Residential housing market continues at breakneck pace

Residential home sales in the four-county BizWest region of Boulder, Broomfield, Larimer and Weld counties continue on a record breaking pace. The 2,215 homes sold in June represented a 10 percent increase over last year, and the median price broke $300,000 for the first time, hitting $305,000, an increase of 14.2 percent from June last year.

For the first six months of the current year, home sales are up 8.3 percent, and the median price is up 14.9 percent, to $298,725.

By area, Weld County leads the way with a 15.2 percent increase in sales, and Larimer County has the highest price increase, up 18.8 percent to $300,000. Boulder County has the highest-priced homes, with the median price up 10.7 percent to $387,500.

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The net active listings increased 10.8 percent to 2,840 homes available for sale at the end of June, but this is way down from the 4,016 listings at this time last year. With a projected demand for 11,000 homes over the next six months, the current supply is equivalent to a miniscule 1.5 months, when a balanced market between supply and demand is considered to be a six-month supply.

Another interesting number is that of all the homes sold in June, the average selling price was 100.4 percent of asking price. This is the first time this figure has gone over 100 percent. The figure for the year to date is 99.8 percent, up a full point from last year and up more than three points from 2011.

As for time on the market, the homes sold to date this year have averaged just 37 days to offer compared with 44 days last year and a more normal 96 days as recently as 2011.

The largest category of residential homes is resale of single-family detached homes, and many services track average selling prices instead of median selling prices, so we wanted to take a look at this. The rapid increase in selling prices began four years ago, and since then prices in Boulder County have increased 32.9 percent to $570,684; in Broomfield 37.2 percent to $454,321; in Larimer 30.5 percent to $346,239; and in Weld County, a whopping 51.7 percent to $278,537. Year-over-year prices are up 12.4 percent in Boulder, 15.8 percent in Broomfield, 11.3 percent in Larimer and 14.5 percent in Weld. To put this in perspective, from 2004 to 2011, the net average price increase was less than 1 percent, and we have never had a double-digit year-over-year price increase in the years that we have been tracking the market.

Obviously, the short supply and record demand fueled in part by low mortgage interest rates, high rental rates and soaring prices for new construction have put us on this path, but the good news is that we don’t foresee any balloon forming and prefer to treat this as more of a correction from years of minimal price increases and not enough new homes being built. In other words, get used to higher selling prices and a supply that falls short of demand.

Dave Pettigrew is a real estate broker at Ascent Real Estate Professionals in Fort Collins. Contact him at FCRealtor@msn.com or 970-282-9305.