The Whole Enchilada
For the second time in recent history, a key metric has been hit in the Boulder housing market. Inventory plummeted in single month to a level concurrent with Sold numbers. The last time this occurred – I think in 2016 – it was even more dramatic because inventory matched available inventory. The impact is the same though – demand is outpacing availability causing prices to spike.
Anthony M., one of my title partners, prepared an in depth snapshot of the Boulder housing market. Thank you Land Title Guarantee Corporation for your help and support.
- ASF: Attached Single Family — condos, town homes, 1/2 of a duplex
- DSF: Detached Single Family — houses
Here you can see that inventory through most of 2020 was higher than sold data and available homes. But, in December the ratio tightened abruptly. Inventory fell below the number of sold units.
This is really a big defining moment in the Boulder housing market. It could be in Spring as the usual influx of homes hits the market this lack of inventory eases. Or, this could be a harbinger for an incredibly tight Sellers Market.
Just looking at this one graph, there is a great deal of data. YoY there was fifty percent fewer properties for available for sale in December. That’s a massive change. Under contract units plummeted – because there were fewer homes to buy! The average sold price was up almost seven percent, MoM.
December MoM Boulder Housing Market Inventory Issue
Just looking at DSF – Detached Single Family – Boulder homes for sale in December, so much to unpack. First, the average SOLD home price shot up a whopping 19.46% from a year ago. The increase was close to ten percent month over month. This is a direct result of lack of inventory.
Look at the graph and you see that Sold homes numerically exceeded new inventory. If new inventory continues and falls below existing inventory – watch out!! When you view this trend over time, notice that green line never dips below sold numbers. Until this past December.
If you are a Boulder Home Seller, contemplating making a move, now is the primo market to get your house listed. This is the market where you get top dollar. Contact me to discuss your needs. If you are a Boulder home buyer, you need to be overly prepared to make an offer. This means:
- Seeing homes the day they are listed.
- Being prepared to make offers immediately.
- Having funding – cash, mortgage – in place.
- Supplying POF – Proof of Funds – if a cash offer.
- Eliminating contingencies, such as inspection or appraisal, to be more competitive.
Boulder Home Inventory At Record Lows
They say a picture is worth a thousand words. Here goes!
We (Boulder region) were already at low inventory levels since the Great Recession a decade ago. And then this Fall the available places for sale on the market just really changed. By December, you see he market in uncharted waters. A change of 45.63%, year over year. Or, put another way, for every two houses that were for sale in December 2019, this year there was just one.
If this trend continues, brace for a wild 2021 Boulder.
Attached Units Selling Because
Two radically different trends are impacting ASF Boulder sales. On the one hand, the impact of the pandemic is causing owners to flee city centers and seek more space indoors and out. And simultaneously, money is so cheap, lots of people are buying into the housing market and snapping up every available attached dwelling.
With the flight away from Denver and Boulder metro areas to less crowded suburbs, expect to see attached dwellings around our county to remain strong bastions of sales increases this year. My guess – watch for explosive growth in ASF Boulder residential prices in 2021.
A Tale Of Two Realities
Keep in mind, while entry level and trade up condos and town homes are racing off the shelves, we continue to see some softness in the luxury and ulta high end side of things when it comes to ASF. So its possible a Boulder condo seller could see strong interest in her listing and then be in a position to get a deal as a buyer when trading up to a luxury townhouse in the city center.
Diving Deeper Into Boulder Housing Market Inventory
In the county, Boulder inventory was only down about 20% (see graph above). With median values for single family homes being north of a million dollars, this shouldn’t surprise. But then look around the county. Its very difficult to find a home for sale in:
- Superior, YoY inventory down 76%
- Louisville, YoY inventory down 65%
- Erie, YoY inventory down *88%
- Longmont, YoY inventory down 62%
Erie Homes For Sale
The Erie statistic can be misleading. You want to keep in mind some of Erie is in Boulder county and some is in Weld County. This is no small thing. Boulder housing market and Weld County have different policies regarding growth, open space and community services. The seat of county government for Weld is in Greeley. That town is night and day different with Boulder. Just saying.
Schools change as well when you move from one county to another. So, while the Boulder county inventory for Erie has plummeted, don’t be surprised to see tons of houses in Weld County Erie for sale.
Another Visual Look At Boulder County Single Family Homes
In a balanced housing market, you will see about four to six months of inventory available for purchase. Here, over the last three years there has been far less. And, we have experienced a Sellers Market (high demand, low inventory).
Take a look at December ’18, ’19. You see these were months when housing inventory decreased compared to the rest of the year. And the trend continued this winter. But, we only had .69 months of inventory – only 2/3rds of a months supply. That’s a big change from the years prior.
The places where clients have, in the past, sought homes outside of Boulder were practically closed to new buyers this year. Niwot had sixty percent fewer homes for sale; Longmont 62% fewer, Superior 78% fewer.
Anthony M., says “The sellers are holding all the cards here.” Don’t expect new roofs or big time concessions.
Post Shut Down Buyer Demand Spikes
We saw intense demand for the homes available following the shut down. Less to do – movie theaters shuttered or lacking blockbusters. Birthday parties, spa days and lunch bunch weekends cancelled en mass. From April through the end of the year we witnessed unprecedented demand for single family homes in Boulder County.
Bigger suburb homes are the hot ticket
Boulder SFR Luxury Market Doing Incredibly Well
A few years ago I was writing about the Boulder market and discussing million dollar plus sales. That metric sailed. Million dollar homes are now the median and average priced places around the city. But the idea, the concept, that we have this luxury price point, that remains. And the luxury upper end in the city is booming. Take a look:
$3,000,000 Homes For Sale Boulder County
In December, with exceptionally tight Boulder housing market inventory levels, we did see 31 places for sale around the county exceeding $3M in price. Believe me when I say, this is a dramatic shift from a decade ago. And, then you look at the sold data and see 20% of that inventory number was sold. The number of sold three million dollar and up pads in Boulder was in fact 200% more than a year ago. Wow.
Wow. We have a lot of high end inventory for sale. And its getting bought up. In some respects, it is easier to buy a luxury home right now than an entry level house. Homes for sale under a million bucks? Seventy single family residences in the county. Over a million dollars? One hundred and forty. Double the choices at the higher price points in Boulder Co.
Now, for the year, when you look at sold inventory, sure the entry level and trade up properties were hot. But still, $1M to $1.5M saw 31 sales. There were seventy five percent as many homes sold between a mil five and two million as there were homes sold from $300K to $400K.
Folks, I’m not telling you anything earth shattering here. Boulder is getting more expensive by the minute. And buyers looking to live here are starting to consider points further and further away to buy into the market.
Mortgage Interest Rates have an impact. Even as I’m writing this update, a news flash just lit up my iPad from Dana B. over at Guaranteed Rate. Jumbo 30 year rates are in the low threes. That’s the interest rate when you are getting a really big mortgage – like the sort you would need for a three million dollar plus home. That’s just insanely good.
For a contrast, consider my listing at 708 Brome Pl. I was looking at the sellers purchase contract from back in 1985 (wrote a post about the changes in contracts here). Anywho, that contract said the buyer would have an interest rate of 9.5%. You wouldn’t want to buy a three million dollar house 9.5% over thirty years! No Way!
But Why Are Lower End Boulder County Sales Down?
Inventory. Go back to the very first slide and you’ll see, there are simply no homes for sale. This can’t be overstated. The lack of inventory is going to have a major impact on our Boulder housing market if the trend continues in 2021.
Watch For Appraisal Gaps
As the market moves into the next level, be prepared to see appraisal gaps. Its pretty common to see home buyers guarantee to cover a shortfall, especially when financing a home. And its been my personal experience to see several recent transaction have appraisal issues. Why? The Boulder housing market is moving so quickly appraisers are having a difficult time finding homes to justify sales.
Buyers: be prepared to bring extra funds to close on homes in 2021.
Out Of State Buyers Flock To Boulder
Remember, just as locally we are seeing people move from urban centers in Denver and our downtown to larger homes in the ‘burbs, we are also seeing instate migration. Colorado remains a hot spot and our county remains a preferred destination.
Average sellers in California are selling higher than our prices, relocating here, with piles of cash to invest. Do I like it? As a Realtor, okay. As a resident, not so much. Trails are definitely more crowded where I live. I do think our normal snowy cold winters will scare a few of these relocation folks back to warmer climes. Especially once the covid-19 pandemic subsides. BTW, public notice plug. Check the CPR news website for info on when you can qualify for a vaccination.
Boulder County Average Sold Price Relentlessly Increases
Since the Great Recession, we have seen the county recover home values and climb relentlessly. Sure, there are moments when values spike more than other months. But its difficult to time the market like that. For instance, I generally believe the winter can be a time of opportunity. Not so in 2020, right!?! For the county, prices gained just a tad less than 20% year over year.
Home Sellers: let’s talk about your house. This could be the ideal year to trade up. Take advantage of that equity gain to move from your current residence to your dream home. Just do keep in mind, these are average numbers over a wide variety of price points and styles of homes. Look at the stats for Lafayette and Niwot as outliers in December.
One city saw a 1% gain while the other experienced 65%. I suspect the true increases are different than is listed when broken down more specifically.
Final Thoughts From Realtor Bob Gordon
Home buying clients want to start the process early. Sure, your lease might be up in early summer, but you need to start the process sooner. Why? It’s not uncommon to run into multiple offers on a house. This can happen more than you realize. There is just so much competition out there. Home Sellers that will be buying back into the market. This is a great time for you. Let’s say you are selling under a million – where inventory is so low there is less than a month’s homes for sale. You are apt to see multiple, better than full price offers. Meanwhile, when you trade up, especially into that sweet spot ($1.3 to $1.6M) there are more choices. This would be an ideal market to make a move. Plus, interest rates are just ridiculously low.
I’ve been assisting clients since 1995 and look forward to putting my expertise to work for you. Give me a shout online – just use this link to reach me.