‘Dry’ describes the climate of the Boulder-area since July. But ‘dry’ doesn’t adequately portray the complexities of today’s Boulder County real estate market.
Ken Hotard, senior vice president of public affairs for the Boulder Area Realtor® Association, has two additional terms for the current Boulder County real estate market that are somewhat contradictory: expected and unprecedented.
Sales trends, Hotard says, are performing as expected.
“The market overall is pretty much unchanged. Single-family home sales matched July, which continues to trail year-to-date well behind last year in both single-family and townhomes,” Hotard says.
Boulder-area markets saw 443 single-family home sales in August, the exact number of sales compared to July 2016, and an 11.4 percent drop in year-to-date sales compared to the prior year through August 2015 with 3,022 units sold versus 3,410.
Inventory of single-family homes for sale in Boulder County improved modestly last month, growing by 2.7 percent compared to July with 986 homes available for sale compared to 960.
For condos/townhomes, the 149 units sold in the Boulder-area markets improved 7.9 percent in August 2016 compared to July’s sale of 138 units. Year-to-date, attached dwellings sales dropped 17.6 percent through August 2016 compared to the prior year through August 2015 – 925 units compared to 1,122.
But when it comes to inventory, the term ‘expected’ falls short. Attached dwellings for sale in Boulder County grew by 47.5 in August 2016 compared to July 2016 – 174 units versus 118 units.
“The inventory numbers are relatively small so the percentages look much larger, but when you are approaching a 50 percent inventory increase, it's noticeable,” said Hotard. “The inventory increase likely is due to the high price points, which encourage condo/townhome owners to decide it's time to make a move or sell a rental unit.”
Average and median sales prices continue double-digit increases across nearly every category, reflecting the current demand and tight inventory. “Some people are priced out of the market, and it’s in part due to the lack of housing supply,” he explains.
And that’s where the ‘unprecedented’ part of the residential housing story begins.
With strong job growth in the region and demand for housing high, typically builders would build new homes, notes Hotard.
But new home construction continues to lag demand in Boulder County, with little to no additional homes being built and no change in sight in the near future.
The lack of housing supply extends to the Denver-metro area where the housing deficit is one of the most severe in the country, according to a new study by National Association of Realtors.
The NAR study shows that a new home is needed to meet the demand created by every 1.6 new jobs, but only about 25 percent of the needed homes have been built in the Denver-area.
“I've never seen a market like this one with inventories so low, prices at all-time highs, strong job growth, and yet there is a lack of construction. I think ‘unprecedented’ is a fair word for it,” says Hotard.
“Boulder-area real estate markets are among the best in the country, but it's also a very challenging and difficult market. The complexity makes it difficult to make predictions for now. The challenges certainly add to the value of high-quality realtors for buyers and sellers in this market.”
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