July 11, 2014

Distinctive Stats: Has real estate bubble burst in Boulder market?

Sales were off significantly in June.

Year-to-date home sales are down 266, or 12.2 percent, compared with last year. June sales declined 32.3 percent compared with the May numbers. Why such a significant decline in month-to-month sales? Is this a lack of quality inventory or has the market peaked?

Generally, the market within the city of Boulder is down less than surrounding areas and almost all price points seem to be affected. The only segment that was up in Boulder is luxury homes above $1.2 million, which saw a modest 2.5 percent increase.

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The data is telling us that Boulder homes below $750,000 are in short supply. The same is true, in balance, of the market for homes below $500,000. Within these price points, interest from buyers appears to be good. However, they are having difficulty finding what they want. This shortage is resulting in increased home prices, but they do not appear to be increasing fast enough to attract a significant number of new sellers.

The only segment of the market that appears to be stable is the luxury market within Boulder, which is up a modest 2.5 percent from a year ago. The luxury market outside of Boulder has not been so fortunate. It is down significantly, but some of that may be a timing issue, because the number of homes under contract is not off as much as the sales.

Increasing prices are making it very difficult for real estate professionals to accurately price homes. Sellers are testing new listing levels that are not supported by comparative sales, and the homes are selling within a few days at or near the asking price. In some cases this is resulting in appraisal problems, which now have savvy real estate brokers requesting that appraisal clauses be removed from purchase contracts.

Has the market peaked or are we only suffering from an inventory shortage? It is too soon to tell, but the indicators are that sales for the balance of 2014 will be down from a year ago.


Sales were off significantly in June.

Year-to-date home sales are down 266, or 12.2 percent, compared with last year. June sales declined 32.3 percent compared with the May numbers. Why such a significant decline in month-to-month sales? Is this a lack of quality inventory or has the market peaked?

Generally, the market within the city of Boulder is down less than surrounding areas and almost all price points seem to be affected. The only segment that was up in Boulder is luxury homes above $1.2 million, which saw a modest 2.5 percent increase.

The data is telling us that Boulder homes below…

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