Real estate is a good indicator of the economic health of the nation. When the real estate market is firing on all cylinders, the overall economy has a tendency to flourish. When the real estate market is limping along, the opposite is often true. According to a recent report by the National Association of Realtors (NAR - April 22, 2014), the nation’s real estate market is somewhere in between those two variables.
NAR’s report shows existing home sales (single family & attached units) in March/2014 were down 7.5% nationally compared to March/2013 (4.59 million units vs. 4.96 million units).
“There really should be stronger levels of home sales given our population growth,” said Lawrence Yun, NAR chief economist. “In contrast, price growth is rising faster than historical norms because of inventory shortages.” Yun says that current sales activity is underperforming by historical standards, but he expects some improvement in the months ahead, “… especially if inventory continues to improve and mortgage interest rates rise only modestly.”
Real Trends, a residential brokerage and housing industry communications and consulting company based in Denver, states in their April/2014 Housing Market Report that the average price of homes sold in March/2014 increased by 8.8% across the country when compared to March/2013. The Housing Market Report shows that housing sales declined by 1.5% in March/2014 when compared to March/2013.
“March 2014 sales of new and existing homes reflected the decline in the affordability rate in most regions,” said Steve Murray,editor of the Real Trends Housing Market Report. “The slowdown in year over year unit sales also reflects the absence of real growth in employment and household incomes. We expect that year over year increases will continue to be only slightly improved on a year over year basis in the months ahead.”
Closer to home, Boulder County statistics from IRES (Northern Colorado MLS) somewhat mirror what is happening across most parts of the nation, particularly the West and Midwest. Through April/2014 single family home sales in Boulder County are down 13.64% when compared to through April/2013 (817 vs. 946).
Attached unit sales are down 5.05% for the same time periods (339 vs. 357). The combined market is off 11.29%. Available inventory is one of the culprits. At the end of April/2013 there were 1,179 active single family home listings in Boulder County. At the end of April/2014 that number stood at 1,062 – a reduction of 11%. Decreasing inventory has been an issue since the Boulder Valley real estate market began to rebound in 2011.
According to IRES, the average sales value of a single family home in Boulder County through April/2014 is $513,284. That compares to $471,936 through April/2013 – an increase of 8.06%. Finally, the Absorption Rate for Boulder County single family homes currently stands at 156 days. That’s the amount of time it would take for the market to sell through, assuming the same rate of sales activity and no new listing inventory entering the market. In April/2013 that number was 147 days.
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