The Market Is Shifting June 2022 Statistics

The Market Is Shifting June 2022 Statistics

Here are the latest real estate statistics for Boulder County.

We have seen a shift in the market. A few key factors that affect the real estate market have shown a change for the worse in the last few months. Interest rates have nearly doubled in the last six months and prices have risen 20% over the past year.  These, taken together have reduced affordability dramatically. The stock market has decreased by over 20% this year and inflation has made everything else more expensive as well. All of these taken together have caused the shift.  We are now seeing inventory rise, more price reductions, fewer houses go under contract and fewer showings. During June sales were down 25% from a year ago. Year-to-date sales are down 15.7%.  During June 55% of the sales closed at a price above the list price, this is down from 70% in May and 76% in April.  The average premium paid for those houses that closed above list was 6.3%, down from 9.6% in May and 11.2% in April.  The average sales price in June was 2.6% above the list price.  In May the average was 6.2% and in April it was 8.3%.

Affordability is a huge deal! Let’s take for example a home that sold for $500,000 last fall.  After a 20% downpayment, the buyer would have a principal and interest payment of $1,701.  Fast forward to June when that same house is selling for $550,000 (if you’re lucky) and the interest rates have jumped from just over 3% to just under 6%.  The P & I payment on that same house is now $2,602. That is a $900 increase or 52%.

I’m seeing a steady stream of sellers who wished their timing wasn’t quite so bad.  Take a look at the full presentation below for all of the details including a spike in price reductions and a reduction in contract activity.

Boulder County Real Estate Statistics for May 2022

Boulder County Real Estate Statistics for May 2022

The May sales numbers look strong, but it seems that the market is softening. Over the past few weeks I’ve seen an imbalance in the number of new listings (a lot) and the number of contracts accepted (not so many). This is the opposite of what we have been experiencing most of the year. The result is that more homes are staying on the market longer, fewer are getting multiple offers and therefore the pressure on prices is lessening. The number of showings per listing is also decreasing. During May 70% of the sales closed for above the list price and the average price of those homes was 9.62%.  17% (76) of homes sold in May sold for more than 15% over the list price.

See the full picture in the slides below.

Signs of a softening market?

A strong supply of new listings.

And at the same time, there are fewer properties going under contract.

And more price reductions.

The number of properties that are not already on the market is increasing.

Boulder County April Real Estate Statistics

Boulder County April Real Estate Statistics

A Fever Pitch!

In a recent Seth Godin blog post he wrote “The only thing worse than losing an auction by a few dollars is winning one by a lot.  All of this makes sense until it doesn’t. The “market” is very smart about any given moment in time, but not always particularly smart about the future.”

I think this quote rings true for our local real estate market (and many others around the country). The average buyer makes a number of unsuccessful offers and learns from each one what it takes to win in this market. It hurts to be close and it urges them to do a bit more next time.  A more aggressive price, a waived inspection, increased earnest money, non-refundable earnest money, as-is…  That’s what it takes in many instances right now.  In that way, the market is smart right now.  Buyers are learning and adapting.  But is this sustainable?  No.  Are those values locked in? No.  The stakes of the market have  risen and a lot of buyers have gone all in.

April was a huge month for real estate in Boulder County! The statistic that I think most characterized the month was that 21% of all sales closed for 15% or more than the list price and15 sales went for more than 30% over the list price! 76% of the 426 sales sold for above list price.  Needless to say, it’s very competitive and frustrating for buyers right now.   See the slideshow for more detailed statistics.

All of this is set in environment where interest rates have increased by almost 2% over the last six months and the stock market has fallen by double digits year-to-date.  So far, buyers who are in the process, seem to be committed to buying a home, even as their monthly mortgage obligation is rising significantly.

Still Sizzling – March 2022 Boulder County Real Estate Statistics

Still Sizzling – March 2022 Boulder County Real Estate Statistics

Another busy month in the real estate market. Inventory increased this month, but it is still 20% below last year and not anywhere near meeting the demand. In March 73% of all sales in Boulder County sold for a price in excess of the list price (up from 61% in February and 48% in January).  The average sale price for all properties sold during the month was 7.3% above the listing price.  When a property sold for above list price then the average sale was 11% above the list price. Astonishingly, 20% of all sales sold for 15% or more above the listing price. The highest premium paid was 42% above the list price. What all of this leads to is super-charged price appreciation and buyers scratching their heads.  I’m seeing more and more buyers removing contingencies on their offers.  Waiving the opportunity to object to a low appraisal has become commonplace. We are seeing buyers waive inspections altogether and waiving the opportunity to terminate in the case of their loan being denied. Basically they are taking a risk and putting their earnest money at risk early in the process. Despite all of the demand, sales actually decreased by 21% from March of last year.

 

The Accelerating Market February 2022 Statistics

The Accelerating Market February 2022 Statistics

It’s becoming a very difficult market for buyers. In February, 61% of all sales in Boulder County sold for a price in excess of the list price (up from 48% in January and 47% in December).  The average sale price for all properties was 5.3% above the listing price.  When a property sold for above list price then the average sale was 9.8% above the list price.  14% of all sales sold for 15% or more above the listing price. What all of this leads to is super-charged price appreciation. We have seen highly competitive markets before but what is new are buyers willing to pay 20% to 30% above the most recent area sale in order to secure a home. Boulder County has had the most stable real estate market in the nation since 1972. Prices rising at this pace remind me that real estate is cyclical and that at some point the market will cool. View the annotated slideshow below to see all the details.