And the Beat Goes on. That’s a 1980 song from an American group called The Whispers. The song is about moving on from a lost love. In a different sense, the Boulder Valley, Metro Denver, and Northern Colorado real estate markets have moved on from a period of time when real estate values plummeted, bank foreclosures and short sales multiplied, and banks were draping Out-of-Business signs on their front windows courtesy of the Federal Reserve.
In the span of less than two years the Boulder Valley real estate market has shifted from a buyer’s market to a balanced market to a seller’s market. Driven by pent-up demand and affordable mortgage interest rates the Boulder Valley real estate market regained its mojo. Sometimes the wheels of change move quickly.
The Boulder County real estate market peaked in 2005 and plateaued in 2009. The years 2010 and 2011 mirrored 2009. 2012 saw the market begin to shift upward with sales activity increasing by 23% over 2011. Four months into 2013 the market is up 16% for single family home sales (938 vs. 808) compared to the same time period for 2012. Attached unit sales are up 21% (351 vs. 289) for the same time periods. The overall market is up nearly 18%.
The Absorption Rate for the Boulder County real estate market for single family homes stands at 147 days year-to-date. This is the length of time it would take for the market to fully sell assuming no new listings came into the marketplace and the rate of sales activity remained the same. It’s a good gauge for determining what is happening in the market over the course of the past few months. Absorption Rates drift down as sales activity in the spring and summer markets increase. The Absorption Rate at the end of 2012 was 91 days; 2011 was 156 days; and 2010 was 189 days. Look for 2013 to end the year with an Absorption Rate of less than 80 days.
The question becomes can the Boulder Valley real estate market sustain itself? Available inventory of single family homes in Boulder County continues to creep-up, but at a snail’s pace. March/2013 ended the month with 1,057 active single family home listings in Boulder County. That number at the end of April/2013 was 1,149, an increase of less than 9%. If single family homes are up 16% year-to-date, but inventory is increasing at less than 9%, then that means … well, you do the math.
The Boulder County real estate market is beginning to experience the trickle-up effect where more expensive homes are selling. In April/2013, there were 20 single family home sales in Boulder County over $1,000,000. That compares with 10 sales in April/2012; 9 in April/2011; and 13 in April/2005, when the market peaked. The most active price range (percentage wise) for Boulder County single family home sales in April/2013 was $800,000 to $1,000,000, where there were 29 sales. Entry level homes continue to sell well and now the market is experiencing that upper movement in buyer confidence. That’s a positive sign for the market as a whole.
As we enter the peak real estate selling season here are some things buyers and sellers will need to focus on. For buyers, available inventory will continue to remain at a low level with well-priced homes selling quickly. Get your financing in place before you make an offer. This bodes well in the mind of sellers to know they have a qualified buyer. For sellers, be aware of changing market conditions. Home values are trending up. Take advantage of that shift by pricing your home competitively, but also knowing this is not a discount housing market.