies a more measured pace in sales compared to the rapid turnover seen in the past couple of years. This could be attributed to buyers being more cautious due to the higher interest rates, leading to longer negotiation periods and more deliberate purchasing decisions.

Market Trends Over the Years

Analyzing the market trends from May 2014 to May 2024 reveals significant changes. In 2014, the market had 2,433 active listings, which drastically decreased to 677 in 2022, reflecting a tightening market. Although we haven’t reached the inventory levels seen before 2021, 2024 shows a recovery in inventory levels with 1,037 active listings. This increase in inventory suggests that more homeowners are listing their properties.

The average sales price has shown remarkable growth over the decade, jumping from $314,000 in 2014 to $1,160,865 in 2024. This increase underscores the substantial appreciation in property values in Southwest Colorado, highlighting the region's growing desirability.

Mortgage Rates and Market Dynamics

The current high mortgage rates of 7% have tempered demand compared to the frenetic market activity of 2022, when rates were around 5%. The impact of higher borrowing costs is evident in the average days on market, which has increased to 114 in 2024 from a low of 89 in 2022. Buyers are more cautious, leading to longer transaction times and potentially more negotiation on price.

However, the rising inventory levels suggest that sellers are still willing to enter the market, possibly to capitalize on the appreciated property values. This trend provides more options for buyers, even if they are navigating a higher cost of financing.

The real estate market in Southwest Colorado for May 2024 presents a complex yet intriguing landscape. While high mortgage rates have cooled the demand from the highs of 2022, the increase in inventory indicates a resilient market with opportunities for both buyers and sellers. The substantial appreciation in property values over the past decade further highlights the attractiveness of this region.

As the market continues to adjust, staying informed about these trends will be crucial for making strategic real estate decisions in Southwest Colorado. Whether you're buying or selling, understanding the current dynamics can help you navigate the evolving landscape effectively.

For more insights and updates, stay tuned to our blog and ensure you're equipped with the knowledge to make informed decisions in this dynamic market.

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