April 2022 Boulder Area Real Estate Sales Stats
We have a lot to talk about so buckle up folks. Inventory. Interest rates. Sales. Listings. Days on Market. Out of town brokers. And finally, Ft Collins. Let’s get started.
They say, “Everything is for sale if the price is right”. How true is this in real estate? If it isn’t listed, is it really for sale? If the quote above were true, we’d probably see more sales than inventory. Prices would slow down due to demand being met outside the traditional marketplace of the MLS. Since prices are still rising in double digit percentages every month, demand is not being met. But there is a change in the market and agents keep asking me to help put a finger on it. Warning: I have data, but no solution.
A question presented to me is: with the rise in interest rates, is the low end of the market starting to lag? Good question. Higher interest rates eliminate many first-time buyers, and they also take a lot of investors out of trying to buy low-price investment properties…thereby slowing the market for the low end. An additional theory is that the move-up properties are still moving fast because people with money, jobs and equity have greater ability to make their move. Let’s see what the numbers say.
I divided last month’s 138 single-family closings in Boulder, Lafayette, Louisville and Superior into 4 groups of equal size, from low price to high. Here is the data for the price points and the number of days on market for each:
$950k and less – 33 days $950k-$1.3M – 27 days
$1.3M-$1.6M – 27 days $1.6M-$6.3M – 41 days
Yes, $950k is the top of the lowest quartile. And you can clearly see there is no hesitation in the lowest quartile. Point one above is dismissed. In fact, the lowest end moved three days faster than in March. The second and third quartiles increased by 4 and 1 day respectively. But the highest quartile improved by 20 days over March. I’d say there is no discernable change in days on market, so if the market is changing, it’s not reflected in these numbers.
Back to the you can’t sell it if it ain’t listed theme. Look at this month’s graph in the report. The graph shows monthly inventory, monthly sales, and monthly average interest rate according to Freddie Mac from January of 2019 until the end of April 2022. The sales and inventory numbers are Longmont Single Family Homes. My apologies, but there is a lot of data behind this chart, and it would have been too labor intensive to build it for Boulder. Please bear with me because the point is still valid. I included the data points for the peaks and valleys of each line. Now, if interest rates were the only driving factor in home sales, as interest rates drop going from left to right, we would see the line representing home sales increase from left to right, but we don’t. Instead, the closed sales (blue) line is nearly an exact mirror of the inventory (green) line, indicating closed sales are more closely a reflection of the number of listings There is no discernable impact on sales from declining interest rates. What we don’t have is an example of what happens when all three check upward at the same time…like at the far-right end of the chart.
In April, the highest price paid for a home in Boulder was a $6.3M sale of a home built in 1906 on 1.9 acres on Wonderland Hill Rd. It was on the market for 6 days. And it sold for Cash…and it needed the buyer to finish a remodel that is in progress. It also took 74 days to close the sale. My guess is there was an accommodation by the seller to stretch out the close date to make the move less stressful. This is a completely typical strategy these days and buyers are willing to wait for their new home. It’s a clear indication that sellers control the market and how buyers are willing to accommodate a seller just to get into a home.
In the entire region, from Boulder to Longmont, to Greeley and into Ft Collins, Boulder is the only town that has negative gains in average and median sales prices. Based on the quick sale mentioned above, I think that is due to the extremely high prices from last April. The $1.95M average sales price last April was Boulder’s highest ever.
Speaking of highest prices ever…the price of a single-family home in Lafayette, Louisville, Superior and Erie are shocking. When I was interviewed about stats by a couple of publications after the Marshall Fire, my bare bones assessment was “if you thought we had an inventory problem before, we now have 1,000 fewer homes and 1,000 more families looking for a place to live. Prices will go up substantially”. Well, I didn’t think this would happen, but again, it goes back to supply and demand. Demand is huge and that’s what’s driving this market, not interest rates. And if you aren’t convinced yet, compare the prices of attached dwellings in Boulder versus the East County. They are more expensive to the east of Boulder than IN Boulder… who saw that one coming?
Just east of Boulder County sits the Carbon Valley. Firestone, Frederick and Dacono continue to dance to their own tune. There were SEVEN closings last month under $300k. They were all in the Glens or Prairie Village. The closing with the highest days on market was a mobile home in the Glens for $338,900 at 132 DOM. Just wow. And that isn’t all. There was a resale in Barefoot lakes that closed for $715k. It was originally purchased in 2019 for $543,900. The sellers grossed a 31.5% equity gain (or $171,100) in three years! All those people not wanting to buy “at the top of the market” three years ago are regretting their decision now.
The spotlight area this month is Ft. Collins. Their population is about 75% larger than Boulder or about 75,000 more people, but just like in Boulder, many of them are college kids. That’s about the only thing thee two towns have in common. Just based on the size difference one would expect Ft Collins to have about 75% more transactions than Boulder. In reality, there are consistently about 160% more transactions in Ft. Collins than in Boulder. Their price point is much lower, and they have a decent amount of new construction in and around town. With large price gains this year it makes one wonder if buyers drive this far to seek value. In today’s remote-working, gig-economy, I guess it’s possible.
So, what’s the point to all of this? My answers: 1. If you’re waiting for the phone to ring, you’re doing it wrong. 2. If you aren’t getting any local listings, maybe your sphere hasn’t heard from you recently. 3. Listings are starting to pop big-time in the metro area… take a peek at Arvada, Westminster and Lakewood for additional business opportunities.
I’m just trying to help you and your clients. For more ideas give Dori Van Lone a call or text at 720-534-8190. She’ll sit down with you to develop listing solutions to jump start your business.