Although May’s real estate statistics show the lack of inventory is hindering home sales in the Boulder area, the market remains on a slow, steady track to improvement.
“It’s really a remarkable market that we’re in, where we’re seeing sales volume improvements in most cases … while inventory plummets,” observes Ken Hotard, Boulder Area Realtor® Association senior vice president for public affairs. “It feels a bit like a hyper market. Realtors are complaining that they don’t have enough homes to show, and if we had more listing activity we would see a more normal and thriving marketplace.”
Year-over-year single-family home sales dropped only 7.5 percent in May 2014 compared with May 2013 – 404 units versus 437 units, while sales in May represented an increase of 14.8 percent over the 352 units that sold in April.
Those numbers are impressive considering the inventory of single-family homes for sale in May – 942 units – was a decrease of 40.5 percent compared with the 1,584 units for sale a year ago and a 27.6 percent drop compared with the 1,302 homes available in April.
In the condominium/townhome market, 156 units sold in May, a 4.7 percent increase compared with May 2013’s 149 sales, and is an 11.4 percent increase compared with the 140 units that sold in April.
The attached-unit market also remained strong despite a steep decline in inventory year-over-year, with units for sale dropping from 415 in May 2013 to just 206 units in May 2014, which also represented a 45.6 percent drop compared with the 379 units for sale in April.
As expected, the lack of inventory resulted in considerable average and median sales price increases and “tumbling” days on the market in nearly every Boulder-area community in both single-family and attached-unit markets, Hotard says.
“The seller’s market is strengthening,” he notes.
While lending remains tight, Hotard says that job growth is improving, putting more demand in a market with low inventory and builders who not supplying enough new housing.
The result will be declining affordability not only in the housing market but in the rental market, as well, he says.
Another issue the real estate market is facing in general is the lack of young adults looking to buy a home because of their college debt, Hotard says, pointing to a recent Wall Street Journal article. The homeownership rate for adults aged 25 to 34 has fallen from 49 percent in 2003 to 41 percent in 2013. And whereas that age group used to make up 22 percent of mortgage borrowers, it now makes up only 2.5 percent.
“Student-loan debt is having an observable impact on young people’s ability to participate in home ownership,” he says. “It’s pretty difficult to save up 20 percent to put down on home. If they can put it together, much of it will come from family.”
And while it’s unlikely that the higher-priced Boulder market sees many young home buyers, the lack of those buyers in the greater-Boulder market is “certainly having an impact.”
Meanwhile, Hotard says May’s statistics were still “flat or improving.”
“The market is flattening out heading into summer,” he says. “April was a great month, May not so much. I think it’s directly related to inventory.
“The economy is improving very slowly. The housing market is improving very slowly. I don’t think anyone sees signs of a huge escalation in either the general economy or the housing market over the next 12 to 18 months. On the flip side of that, no one’s expecting a downturn, either,” Hotard says.
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