While buyers are braving the sluggish economy to find their dream home in the Boulder area, it appears many home owners have yet to find the courage to put their homes on the market.
Home sales and prices are rising steadily, but low inventories are still holding the Boulder-area market back, according to Ken Hotard, senior vice president of public affairs for the Boulder Area Realtor® Association.
“The market continues to be characterized by lower inventories than needed to meet current demand,” he says. “While mortgage interest rates are going up slightly, they’re still at historic lows, luring buyers into the marketplace. We also continue to see significant cash sales hovering between 25 and 30 percent.”
The 1,346 single-family homes on the market in April was a 4.5 percent increase over March, but a 30.2 percent drop from April 2012; and the 44 attached units on the market in April was a 10.7 percent increase over March but a 23.5 percent decline from April 2012.
April’s inventory in both housing categories represents less than 3.5 months worth of supply. But considering 40 percent or more of those homes were under contract, the Boulder area is hard pressed for inventory.
“That’s a really tight market,” Hotard says. “Six months’ (worth of inventory) is considered a balanced market. Home owners who are under water with their mortgage or do not have enough equity to buy their next dream home are not going to sell in this market. A weak economy continues to be a drag, as well. And limited employment gains in recent months create feelings of insecurity.
“Only an improved economy is going to resolve that.”
Nearly every community in the Boulder area experienced increases in both average and median home prices in April. “Tight inventory is pushing home prices,” Hotard says. “There’s no question we’re in a seller’s market at this time.”
Despite limited month-to-month inventory gains, sales are still improving year-over-year as well as month-over-month.
Single-family home sales climbed 14 percent in April compared with a year ago, and attached-unit sales climbed 26.7 percent compared with a year ago. Single-family sales improved 24.4 percent in April compared with March, and condo/townhome sales improved 16.4 percent.
“This is the market we’ve got and it will probably look this way through the summer and into the fall,” Hotard says. “We’re not back to where we were in the early 2000s, but we’re making inroads. Steady progress is the best kind” versus the “artificial and unsustainable” market experienced before the recession.
Owner and Founder
RE/MAX of Boulder