Boulder County real estate market has started the year a little slower than 2013 did. Through February/2014 single family homes sales are down 16.4% (296 vs. 354) and attached unit sales are down 9.5% (123 vs. 136) compared to the same timeframe for 2013. Overall the market is down 14.5%. Available inventory for single family homes was down 20% at the end of February/2014 compared to the end of February/2013 (752 vs. 939); fewer active listings would lead one to believe there would be fewer sales (Columbo 101). The Absorption Rate, for single family homes, at the end of February/2013 stood at 161 days. At the end of February/2014 that number was 150 days, which means properties are selling about 7% faster these days than they did at this time last year.
What’s happened since January/2013 to have an impact on the Boulder Valley real estate market, and on a regional, state and national level?
- Unemployment Rate: According to the Department of Labor and Unemployment things have improved. In January/2014 the Colorado unemployment rate was 6.2% (nationally 7.3%; Boulder County 4.4%). In January/2013 the Colorado unemployment rate was 6.6% (nationally 7.9%; Boulder County 5.5%).
- Mortgage Interest Rates: The traditional thirty year fixed rate loan has increased from 3.51% at the end of February/2013 to 4.37% at the end of February/2014. Still a very reasonable rate when compared to double digit rates in the not too distant past.
- Home Values: Scarcity creates demand and home values have improved over the past twelve months. For the Northern Colorado real estate market, which includes the Boulder Valley, residential properties increased in value on average 7.36% in 2013 compared to 2012 ($322,186 vs. $300,083). Historically, the trend is for homes at the entry level to appreciate at a higher percentage rate as first time buyers and investors see an opportunity when the market rebounds.
- Foreclosures: According to the Colorado Division of Housing, Northern Colorado experienced a 42% decrease in foreclosures from January/2013 to January/2014. Statewide foreclosure filings were down 34.3% for the same time periods year over year, with foreclosure sales down by 37.1%. Once the happy hunting ground of savvy investors looking to either fix and flip or hold and rent, foreclosures are no longer as prevalent.
- New Construction: New home construction continues to be a viable part of the real estate market, adding inventory to a depleted resale market. Available building sites have been swallowed up over the course of the past few years as production builders saw an opportunity to benefit from bank owned properties. The focus now is on creating new subdivisions, with the infrastructure (roads, utilities, flat work, landscaping, etc.) being the priority.
In analyzing the current Boulder Valley real estate market, we’ve experienced a noticeable shift from a declining market in the 2006 -2011 period; to a somewhat frenzied market in the 2012 -2013 period; to a more rational market now in 2014.