From our Good Friend Dan Johnson at RE/MAX Alliance in Louisville:
Boulder Economic Snapshot
A look at the current real estate market; provided by
RE/ MAX ALLIANCE
As late summer melds into early fall the Boulder Valley real estate market continues to remain strong both in the resale sector and new home construction. For the first time in several years we’re seeing a few new homes being built in the higher price ranges. These are all presales as lenders and builders are still wary of building spec inventory in a price range approaching and exceeding seven digits.
Through July/2012 Boulder County single family sales are UP 24.71% when compared to through July/2011 (1,953 homes vs. 1,566 homes). Attached units are UP 28.91% for the same time periods (691 properties vs. 536 properties). The overall market is UP 25.78%. The most active price range for single family homes continues to be entry level properties under $500,000, where homes are selling on average in about 121 days. According to IRES (Northern Colorado MLS) there have been exactly 100 homes priced at $1,000,000 and up that have sold this year in Boulder County through July/2012.
Since 2005 when the local market peaked, the Boulder County market in 2012 is coming close to mirroring the 2008 market (down 4.38% in 2012). This is encouraging after watching the local housing market decline and remain relatively stable from 2009 through 2011. This is historically characteristic of real estate markets. They seem to drop off the edge of a cliff, regain their balance, and then claw their way back to the top. It’s a slow process, fraught with many sleepless nights on the part of buyers and sellers, not to mention Realtors, title people, inspectors, appraisers, builders, etc.
The Absorption Rate for Boulder County continues to decline as available inventory remains at a low level and sales expand. The Absorption Rate for Boulder County at the end of July/2012 stood at 165 days (5.4 months). This is on the fringe of being a balanced market, where buyers and sellers view themselves on a level playing field.
With this uptick in the Boulder Valley real estate market, where do we go from here?
Unless something dramatic happens in world affairs and the economy takes another shift south, look for the balance of 2012 and into 2013 to remain much the same as they are now. Available properties for sale will continue to remain at historic lows as sales activity swallows-up the inventory at a pace at least equal to new inventory coming into the market. Look for home mortgage rates to continue to vacillate up and down slightly, but remain at a reasonable level. New home production builders see opportunity in the marketplace. As the inventory of platted lots dwindle, dirt work on new home subdivisions will once again be part of the landscape.
The Boulder Valley real estate market has not reached the point of a scarcity mentality where either there is (a) a plethora of listings and few buyers (a buyer’s market) or (b) a limited number of listings and an abundance of buyers (a seller’s market). For the next year, the Boulder Valley should experience a balanced real estate market, where well-priced properties in good condition will sell in a reasonable amount of time.
There’s an old saying in real estate: “Price overcomes all objections.” Pricing continues to be one of the dominant elements in the real estate market as resale properties must now compete more with new construction.