The Montrose Market is following a similar trend headed into its fourth consecutive year of anemic sales activity. Ironically enough, prices are still holding steady at $466K year-over-year. Active listings are continuing to stack up as stale inventory from the winter continues to drive months of available inventory.
The total months of inventory in the Uncompahgre Valley sits at 6 months, though there are significant divergences in specific price ranges. Buyers and agents are experiencing a limited number of fresh purchase options even though overall inventory is higher than the previous 3 years. Overpriced homes are sitting longer or not selling at all.
The total months of inventory, sitting at 6 months, is considered balanced, but this is an average and not a reflection of isolated and specific price ranges. Homes in the upper price ranges are beginning to consider price adjustments to attract buyers. Homes under the $500K mark are extremely competitive if they are rare, desirable and stand out. Gone are the days of quirky and unmaintained properties selling for top dollar. These types of homes with bad floor plans, unmaintained or outdated finishes are now being looked over as buyers re-evaluate what they’re willing to pay for.
Buyer reluctance is especially pronounced over the last 45 days with inflation at 4.2% and mortgage rates increasing above 6.5%. Real and projected fears of prolonged inflation have battered the bond market and mortgage markets, causing investors to demand higher yields.
Many first-time homebuyers simply cannot afford a home in the current environment without a significant change in their financial picture. Current homeowners are faring much better when selling and buying within the same or similar price range.
Although the US economy is showing strong footing, evidenced by low and revised unemployment numbers, mortgage rates are projected to remain elevated above 6% and possibly higher in the next 12-18 months. This could put a serious damper on the already slower real estate market. Home prices may need to adjust if sellers are hoping to sell within a realistic timeline.
Seller Perspective
• Home prices remain stable, but buyers are becoming increasingly price-sensitive.
• Proper pricing and presentation matter more than ever as overpriced or outdated homes are taking longer to sell.
• Sellers in higher price ranges should expect slower demand and possible price adjustments.
Buyer Perspective
• Higher mortgage rates continue to impact affordability, but growing inventory is creating more opportunities and choices.
• Buyers have more negotiating power as inventory continues to increase.
• Well-priced homes under $500K remain competitive and can still attract multiple offers.
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