It’s becoming a very difficult market for buyers. In February, 61% of all sales in Boulder County sold for a price in excess of the list price (up from 48% in January and 47% in December). The average sale price for all properties was 5.3% above the listing price. When a property sold for above list price then the average sale was 9.8% above the list price. 14% of all sales sold for 15% or more above the listing price. What all of this leads to is super-charged price appreciation. We have seen highly competitive markets before but what is new are buyers willing to pay 20% to 30% above the most recent area sale in order to secure a home. Boulder County has had the most stable real estate market in the nation since 1972. Prices rising at this pace remind me that real estate is cyclical and that at some point the market will cool. View the annotated slideshow below to see all the details.
The Boulder County real estate market is still red hot. It seems like the pressure was turned up after the recent wildfires and it’s not easy to buy a nice place. Inventory is down 41% from a year ago and sales are up 7.7% from last January. It’s a very efficient market. Multiple offers on properties are still very common and expected on all well priced properties. Interest rates are rising but instead of suppressing sales, we are seeing buyer’s urgency to buy now increase before rates rise further. The average price paid for all properties is 2% over the list price and for the 48% of sales that closed for a price above the list price, the average premium paid was 6.3%. The property that closed with the highest percentage price in excess of the asking price that closed this month was 28%. For all details watch the video below and view the slides below.
The residential real estate market in Boulder County was especially strong during 2021. Even though sales increased by 15% throughout the county the inventory of available homes seemed to never quite meet the demand. The effects of high buyer demand in a low inventory market were rapidly increasing prices, faster sales and a continuation of the strong seller’s market. In 53% of all sales this year buyers paid more than the listed prices. Last year it was 29%. It was a very competitive market to say the least! Frustrating to buyers, many of whom had to make offers on many homes in order to finally get one accepted. In addition to premium prices, it was typical for buyers to waive normal contingencies in the sales process such as appraisals and inspections in order to get their offer accepted.
Boulder County wasn’t the only market experiencing these same pressures. Every major market in the United Sates saw similar factors which lead to an average one-year appreciation (as of September 30th) of 18.5%! This is the highest on record. Additionally, prices rose in all 50 states and in all of the largest 100 markets.
Here are some of the key statistics for Boulder County real estate in 2021: (click on the links in each item to see the associated graph below)
Total sales were up 15% during 2021 to 6,002 sales. This is the highest level of sales in Boulder County since 2005 and in the top five years since 1997.
The median price for all Boulder County single family home sales in 2021 was $775,000 which is up 24% from 2020. Click here to see a comparison of Boulder County appreciation and City of Boulder appreciation.
There were 1,270 sales that exceeded $1 million during the year which is 506 more than a year ago. Not surprisingly, an all time record! See the graph on this page to see the steady climb of + $1 million sales. There are two factors at work here. First is the cumulative price appreciation. Second is the improvement in the housing stock. A $1 million home in the City of Boulder is now below average and most likely needs some work.
Low Inventory – At the end of December there were just 487 properties on the market in Boulder County and 347 (71%) of those were already under contract. This is 40% less than we had a year ago and at an all-time low. Inventory not meeting demand is one of the main trends we are seeing in the market.
The average sale last year closed for 2.6% above the list price.
53% of properties sold for a price above the list price (up from 29% last year). The average premium paid for these sales was 6.74% (up from 2.8%)
27% of properties sold for a price below list price.
Over the past decade owning real estate in Boulder County has been a great investment! Cumulative appreciation over the last decade is 110%.
Click here to jump to my commentary on current conditions and what we may expect in 2022.
Looking Ahead
At the end of 2021 we were already at all-time lows of inventory of available listings. Then on December 30th a wildfire burned down 1,084 homes in rural east Boulder, Superior and Louisville. To put this in perspective, there were a total of 540 sales in Superior, Louisville and east Boulder during all of 2021. We now have over 1,000 families looking for housing. Most of these residents will be looking for rental housing while they work with their insurance companies and start the re-building process which could last more than two years, but some are actively looking to buy in the area. Over the first few weeks of 2022 I have made offers for a number of clients and have found that the demand has picked up to last spring levels. The properties various buyers I have worked with competed with 14 other offers, 8 other offers, 5 other offers and 2 other offers. All went for above the listing price.
I don’t see much of a change in market conditions unless we see a rapid influx of listings to the market. Enough to satisfy the demand for a few weeks and then get a bit ahead. On the demand side, interest rates are finally creeping up slightly and they are expected to rise by a meaningful amount by the end of the year. An increase in interest rates along with the recent price jumps may take some buyers out of the market.
Here are some items I’ll be watching closely this coming year:
Vacant lot sales in the wildfire area. I do think there will be a good number of people who will not be interested in rebuilding. After a cleanup period I will be interested how this market reacts. This is traditionally a very slow market with not many sales because of the rare nature of vacant lots in established towns. How will prices react? Will builders be interested? Will Boulder County give a moratorium on raising the taxes to vacant land rates?
Will out of town buyers be deterred by the wildfires that struck our local suburban areas in December? Many of our buyers during and pandemic have moved here by choice. Choosing the Boulder area over other western cities like Boise, Bend, Austin and Salt Lake City. Will seeing the aftermath of the fires on the national news, which we had never before seen in these areas, deter buyers from moving here?
Inventory of homes and under contract percentage. I track these statistics and post them each month.
As mentioned above I’ll be tracking interest rates and their effect on buyers.
Beautiful Rock Creek Home – 3117 Cimarron Place – $925,000
The owners of this home had planned to list in March, but they have a place to live until their new home is built, so they are hoping their home fills a need for a buyer. Large, fully furnished, 4 bedroom + study home. Well located on a quiet cul-de-sac in south Rock Creek. Close to Eldorado K-8 and the south pool. Not affected by the fire including smoke. Some features include: newer luxury vinyl tile on main floor, fully finished basement with large rec-room, bedroom, and 3/4 bathroom. With just a few exceptions, everything you see in the house is included (furniture, accessories, TV’s, appliances, dishes…).
We are at a strange juncture in the market. The statistics show that sales continue to be strong and that the inventory of available listings is at an all time low. Now with the devastating fires in our community, the questions about the market going forward just got more complicated.
How will the loss of nearly 1,000 homes in Louisville, East Boulder and Superior affect our market going forward?
Will the news of the fires stem the flow of new residents to our area?
Given the high cost of construction, will all of the homes that were lost be able to be rebuilt with insurance proceeds?
Currently there is a huge demand for rental homes. Will the market be able to absorb that demand in a reasonable way?
So many questions and we have a full year ahead of us. It’s really too early to tell what affect the first will have but there will most certainly be immediate demand for rental housing. Some owners who have displaced will be able to purchase right away and go through the long process of recovery in a new home. But those will be the great minority.
Instead of dwelling on what seems to be a very difficult spot many find themselves in, I am looking for and celebrating each bit of good news as families are finding rentals, as help is received, as insurance claims are processed and as our community circles around those who need us most right now.
Click through the slide deck below to see an annotated presentation on the latest real estate statistics for Boulder County.
