Since the trap door fell out on the national economy, the housing market has been wallowing in a dark cellar looking for sparks of optimism from which to ignite. This past year the sparks caught and the housing market began it’s path toward recovery. Today I will begin highlight a few of the more interesting statistics for the year. To get a full view of what is happening in the different market segments, I encourage you to get a copy of The Kearney Report (to be released soon) and study the graphs and explanations included therein.
The number of residential properties that sold in Boulder County was up 23% during the year. On a monthly basis, each months sales eclipsed the sales of the same month in 2011 so it was a consistent recovery not one weighted to either end of the year. After five years of stagnant to slightly negative appreciation we saw once again prices of homes rising. This was especially true as we closed the year. Many factors go into home price trends but the largest factor locally was basic supply and demand. As the year progressed the activity in the market remained strong but the number of homes on the market dwindled. By the end of the year the number of active homes on the market was down to about half as many as were on the market at the same time in 2009. This competition for good listings is leading to multiple offers and upward pressure on prices.
Low interest rates are definitely a driving factor in buyer demand. The affordability of homes (total monthly outlay compared to income) is at a historically high rate. That is when a buyer purchases a home now they can afford more home because the prices have not been rising with inflation and the interest charges are way down. Add to this the tight rental market where rents have been rising and good properties have been hard to find, and you get a really strong environment for buying homes.
The market is off to a strong start this year. All indications show that we will have good buyer demand. The only unknown variable is if we will have an ample supply of homes on the market. If you have been thinking about selling but have been putting it off, we would love to explore that possibility with you and let you know if it makes sense for you.