The Boulder-area market’s improving home sales and prices in March were tempered by its continually declining inventory.
“In the major market areas, year-over-year inventories continue to tighten while sales showed strong gains,” says Ken Hotard, vice president of public affairs for the Boulder Area Realtor® Association.
The market in Boulder city limits saw 90 single-family home sales in March compared with 63 a year ago, a 42.9 percent increase; and the 68 townhouse/condo sales represented a 7.9 percent improvement from the 63 units that sold in March 2014. However, only 120 homes came on the market in March, a 20.5 percent decline compared with the 151 that went on the market a year ago.
Boulder County had 296 single-family home sales in March, a 33.3 percent increase from the 222 that sold a year ago. However, only 390 homes came on the market during the month – a 15.6 percent decline compared with a year ago – and only 917 new listings have come on the market in the first quarter of 2015, an 8.8 percent decline compared with the 1,006 homes that were newly listed in the first quarter of 2014.
Strong demand and low inventories lead to higher prices, Hotard says.
The city of Boulder saw its median sales price for single-family homes exceed $808,000 in March 2015, a 26.6 percent increase compared with $639,000 a year ago; the average sales price of $946,692 in March for a single-family home in Boulder is a 5.3 percent increase over the $898,708 average a year ago. Boulder’s median sales price for attached units increased 42.4 percent from a year ago to $334,750 and the average sales price of $422,974 was a 27.4 percent increase.
Boulder County’s price increases weren’t quite as dramatic on the single-family side, with the median sales price increasing 6.6 percent and the average sales price increasing 4.6 percent, but the condo/townhome market saw its median sales price increase 36.8 percent and the average sales price climb 25.9 percent.
“Boulder and Louisville are experiencing historically high average and median sales prices for single-family and townhome/condo units,” Hotard says.
Louisville’s median sales price for single-family homes increased 30.8 percent in March compared with the year before, and the average sales price jumped 11.7 percent, while its median and average sales prices of attached units both climbed 24.6 percent.
“The markets are more challenging on the buyer size with limited options and upward pressure on prices,” Hotard says.
Boulder County significantly outperformed Broomfield County in sales in March compared with February, posting a 63 percent increase, 296 units verses 182. Broomfield saw only 18 single-family home sales in March compared with 20 in February, a 10 percent decline.
Broomfield’s 18 single-family home sales in March compared with 25 a year ago is a 28 percent decrease, and five attached units selling in March compared with six a year ago represent a 16.7 percent drop.
Hotard notes that the Boulder-area market has been in a pattern of dropping inventory and increasing sales for about 18 months – making the real estate industry even more competitive for listings – but it can’t last forever.
“You don’t know when that trend comes to an end, but it certainly will at some point,” Hotard says. “It can’t go on indefinitely without something giving.”
Although the national Consumer Price Index is rising – reflecting rising rents and home sales prices – wages and income are not keeping up, he adds.
Hotard predicts that one outcome of that conundrum is the Federal Reserve won’t raise mortgage interest rates this summer, resulting in continuing historically low rates.
“The economy is not showing the kind of strength to support lowering interest rates that soon,” he says. “It’s hard to have confidence in the economy with that set of data.”
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