In the looks-can-be-deceiving department, it appears Northern Colorado's new home market is stronger position than it may seem on the surface.

Traditionally, a valuable measure of any new home market is the months of inventory available for sale. For example, if 10 homes have sold over the past year in a certain market segment, and there are 10 homes currently available for purchase, then it follows that there is a 12-month supply of homes on the market. Most experts agree that a six-month supply represents a healthy equilibrium in a local market.

Through extensive research conducted by The Group Inc., we've found a number of "phantom listings" in the Northern Colorado market that have exaggerated new home inventory and artificially increased the months of supply. These "phantom listings" consist of properties that appear on the Multiple Listing Service as being available for sale, when in fact the home is not yet under construction. Because construction is not under way, it could be many months before the home is actually ready for purchase. For example, there are currently 37 new homes in the Fort Collins market listed for sale priced between $200,000 and $250,000. However, only seven of those are under construction and 30 are considered "phantom listings."

It is important for sellers, buyers and lenders to have a true picture of the new home market. Contact me for more details on "phantom listings" and the state of the new home market.

The Group Inc. Real Estate. New home market stronger than it appears: impact of "phantom listings." Volume 34, Number 9. September 2010.