The Latest Kearney Report -Q1 2017

The Latest Kearney Report -Q1 2017

I have just published The Kearney Report for the 1st Quarter of 2017.  The entire report can be viewed below on this page or you can download the PDF link here The Kearney Report 1st Quarter 2017

Real Estate Market Update

The Boulder area real estate market has been one of the most robust markets in the nation over the past few years.  The market has been characterized by steady sales, low inventory and rapidly rising prices.  This trend continued through the first quarter of 2017.

During the first quarter of 2017 there were 847 sales in Boulder County which reflects a 5% drop from the previous year. The median sales price during the quarter was $465,000 which is 9% higher than it was a year ago.  Inventory, especially towards the end of the quarter and then extending into April and May has increased giving buyers more breathing room to shop for homes.  During the first quarter, 35% of the sales had a price above the list price, 20% were at the asking price and 45% were below.  Of those that did sell above list price the average premium paid was 4.4%. During the first quarter of 2016, 42% sold above list price and the average premium paid was 5.5%.  It seems that calling this a slow down is splitting hairs but during that same period it was my experience that showings were down and the number of offers received on any one property was down as well.

Through the end of April the total number of residential sales in Boulder County is up roughly 1% with January and March exceeding last year and February and April lagging last years totals.  We still do have a great influx of new residents which has been fueling the unusually strong market but whether it be higher interest rates or higher prices, or both, the activity has lessened.

You may have noticed that there are not many for sale signs out there. The inventory of “for sale” homes in Boulder County at the end of the 1st quarter is up 12% from a year ago.  There are definitely more choices out there.  I have seen many listings that have fit into this predictable pattern: the house gets listed for a high price compared to recent sales in the neighborhood (the hope), after 10 days or so of moderate showings and no offers (the reality) the sellers reduce the price (the chase) hoping to rekindle interest in their home.  In my experience it’s more difficult to make an adjustment after 10 days and get interest than it is to price it right in the first place.

As you browse through the rest of the report you will find, for comparison purposes, a number of market measures displayed for each of the submarkets in our area. Enjoy the report.

Here is our advice for buyers and sellers in the current market.

Buyers – Interest rates are increasing slowly and with increased inventory you may be able to avoid competing for a home with other buyers. On average, homes are still selling for just below asking price. If you are patient you may reap the rewards of waiting for a seller to become motivated and find that the price that you pay is reasonable compared to the neighborhood.

Sellers – Properties are still selling however the exuberance of past years isn’t there.  This may be a good time to lock in the gains we have seen in the market over the past three years.   When pricing your property lean towards reality and away from greedy and you will most likely find a buyer who is on the same page.  “Testing” the market can have poor results if you find your house still on the market two weeks later.  Price reductions don’t have the same impact of a well priced new listing.

Boulder Real Estate Market Slowing But Remains Strong in April

Boulder Real Estate Market Slowing But Remains Strong in April

Each spring since 2013 the real estate market in Boulder County could be characterized as frenetic. This year the market is a bit more tempered.  If you just look at April’s numbers the market seems similar to a year ago.  Sales are similar, inventory is up, prices are up…  However, despite strong forward looking sales it seems that the market has lost some of the strength we have seen over the past three springs.  Houses are staying on the market longer and there are fewer showings on new listings.  It will be interesting to see how it plays out but we don’t usually see the market slow down until late June and we are seeing it earlier this year in some segments.

Sales in April were down 9.4% when compared to last April. Year-to-date sales are still up 1% but it seems that this year is losing a bit of steam.  Anecdotally, there have been fewer than expected showings on listings and even on popular properties when multiple offers have been received, the numbers of showings and offers is down. The slideshow below illustrates graphically different segments of the local real estate market including; number of sales, inventory (which is rising), under contract percentage etc.

 

Which Boulder Neighborhoods Have Appreciated The Most?

Which Boulder Neighborhoods Have Appreciated The Most?

Which Boulder neighborhood has appreciated the most and which are lagging behind?  This is a tough question to answer since there are so many variables.  But hopefully some data will help to make some sense of that question.

Over the past five years the Boulder area has been on quite a run of price appreciation.  Some quick research in the MLS tells me that we have seen 50% appreciation in median prices in Boulder County over the past five years.  Breaking it down a bit more, here are the appreciation rates for the local communities over the past five years (from information gathered in IRES MLS):

  • Boulder – 66%
  • Louisville – 51%
  • Lafayette – 60%
  • Longmont – 61%
  • Superior – 56%
  • Erie – 50%

To break it down a bit further I have divided the City of Boulder into eleven distinct neighborhoods.  To see more on these neighborhoods please see the Boulder Neighborhood Guide which I update each year.  A map of how I have delineated the neighborhoods is below.

With the baseline of 66% appreciation over the past five years, here are the appreciation rates for Boulder neighborhoods.

  • South Boulder – 65%
  • Chautauqua – 52%
  • Mapleton Hill – 44%
  • Newlands – 36%
  • Wonderland Lake/ Dakota Ridge – 34%
  • North Boulder East – 76%
  • Whittier – 46%
  • North East Neighborhoods – 126%  (Note- Mostly condos and townhomes in this area with the exception of the Four Mile Creek, Kalmia 38 and Northfield neighborhoods which have seen high priced new builds which have raised the median prices way above the average)
  • East Boulder – 49%
  • Retail/Industrial Core – 106% (Note – not many sales in this quadrant. New builds at Boulder Junction are bringing up the prices)
  • Gunbarrel – 51%

Keep in mind that the sales and prices represented above include both single family and attached dwellings and that the underlying sales are not a constant.  For example, some years there are more condos sold, some areas have had new construction, some areas have had many major remodels or scrape off and re-builds.  Over time Boulder’s stock of homes are improving.  To find evidence of this just drive through Boulder’s neighborhoods and see the number of contractors trucks at work.

Boulder County Real Estate Statistics – February 2017

Boulder County Real Estate Statistics – February 2017

The market is already up and running for the spring season. Inventory is up a bit and the percentage of those listings that are under contract is hovering around 50%.  Homes are still selling quick and it’s still a seller’s market but there is not quite as much pressure on the market as there was a year ago.  At the end of February, we can see that sales overall were up 3% in the first 2 months of 2017. However, total sales were down 5% in February when compared to last year.
See the slideshow above for graphs and more statistics.
Average Negotiation, Days to Offer and Other Random Facts

Average Negotiation, Days to Offer and Other Random Facts

If you are looking for the entire statistical overview of the Boulder real estate market in 2016 check out this comprehensive post and then this one about sales by price range. After working on those year end reviews articles I realized that I had some random charts that may be of interest.  These include DTO (Days To Offer); Average Negotiation; and Sales by Area throughout Boulder County.

Both Days on Market (DOM) and Days to Offer (DTO) are presented in the chart above.  I like DTO better because it gives a more reliable read of the strength o of the market.  Days To Offer tells how long it took for an average listing (in this case all residential properties in Boulder County) to go under contract. In 2016 it took on average just 30 days to go under contract. This was one day longer than a year ago but less than half as long as the 15 year average of 66 days.  We have been blessed with lots of buyer demand.

The graph above takes a bit of explanation.  Each column represents a quarter except for the one on the far right which represents 2016 as a whole.  The graph is measuring the relationship between sales price and listing price.  The blue section represents those properties that close below list price (at a discount).  The orange section represents those properties that sell for exactly list price.  The gray section represents those properties that sell for above list price (at a premium).  The data included was both single family and attached homes in Boulder County.

Throughout the year the properties that sold at list price (orange) were consistently between 20% and 35%.  In order to get a good sense of the strength of the market look at the gray sections.  In the first quarter of 2016, 42% of properties sold for above list price; in the second quarter it was 50%; in the third quarter 42% sold at a premium; and in the fourth quarter the market slowed and just 26% of all sales closed with a price above the list price.  On average for the year, if a property did sell at a premium it sold for 4.7% above the list price.

 The pie chart above shows the percentage of sales that took place in each of the major communities during 2016.  It’s interesting that Longmont has the most sales even though Boulder has more population.  Here is a quick comparison of the percentage of the county population and the percentage of the county’s real estate sales.

Community               Population               % of County pop.               % of County sales

Boulder                       103,166                          33%                                    24%

Longmont                     89,919                           29%                                    33%

Lafayette                      26,784                            9%                                      8%

Louisville                     19,588                             6%                                      6%

Half of Boulder’s housing units are rentals. This is one explanation why it’s sales lack its population as a percentage.

Sales By Price Range Around Boulder County

Sales By Price Range Around Boulder County

The median price of residential (including single family and attached dwellings) home sales in Boulder County during 2016 was $450,000. This was up roughly 12.5% for the year.  But this is far from the whole story regarding home prices in Boulder County.  As we break the statistics down into the individual communities throughout the county we start to get a broader sense of what is happening.  The first graph below shows the median single family home prices of each of the local communities since 1997.  Over the last twenty years Boulder has really outpaced the other communities in the area.

Boulder County Comparison of Home Prices

The comparison for attached dwellings (condos and townhomes) is similar but not quite so differentiated.

Comparison Prices condo

Another way to look at the prices in different communities is to break down by price range where the sales took place in each community.  First let’s start with the county as a whole.

Boulder County sales by price

During the most recent quarter 62% of all sales were less than or equal to $500,000.  This percentage has been relatively stable over the past three years (comparing just 4th quarters). However, the lower price range ($0 – $250,000) has decreased 17% and those sales have moved to the right.

Boulder is more expensive! This isn’t news.  Just 36% of all sales were $500,000 and below. It’s interesting to look at the more equal dispersion of sales across all price ranges.  Over the last three years the entry level has shrunk by 2/3 and the high end has increased.

 The sales mix in Longmont is completely different that Boulder.  91% of sales are $500,000 or below.  82% of sales are between $250,000 and $500,000 and over the last three years the entry level has shrunk from 45% to just 9%.

In between Boulder and Longmont are the other communities in East County.  The graph below puts Erie, Superior, Lafayette and Louisville together.  During the most recent quarter in those communities 59% of sales took place at or below $500,000.  The $500,000 to $750,000 price range is really growing and$1 million plus sales are still rare in those communities (doesn’t include unincorporated Boulder County).

Prices are rising but there is still a nice mix of price ranges within a reasonable commute to anywhere in Boulder County.  It’s always been a trade-off between price, location and condition.  But now the entry point is higher.