Wednesday, October 16, 2013

Housing Economic Snapshot

Economic Snapshot
A look at the current real estate market; provided by RE/MAX ALLIANCE


Economics seem to rule the roost these days. As such, there always appears to be some degree of drama attached to them. Economics are the core issue when it comes to mortgage interest rates fluctuating up and down, the stock market typifying a roller coaster or the government shutting down because the political parties can’t agree on what to do.
Buying and selling real estate is an economic decision. If a seller decides to sell their home, what is the economic impact to them? What are the economic options left if they do sell? For a buyer, deciding what to buy is based to a great degree on their economic situation. How much can they afford? What is the economic bearing on their financial state?
The 2013 Boulder Valley housing market has been a year characterized by economics. On average, home values have increased across the area in most price ranges. Mortgage interest rates have vacillated between 3.5% and 4.5%, still residing at near historic levels. Buyers have outnumbered sellers, with available resale inventory struggling to keep pace with demand and new home construction continuing to be a viable part of the overall market. The economic scene across the Boulder Valley has shifted noticeably over the past nearly two years from the previous seven years when bank foreclosures and short sales, and depreciating property values were more the norm.  
Below is a brief overview of the activity level for single family homes in a number of the Boulder Valley areas through September/2013, courtesy of IRES, the Northern Colorado MLS. 

                    Area                     Active Listings            Solds Y.T.D.         Absorption Rate
              Boulder County                  1118                            2766                      110 Days                              Larimer County  1999                                    4331                            126 Days                                    Weld County  1414              3148                                    122 Days
              Boulder                               351                              844                        113 Days
              Erie                                     113                              315                        98 Days
              Lafayette                            75                                257                        80 Days
              Longmont                           370                              1028                      98 Days         
              Louisville                            43                                183                        64 Days
              Suburban Mountains          270                              246                        299 Days                  
              Suburban Plains                 239                              464                        140 Days
              Superior                              31                                114                        74 Days
                                                     =======                    =======                  =========
             Community Totals:          1492                             3451                      118 Days     

            The Absorption Rate is the length of time it would take for the existing inventory to sell assuming the same rate of sales activity and no new inventory coming on the market.
            In September/2012, Community Totals were 1774 (active listings), 3038 (sold listings) and 160 days (absorption rate). The Boulder Valley market has experienced a 16% decrease in active listings, 13.5% increase in sold listings, and 24% decrease in the Absorption Rate year over year.
            Look for the balance of 2013 and moving into 2014 to mirror what is happening now in the local housing market. Mortgage interest rates should reside in the 4%+ range, home sales and available inventory will normally trend down as fall turns to winter.     

Tuesday, July 9, 2013

Economic Snapshot

Economic Snapshot
A look at the current real estate market; provided by RE/ MAX ALLIANCE


              Over the course of the past eighteen months the Boulder Valley real estate market can be characterized as one of demand exceeding supply. Spawned by low mortgage interest rates and improved economic conditions, the Boulder Valley real estate market has flourished. The direct result of that is an increase in home values. All geographic segments of the marketplace have benefitted, with the core area of Boulder and those outlying areas closest to Boulder showing the most improvement.   
            Below is a brief overview of the housing market in our area by locale for single family homes from IRES (the Northern Colorado MLS). 
                                           2012 (Thru June)          2013 (Thru June)       
                Area                 Average Sales Price      Average Sales Price      % Change
              Boulder                         $666,232                     $749,116                     +12.44%
              Superior                        $410,166                     $469,584                     +14.48%
              Louisville                      $421,352                     $504,165                     +19.65%
              Lafayette                      $399,302                     $423,943                     +6.17%
              Longmont                     $255,818                     $280,923                     +9.81%
              Suburban Plains            $546,327                     $571,726                     +4.64%
              Suburban Mountains    $394,289                     $427,505                     +8.42%
              Broomfield                   $357,499                     $391,432                     +9.49%
                                                   =======                    =======                    =======
                 Average …               $442,418                     $476,568                     +7.71%       

              As the economy has shown signs of stabilization, home mortgage interest rates have trended up slightly over the past sixty days. The traditional thirty-year fixed rate loan that could be had for under 4%, now resides closer to 4.5%. All indications are that mortgage rates will continue to hover around that mark for the foreseeable future.
              Sales activity for single family homes and attached units across Boulder County continues to outpace 2012 numbers through June of each year. Single family home sales are up 6.43%; attached unit sales are up 15.23%; and the cumulative market is up 8.71%. The Absorption Rate for single family homes across Boulder County is at 144 days through June/2013. That number was 182 days in June/2012. The inventory level of available single family homes in Boulder County crept up 5.20% in June/2013 vs. May/2013 (1,355 vs. 1,288).
              Faced with the dog days of summer, the Boulder Valley real estate market is experiencing continued improvement in sales activity over 2012, an increase in home values, an upturn in home mortgage interest rates, and fewer days on the market. With the possible exception of the somewhat higher mortgage interest rates, the Boulder Valley real estate market is healthy. Look for another upward push in sales activity before we drift into fall, when buyers and sellers typically begin the process of settling in for the start of the school year and the holiday season. This year may be a little different with continued pent up demand potentially fostering a more dynamic fall selling season.     


Wednesday, April 10, 2013

Boulder Valley Real Estate Snaphot

Economic Snapshot
A look at the current real estate market; provided by RE/MAX ALLIANCE


            One of the issues the area real estate market faced as the year began was available inventory of homes for sale across the Boulder Valley. 2012 ended with 814 single family active listings in Boulder County. That was down 27% from the end of 2011 (1121 active single family listings).
The decline in inventory was driven by sales activity. When comparing 2012 to 2011, single family home sales were up 24.44% (3258 vs. 2618) for Boulder County. Attached unit sales were up 20.80% (1144 vs. 947) for the same time periods. Collectively, those two market segments were up 23.47%.
Through March/2013 the Boulder County real estate market continues to sustain itself. Single family home sales are up 14.61% compared to through March/2012 (604 vs. 527). Attached unit sales are up 20.41% for the same time periods (230 vs. 191).
Below are some sold numbers for single-family homes for various geographic areas throughout the Boulder Valley. Information is courtesy of IRES (the Northern Colorado MLS).

                                                           2012 Sales                2013 Sales
                                                          1st Quarter               1st Quarter          
                         Area                        Single Family          Single Family       % Change
              Boulder                                        138                           143                  +3.62%        
              Erie                                              50                             70                    +40.0%
              Superior                                       19                             23                    +21.05%                  
              Louisville                                     28                             30                    +7.14%
              Lafayette                                     43                             51                    +18.60%      
              Longmont                                    172                           235                  +36.62%      
              Suburban Plains                           89                             96                    +7.86%
              Suburban Mountains                   34                             42                    +23.52%      
                                                                   ===                          ===                 ====
                  TOTAL                                  573                           690                  +20.41%

            This is the scenario that currently exists across the Boulder Valley, Metro Denver, and Northern Colorado – fewer listings and more sales. Combined with low mortgage interest rates the result is a perfect storm, if you’re a seller.
            Normally, scarcity creates demand, which in turn adds value to whatever is in short supply. Looking at the areas noted above and average sales value; here is what has happened to the average sales value for single family homes when comparing end-of-year 2012 to through March/2013: Boulder (+2.62%): Louisville (+1.56%); Lafayette (+12.61%); Longmont (+9.66%); Superior (+.96%); Erie (+9.50%); Suburban Plains (+5.45%); and Suburban Mountains (+3.40%). Collectively, these market areas are +5.14%.
            Look for the Boulder Valley spring real estate market to continue to flourish. Available inventory will creep-up, but will continue to be swept-up by prospective buyers waiting in the wings. Mortgage interest rates have trickled-up over the past few weeks, but there are no signs on the horizon they will shift noticeably either up or down for the balance of 2013. 

Sunday, February 10, 2013

Boulder Valley Real Estate Economic Snapshot

Economic Snapshot
A look at the current real estate market; provided by RE/MAX ALLIANCE


            The Boulder County real estate market continued its active pace in January/2013 as single family homes and attached unit sales outpaced January/2012 sales. Single family home sales were UP 20% (166 vs. 138). Attached unit sales were UP 29% (62 vs. 48). The collective market was UP nearly 23%. Sales figures for January/2013 approached January/2007 sales numbers.
            The inventory of available single family homes increased 5.77% at the close of January/2013 compared to the end of 2012 (861 vs. 814). Inventory levels will continue to grow as winter melds into spring and the real estate market gains momentum. Available inventory will be the key to how active the Boulder County real estate market is in 2013. 2012 ended the year with nearly 27% FEWER active single family homes on the market compared to the end of 2011 (814 vs. 1121). When you take 2010 into consideration, there were 40% fewer single family homes available at the end of 2012 (814 vs. 1353). The past two years have seen buyer activity increase swallowing-up available inventory. Expect this pattern to continue throughout 2013.
            On the financing side, the Federal Reserve has indicated they are going to keep lending rates at historic lows through the balance of 2013 and into 2014. The Fed’s goal is to get the national economy stabilized and then growing at a reasonable rate. National unemployment rates have dipped to slightly under 8%. Colorado’s unemployment rate has pretty much mirrored the national rate for the past five years.
When the Boulder County real estate market was HOT back in 2004 through 2007, the Colorado unemployment rate had dipped below 4%. The national rate dropped to around 4.5% at that time. In its August/2012 economic forecast, the Congressional Budget Office (CBO) estimated the unemployment rate would be 5.9% by 2017. Getting from there to below 4% again would require a Herculean effort on the part of the local, national and global economy.
But that’s the future. We have to deal with the realities of today. Here are some thoughts to chew-on in looking at the Boulder Valley real estate market.
1.    It’s a seller’s market, especially at the entry-level. Single family homes in Boulder County priced from $150,000 (yes, there are still a few out there at that price level) to $600,000 had an Absorption Rate of 114 days in January/2013. (That number will decline as the year progresses.) In January/2012 the Absorption Rate for the same price range was 236 days.
2.    If an entry-level property is priced competitively and in reasonable condition, multiple offers are now the norm. Short sale properties, especially, invite multiple offers.
3.    The upper end of the market (homes over one million) is showing some resiliency. In January/2013 there were nine million dollar plus homes sold in Boulder County. In January/2012 that number was seven.
4.    As buyer demand increases, home values follow suit. We’re seeing the trickle-up effect as mid-range and upper end homes are experiencing a positive movement in values.
In the Boulder Valley, spring and early summer are characteristically the busiest time of the year with home closings peaking in the March through August period.

Saturday, January 5, 2013

2012 Boulder County Real Estate Update

Economic Snapshot

A look at the current real estate market; provided by RE/MAX ALLIANCE

            In taking literary license with Charles Dickens’ opening line in A Tale of Two Cities, the 2012 Boulder County real estate market wasn’t the best of times or the worst of times, but it did experience a marked improvement over the past several years.
Single family home sales were UP 24.10% in 2012 when compared to 2011 (3,249 vs. 2,618). Attached unit sales were UP 20.48% for the same time periods (1,141 vs. 947). The collective market was UP 23.14% (4,390 vs. 3,565). This was the best year since 2007 for Boulder County sales activity, but it was still down 24.25% from 2005 when the market peaked (4,390 vs. 5,795).
The Absorption Rate (the length of time it would take for the market to fully turn) for single family homes ended the year at 91 days for Boulder County. 2011 ended the year at 156 days; 2010 at 189 days. Homes sold twice as fast in 2012 than they did in 2010. This was spurred my low mortgage interest rates and diminishing inventory.
For Boulder County, the year ended with 814 active listings. This was down 27.39% when compared to the end of 2011 (814 vs. 1,121) and down 39.84% when compared to the end of 2012 (814 vs. 1,353).

Below is an overview of sales activity for the past two years for single family homes in the various Boulder Valley areas, courtesy of IRES – the Northern Colorado MLS.   
                        2011       2012           %                 2011                  2012                 %
     Area           Solds      Solds      Change     Average Price   Average Price   Change
Boulder           614         786         +28.01%         $664,423          $668,423         +0.60%                 
Louisville        201         241         +19.90%         $412,121          $431,017         +4.58%        
Lafayette         251         302         +20.31%         $372,445          $385,179         +3.41% 
Superior           109         157         +44.03%         $423,885          $425,426         +0.36%
Longmont       831         995         +19.73%         $244,825          $258,856         +5.73%     
Sub. Plains      411         537         +30.65%        $552,552          $552,612         N/C          
Sub. Mtns.       253         296         +16.99%         $396,421          $422,299         +6.52%        
Broomfield      351         373         +6.26%           $354,650          $357,449         +0.79% 
                        ===        ===        ======          =======         ======           ======
   Totals …      3021    3687         +22.04%        $425,616          $440,742         +3.55%    

            2013 promises to be a year of continued change. Here are some thoughts relative to what the Boulder County market may experience.
  • Lack of available inventory will further foster a seller’s market, with both the resale market and new construction benefitting.
  • Land sales, once a dormant part of the real estate landscape, will experience a rebirth as production and custom builders seek out new opportunities.
  • Home mortgage interest rates should continue to hover below 4.0% for the traditional thirty-year fixed rate mortgage as the economic impacts of the decisions surrounding the fiscal cliff become more apparent.
  • Rental rates will continue to increase as the availability of rental units shrinks.