I remember back from my economics course in college that you could analyze almost any situation using supply and demand curves. As supply increased or demand decreased the price for that good would fall to find its equilibrium. Real Estate is a little less liquid than widgets or corn so the same analysis does not always work. The main difference for real estate is that while it is for sale it is still performing a function. You have to live somewhere, right? Sometimes sellers are not motivated and will only sell if they can get their price. This stubbornness makes the real estate market a little more stable, it gives it ballast to withstand the storm.

One way to look at the supply side of real estate is to look at the total number of listings on the market. Right now there are 2,538 single family homes on the market in Boulder County. That doesn’t mean much until you have something to compare it to. This is where I do my version of inventory analysis. I compare the number of listings with the total number of sales during the past year. I then convert that number to a monthly statistic that I can track. For example during the past 12 months there have been 4,298 sales of single family homes in Boulder County. I use the equation (# sales/12)/# active listings = months of inventory. So right now we have approximately 7 months of inventory in Boulder County. In other words it would take 7 months to sell all of the houses currently on the market if we continued at the same pace.

Below I have included charts that show inventory by price range for both single family homes and attached dwellings in Boulder County. In general there is more inventory in the County than there is in the city limits and there is more inventory at the higher price ranges. The chart for attached dwellings shows a huge number for condos above $600,000. In reality there are not many that have sold over the past year in this range and what has sold tends to be new construction in downtown Boulder with many pre-sales. I would not interpret this hot market to be the weakest in the report.

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