During the last year, buyers throughout Boulder County have been asking this question “why does buying a house have to be this difficult?“. Soon after embarking on a search, buyers find that there really aren’t many homes to view (at the end of October the number of listings was down 35% from a year ago). They get in a weekly routine of hustling out to view the latest listings hoping to get an edge on their competition. But alas, it seems that an entire group of buyers is on to the scent of the same listings. All swarm the listing over the first few days, quickly discern whether 1) It’s not condemned. 2) Whether they could live there. 3) Whether they actually would like to live there.
If the answer to the proceeding questions is positive, then they move on to 1) Whether anyone else will like it and how many offers are likely to be received. 2) When should we put in an offer? Before the deadline; at the deadline or wait it out and hope for no other offers and submit after the offer deadline. 3) How much should we offer? 4) How else can we entice the seller to choose us? More often than not, it turns out that multiple buyers, along with their Realtors go through this exercise each week only to get that dreaded call (or worse a canned email) that says “thank you for your wonderful offer BUT the sellers have decided to choose a different offer”. Sigh. Regroup. Start process again…
Multiple Offers Are Indicative of Excess Demand
During the first three quarters of 2021, 890 (53%) of sales closed for a price in excess of the list price. During the spring this number was closer to 80%. Most of these can be presumed to be as a result of multiple offer negotiations. The average premium paid on these homes was 6% above the list price. This scenario leaves many disappointed buyers who, if they can take the feedback of failure and try to win the next one by going even further out on their financial limb. All of this is rocket fuel for home appreciation and good for business for a family therapist!
But why is this happening?
Why is it so difficult for buyers? In a word, INVENTORY. The supply of new real estate listings in Boulder County (and in most other parts of the country as well) isn’t enough meet the demand. Our market is seasonal to some extent and we definitely slow down this time of year, but I just crunched the statistics for in terms of inventory for Boulder County, City of Boulder, Louisville, Lafayette, Longmont and Erie and I have organized my findings in the infographics for each community that you can view below.
Here are some key takeaways.
Boulder County has a population of over 329,000, currently there are 281 listings for sale in the entire county that are not already under contract.
The City of Boulder has a population of 105,000, currently there are 100 listings for sale that are not already under contract. Just 35 if you are looking for a single family home.
The lowest ratio of listings per population is Longmont where the population is 98,711 and there are just 129 listings (just 31 if you don’t include under contract listings).
Overall 62% of the current listings in Boulder County are under contract.
Note all of the data I used for this research came from IRES the primary MLS for Northern Colorado and ReColorado the primary MLS for the Denver metro area and was from November 17, 2021.
Doing this analysis during the second half of November enhances the effect, but it is the same situation I have been seeing all year. Yes, we will start seeing a whole new fresh crop of listings just after the new year. We will even see a trickle of new listings into the MLS over the next six weeks. However, unless something dramatic changes we will still see sellers in the Boulder market in a good position and buyers waiting, scrambling and competing for the good homes when they come on the market.
If you are considering selling your home in 2022 I think it will be a great time to do so and I would love for you to consider me as your listing agent. If you are considering buying a home in the greater Boulder area you need a good Realtor on your side and I’d love to put my experience, knowledge and enthusiasm to work for you. Please contact me to get started.
Even though sales are down 7% from the same month a year ago, the market continues to be strong. When comparing October 2021 to the past I find that this past month was 11% higher than the five-year average. The average price for all sales in Boulder County exceeded the list price by 2.6%. 44% of the sales during the month closed for above the list price. Another example of the strength of the market is that the average premium paid for those that closed above the list price was 5.22%, this was .33% high than last month. The inventory of properties on the market is 35% lower than it was a year ago and last year was already historically low.
Below are a few key charts. Below that is the full annotated slide deck showing all of the key statistics compared to past years.
As always please let me know if you have a specific area or price range you would like me to research feature.
The themes in the local real estate market have not changed. We are still seeing very high sales, low inventory, price appreciation, multiple offers on homes and offers in excess to list price.I’ll write about each of these topics below as well discussing how we fit into the broader market.
During the third quarter, Boulder County reached a high water mark since 2007 with 1,745 total sales. This was just an increase of 20 sales from last year and up 11 from last quarter, but together, this most recent quarter, last quarter and the 3rd quarter of 2020 were the top quarters in terms of sales since Q2 2007. This is despite the low inventory, which I will discuss next.
Just as it is in almost every market across the country, inventory of available homes is low. In fact, it’s down 18.5% from a year ago. Here are the factors at play. 1) Homes are selling fast, they come on and off the market very quickly and therefore there is no compound effect of old inventory being added to new. However, we are getting enough flow through the market to support the highest sales in 15 years. 2) There seem to be more first time homebuyers looking for homes than there are a steady supply of homeowners selling homes and becoming renters.The pool of homeowners is growing.3) Many current owners know that they can sell their home for a good price, but finding a replacement home seems like an impossible task (don’t fear, that’s my job!).
Prices of homes are rising. Actually, it seems that the prices of many items are rising because of supply issues. Not only locally but nationwide. Comparing the sales of this past quarter to the same quarter a year ago, we see an increase of 11%. This most likely understates the increases many properties have seen over the past year.
One of the main causes for the rapid rise in prices is the competitive offer situation caused by low inventory, high demand and the ability of buyers in our market to bring enough cash to the closing table so that a low appraisal doesn’t stop a sale. During the quarter 53% of all sales closed for a price higher than the list price. The average sale closed for 1.4% higher than the list price and when looking only at those properties that sold for a premium, the average sale closed for 6% above the list price!This seems really incredible, but these numbers are actually lower than last quarter when 64% of homes sold for a premium price and the average premium paid was 8.7%.No wonder prices are increasing quickly!We are still seeing certain properties sell for significantly over list price and with over 10 offers but this is less common than it was earlier this year.
Houses are selling quickly!On average, it took 20 days to place a house under contract. Last year during the same quarter it took 31 days. This is actually a bit longer than it should be because the normal rollout of a new listing, even if it received multiple offers right away is 5-7 days.
There are some segments of the market that are not experiencing these strong market conditions. Most notably is the condo/townhome market, especially older units.I’m seeing many attached dwellings sit on the market for quite a long time and then only sell when the price is reduced or improvements made.Is this a sign of things to come in the broader market? I’m always here for you to be of service and would be honored if I’m your first call when you need real estate advice.I love your referrals.Enjoy the full report below stay in touch!
The market is showing some good resilience and strength as we head into the 4th quarter. I started tracking sales on a monthly basis in 2004 and sales this September were higher than in any other September during that 17 year stretch. Inventory is holding steady at a very low level. In September 48% of the sales sold for over the asking price. The average premium paid for those that went for over the list price was 4.89%. Compare this to May when the average premium paid was 9.74%. The market is still strong but the strength isn’t quite so deep. Some houses are still garnering a lot of interest and are selling right away for well over asking price and others are sitting on the market for awhile. The average sale in Boulder County last month sold for 1.3% over the asking price.
I’m not ready to say that the market has made a turn, but it certainly seems clear that the upward trajectory has slowed over the last few months. Both inventory and interest rates remain low. When that is coupled with strong demand the result is that houses are still selling. In august 49% of closings were for a price above full price. Taken alone that still signals a very strong seller’s market. But when compared to May when 86% of sales were for above list price it isn’t quite as impressive. On average properties sold for 2.9% above list, in May it was 6%. Still a really strong market, but not quite so crazy.
Here is a summary for the month of August in Boulder County (this includes both single family and condo/townhome listings)
Number of sales 533 (down from 565 a year ago)
Median price $630,000 (up from $605,000 a year ago)
The average sale closed for 2.9% above the asking price. (last month it was 4% and it was 6% in May)
End of month inventory of active and under contract homes 1,114 (down 20% from last year)
30% of sales during the month sold for below list price
21% of sales during the month closed exactly at list price
49% of sales during the month sold for above list price
The average premium paid for those sales that closed above asking price was 5.09% (July was 7.5%, June 8.7%, May 9.7%)
There were 10 sales during the month that closed for 15% or more above list price. (36 in July, 72 in June)
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