The Boulder Valley’s strong seller’s market continued throughout the first quarter, but signs of hope for buyers have begun to emerge.
Since 1991, Boulder has appreciated more than any other metropolitan area in the country. In fact, the average home in Boulder County has appreciated a whopping 303.62 percent in the past 24 years. Last year, Boulder County ranked seventh nationally for home-price appreciation with a 13.2 percent increase.
Anyone participating in the housing market understands that we have been in a strong seller’s market for some time, and that trend largely continued in the start of 2016. In the first quarter, the average sale price of a single-family home in Boulder County appreciated by 8.8 percent over the first quarter of 2015. Unlike last year, where growth was fairly even throughout Boulder Valley, the overall number this year can be somewhat deceiving. For example, the average single family home price in Superior rose nearly 30 percent thanks in large part to a new development of upscale homes, while the suburban plains rose a modest 3.3 percent. For attached homes (condos and townhouses), the average appreciation was 10.2 percent.
Again, a closer look behind this number tells a varied story. The average attached unit in Louisville appreciated a mere 0.5 percent, compared with 45 percent for Lafayette and about 78 percent for Superior. Some of this variation is accounted for by the relatively few sales in these markets in the first quarter.
Another indicator of the strong seller’s market is the increase in the sales-price-to-list-price ratio. In the first quarter of 2015, homes and condos in Boulder County sold for 98.1 percent and 100.3 percent of their listing price, an increase of 1.4 percent and 2.2 percent, respectively. On the single-family side, each of the cities in Boulder and Broomfield counties averaged more than a 99 percent SP/LP ratio, with only the suburban plains and the mountains below that mark. Even more impressive, every attached-home market in Boulder and Broomfield counties exceeded 100 percent SP/LP ratio. Essentially, this means that buyers should expect a bidding war on nearly every attached home for sale.
Months of inventory is yet another indicator of our robust seller’s market. In Boulder County in the first quarter, there were an average of 1.82 months of inventory of single-family homes and 1.12 months for attached homes. About six months of inventory indicates a balanced market (that is, if no additional homes entered the market, it would take about half-a-year to sell off the existing inventory of homes), while fewer than that indicates a seller’s market and more indicates a buyer’s market.
Despite the continued seller’s market, glimmers of hope have emerged for buyers. Perhaps the biggest reason for optimism is the increased number of active single-family listings on the market. Each year since 2010 has seen fewer homes on the market compared with the preceding year — until this year. Boulder County started the year with 19 percent fewer homes on the market than the start of 2015. However, by the end of the first quarter, our inventory actually was about 1 percent higher than a year ago — a 20 percent turnaround in 90 days. Unfortunately, this trend did not carry over to the attached dwelling side.
Not only are there more homes on the market, but fewer of them already are under contract, meaning that buyers of single-family homes actually have more to choose from than they did last year. For example, last year there were 634 single-family homes on the market, but 57 percent of them were already under contract. This year, there were 640 homes on the market and only 53 percent of them were under contract.
Admittedly, this is not an extremely bright silver lining for buyers in our current seller’s market, but right now we’ll take what we can get.
Jay Kalinski is broker/owner of Re/Max of Boulder. He can be reached at email@example.com.