Despite a few snow storms, spring is in full swing in Boulder County, which usually brings robust buying activity in residential real estate. But home sales slowed in April with a mixed bag of a drop in multi-family home sales and a modest improvement in single-family home sales.
And for those who follow the Boulder-area markets, the factor driving this market will come as no surprise. That factor is the inventory level, according to Ken Hotard, vice president of public affairs for the Boulder Area Realtor® Association.
“Inventory continues to be the word of the day,” he says. “If you look at the data, last month we saw some inventory gains in multi-family and single-family that resulted in pretty strong gains in sales last month. This month there was a precipitous drop in inventory in condo and townhomes and sales reflected that, dropping as well.”
Sales of condominium and townhomes fell 31.3 percent in April 2017 compared to March with 110 units sold vs. 160. Inventory of condo/townhomes dropped 20 percent in April with 128 units for sale vs. 160.
Single-family home sales improved 6 percent month-over-month – 354 units sold in April compared to 334 the previous month. Inventory for single-family homes grew 14.2 percent with 861 homes for sale in March compared to 754.
Hotard says year-over-year sales are holding steady due to the inventory shortage and continued strong demand. These two forces fuel price appreciation and create a seller’s market.
Year-to-date, single-family home sales decreased a scant .3 percent through April 2017 with 1,115 homes sold compared to 1,149 through April 2016.
Condo/townhome sales year-to-date increased 25.4 percent through April compared to the prior year – 415 units vs. 331.
“People might not realize that the inventory changes we see in our marketplace are just temporary fluctuations, which reflect changes that occur as the result of existing homes coming into the market – not new homes,” notes Hotard.
Since the person selling a home is also typically buying a new home – often still in the Boulder-area – there is a net no real change in inventory.
“We need new product, a new supply of homes, in our marketplace. We’re still not adding any substantial new inventory and as a result we cannot have a long term effect on the inventory,” notes Hotard.
He adds that though housing demand is there, the construction industry isn’t increasing building.
“There are a lot of different factors affecting construction such as availability of labor and cost of construction loans,” says Hotard. “Today, construction lending is quite low historically. The construction loan issue affects the small operations and these small operations really add the bulk of new home building to our marketplace.”
Nevertheless, Hotard says Boulder County remains one of the strongest housing markets in the country, with the homes that are available selling quickly.