Real estate statistics from May and June were a continuation of the “inventory story” in the Boulder-area market.
Although sales in May topped those in May 2012, it wasn’t as impressive as growth in previous months, and fewer single-family homes sold in June compared with the same month the previous year. Inventory continued to decline year over year in May and June.
In May, 437 single-family homes sold compared with 422 sales the year before, while 149 condominiums/townhomes sold compared with 145 the previous year. Inventory dropped from 2,009 single-family homes and 580 attached units in May 2012 to 1,584 single-family homes and 149 attached units in May 2013 – 21.1 percent and 28.4 percent differences, respectively.
While single-family home inventory increased from 1,346 homes on the market in April compared with 1,584 in May – an increase of 17.7 percent – only 415 attached units were for sale in May compared with 444 in April.
“The biggest changes to notice about these May numbers is the low 3.5 percent single-family sales growth year over year and the 6.5 percent drop in month-over-month condo and townhome inventory,” says Ken Hotard, senior vice president of public affairs for the Boulder Area Realtor® Association. “But May could just be an anomaly rather than a change in trend lines.”
While the real estate market is usually at its strongest during the late spring and summer months, June’s statistics indicate that, just as spring/summer sales came early this year, so might the fall slowdown – at least for single-family homes.
June saw 485 single-family homes sales, a 2.2 percent decline from June 2012’s 496 sales, while the sale of condos/townhomes jumped 31 percent from 132 sales in 2012 to 173 in 2013.
While May posted “solid, modest gains year over year and month over month,” Hotard believes it is the tight inventory that slowed down sales of single-family homes in June.
Although in recent months inventory had increased month over month despite declining year over year, single-family home inventory increased a mere 0.9 percent in June compared with May, and attached-unit inventory increased only 3.8 percent.
“This is fairly predictable given our inventory situation and the buyer demand out there,” Hotard says. “It’s about inventory and it’s about price points; those are driving the market at this time.”
It is the second quarter statistics that demonstrate that spring brings out the home buyers, especially in comparing those numbers with those from the first quarter of 2013.
“When we compare sales for the second quarter of 2013 with the second quarter of 2012, we see a modest 4.1 percent gain in single-family sales,” Hotard says. “In the attached market, we saw a healthy 19.3 percent improvement in sales.”
But single-family home sales climbed 80 percent from the first quarter to the second, and attached unit sales improved 81.3 percent compared with the prior quarter.
“Spring is the time many buyers and sellers spring into action,” Hotard says.
However, Hotard notes he’s already hearing from Realtors that the market is starting to slow as the demand has absorbed the much of the available inventory. “(The lack of) inventory is holding back some amount of additional sales.”
And, while it’s more likely to affect home owners looking to refinance, recent rises in interest rates may impact home buyers, as well.
“Interest rates shot up to around 4.45 percent on a 30-year fixed loan but then retreated some,” Hotard says. “It will likely slow down refinancing and could take some buyers out of the market.”
Regardless, Hotard remains positive about the current market and the economic situation behind it, such as positive job numbers, declining unemployment, some loosening of financing and more aggressive buyers entering the market.
The Federal Reserve also appears committed to keeping interest rates in check, with Chairman Ben Bernanke stating on July 10: “You can only conclude that highly accommodative monetary policy for the foreseeable future is what’s needed in the U.S. economy.”
And the fact that all Boulder-area communities experienced increases in average and median single-family sale prices for both May and June indicates the demand for homes remains strong.
“Obviously, competition for the inventory that’s out there will continue into the fall,” Hotard says.
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