Strong Recovery – Low Inventory – Rising Prices
The pandemic has had a surprising effect on many real estate markets throughout the United States. Many areas, including Boulder County, have seen a very strong market over the past few months. Other areas have seen a drop in demand as residents seek more personal space while continuing to work remotely. Our area is definitely seeing migration from other parts of the country. This isn’t a new phenomenon, but it has been accelerated by the events of 2020. The pandemic, the fires in the western U.S. and low interest rates have people on the move. Last year at this same time I was writing about increases in inventory and slowing appreciation. This year, I’m seeing just the opposite.
A quick recap of our local real estate market so far in 2020.
- Sales activity started out very brisk. YTD sales in the county were up 23% through February. A strong start!
- In the first weeks of March, the real estate market was ‘shut down’ along with everything else and closings in April and May were down 30% and 48% respectively.
- We began to slowly start to show properties again in May and closings in June were about equal to where they were the previous year.
- Since June 1st we have seen a very strong market with monthly sales up 21% in July, 25% in August and 21% in September. Total sales are now back up by 2% for the year.
- After slowing and even slightly negative appreciation at the end of 2019 and the beginning of 2020, prices are now on the rise again.
A few of the factors that are causing this resurgence in home sale activity are as follows.
- Low interest rates are keeping payments affordable. Currently rates are in the high 2’s and low 3%’s for the most qualified borrowers.
- Homeschooling and working remotely are causing people to rethink their space needs. Never before have people spent more time looking at their own four walls! Many have used this time to reevaluate and then act boldly as they reimagine their future.
- A few years ago I saw many reports that the millennial generation wasn’t interested in buying real estate. The reports said that they were more interested in experiences than owning something. Well, that prediction has not come to pass. We are seeing many first time homebuyers in this market including millennials.
- The economic recovery has not been an equal for all. On average, renters and lower wage earners have been more severely affected by the shut-down. Those with higher wage jobs have not been affected (actually the savings rate has gone up) and are in a good position to take advantage of the buying conditions.
This report shows positive signs in all aspects of the home sale market in Boulder County. I expect this trend to continue, but there is still much uncertainty ahead. Homes continue of sell and as always, I’m actively helping buyers and sellers successfully close transactions. I’m always here for you to be of service. Enjoy the report below and stay in touch! For best viewing, click on the full screen icon in the top right hand corner or download the report here.