Here’s what happened to all the inventory in our market.
Our inventory is currently at historic lows. In fact, in Northern Colorado, the number of homes for sale is down by almost 70% over this same time last year. There are eight reasons behind this shortage of inventory:
1. The pandemic. During the height of COVID, people were afraid to have many people over for showings, and they didn’t know if they were going to move at all. There was just too much uncertainty.
2. People aged 65+ stayed in their homes. Many homes that would otherwise have hit the market when their owners reached the age of 65 didn’t enter the market, as the pandemic caused many to stay in their homes.
3. Homeowners didn’t sell due to a lack of replacement options. Many sellers are unsure they’d be able to find a new home to buy if they did list their current one, so they’ve held off. That has contributed to a low inventory traffic jam in the market.
“Chances are builders won’t be able to fill the gap in demand for a few more years.”
4. Fewer foreclosures and short sales occurred. Many homeowners went under forbearance during the pandemic, which stopped many of the foreclosures and short sales that would have otherwise occurred.
5. New construction. Builders still aren’t out of the hole carved out by the Great Recession. Between 2008 and 2012, few homes were built, which means that they’re having to play catch-up with demand. Chances are they won’t be able to fill the gap for a few more years.
6. Inflated prices for materials, shipping, and labor. This puts further pressure on homebuilders who are struggling to keep up.
7. People are renting out their previous homes. Instead of selling, many people are keeping their primary homes to rent out. They bought them for such a great price and interest rate, so they’re using them as investments for their retirements.
8. Record numbers of folks moving to Northern Colorado. Ours is one of the hottest regions in the country in terms of buyer traffic. The flocks of people moving here keep inventory tight.
These are just a few of the reasons why we’re in such a sparse market. As a real estate team in Colorado, we have many strategies to help buyers and sellers navigate these crazy conditions, so if you have any questions, feel free to reach out to us. We look forward to hearing from you soon.