A look at the current real estate market; provided by RE/MAX Alliance on Walnut.
Every ending has a new beginning. An old year has drifted away and now we’re on to who knows what. For Boulder County, the 2014 real estate market was somewhat similar to the real estate markets in 2012 and 2013. Single family home sales were 3,258 (2012); 3,495 (2013); and 3,251 (2014). Attached unit sales were 1,144 (2012); 1,329 (2013); and 1,391 (2014). The combined market was 4,402 (2012); 4,824 (2013); and 4,642 (2014). We’re still a ways from 2005 (5,795 combined sales) when the Boulder County real estate market peaked.
The average days on the market for a single family home in Boulder County in 2014 were 76 days. This compares to 71 days in 2013 and 91 days in 2012. The Absorption Rate – the time it would take for the market to fully turn assuming no new inventory and homes selling at the same pace – is 2.5 months.
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.
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This past year was characterized by a lack of available resale inventory. The year ended with 678 active single family homes in Boulder County. This compared to 679 active single family homes at the end of 2013 and 814 active single family homes at the end of 2012. In 2010, when the area real estate market plateaued and began to turn in a positive direction, there were 1,353 active single family homes in Boulder County at the end of the year.
Scarcity creates demand and that’s what has led to the increase in home values. In 2013 the average price of a single family home in the collective market noted above was up 9.25% compared to 2012. As such, home values, on average, have increased 15.65% over the course of the past two years. A healthy return based on the economic concept of leverage – an investment strategy of using borrowed money (a mortgage) to generate investment returns (equity and appreciation). Like most things in life, there’s some degree of risk if the real estate market shifts and turns south, as we saw in the Boulder Valley and across the country in 2006 through 2010.
Onward we go into the unknown, but look for no major changes in the Boulder Valley real estate market in 2015. Inventory will remain at historic lows and home values should continue to increase as buyer demand sustains itself.