The Montrose real estate market has hit record high values entering the traditional spring selling season. Home prices are up 8% from a year ago, with the 3-month median at $544,075. Limited supply of homes coupled with a larger number of luxury home sales in the month of June, contributed to the price spike. Of the 52-home sold in June, 40% were newly constructed luxury homes priced above $700K. The national market also had record home price appreciation for the month of June.
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Long-term home prices in Montrose have steadily increased from 2012-2020, then massively appreciated from 2020-2023. The monthly supply of homes coincides with this long-term trend, illustrating that supply, or lack thereof, is driving and backstopping valuations. Home supply has increased from its record low in 2022, yet is still creating a seller’s market with 3.9 months of available housing inventory. Phantom inventory (homes that are listed for sale but are not yet constructed/available) are now encompassing 12% of the current housing inventory in Montrose.
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The number of homes selling in our valley is relatively flat compared to last spring, while the number of homes pending paints a different story. Pending home sale numbers (which projects future closings), has been trending downward for a consecutive 3-months. Unless the month of July and August produce a different pattern from the spring, the summer selling season may be stalled heading into the fall.
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Understandably, the current real estate market is heavily mortgage rate dependent. Mortgage rates spiked 50 BPS (.05%) to 7.5% in April, and have recently receded in June to around 7% for a 30-year fixed conventional. This may be the strongest contributing factor to the 25% drop in pending sales activity. From a long-term macro perspective, this is unusual market behavior for the spring season. The number of home sales in June is in line with activity last seen in 2014, a far cry from the pandemic activity between 2020-2022. Yet with such a perplexing market, real estate is still proving to be a solid investment when committed to the long-term, as the last 14-years of appreciation can attest to.
Click Here to View Residential Sold – June
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