Although the Boulder area real estate market is “relatively healthy,” it is not a “pure” market, according to Ken Hotard, Boulder Area Realtor® Association’s senior vice president of public affairs, noting artificial market features are making it difficult to foresee much change.
The “health” of the market – at least the single-family portion – comes from the fact that 332 single-family homes sold in October, a 5.4 percent increase over the 315 homes that sold in October 2012 and a 7.8 percent increase over September.
Also, every Boulder community saw impressive increases in both average and median sales prices for single-family homes sold in October.
However, the “relatively” part comes in with the fact that the number of homes on the market in October – 1,201 – was a decrease of 17 percent compared with a year ago and a 12.3 percent decrease compared with the previous month.
Also, condominium/townhome sales increased by only one sale – from 96 to 97 – in October 2012 versus October 2013, and inventory decreased 33 percent compared with a year ago and 14.5 percent compared with September. On the other hand, median and average sales prices also increased in nearly every Boulder-area community except for Broomfield and the mountains, where attached-unit sales for the month were extremely low or nonexistent.
“Some could argue that at some level it’s a seller’s market, I’m not really sure what to call this market but it is behaving like a seller’s market,” Hotard says, reflecting on the circumstances that have led to and continue to affect the market. “Continuing tight underwriting by lenders, low inventories and rising interest rates are holding back growth in sales volume while pushing prices higher, here and nationally. We have a sustained demand for housing in the Boulder Area, supported by people’s willingness to purchase homes at somewhat heightened prices, reflecting expectations for higher interest rates and increasing home prices in the future.”
Otherwise, October’s statistics reflect the pattern established 18 months ago, and Hotard says he’s positive that Boulder-area markets will continue to see growth in sales and declines in inventory.
The fact that sales of condo/townhomes remained virtually unchanged in October compared with September along with sharp declines in inventory “says to me that the attached-dwelling market is tightening up,” he notes. “In the single-family market, we see consistent sales increases and more moderate declines in inventory.”
And while the Boulder area is still recovering from the September flood, how the disaster has or will affect the market is still not apparent in monthly real estate statistics, he notes.
Other than closed roads preventing potential sellers and buyers from accessing mountain properties, it might not affect the market much one way or the other, Hotard says.
“I think we’re in a pattern that I don’t see changing in the next 12 to 14 months,” he says. “I would not expect 2014 to look any different than 2013 in terms of sales volume, though we’ll see increased prices with continued low inventory.
“The (national) economy is still on life support of some sort,” Hotard adds. “It’s being propped up by central bank policies and government spending. We’re probably not ready to take off just yet.”
The fact that more than 100 of the Boulder area’s single-family properties priced at $500,001 and higher sold in October and 230 at $500,000 or less, demonstrates demand at a range of price points and that the market is “relatively healthy,” Hotard says.“There’s just not enough of it,” he adds.
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