The themes in the local real estate market have not changed. We are still seeing very high sales, low inventory, price appreciation, multiple offers on homes and offers in excess to list price. I’ll write about each of these topics below as well discussing how we fit into the broader market.
During the third quarter, Boulder County reached a high water mark since 2007 with 1,745 total sales. This was just an increase of 20 from last year and up 11 from last quarter, but together, this most recent quarter, last quarter and the 3rd quarter of 2020 were the top quarters in terms of sales since Q2 2007. This is despite the low inventory, which I will discuss next.
Just as it is in almost every market across the country, inventory of available homes is low. In fact, it’s down 18.5% from a year ago. Here are the factors at play. 1) Homes are selling fast, they come on and off the market very quickly and therefore there is no compound effect of old inventory being added to new. However, we are getting enough flow through the market to support the highest sales in 15 years. 2) There seem to be more first time homebuyers looking for homes than there are a steady supply of homeowners selling homes and becoming renters. The pool of homeowners is growing. 3) Many current owners know that they can sell their home for a good price, but finding a replacement home seems like an impossible task (don’t fear, that’s my job!).
Prices of homes are rising. Actually, it seems that the prices of many items are rising because of supply issues. Not only locally but nationwide. Comparing the sales of this past quarter to the same quarter a year ago, we see an increase of 11%. This most likely understates the increases many properties have seen over the past year.
One of the main causes for the rapid rise in prices is the competitive offer situation caused by low inventory, high demand and the ability of buyers in our market to bring enough cash to the closing table so that a low appraisal doesn’t stop a sale. During the quarter 53% of all sales closed for a price higher than the list price. The average sale closed for 1.4% higher than the list price and when looking only at those properties that sold for a premium, the average sale closed for 6% above the list price! This seems really incredible, but these numbers are actually lower than last quarter when 64% of homes sold for a premium price and the average premium paid was 8.7%. No wonder prices are increasing quickly! We are still seeing certain properties sell for significantly over list price and with over 10 offers but this is less common than it was earlier this year.
Houses are selling quickly! On average, it took 20 days to place a house under contract. Last year during the same quarter it took 31 days. This is actually a bit longer than it should be because the normal rollout of a new listing, even if it received multiple offers right away is 5-7 days.
There are some segments of the market that are not experiencing these strong market conditions. Most notably is the condo/townhome market, especially older units. I’m seeing many attached dwellings sit on the market for quite a long time and then only sell when the price is reduced or improvements made. Is this a sign of things to come in the broader market? I’m always here for you to be of service and would be honored if I’m your first call when you need real estate advice. I love your referrals. Enjoy the full report below stay in touch!