A look at the current real estate market; provided by RE/MAX ALLIANCE Downtown.
As a kid did you ever play musical chairs? While you were ready to pounce as soon as the music stopped, did someone get there first and no chairs were left? That is a bit how this summer season real estate market has felt.
Experts expected a strong summer real estate season, but no one predicted quite the growth in home value we’ve seen in Boulder Valley.
Financial analysts keep insisting interest rates will begin ticking upwards soon enough, but for now low rates are buoying consumer demand in the mortgage industry.
In addition, while the number of sold homes in June, July and August closely reflected those of 2014, the number of homes on the market was drastically reduced from last year.
Tighter real estate inventories have created a false ceiling to contend with as well. Consider there were just 689 active listings in the Boulder County as compared to 936 last year! This effectively keeps the sale numbers from rising despite the increase in demand due to a brighter economic outlook. Employment growth coupled with slow, but steady economic growth has created a steady supply of willing and able consumers.
The buyers continue to circle, but there just aren’t enough “chairs” to go around. While this causes house prices to rise and makes the sellers happy, so far it hasn’t caused enough of them to flood the market with more resale homes.
However, new construction has begun making a strong break out statement in the real estate market. New homes sales nationally are expected to rise almost 26% over last year.
This upsurge in housing starts in Boulder, Longmont and Nederland combined is welcome relief for many buyers and includes new design concepts based on consumer preferences.
One such design accommodates multiple generations of family banding together and purchasing one big home. Not a duplex and not a traditional multi-family unit, the design allows grandparents live-in access to their grand kids, alleviates financial stresses on the traditional two parent household, yet grants privacy to each generation.
The August median sale price for single family homes in Boulder County of $474,700 reflects this stable economic growth. Resale averages finished the summer season strong at 379 housing units sold and closed this month after an average of 54 days on the market. This reflects a 15% increase in homes sold over this month last year. Sale prices jumped from a median of $430,000 last year at this same time.
These robust spring and summer market statistics continue to reflect that self-correction we know happens in the normal cycles of real estate seasons.
Along with increased demand for newly built housing, another trend we’re experiencing is increased remodeling resulting in income property. Those once upon a time in-law apartments, garages, attics and basements are transforming into self-contained rentable income units within the family home.
While sellers seek ways to generate greater equity gains, buyers remain constrained by inventory levels. Rising rental costs, with Colorado at almost 3 times the national average, are pushing more buyers into the marketplace.
The music hasn’t stopped yet. With so many buyers still looking to find a home, this market strength is likely to push into the fall.