The summer is winding down. The kids are back in school. The nights are a bit cooler. The commonly held belief is that summer is the best time to sell a home. That might have once been the case but we have seen a shift. Late spring seems to be when the most buyers are shopping for homes. Typically, the most contracts are written in May and the most closings come in June. Some years this shifts a bit but for most years this is the typical pattern.
During the past few years I have found mid-July to mid-August to be quite slow. Vacations and varied activities seem to get in the way of serious house hunting. I have also found that once school starts we have a bit of a fall surge that lasts through the end of October. Maybe this past week signaled the beginning of the "surge".
This past week 88 contracts were written and accepted in Boulder County. This represents the most since we had 98 the last week in May. This year our top weeks for contracts accepted were the final weeks in April when we averaged 155 contracts per week.
The interest rates are still great! This means that as a buyer of Boulder real estate you can comfortably afford more home. Let me know how I can be of service.
What is happening in the Boulder real estate market? That's a tough question but I think I will answer by giving some perspective.
The normal cycle for selling homes in the Boulder Colorado starts slow in the winter, then activity picks up during the spring until it reaches its peak in May or June. After the peak we usually go in a stair step pattern back down to the holidays. The shape of the sales curve during most years is a bell curve. This picture only includes sales so for contracts written you must move the curve to the left 1 month. So where does this put us now that we are in the last week in July? By all accounts we have reached our peak for the year, the only question is how strong the rest of the year will be.
Interest rates are incredible and any buyer who is sitting on the fence worried about the state of the market will be kicking themselves if they don't take this opportunity. NOW is the time to act!
The chart above shows weekly activity in the Boulder County real estate market since April of 2009. Here you can see the cycles of accepted contracts in blue and closed sales in red. I have highlighted the time frame of late June to late July during 2009 and this year so that it is easier to compare market activity. This year after reaching a climax in contracts on April 30th (end of tax credit) we have seen a sudden a sharp drop which has now stabilized at about 70 contracts accepted in any given week. This is about 10 below last year.
Another measure of if houses are selling is under contract percentage. The higher the percentage, the more activity in the market. As a rule of thumb anything above 15% is considered healthy and strong. Here are some current market statistics for Boulder County.
All price ranges - 12% of active homes are under contract.
$400,000 and less - 13.7% of active homes are under contract.
$400,000 - $800,000 - 13% of active homes are under contract.
$800,000 - $1.2 million - 8% of homes are under contract.
Greater than $1.2 million - 4.2% of active homes are under contract.
City of Boulder - 12.3% of active homes are under contract.
So the answer to the question 'Are Houses Selling in Boulder County?' is yes! There is still market activity but frankly I'm surprised more buyers are not taking advantage of fixed rates that start with a "4".
The first four months of 2010 were just what we needed in the Boulder area real estate market. The federal homebuyer tax credit, low interest rates and an uptick in overall economic optimism led to a surge in activity. The likes we had not seen for a number of years. It wasn't record breaking stuff but it certainly got us out of the spiral of declining activity which started in August of 2007 and continued until sales on a monthly basis were consistently 40% below what they had been back in 2004.
Through May (numbers not quite final), sales of residential property in Boulder County were up 32% compared to the first five months of 2009. A good result of healthy activity.
As I mentioned before, our market so far this year has stood on three pillar: tax credit, low interest rates and increased economic fundamentals and optimism. Well, the tax credit has now expired and we are now seeing how strong the two remaining pillars really are.
First for my unquantifiable testimony. I have been busy, quite busy in fact. But I would be fibbing if all of my time has been spent writing and negotiating contracts. I have been meeting with potential sellers, signing up listings, preparing marketing materials, updating and creating websites, showing houses, counseling buyers, etc. Generally doing the activities that lead to future contracts and closings. My listings have been getting fewer showings lately and the volume of the general buzz has decreased. We are finding our new, post tax credit baseline and this level I believe is above where we were but still not back to where we would like to be.
Now to a few quantifiable measures of actvity. The attached charts show three measures of activity: showings, contracts and closings. The first chart in the presentation (view full screen for best viewing), shows real estate activity in Boulder County on a weekly basis. The red line shows the number of closings during any given week and the blue line shows the number of properties that went under contract during a weeks time. You can see that there has definitely been a drop off in contract activity since the April 30th expiration of the tax credit. Closings are still holding strong and because of the lag time of a typical real estate transaction between contract and close, I expect June's numbers to be reasonably strong as well. But we may have already hit our peak for the year. Time will tell.
The second the third chart present showing activity for my office on a monthly basis. I track gross showings and the number of showings per active listing on a daily basis and then average it out for the month. The total number of showings decreased 27% in May (compared to April) and the number of showings per listing decreased from 9 in April to 6 in May. Some listings got much more than six and some unfortunately had fewer than six buyers take a look.
It has been six days since the expiration of the Homebuyer Tax Credit and to be frank the activity this week has been a bit slow. This is understandable since those buyers who qualified had a big incentive to get something done before the April 30th deadline. The chart above shows a full year of data that tracks sold and contract activity in Boulder County in one week chunks. The blue line shows the number of homes that received accepted contracts during any given week and the red line shows the number of homes that actually closed during the week.
You can see that we had a definite upward trend in contracts beginning January 1st and this past week the activity decreased significantly. Sales are up 35% so far this year and we have been consistently ahead of 2009 numbers. That is until this week. If you look to the left you will see that for the week ending May 14 2009 the number of homes that went under contract during that week was greater than the number this past week.
To be fair. Our market was just starting to get rolling a year ago and we have had a strong year so far. I'm hoping that this is just a one or two week hiccup and that we will then continue with a strong spring/summer selling season. From my point of view the stimulus worked.
One year ago this week I thought it would be cool to get a sense for the market activity on a weekly basis. Every Thursday morning for a year I have done a specific search which identifies the specific activity in the real estate market in Boulder County. During the past year there have been 8,304 new listings, 7,808 price reductions, 5,642 homes go under contract and 4,181 homes get to the closing table. The graph below shows two of those categories on a weekly basis; the number that went under contract and the number that sold.
When a house goes under contract it becomes a leading indicator of a future closing. But from the data over the past year it appears that a quarter of all homes that go under contract do no make it to the closing table.
The trend this year has been pretty clean since the first of January. Our trend for increased sales is still on an upward trajectory. It will be interesting to see what the next few weeks have in store since the tax credit stimulus expires tomorrow.
So far, it has been an interesting year in the Boulder area real estate market. It feels very different than a year ago, for the better. More activity, more showings, more calls, more plans, more positive expectations... However, after looking at two months of data we are just a touch ahead of last year in terms of properties closed.
Here is what I think is going on. We are busy setting the foundation for a surge that will correspond with the expiration of the homebuyer tax credit. We are already seeing its effects but as the deadline draws near buyers will stop shopping and start buying. This should happen by the end of March. If you don't recall the basics of the tax credit see my previous post on that subject. Even if you have already filed your 2009 taxes you can do an amended return and see that money this year!
Here is a chart showing the activity in the local market on a weekly basis. You will notice that there was a surge in closings this past week. This is fairly normal at the end of each month.
The real estate market in Boulder County is starting to get its legs for spring. Showings have been very strong for this time of year but up until this past week contracts have been lagging. The chart above shows two data sets collected every Thursday morning since last April. The blue line shows the number of homes that went under contract during any given week and the red line shows the number of properties that sold during any given week. You can see that the sales for January reflect the typical slower activity over the Holidays. However, the far right side of the blue line shows a definite trend toward strong activity for the spring.
The last 10 days of the year are usually some of the slowest of the year when it comes to real estate. Throughout the Boulder area people are out enjoying the snow, enjoying friends or are out of town all together. Even though showings and contract writing is slow I know that many people are starting to consider where they want to be living next Christmas.
I too am taking a few days off to spend some time with family, but at the same time I'm gearing up for 2010. The business landscape is always changing and I am continually looking for new and better ways to help my clients buy and sell homes. I am truly excited for the coming year and if you are considering a new home I'd love to talk it over with you.
Here is a quick chart showing the weekly activity in the Boulder real estate market. Of the 67 properties that closed last week in Boulder County the median price was just $267,400. Still the lower price ranges are selling well.
The activity in the market continues to surprise me. I just did a quick preview of November sales and total sales in Boulder County are going to be way up for November compared to a year ago. I see three major factors fueling the real estate market in the Boulder area: higher consumer confidence, first-time homebuyer tax credit and low interest rates.
The unemployment rate in Boulder County is 6%, well below the national average. It looks like many of those happily employed people are deciding to buy real estate while the conditions are just right.
On a related side note. Segate, a large employer who has employees in Longmont Colorado had layoffs and mandatory 10% pay cuts about a year ago. From what I have heard, the company has reinstated the original pay scale. This type of action frees up the wallets of all of the employees who are no longer afraid for their jobs.
The table below details the real estate market activity in Boulder Colorado. I created this weekly activity index at the end of April and have been tracking and commenting on this and other market data on this blog since that time. Basically what we have been seeing in the market is pretty steady activity. We are down from the past few years but we are holding up okay. Sales of all residential property in Boulder County is down roughly 23% through the end of September.
What is interesting about this index is that you can easily compare the number of homes that go under contract to those that actually close. I've found through my research that 24% of homes that go under contract don't make it to the closing table. Another interesting statistic is the median price of the homes which have closed. The median price of sales has consistently been under $300,000. The average price of sales is also down so far this year. There are two reasons causing the lower sales prices; low interest rates for loans less than $417,000 and the first time homebuyer credit.
Thursday, August 19, 2010 at 2:31PM 
