The 2017 first quarter numbers are in and while the residential resale market continues to be highly favorable for sellers in most areas and price ranges, there have been a few changes worth taking note of as we head into the busiest time of year.
Resale housing prices have continued to rise throughout Boulder and Broomfield counties. The cities of Boulder and Louisville still have some of the highest levels of demand of any area in the Front Range. However, significant price increases in these areas over the past years continue to push buyers into the eastern parts of the county as they gravitate toward better affordability and more options.
Typically, the first few months of the year are a busy time as the backlog of market activity from the holiday season results in a spike of new listings coming on the market in January.
This year however, we got off to a slightly slower start than anticipated as the number of new listings in January dropped by close to twelve percent compared to January 2016. The rebound came later in the quarter with most areas seeing 15-20% increases in the number of new listings in March over their 2016 levels.
Whether this delay in activity was unique to the first quarter or whether we’ll continue to feel its ripples throughout the rest of the year is something we’ll be paying close attention to in the coming months.
Many buyers continue to find themselves competing in multiple-offer situations, especially in the lower price points of each market. Still, the number of listings reducing their price in order to entice an offer rose slightly in the first quarter. In a few select market segments this was caused by sellers having to compete with a surplus of available homes. In others, overly-aggressive pricing is driving away market-fatigued buyers who would rather pick their battles elsewhere. Either way, a bit more balance definitely seemed to find its way into some parts of the market for the first time since late 2015.
While not significant enough to signal any type of broader market correction anytime in the near future, changes like these can have a significant impact on the value and liquidity of specific properties proving once again that real estate truly operates on a hyper-local scale.
2016 saw the emergence of two distinct markets for single family homes in Boulder; each of which seemed to function very differently. The same held true for the beginning of this year with very different market conditions for homes priced at, or above, $1M versus those priced below. Most telling was that Boulder’s average single family home price for the first quarter settled near $820K with the median sales price only slightly lower signaling greater activity in the lower price ranges.
Homes under $1M continued to benefit from a strong seller’s market with inventory levels consistently under one month of supply and extremely high buyer demand. Conversely, while the $1M+ segment saw large increases in the number of homes listed for sale, the number of new listings significantly outpaced the number sold.
With just under thirty percent of homes in this range under contract at any time and homes taking an average of almost 30 days to find a buyer, inventory levels have begun to rise providing more choices for buyers and increased competition for sellers. This was especially apparent in homes priced over $1.5M where inventories reached 11 months of supply in March and appreciation slowed to just over 1% for the first quarter.
Sales of attached homes, primarily condos and townhomes, remained very competitive in the first quarter. With the bulk of the market falling in the $200K-$600K range, the largest percentage of both new listings and sales was in the $300K-$500K price segment. With less than 1 month of inventory and an average of close to seventy percent of the available homes under contract, above average appreciation and high demand seem likely to continue for the foreseeable future.
Broomfield’s single family home market was dominated by homes in the $300K-$600K price range which accounted for over two-thirds of the activity in the first quarter.
Appreciation in the area benefited greatly from having more affordable inventory which lead to multiple offers on the majority of homes and properties under $400K averaging two percent over their list price.
Oddly enough, Broomfield also had the highest rate of expired listings of any of the areas analyzed coming in at just over eight percent. Most of these seem to have been overpriced and very few had price adjustments which means sellers may have been overly aggressive in their estimation of what the market would bear. Buyers lately have also shown a hesitancy to compete, or even submit an offer on a property, when the list price is at the very top of the value curve which may be a contributing factor. Broomfield’s luxury market, starting at $800K and above, was a very different story. Accounting for less than ten percent of the overall activity, this segment is much more neutral with just over six months of inventory and homes generally closing four to six percent below asking.
Sales of attached homes in Broomfield saw gradual increases in activity but remained very low compared to historical data. On the upside, the homes that were listed, sold quickly. With ninety-five percent of the market falling between $200K and $500K, the median sold price ended the quarter near $345K; up from the first quarter of 2016 when it was consistently in the low $300K’s. With less than one month of inventory and properties going under contract in less than a week, the appreciation trend here is likely to continue well into the year.
Erie’s single family resale home market, over fifty percent of which falls into the $400K-$600K price range, continues to be impacted by downward pricing pressure from newly constructed homes starting in the $500K’s. As a result, resale homes seem to have hit a price ceiling at the point where buyers are able to choose between a new home with finishes of their choice versus slightly older homes in more established neighborhoods.
While the resale market under $500K remains extremely competitive, price points over $500K started to show signs in the first quarter of becoming slightly more balanced as a significant number of buyers opted for new construction options.
Attached homes in Erie made up less than fifteen percent of the total resale market in the area during the first quarter and the bulk of the activity was attributed to the $200K-$300K price range as smaller condos experienced the highest turnover. With the median list and median sold prices seeing very little departure from the mid-$250K’s, appreciation in this segment during the year will likely depend on attractiveness of these properties to first-time buyers and investors; both of which are heavily dependent on the fluctuating rental market.
The trend of rapidly increasing home prices experienced in Lafayette over the last eighteen months continued during the first quarter this year.
Offers on single family homes in Lafayette boasted one of the highest average percentages over list price coming in at three-and-a-half percent.
This, in turn, contributed to close to a twelve percent gain in the average sales price year-over-year ending the month of March at $525K. Uniquely, these gains were realized over a relatively even distribution of properties priced between $300K and $900K putting Lafayette near the top of the list for the most competitive, and fastest appreciating, markets in the area.
Attached home sales in Lafayette were isolated mainly to the $200K-$400K range with very little activity above or below these price points. There is some speculation that higher rental rates and continued high demand for rentals by tenants in the area are causing investors to hold these types of properties contributing to lower activity. Combined with the rapid price inflation making it more difficult for owners of attached homes here to sell and move-up within the area, and some competition with new construction priced in the upper $300K’s to lower $400K’s, opportunities to break into this market may be limited for the better part of the summer.
Longmont’s single family resale market was the most active, based on the volume of new listings, of any area we reported on for the quarter. Two-thirds of the homes listed and sold here in the first three months of the year fell into a narrow price range of $200K-$500K positioning Longmont as one of the most affordable options for single family buyers in Boulder County.
Affordability translated directly to popularity with inventory levels staying well below one month worth of available homes and properties generally going under contract in a week or less.
Despite being one of the most affordable single family price segments, Longmont also had one of the lowest prices per finished square foot of any area in the county meaning buyers here are getting more house for their dollar.
The condo and townhome market in Longmont continues to live squarely in the $200K-$400K price segment with rare exception. During the first quarter, over seventy percent of the available attached homes here were under contract at any time and, with prices averaging one-and-a-half to two percent over asking for the quarter, the average absorption rate struggled to exceed two weeks of inventory.
Louisville’s single family market continued its trend of being one of the least active single family markets in the county with 10 less total homes listed for sale in all of the first quarter than were listed in City of Boulder in the month of January.
The results of the inventory drought are apparent with sales prices here averaging more than four percent over asking and, in many cases, buyer competition pushing prices upwards of eight to ten percent over list price.
With over two thirds of the market priced in the $500K-$800K range, homes below $500K averaged over twenty percent fewer days from contract acceptance to closing likely due to a larger number of buyers leveraging cash in order to compete in this segment.
The story was similar for condos and townhomes with inventory levels at functionally zero and sold prices exceeding the list prices by an average of just over four percent, the few homes reaching the market continued to be in high demand.
While single family inventory levels are low in Niwot, this is one of few areas where buyer activity seems to be following suit. Niwot ended the quarter with slightly over 40% of the listed homes being under contract and it taking an average of almost 30 days for most homes to receive an accepted offer. As sellers adjust to being in direct competition with homes in central Boulder, and inventory levels signaling a neutral market, Niwot may become one of the more opportune areas for buyers looking over $1M.
Available attached homes were virtually non-existent as a market segment in the first quarter tallying only ten new listings over the three months, many of which spent upwards of 20 days on the market.
The Superior single family home market was alive and well in the first quarter with very little deviation from 2016 in terms of activity. This market continues to be steady and evenly distributed over a fairly broad price spectrum of $400K-$900K with the majority of activity between $500K and $800K.
Price points under $600K were in highest demand with sold prices averaging three percent over asking, a sign of active competition and multiple offers being common.
Inventory levels here, as with many other areas, rarely ventured beyond one month in any price category as market conditions across all price ranges pushed median prices up by roughly fifteen percent year-over-year.
Superior’s resale condo and townhome market began the year with slightly higher inventory carrying over from late 2016 which buyers quickly absorbed in the month of March when more homes sold than came on the market. Driven by competing offers in many cases, properties remained on the market for an average of just four days before going under contract and sales prices exceeded list prices here by close to four percent.