I have just completed the latest edition of The Kearney Report for the second quarter 2017. The goal of this report is to give you a quick understanding of the statistics and trends in the Boulder County real estate market.
You can view the entire report below or you can download the PDF here. The Kearney Report 2nd Quarter 2017
Real Estate Market Update
During the second quarter of 2017 the Boulder area real estate market continued to be a strong sellers market, but towards the end of the quarter there was a change in the market. In this summary I will discuss these trends as well as discuss what we might expect to see during the third and fourth quarter of the year.
During the second quarter of 2017 there were 1,459 sales in Boulder County which reflects an 8.3% drop from the same quarter of the previous year. The median sales price during the quarter was $500,000 which is ironically 8.3% higher than it was a year ago. Inventory this year has been been consistently higher than the past two years and this has given buyers more choices when looking. This was especially true at the end of May when the levels of active inventory were above 2016 and 2015 levels, equal to 2014 levels and just below 2013 levels. During the second quarter, 41% (50%) of the homes sold for a price above the list price, 22% (20%) were at the asking price and 36% (30%) were below. When comparing this years numbers to last years, which are shown in parenthesis, it’s clear that the market has stepped back a bit from the record market of a year ago. Of those that did sell above list price, the average premium paid was 3.76% which is down from 4.4% a year ago. Still an impressive number of homes selling above list price, but there were fewer that did and those buyers that had to pay a premium paid less of one.
Through mid May the market was cruising along, homes were selling quickly and there didn’t seem to be much inventory in most price ranges. A week before Memorial Day we felt a shift in the market. New listings that we expected to sell quickly sat on the market. We started to see more price reductions and before long it wasn’t uncommon for houses to be on the market for 20 or more days where before 7-14 was the norm before finding a buyer. Since there is a 30-45 day gap between when a house goes under contract and when it closes Mays statistics still looked good, sales down just 1.8%. However, sales dropped by 12% in June and at the end of June the percentage of properties that were under contract compared to all active listings had fallen over 14 percentage points compared to a year ago and were at 44%.
The slowdown in the market may be just seasonal. It is normal to experience a slow down in the market over the summer as people go on vacations and enjoy all that Colorado has to offer in the summer. However, a slowdown in the middle of May is earlier than usual. It could be that after three years of a relentless seller’s market buyers needed a break. The true test will be in September when, over the past three years we have felt momentum build again until the holidays. We’ll keep you posted.
The Boulder County real estate market has been one of the most robust markets in the nation over the past decade. According to FHFA.gov Boulder ranks 28th in the nation over the last five years in appreciation. When I looked at the markets that have outpaced us over the past five years I found many markets that are more “boom and bust” than ours. I then looked at cumulative returns over the past 10 years and found that the Boulder market was a close second only to Denver, above San Francisco and Portland. We have been blessed by a steady upward trending market without the up’s and downs that typically accompany high growth. Real estate is cyclical and it will be interesting to see where we are in the cycle over the next few years. Enjoy the report!