BOULDER – The first quarter of 2017 hints at hopeful signs for homebuyers in Boulder County, as inventory for single-family and attached dwellings increased, according to RE/MAX of Boulder’s DB Wilson.
For the past several years, inventory shortages have been an issue in all housing types across Boulder County as demand for housing remained steady even in the face of significant price appreciation.
“The appreciation we’ve seen over the last three years is truly unsustainable,” says Wilson in a recent interview with RE/MAX of Boulder Realtor and Author Duane Duggan on the RE/MAX of Boulder video podcast (at bit.ly/2qPf9r3). “One thing of significance in both single family and attached dwellings is that we’re seeing inventory start to rise and this is a really good thing,”
Wilson expects the increase in inventory to slow the appreciation rate as well as give buyers “more of a selection” in housing options.
As the statistician for RE/MAX of Boulder, Wilson reviews 10 data points in his monthly, quarterly and yearly analysis of Boulder County residential real estate. Data points include median and average price ranges, sales to list price, days on market, total number of sales, expired listings or homes that never sell, months of inventory, percentage under contract and the interest rate. Those numbers are then compared to the same period last year.
“Though early in the year, this gives a bigger view than month-to-month statistics,” says Wilson.
Quarter one analysis showed that price appreciation is still increasing, but may be showing signs of slowing. In the first three months of 2017, the average price of a single-family home in Boulder County increased 8 percent over the same period last year to just under $656,000. Last year at this time, the appreciation rate was almost 11%.
Median price rose 8.5% percent to about $588,000.
“Price is pretty expensive at this point, and we’ve all been talking about affordability,” says Wilson.
Though Wilson says the increase in inventory will help, countywide there are just 688 homes available compared to 640 a year ago. “Fifty percent are under contract, so there’s still huge demand from buyers. That equates to about 3.7 months of inventory. Five to seven months is considered a stable market, anything less than that is a seller’s market,” Wilson adds.
In single-family homes, sales price compared to the list price dropped slightly. Wilson notes this may be an indication “sellers have gotten too aggressive with pricing, maybe Realtors are getting a little too aggressive.”
While interest rates are up about 14 percent, the quarter finished at about 4.2 percent.
Even at 4.2 percent, this is historically very low.
In attached dwellings, inventory surged ahead with a 43 percent increase.
“At first blush you say that is incredibly different and showing signs of a slowing market. But if you look at the other 10 statistics, you’ll see that this is a good thing because we were abnormally low a year ago and the year before that,” Wilson comments.
As a result of the inventory, townhomes and condo sales increased 38 percent over the first quarter of last year with 265 sales in quarter one over 190.
Even with the large inventory increase, there is just 1.9 months inventory available.
“It is still a seller’s market,” says Wilson, noting that less than five months of inventory is considered to be a seller’s market.
More than half of the available units – 63 percent – are under contract. Average price increased more than 10 percent over last year, reaching $408,000 countywide.
With a sales to list price ratio still at over 100 percent, Wilson notes the attached dwelling market is very strong, which makes him thankful to see more units come on the market.
“It’s really increasing the availability for buyers and we expect that inventory to continue to rise, but affordability is the issue. Typically attached dwelling is a great entry point for the first time home buyer with interest rates and prices going up as much as they are, affordability is a real problem,” he explains.
Overall Wilson says the strong seller’s market can be frustrating for a buyer. “It continues to be very important to use a Realtor with expertise and the current market conditions at their fingertips. Yes, prices are up, but there are some other things going on as well.”
Though the market is challenging, Wilson believes it’s starting to change. “When [the market] starts to check itself, that’s good – I think it’s good for everybody. It’s still a wonderful time to buy and a terrific time to sell.”
To see RE/MAX of Boulder’s video podcast discussing quarter one statistics, visit bit.ly/2qPf9r3.