Home sales in Boulder-area single-family and attached housing markets rose in August along with the late summer heat index.
Single-family home sales increased 10 percent in August 2018 compared to July with 460 homes sold in Boulder-area markets vs. 418. Sales for condominiums and townhomes climbed 15 percent with 146 units sold vs. 127.
Meanwhile, Denver-metro home sales went in the opposite direction, slowing significantly over the same period, according to the Denver Post.
It’s testament to the state of Boulder Valley real estate market, according to Ken Hotard, senior vice president of public affairs for the Boulder Area Realtor® Association.
“We have our own little market here. While Denver dipped, Boulder Valley showed strong growth in sales, despite ongoing rising prices and inventory squeeze,” says Hotard.
Year-to-date sales also continue to climb steadily. Single-family home sales grew 1.7 percent through August 2018 compared to last year – 3,154 homes sold vs. 3,100. Attached homes followed a similar track, improving 1.6 percent year-to-date – 1,154 sold in 2018 compared with 1,135 in 2017.
Inventory dropped 2.0 percent for single-family homes – 993 units in August 2018 vs. July’s 1,013. But condo/townhomes available for sale grew 11.2 percent with 268 units available in August vs. 241 the previous month.
Hotard attributes the unceasing increase in real estate sales and prices to the area’s strong economy and continued job growth, along with a desirable quality of life. “Significant companies are hiring in Boulder, like Zayo, Google, Twitter – and the natural foods industry is strong,” he adds.
Interest rates are slowly pushing upward, which traditionally results in a slowdown in rising home prices and sales. But Boulder Valley’s housing market may not readily respond to interest rate increases.
“It’s unknown what the tipping point is for interest rates affecting our housing market. And with 35 percent of Boulder County homes bought with cash, rising interest rates may not have a significant effect locally,” says Hotard.
Looking ahead to the final quarter of the year, Hotard expects sales to continue to match those of last year, unless “something unusual happens.”
“We seem to be operating on an upward trend and it’s hard to see what would stop it. The real challenge for Boulder County is providing the housing and transportation infrastructure to support job growth.”
Posted by Tom Kalinski Founder RE/MAX of Boulder on Tuesday, October 2nd, 2018 at 10:46am.
Boulder-area housing continues to reach new heights, shrugging off a pullback in July sales.
“Prices in Boulder Valley are at an all-time high in both single-family and attached homes. Also inventory challenges are ongoing. Despite both of those realities, housing demand is absolutely holding,” says Ken Hotard, senior vice president of public affairs for the Boulder Area REALTOR® Association.
The City of Boulder July average sales price reached more than $1.3 million – a 15.4 percent increase for the year. Median price hit $984,648. While Boulder’s prices are the highest, every area in Boulder County saw an increase in average sales price ranging from 3.5 percent in Superior to 17.7 percent in Niwot year-to-date.
However, July sales slowed from the previous month, following the typical late summer pattern of a month-over-month slowdown. Sales declined for single-family and attached homes in July compared to June, 2018. Single-family home sales in the Boulder-area markets dropped 16 percent—418 vs. 498 units—while condominium and townhome sales fell 32.8 percent—127 units vs. 189.
Hotard says this year’s July slowdown is a little more pronounced than last year.
Even so, year-to-date single-family home sales were virtually unchanged with a 1.0 percent increase compared to the prior year with 2,666 homes sold compared to 2,639. Attached home sales over the same period improved 5.8 percent; 914 vs. 864 units sold.
Inventory held its own. There was essentially no change in single-family home inventory levels, which rose .8 percent across Boulder County in July compared to June, 2018 with 1,013 vs. 1,004 homes available for sale. Condo/townhome inventory grew 1.3 percent in July compared to the previous month with 241 units for sale vs. 238.
Hotard notes there is potentially downward pressure on the market with interest rates trending upward and prices rising faster than wages in the area.
“But with demand as it is, we’re just going to keep moving forward,” he says.
Hotard adds that real estate is a “dynamic industry and Realtors are responding to the challenges by continuing to advise their clients on successful strategies for selling and purchasing homes.”
Posted by Tom Kalinski Founder RE/MAX of Boulder on Monday, August 27th, 2018 at 2:45pm.
Nine Colorado cities rank in the top 50 best cities for first-time home buyers, according to recent analysis by WalletHub, a personal finance website. Four of those made the top 20 – Centennial, Thornton, Arvada and Greeley, coming in at Nos. 3, 6, 17, and 20, respectively.
With home prices rising in Colorado and across the nation, buying a first home is challenging. Potential buyers need to develop a realistic perspective on market prices, their financing options, and neighborhoods that have a good reputation and appeal to their lifestyle.
To help potential buyers target possible locations, WalletHub compared 300 cities of varying sizes across 27 key indicators of market attractiveness, affordability, and quality of life. Data includes important factors like cost of living, real-estate taxes, and property-crime rate.
Here are the rankings of the Colorado cities reported:
25. Fort Collins
27. Colorado Springs
Among those cities, Colorado Springs has the fourth-lowest real estate tax rate in the nation.
First-time home buyers are often in the millennial generation. As it turns out, Colorado is the ninth-best state for millennials, according to a separate WalletHub report.
Millennials – those born between 1981 and 1997 – make up over 35% of the workforce. While often thought of as “kids,” the oldest are 37 years old.
In addition to a total score of 9, Colorado ranks high for quality of life (7), economic health (3) and civic engagement (10). No. 1 ranked District of Columbia also ranked first in the nation for quality of life and civic engagement.
Colorado was evaluated along with all 50 states and the District of Columbia across 30 key metrics, ranging from share of millennials to millennial unemployment rate to millennial voter-turnout rate.
Here’s a look at the top 10 states for millennials:
For more information, see the full reports at https://wallethub.com/edu/best-and-worst-cities-for-first-time-home-buyers/5564/#methodology and https://wallethub.com/edu/best-states-for-millennials/33371/ .
Posted by Tom Kalinski Founder RE/MAX of Boulder on Friday, August 24th, 2018 at 10:36am.
In this day and age, one could be forgiven for wondering if facts no longer matter or actions no longer have consequences. Whether one watches the national news or a local city council study session where members declare that they want fewer visitors (both tourists and locals from neighboring cities), it is clear we are living in strange times.
Despite all of the uncertainty, there are still a few facts left out there (at least where real estate is concerned), and from them we can draw some reasonable inferences.
1. Home prices throughout Boulder Valley are reaching all-time highs.
At the top of the list, the average single family home in:
- Boulder now costs over $1,250,000
- The suburban plains now costs almost $850,000
- Louisville and the suburban mountains now cost over $750,000
- Boulder County now costs $767,000
Likewise, the average attached home in:
- Boulder now costs over $540,000
- Louisville now costs over $400,000
- Longmont now costs over $350,000
- There are no places left in Boulder County or Broomfield where the average condo is less than $340,000.
2. Local housing inventory is at historic lows
The inventory of homes throughout Boulder County is at or near historic lows..
At the end of June, there were 858 single family homes on the market in Boulder County. To add some perspective, the inventory of homes on the market at the end of June 2006 was 2,763, more than three times as many homes as there are now. There are many reasons for this, including the fact that people are choosing to stay in place longer, increasing prices/lack of affordable places to move to, strong anti-growth policies, etc. Looking at the economic, political and structural factors at play, it appears that this scarce inventory is going to be the new normal.
3. Despite the high prices and low inventory, demand remains high
We gauge the strength of demand for homes using several indicators, including months’ of inventory, the average time a home spends on the market, and the number of expired listings (homes that failed to sell on the market).
Economists say that a balanced housing market has about six months’ of inventory, with more inventory being a buyer’s market and less being a seller’s market. At the end of June, Boulder County had about 3.3 months’ of inventory, compared to 3.8 at this time last year. In the first half of 2016, the average home spent 65 days on the market (from listing to closing). So far this year, that average is 57 days, 12.3 percent faster. Last year at this time, there were 33 expired listings, compared to only 26 this year, which is a drop of 21 percent.
Taken together, these factors demonstrate that demand is getting stronger, even in the face of rising prices and declining choices. And when you consider net migration to our area and plentiful jobs, it also appears that demand will keep increasing and homes will continue to appreciate until . . . when?
What is it that will cool our market and when will it happen?
There are several issues that have the potential to slow our market. First, interest rates continue to rise and as they do they will drain buyers’ purchasing power. Second, as prices have risen faster than wages over the last decade, there may come a point where home prices have to stall in order to allow buyers’ savings to catch up. Third, a macro-level event, such as a recession, international war, etc., could cool the entire economy and affect our market.
The set of variables is too complex to predict accurately what the precise cause(s) will be or when it will come, but it will come. The good news (if you own real estate here) is that there is no better place to invest in real estate than here — even in a downturn.
Jay Kalinski is broker/owner of Re/Max of Boulder.
Boulder County housing sales in May rolled strong once again, demonstrated by sharp growth in the single-family home market and solid performance for attached dwellings.
“Gains in single-family home sales topped 40 percent – a really strong increase that was backed by inventory growth,” says Ken Hotard, senior vice president of public affairs for the Boulder Area Realtor® Association.
In fact, all categories of single-family homes surged, according to May 2018 statistics. Sales of single-family homes grew 41.2 percent in May 2018 compared to April, with 487 homes sold vs. 345. Year-to-date single-family home sales increased 5.6 percent year-to-date through May 2018 compared to the prior year – 1,708 vs. 1,618. And inventory countywide increased 19.1 percent month-over-month with 918 units for sale in May vs. 770 the prior month.
Condominium and townhome sales grew a solid 14.3 percent in May compared to April, represented by 144 units sold vs. 126. Year to date, growth was 23 percent – 594 units vs. 481. Inventory increased 27 percent in May compared to April, putting 208 dwellings in the May marketplace compared to 163 in April.
Hotard says prices moderated slightly in May. Single-family average and median sales prices dropped compared to the previous month. “The median in April was over $1 million, now it’s down to $985,000; and townhome/condos were in the $500,000’s last month and are now in the $450,000’s,” he adds.
The steadily increasing housing market is a sign of strong fundamentals – demand is strong, inventory tight and jobs plentiful. Currently, Boulder is the third largest job center in the state. “But with housing prices too high for the average worker and no new building in sight, we can expect to see jobs that would have located in Boulder County opt instead to land somewhere along I-25,” explains Hotard.
Looking forward, he says June data seems to be tracking solidly along with May.
“We should see a shift in the market as we get to the end of July. I expect it to slow down a bit, but we can expect much of the same.”
He adds that the number of days a home is on the market is short. “Any buyer in this market has to walk into house-hunting ready to buy with a knowledgeable realtor and financing lined up.”
Posted by Tom Kalinski Founder RE/MAX of Boulder on Wednesday, June 27th, 2018 at 11:03am.
Sellers in the Front Range housing market enjoyed a blistering spring season. Everything seemed to be breaking in favor of sellers — brisk appreciation, multiple offers, favorable terms, and generally quick sales. However, several trends are emerging that could derail (or at least diminish) a seller’s summer home sale plans. Here are three of the biggest trends likely to affect our summer market:
1. Rising Interest Rates. For the past several years, economists have been predicting that interest rates will rise from their historic lows (in the 3.5 percent range for a 30-year conventional fixed mortgage). It turns out that the eggheads finally got it right. Compared to this time two years ago, interest rates are at least a percent higher — and with the Fed raising their Funds Rate again at their last meeting (and with more raises on the horizon), it seems that even higher rates are coming. It seems now is an appropriate time to refer back to my article discussing the 1 percent Equals 10 Percent Rule, which is a rule of thumb that for each 1 percent increase in mortgage rates, your buying power decreases about 10 percent. When you consider this with the fact that average home prices in Boulder County have risen about 21 percent in the past two years, it means that the same buyers from two years ago can now afford 31 percent less than they could have back then.
If you’re thinking, “but I’m a seller, it doesn’t affect me.” Think of it in these terms: that pool of buyers who would have bought your 2,000 square-foot, three-bedroom house two years ago? They can now only afford a 1,380 square-foot, two-bedroom condo. That is, the pool of buyers for your home is significantly smaller today.
2. The market hates uncertainty. To say this has been the least conventional presidency of the modern era is an understatement. Setting aside the human side of the geopolitical uncertainty caused by the Trump administration (alienating the G7, backing out of the UN Human Rights Council, separating families at the border, etc.), the president has decided to wage trade wars on multiple fronts. And while these acts might be appeasing his base, they are starting to have a negative effect on the economy. As of mid-June, the stock market has given back all of the gains it made in 2018, due in large part to the trade wars started with China and other countries. Speaking of China, its investments in the United States have dropped 92 percent this year, and less foreign cash means less money to invest in the housing market.
The effect of this is straightforward — when people feel uncertain and less wealthy (i.e., watching their world turn topsy-turvy and stock portfolios drop), they are less willing to take risks and make changes. And while home ownership might be the best investment you’ll make, it still represents a risk, especially if you’re a first time home buyer. Thus, the uncertainties in the economy will produce fewer buyers than a steadily rising market.
3. What the frac? The fracking industry in Colorado has flourished since a Colorado Supreme Court ruling in 2016 held that state laws trumped local bans and regulations limiting fracking. In Weld County alone, there are approximately 23,000 fracking wells, and fights are currently raging over applications to drill near highly populated parts of Boulder and Broomfield counties. Wells are being placed within 1,000 feet of schools, and this encroaching boom has generated growing health and safety related concerns, from a Colorado School of Public Health study reporting that living near fracking wells may increase the risk of cancer, to a home in Firestone that literally exploded from a leaky underground pipeline.
As the concerns grow, so will buyers’ reservations about buying homes near fracking, which could slow demand in these areas. Longmont took the extraordinary step of paying two oil and gas companies $3 million to leave town and prevent future drilling. To be sure, there are competing property rights at issue, but if compromises are not reached that make people feel safe, then homeowners could see their home values fall.
In sum, our market has been red hot this spring, but there are issues on the horizon that could dampen summer sales prospects. Some of these are likely beyond our direct control, but I encourage you to make your voice heard where you feel you can make a difference. Your home’s equity (and your conscience) will thank you.
Jay Kalinski is broker/owner of Re/Max of Boulder.
It’s beginning to look a lot like this year’s Boulder County real estate sales performance will outperform last year’s robust close. Year-over-year sales data for 2017 shows slight improvements compared to 2016, even with inventory at persistently low levels.
“It just proves that demand is strong and consistent,” says Ken Hotard, senior vice president of public affairs for the Boulder Area Realtor® Association.
Single-family home sales in the Boulder area improved 2.1 percent year-to-date through November 2017 compared to the prior year – 4,224 homes sold vs. 4,138.
And the sale of 1,377 condominiums and townhomes through November represented a 5.5 percent gain compared to the prior year’s 1,305 units sold.
“We saw year-over-year sales improvements, but the pull-back in November compared to October was more than average,” says Hotard.
He’s referring to the 7.9 percent drop in single-family home sales in November compared to October — 359 vs. 390 homes sold. Attached dwellings sold decreased 2.4 percent month-over-month with 123 units sold vs. 126.
Since the weather was excellent for house hunting, the pullback is likely indicative of more than the typical seasonal slowdown.
“Inventory is probably the culprit in the November pullback this year, which resulted in not only fewer sales, but also a softening of prices,” he says. When it comes to low inventory, there is “no end is in sight for the foreseeable future.”
Hotard believes price-softening is confined to higher end homes where inventories are larger and homes take twice as many days on the market before selling. “Lower priced homes are not affected,” he adds.
While buyer demand is strong, low inventory can’t supply that demand. November’s inventory is telling: Single-family homes for sale in the Boulder-area dropped 22.8 percent in November compared to October with 777 homes for sale vs. 1,006. Condos and townhomes felt the pinch slightly harder with a 24.7 percent drop for the month of November – 146 units vs. 194.
Mortgage interest deductions may diminish in importance as a result of the doubling of the standard deduction as part of recent tax reform legislation. The National Association of Realtors predicts only a small percent of homeowners will take advantage of the mortgage interest deduction in years to come because of that change.
*Photo courtesy of Edwin Andrade on Unsplash.com
Posted by Tom Kalinski Founder RE/MAX of Boulder on Friday, January 5th, 2018 at 10:15am.