December’s real estate statistics for the Boulder area were a mixed bag, impacted by the typical holiday slowdown, persistent low inventory, and continued rising prices.
Condominium and townhome inventory helped put a shine on December’s attached dwelling sales in Boulder County, which rose 12.5 percent with 117 compared to 104 in November. Yet, single-family home sales dropped 33.1 percent with 224 homes sold in December 2016 compared with 335 in November 2016.
For the year, single-family sales through December 2016 declined 10.3 percent with 4,396 units sold vs. 4,899. Sales of condo/townhomes fell 9.1 percent in the Boulder area, with 1,422 units sold through December 2016 compared with last year’s 1,565.
Ken Hotard, Senior VP of Public Affairs for the Boulder Area Realtor® Association, says 2016 met expectations “with sales down from last year.” He added that attached units performed better with “a little more inventory in the mix in the last quarter, which helped sales through December.” “For now, real estate sales in Boulder County are an inventory story,” says Hotard.
The data supports the point. Inventory of single-family units dipped 24.2 percent in December 2016 compared to November – declining to 521 units from 687, while multi-family unit inventory decreased 25.8 percent – 92 units versus 124 – over the same period. In fact, Hotard notes the largest market areas in Boulder County had less than a month and a half of inventory on hand in December. Meanwhile, prices continue to rise. Data for the year show median sales prices with double-digit growth in all areas except the mountains, which increased 6 percent.
Coming into 2017, Hotard’s expectation is more of the same. “I don’t see a significant shift occurring early in 2017. The first quarter will look a lot like last year with a very slow increase in sales until the second quarter of the year,” says Hotard. In the second quarter, he anticipates an improvement in inventory at “a much healthier pace.” But Hotard finds it hard to predict 2017 at this point, noting uncertainties in potential interest rate increases, the performance of the economy in general and the state of consumer confidence.
One factor that could bring inventory relief is a change in the construction-defects law. The current law increases the liability insurance for developers who build condominiums and townhomes for sale, which has slowed the building of attached dwellings. But he says those close to that legislation are not expecting much change, though the topic will be addressed by the legislature again this year.
Recognizing that high prices present challenges for fostering an economically diverse community, Hotard says “Private developers and Boulder Housing Partners do a pretty good job tackling those challenges without altering the quality of life in Boulder.”