November 2017 – Montrose Colorado Real Estate Market Update
Bidding Wars Make Their Way to the Western Slope
2017 has been quite the year for real estate in Montrose Colorado. Bidding wars finally made their way to the Western Slope from the Colorado Front Range; the Atha Team experienced an abundance of bidding wars on homes that were listed by Sellers working with the Atha Team as well as buyers on the purchasing side. The bulk of this auction type activity occurred bellow the $200,000 price range. The Montrose market has shifted indeed, to a hyper sellers market under $250,000. With that said, homes that are overpriced are still over looked by distinguishing buyers.
A few people have recently asked, “Will this type of market activity continue?” Others have asked, “Are we in a real estate bubble like 2007?” The market activity, when speaking of price increases, may continue. The sustained equity gains in the market depend on inflation and wage growth eventually matching housing costs. Currently, housing costs are outpacing wage growth and inflation of other goods such as food and automobiles due to lack of housing supply. If new housing construction starts continue to lag behind consumer demand, and prices continue to escalate, affordability may act as a ceiling to the impressive gains experienced over the last 5 years.
Real estate bubbles, as with any asset bubble, are typically fueled by speculation. In essence, the difference between 2007 and 2017 is purchase motivation. Today’s consumers are purely attempting to move, up-size, or downsize to meet household needs, rather than acquire a balloon loan, speculate future gains, and attempt to re-sell in 2 years for a quick buck. The credit products that fueled the previous bubble’s hype are just not available today; ask any millennial with student debt or a Gen Xer with bad credit. Supply (lack-there-of,) and demand (consumer necessity) are the driving principles behind this vigorous real estate market, not credit-fueled speculation and enthusiasm.
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Copyright 2017 Keller Williams Colorado West Realty, LLC. If you have a brokerage relationship with another agency, this is not intended as a solicitation. Equal opportunity housing provider. Each office is independently owned and operated. For sale by owner data not included in research findings. Sales data reflects sales from homes not limited to the Atha Team LLC. This information was gathered from Keller Williams, The National Association of Realtor, CoreLogic data analysis firm, Montrose Association of Realtors, and the Mortgage Brokers Association. This data is considered accurate, but is not guaranteed. Copyright Atha Team LLC 2017. All Rights Reserved.