Our office experts predict this year’s Boulder Valley real estate will face the same persistent challenge that dominated last year – high demand and low inventory.
The combination creates a strong seller’s market and tough buying competition. “Fierce buying competition” characterized the first half of 2016, says the 2017 Boulder Valley Real Estate Report published annually by RE/MAX of Boulder. The fierceness was driven by one simple reason: demand far exceeded supply of available homes, townhomes and condominiums for sale in Boulder Valley.
The report cites a number of factors that stimulated market demand, including a large and steady in-migration of newcomers to Colorado – 96 percent of whom settled along the Front Range. The increase in new household formation, combined with a low number of for-sale homes built over the past years, had an intensely competitive effect on home sales in Boulder, Louisville and Superior. Longmont was somewhat less affected due to new developments becoming available for sale, according to the report.
High-dollar home appreciation and low interest rates spurred a surge in real estate investors – from new buyers to those seeking to upsize, downsize or make gains in real estate – all competing for a stake in the market.
Coupled with demand, inventory of attached dwellings was exceedingly low the first half of the year, which led to multiple-offer sales and drove appreciation rates for townhomes and condos even higher throughout Boulder Valley, notes the report.
Inventory increased in the latter half of the year, but since attached dwellings were more affordable than single-family homes, high demand and price appreciation continued.
Today, the prices of townhomes and condominiums have risen significantly, which is cause for concern about affordability going forward, particularly with interest rates potentially on the rise.
Single-family real estate statistics over the past five years cited by the Boulder Valley Real Estate Report includes:
- Average sales price for a single-family home in Boulder County increased over the last five years 48.7 percent
- Inventory decreased more than 60 percent
- Sales price to list price ratio is 99.3 percent
- Expired listings – homes that never sell – dropped 74 percent.
In just one year – from 2015 to 2016 – average sales price increased 13.3 percent to more than $652,000 for a single-family home in Boulder County. Due to low inventory, the number of sales dropped over 10 percent.
In attached dwellings over the past five years, according to the Boulder Valley Real Estate Report:
- Average sales price is just under $400k,
- Average sales price increased more than 56 percent
From 2015 to 2016, the average sales price increased by $70k. Due to extremely low inventory in 2016, the number of sales was down over 9%. Meanwhile, the Boulder Valley Real Estate Report says inventory has been on a steady slide since 2006:
- In 2006, 1766 single-family homes were for sale, down to 417 in 2016
- In 2006, 734 townhomes/condominiums were for sale, down to 100 in 2016
Looking forward, expect 2017 to be more of the same: continued high demand, low inventory, and price appreciation.
“We believe we will see a continuation of our strong, vibrant housing market for some time. We are often asked whether we are facing a bubble situation. We feel we are not even approaching a bubble,” writes D.B. Wilson, managing broker at RE/MAX of Boulder.
Celebrating 40 years in business, RE/MAX of Boulder is a trusted community expert and has earned its place as Boulder Valley’s largest and top-performing real estate agency. RE/MAX of Boulder has over 100 real estate agents who average 14 years of real estate experience and have listed twice as many homes as their next competitor. With the most experienced agents in Boulder Valley, RE/MAX of Boulder provides you with the expert knowledge you can rely on.
To get the full report, including the prediction for the year, sales statistics for specific Boulder-area markets, visit: http://www.boulderco.com/files/34/BVRE%20Report%202017.pdf
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RE/MAX of Boulder