The answer is: “It’s always changing. Why do you ask?” Who can guess the question? I get that not everyone is as optimistic as I am, but I sure am hearing a lot of very negative market talk out there. It’s almost as if everyone read the same dismal script one day and started repeating it. I completely understand that market activity is not the same as it was at the beginning of the year. But please, when someone asks you “How’s the market?” the only answer should be is “It’s always changing. Why do you ask?”
Inventory is rising…so what? This is something we have all been complaining about for several years, and it’s here now… and people are complaining about it still. I don’t get it. Like Megan Aller said “Circle back to your buyers who tapped out earlier this year, negotiating power is up.” This is true. Prices aren’t pulling away from us either and buyers won’t have to over-pay for something they aren’t 100% happy with.
When inventory goes up, we should see days on market go up. In our monthly report of nine local markets 3 markets declined in days on market, two stayed the same and four rose a paltry 2-5 days. This is clearly evidence that the buyers haven’t left the market. Boulder (22%) and Erie (19%) still had significant closings that went under contract in 7 days or less. Lafayette and Louisville only had a couple each. So, for this to happen and the days on market not increase significantly, a majority of homes are closing at or around the average. In fact, with Erie, if we remove the one outlier of 141 days, the average DOM comes down to 29… a one day increase over last year. The DOM number should start creeping up since all our u/c and pending homes are at 44 DOM.
Boulder Real Estate Stats July 2022
Monthly closings are the singular signs, so far, of the impact of the recent interest rate increases. Most areas and home types have seen fewer overall sales this year. These lower YTD totals come from slightly lower sales totals each month, but in July, the YTD totals were substantially impacted by extremely low single-family closings in Boulder (-44.0%), Lafayette (-40.5%), Louisville (-46.4%), Superior (-69.2%), and the Laf/Louis/Sup/Erie attached (-50.0%). We haven’t seen anything quite like this before. My take is that it’s the result of the second month of higher interest rates. Those houses went on the market in May/June. That was the start of buyers pulling back. We should continue to see this for another couple months when people who need to move realize that 5.5% isn’t such a bad rate.
The Carbon Valley should be one of those areas to possibly excel in a higher interest rate environment. The pricing is much more affordable, averaging about $80,000 less than Longmont and over a million less than Boulder. 32% of the Carbon Valley closings last month went u/c in 7 days or less…including a $1.2M property.
Our guest market this month is a place where, when prices started rising 10 years ago, the mantra was: drive until you qualify. It meant that if you couldn’t afford to live in Boulder County you had to drive east…and then maybe north up I-25 until you could find something you could afford. The Johnstown/Milliken was the definition of this mantra. Cheap, easily accessible from Ft Collins and Denver, but a pain to get to SW BoCo. That area has matured nicely since then. On a monthly and yearly basis, they sell about the same number of single-family homes as Boulder. It still makes an excellent choice if a person can work remotely part of the time. This can make even more sense when the homes are one-third the cost or $1,000,000 less expensive. You might consider taking your buyers there since currently 27 of their 76 active listing new construction homes… with that much new construction, you’ll definitely have some negotiating power.
If you are in the camp of “the sky is falling because, look, up in the sky, listings are multiplying right before our eyes!” Feast your eyes on the graph of single homes in Boulder this month. It shows, gasp, listings are increasing. They are so high that we have precisely 2 more listings now than we had last May. Nobody was talking about a market tanking back then. This is the second highest number of listings since the 153 that we had way back in October of 2020. And that giant line on the far-left of the graph represents the whopping 261 listings we had back in June of 2019. Based on the number of closings we had in Boulder in July, that blue bar would have to bust through the top of the graph and go over 300 listings before we’d have a six month of supply… the proverbial balanced market.
I’m going to leave you with one last thing. It’s that annoying commercial I get asked about all the time about title lock. Tell all your peeps not to buy it. It’s a monitoring service. If something has been recorded you get notified. At that point it’s too late. Plus, you have title insurance. Watch this news report and let Dori know if you have any questions. And please share it with your sphere…it’ll be a good touch point. Title Lock Video
Cheers,