The shift in the market has continued this month. Due to a drastic rise in mortgage interest rates, the key indicators in the market have changed. The biggest change I have seen so far is in the number of sales occurring. Sales are down 22% for the year and in October sales dropped from 486 a year ago to 294 (Boulder County single family and attached), a 39.5% decline! Homes are staying on the market longer and negotiations are now favoring the buyers. Very few homes are selling for above the list price. In October, the average sale closed for 3.1% lower than the asking price. In October 62% of the sales closed for a price below list price. Six months ago, just 10% of the sales closed for below the list price.
The major problem for buyers is affordability. Interest rates have doubled over the past year while prices are higher than they were a year ago. This leads buyers to either reduce their price range, make a larger downpayment or pause their search and hope that both interest rates and prices fall enough for them to buy the type of house that they wanted to in the first place.
Real estate prices tend to be sticky, meaning that sellers are reluctant to lower their prices, but it seems that there are a number of factors in play that would point to a softening in prices going forward.
See the slide show below for more detailed statistics.
Fabulous, updated ranch home that has the country feel but located in the city! Sitting on almost an acre, this home has an awesome open floor plan that presents itself as soon as you walk through the door! Well maintained and updated by the current owners, this 4 bedroom/2 bathroom home has new refinished hardwood floors, newer kitchen appliances, new paint, new water softening system, new tankless hot water heater, newer furnace and a/c, all new light fixtures, and all new plumbing underneath the home. Kitchen is gorgeous with cherry cabinets and corian countertops. Private primary bedroom with sliding glass doors that lead to the trex deck. The backyard is a gardeners delight and perfect for entertaining with new flagstone patio and walkway, raised garden beds and potting bench for all of your planting needs. Two car detached garage has an attached shop area. Front yard has new Xeriscape landscaping. Roof was replaced in 2018. Walking distance to bus stop and easy access to downtown Louisville, Boulder, shopping, and trails. You will fall in love with this property once you see it!
As opposed to some other investments, like stocks and more recently cryptocurrency, real estate is fairly stable in any short term period. Depending upon the supply and demand of the moment, prices can trend in one direction or the other, but you won’t wake up one morning and see a 15% drop in one day. The Boulder County real estate market has been especially resilient over the years and owning a home in this area has been a great investment in virtually any time frame over the past 30 years. That said, the Federal Reserve Bank has put a target on the overheated real estate market and in a few short months we are already seeing the effects locally.
Bidding wars are no longer common. Buyer’s are struggling to get comfortable with the new interest rates in the 6’s rather than the 3 and 4% range. Some buyers have exited the market entirely and others have had to reduce their price target. Sellers are needing to adjust to new reality of a softer market and I’m seeing larger negotiations upfront including giving credits so that buyers can lower their interest rates.
Sales of residential real estate in Boulder County is down 20% year-to-date and that is widening. Inventory is rising, but not as much as you think as we are seeing fewer new listings hit the market than in past years. Prices have gone flat and on average the sales prices are below the list price by a few percentage points. There are an increasing number of price reductions as homes sit on the market longer. New home builders are seeing buyers cancel because of the payment increases and they are staring to offer incentives and price reductions in order to sell their inventory. Overall, we are seeing a fairly rapid shift towards a balanced market.
Year-to-date sales are down 19.7%. During September, just 24% of the sales closed at a price above the list price, this is down from 70% in May and 76% in April. During September, the average sale closed for 1.11% below the list price. The average days-to-offer has increased from 13 days in April to 29 days in September. Historically, these are all solid numbers, but they do note the market shift since spring.
To hear more about the high points watch the video. To see the graphs and compare the details month-to-month and year-to-year take a look at the slideshow below.
Pride of ownership exudes throughout this home! You’ll love this little paradise in S. Martin Acres. Inside, walls have been removed and the living areas have been opened up. The appealing kitchen has 42 inch white cabinets, upgraded backsplash, stainless steel appliances and granite countertops. Both full bathrooms in the home have been tastefully remodeled. In the finished basement you will find a large rec-room, a nice bedroom, a study, a large laundry area and a storage room. The exterior of the home is really special! The front features modern styling including a comfortable front patio area. The large backyard features an upgraded fence, a large patio area, extra parking through the oversized gate, a storage shed and a raised garden. The house has a 5.1 kw PV solar system that is owned and which provides most of the needed electricity for the home.
Sitting majestically above the street, this home features ample light, high ceilings, four bedrooms, and a huge yard with many garden plots and a large deck. The kitchen features granite countertops and upgraded cabinets. There is a sunroom addition off the dining room that makes a great sitting area. This home will need some cosmetic updates (carpet and paint) and is priced accordingly. Located on a small cul-de-sac with good mountain views.
