The Buyer’s Cycle
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.
Looking Forward
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.
