Winter 2022 - 2023 Market Report
Bottom Line on Top: despite increased inventory , increased interest rates and slowing of sales, rural property (especially those over $1M) retain the “safe investment” appeal for buyers.
Amazing, professional horse facility on acreage in rural Douglas County.
what does the crystal ball say?
While the recession and interest rate increases have slowed the market. The desire for a safe investment has continued to drive demand for luxury and rural properties.
Sales activity and price growth at the rate seen from March 2020 to March 2022 couldn’t continue indefinitely. Although the slowdown felt like a dramatic market correction, the reality is that the market has moved to a more normalized pace.
The spring of 2023 is likely to continue along the same trajectory: softer than last year, and trending to what feels like a more balanced market. I don’t anticipate a major market correction to corrode past gains.
Tranquil private equestrian farm in Elbert County.
Why DOn’t I anticipate the proverbial shoe to drop?
Current forecasts indicate that the Colorado housing market will be short by nearly 200,000 homes by 2028. With that kind of shortage, you just don’t see pricing falling.
This backlog started after the housing / loan crisis of ’07 & ’08. Nearly 40% of construction companies went out of business from 2010 through 2020. This, combined with stricter zoning laws and regulatory burdens, means fewer homes are being built.
But surely that can’t be the case in rural douglas & elbert county because I see all this building going…
Douglas & Elbert County Horse properties are homes listed within Douglas or Elbert County, Colorado that have 3 or more acres and the zoning allows for horses.
In comparison to longer term trends, especially for the rural market segment, inventory and sales remain relatively low and prices remain at all time highs.
Understanding the supply side of rural homes…
The graph on the left reflects the number of horse property listings in 2022. You’ll notice that it peaked in the summer when the affect of the interest rates was being felt.
But you’ll also notice that we ended the year with less inventory than what would be considered more normal as depicted by the graph on the right (inventory over the last five years).
And So what does all this mean to the luxury (horse) property market?
Because inventory is still at historic lows, Colorado front range is technically still a Seller’s market. But days on market has increased, showing that Buyers have more leverage than a year ago.
Even though the number of custom, high-end developers has recovered from prior to the ‘07 & ‘08 housing crisis, this market is still impacted by the supply of “step-down” homes.
And now the fine print: The above information has been researched from the Metro Denver MLS System (www.REcolorado.com) by Penny Smith of eXp Realty, LLC based in Larkspur, CO. It is believed to be accurate, but is NOT guaranteed. Every property will have unique factors affecting value such as location, condition, acreage, quality, size, age, upgrades and features. A thorough in-person assessment by an experienced real estate broker or licensed real estate appraiser is recommended to determine the actual current market value on an individual property.
Give me a call to discuss the fine print and determine how your home fits into these macro factors.