|
Just about anyone in the real estate biz will tell you that the last few years have been oddball, to say the least. It's been a bit of a wild ride as we navigate the market's ups and downs. Last fall was very slow as buyers and sellers took a break during election time. The drama proved more than most people could stomach, and most chose to hold off on large real estate and housing decisions. The resulting pent-up demand was unleashed after the new year, and we were off to the races as buyers and sellers flocked off the sidelines to try to make moves happen. We saw multiple offers, homes going off the market relatively quickly, and it felt very much like a typical springtime. We had a very busy first half of the year, and now it feels as though the market has started to cool. Let's look at the numbers. Active Listings |
|
|
|
Active listings are up in Boulder County and the Denver metro. Active listings for all property types in Boulder County are up 31% year-over-year and 41% in Denver. This sounds like a sizable jump- and it is. We've read real estate news articles referencing that listings are up across the country, and our area is no exception. This might lead some to believe that the significant increase in listings would result in a decrease in median home prices as supply surges. However, the median closed price is actually up slightly (.3%) year-over-year in Boulder and .8% in Denver. Median Closed Price |
|
|
|
Anecdotally, Ken and I can speak to what appears to be a bifurcated market. We have seen our single-family home listings perform well with solid showing activity and solid offers received. It's true that the timelines are a bit longer than they were a few years ago. Still, most sellers who have put effort into listing preparation and have a bit of patience have been able to secure satisfactory offers for their properties. On the other hand, we have noticed that our attached home listings have seen less showing activity and interest from buyers. In most years, this part of the market is primarily comprised of first-time homebuyers and retirees who want to downsize. It may be that first-time homebuyers and retirees are more impacted by the recent uncertainty brought on by the current political and economic climate, which is softening this section of the market. First-time home buyers can frequently delay the purchase of their first home by a few years if they don't feel that market conditions are ideal. And for retirees and empty-nesters, they already have a house to live in. It may be bigger than they'd like, but they are also likely to be able to delay downsizing for a few years to wait out odd market conditions. Attached homes in HOA communities are also more likely to have HOA fees that have increased in the last few years due to increases in insurance costs. With more available single-family home listings to choose from, would-be first-time condo and townhome purchasers may be choosing single-family homes rather than attached dwellings. All of this seems to be adding up to an even more buyer-favored market for attached homes. Months Supply of Homes |
|
|
The months supply of homes in Boulder County is at 4.4 months, 25% higher year over year. The higher the months of inventory, the more buyer-favored the market becomes. We would categorize 4.4 months as a solidly buyer-favored market. However, we are still quite far from the market conditions of the Great Recession. The chart below shows the number of active listings in the Denver Metro area going back to 2010. During the recession, the number of homes on the market peaked at around 24,000. Currently, we have around 15,000. Historic Active Listings-Denver Metro |
|
|
The May statistics show that, although we saw the typical spike in activity at the beginning of the year, showing activity is slowing similarly to the way it did in the second half of last year. It's normal to see a slowdown in activity each year, but it typically emerges in the later months. It appears that we are seeing the downturn in activity a few months earlier than usual.
|
|
|
Our best guess is that, depending on the individual, this is due to economic or political uncertainty, fears of possible job losses, concerns about the impact of tariffs, or the fact that interest rates haven't decreased and home prices haven't come down to ease the strain, particularly on first-time home buyers. As we roll into the second half of the year, we will have to wait and see how strong buyer activity is. Tariffs, job losses, and economic uncertainty may continue to put pressure on the market. In this case, buyers may be able to get deals done with very favorable concessions. Time will tell- and we will be here to show you the data. |
