Home prices on the rise while inventory continues to fall

Posted by Tom Kalinski Founder RE/MAX of Boulder on Friday, January 17th, 2014 at 4:16pm.

Though December’s real estate statistics for the Boulder area reflected the slow season in month-to-month sales, they also showed continued resilience compared with a year ago.

Single-family home sales improved to 243 in December 2013 compared with 235 in December 2012, an increase of 3.4 percent. However, December sales were down 7.2 percent compared with the 262 units that sold in November.

The condominium/townhome sales were consistent with those a year ago, with 85 units selling in December compared with 84 in December 2013, and remained unchanged from November.

Ken Hotard, senior vice president of public affairs for the Boulder Area Realtor® Association, says the sales statistics are consistent with what’s expected for this time of year.

“There’s really nothing unusual here,” he says. “The housing recovery continues to move forward, setting us up for a nice start for 2014.”

The exception, Hotard says, is the fact that average and median sales prices continue to improve in nearly every community for both the single-family and attached-unit markets.

“We’re seeing very strong price improvements in virtually every market,” he says, adding that the limited inventory definitely has something to do with that. “I’m struck by the tight inventory in virtually every market area. There’s nothing that suggests a significant increase in the short run.”

The year-to-year inventory of single-family homes for sale in December dropped 16.7 percent compared with December 2012, from 980 units compared 816 units. And single-family home inventory fell 21.9 percent in December compared with the 1,045 units available in November.

The year-to-year inventory of attached units for sale fell from 306 units in December 2012 compared with 206 units last month, a drop of 32.6 percent. And condo/townhome inventory declined 20.5 percent from the 259 units on the market in November.

Hotard says the beginning of 2014 is definitely setting up as a sellers’ market, especially for single-family homes.

“Will home builders come back into the market with any robustness? I don’t think we have the answer to that question just yet,” he says. “In the city of Boulder, there’s not a lot of opportunity to provide single-family housing in the short term. And the attached units that we have seen built in last couple of years are rentals.”

Statistics for the fourth quarter of 2014 show that attached-unit sales dropped significantly – 43 percent – from the third to the fourth quarter and single-family sales fell 33 percent during the same time.

“Seasonal adjustments along with tight inventory account for slowing in the fourth quarter,” Hotard says. “In addition, tight credit, higher interest rates, insufficient job growth and stagnant wages – all of those factors tend to be a drag on the housing market."

In fact, he notes that with those forces working against it, “you would think we’d have a more challenging housing market than we have. We are all very fortunate to be working in this marketplace at this point in time compared with many parts of the country.”

Tom Kalinski 
Owner and Founder
RE/MAX of Boulder

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