Distinctive Stats

Sellers’ market strong as inventory keeps falling

The total market in the Boulder area is down in unit sales and homes available for sale from last year at the end of May.
Sales of single-family homes are down 7.1 percent and attached dwelling sales are down 19.2 percent. The most significant cause of this decline is a lack of inventory. Actively listed single-family homes are down 5.4 percent while attached homes are 11.8 percent below last year’s level.
The market below $500,000 is even more challenged. It has seen sales decline by 19.8 percent in the single-family category and attached homes are down 20.7 percent from the previous year. Inventory in this segment is 26.9 percent below last year’s levels.
The limited inventory under a half-million dollars has created a strong seller’s market. Multiple offers are commonplace, and it is not unusual for the contract price to be 8 percent to 15 percent above the listing price. Well-priced homes in this segment often are under contract in less than five days.
Winners of bidding wars have everything lined up before submitting an offer. They are waiving inspections and appraisals. All of their financing has been approved by their lender’s underwriter and they are often paying all of the seller’s costs including title insurance. Even with all of these buyer concessions, they still may not be successful because they generally lose out to a “cash buyer.” It is not uncommon for a buyer to lose out on as many as 10 properties.
Buying a home in the under $500,000 segment is stressful and often filled with disappointment for the buyer and his or her agent. Navigating the multiple-offer minefield requires knowledge, experience and skilled communication. It is important for buyers to understand that the experience and skill of their Realtor and lender likely will be a significant part of a winning bid.
In May, the strongest segment of the market was between $750,000 and $1.2 million for single-family homes. Sales in Boulder are up 33.5 percent from the previous year, while inventory has increased by 28.6 percent.
The news is not as good for attached homes in the market. Boulder sales are down 10 percent and inventory is up more than 120 percent.
The limited availability is positive for sellers because it is reducing the number of days on the market and the listing price frequently is being bid up for homes under $1 million in Boulder and $750,000 in the surrounding markets.
For buyers, the market is challenging, but waiting is not a solution because prices are rising rapidly and interest rates are poised to begin increasing. The cost of becoming a homeowner in the Boulder Valley is not going to decline in the foreseeable future. It is time to get moving!
David W. Scott heads the Scott Group at Colorado Landmark Realtors and is president of the Boulder Area Realtor Association. Contact him at 303-588-8358 or dwscott@coloradolandmark.com.