As the first quarter of 2021 is now in the rearview mirror, let’s take a look at how the market is doing.
We just finished compiling the most recent numbers for Boulder County and the Denver Metro. Read on below for an in-depth analysis of market conditions.
Median Sold Price
The statistic on top of most buyer’s and seller’s minds is the Median Sold Price. The Median Sold Price statistic shows whether home values in an area are increasing or decreasing as compared to previous years.
In order to accurately tell the story of what has played out over the past few months, we’ve had to change the format of our email. There really are two stories. One in the detached single family home market and a very different one in the attached home market.
Lock-down living conditions changed both the way we work and the way we live in our homes. Some of those changes are expected to persist into the post lock-down world. With more people feeling a greater need to have their own private outdoor space and many households now requiring at least one, if not two, work-from-home spaces, demand for housing has shifted from what it once was. Where there used to be a healthy balance between those looking for single detached homes and those looking for lower maintenance condo and townhome set-ups, a much larger proportion of the buyer pool has shifted their focus to single family detached homes. This sharp increase in demand has driven competition for single family homes to levels we haven’t seen before.
Note: We typically use 12 month rolling data for these graphs. Since we have seen dramatic shifts in the trends in just a few short months, in order to provide an accurate representation of what is currently happening, we’ve switched to 3 month rolling data.
Median Sold Price- Boulder County- Single Family Homes
The above chart represents the Median Sales Price in the Single Family Home Market- 3 Months of Rolling Data. You can see that after January 1st, demand increased and price appreciation followed suit.
Median Sales Price in Boulder is up 26% year-over-year. Louisville is up 23%, Lafayette is up 22%, and Longmont is up 7%.
Median Sold Price- Boulder County- Attached Homes
The market for Boulder condos and townhomes has been a softer over the last year due to CU students being gone for quite a bit of the school year. Home buyers also moved their focus elsewhere looking for more square footage, yard space, and work/school from home options. We will wait to see, as many people get vaccinated, whether or not the attached home market comes back to pre-pandemic demand levels. We can say that our recent experience with clients in the attached home market lends us to believe this will be the case.
Median Sold Price- Denver, Arvada, Westminster, and Broomfield- Single Family Homes
Denver real estate follows the same trends we have been seeing in Boulder County.
Median Sold Price in Denver for single family homes is now at $570,000, up 18% to this same time last year.
The western suburbs of Denver also continue to appreciate at a fast clip. We are seeing Median Sales Price increases in Arvada up to $560,000 (up 13%), Westminster up to $491,000 (up 14%), and Broomfield up to $616,000 (up 17%).
Median Sold Price- Denver, Arvada, Westminster, and Broomfield- Attached Homes
Attached homes in the Denver metro have proven more resilient than attached homes in Boulder County. Median Sales Price for Denver attached homes is up to $421,000 (up 5%). Broomfield Median Sales Price is up to $430,000 (up 23% – we believe this is likely due to a large number of new builds in the area skewing the data), Arvada is now at $343,000 (up 4%), and Westminster is up to $290,000 (up 7%).
Median Days on Market
Days on Market metric shows us how many days it is currently taking for homes to get from the first day of their listing to the closing table.
We have two local Multiple Listing Services in this area and they show Median Days on Market differently on their platforms. The Northern Colorado Multiple Listing Service (IRES) shows Median Days on Market calculated as the total amount of time a home is listed (from day 1 to the closing day). The Denver Metro Multiple Listing Service (Matrix) shows Median Days on Market calculated as the total amount of time a home is listed before accepting a contact, so we have to take this into account when we are considering this data.
Here we’ve gone back to combining the attached condos and townhomes and detached single family homes because the numbers are largely the same between the property types.
Let’s look at the northern Colorado data first.
Median Days on Market- Boulder County
As you can see from the graph above, the Median Days on Market have decreased year-over-year in Boulder County, meaning homes are being shown for shorter amounts of time before going under contract with a buyer. The average number of days a home spends on the market in Boulder is now at 50 days, meaning from the list date to the closing date we see an average of 50 days of total list time. This number is down 12% compared to last year.
If Median Days on Market for a specified area is 50 days, that means a home is most likely for sale and being shown for about 20 days, then the seller of that home is accepting a offer from a buyer, with the Under Contract period being about 30 days so a buyer can do their due diligence and close on their loan. This number is highly variable between properties. While some homes may fly off the market with multiple offers, other homes may sit for longer, especially in the upper price ranges and in the Affordable Housing Program (homes in the Affordable Housing Program must be listed for at least 30 days before accepting an offer.)
The Days on Market in Longmont is now at 43 days, down 20% from last year. The Median Days on Market in Louisville is at 43 days (down 12%) and Lafayette is now at 41 days (down 19%).
Now, let’s look at the data from the Denver metro.
Median Days on Market- Denver, Arvada, Westminster, and Broomfield
This graph is showing us the Median Days on Market, calculated from the day of listing to the day a seller accepts a contract. You can see that the Days on Market for the Northwest Denver area is slightly faster than in Boulder County. Sellers in Arvada, Westminster, and Denver could reasonably expect their homes to receive an offer in 5, 5, and 7 days respectively.
These fast Days on Market metrics show that although there is more competition for single family homes, buyers interested in attached homes are still making their decisions to offer quickly.
Months Supply of Inventory
Another metric Realtors use to evaluate market conditions is the “Absorption Rate”. This number is the months of supply of listings currently on the market. It lets us compare how many listings we have to how many buyers are in the market. An Absorption Rate of 6 months means that if no new listings were to come on the market, all current and active listings would be sold within 6 months. An Absorption Rate of below 4-6 months indicates a Seller’s Market.
Months Supply of Inventory- Boulder County
Inventory levels in Boulder County are historically low. The Months Supply of Inventory in Boulder is down 59% as compared to this time last year. Inventory numbers in Longmont, Lafayette, and Louisville are down significantly year-over-year as well. Since all of the inventory levels are still well below balanced market levels of around four to six months, we can expect to see high buyer demand and competition for the best homes in the best condition.
Months Supply of Inventory- Denver, Arvada, Westminster, and Broomfield
The four cities of the Northwestern Denver area all show much lower levels of inventory than this time last year. The Months Supply of Inventory numbers in the Northwest Denver area indicate a sizzling hot Seller’s Market. The best homes in the best condition should see strong buyer demand and receive multiple offers and offers well over the list price. This is in line with our recent experience with buyers in these markets.
So what do all of these numbers tell us about how our market is faring this year? What might Buyers and Sellers expect as we head into the second quarter of 2021?
The story of the market right now really has to do with demand. Buyer’s needs have changed due to COVID, low interest rates are driving very high buyer demand, and sellers have been hesitant to list their homes. Those sellers that have listed their homes have had lots of buyers through their homes for showings and during the pandemic this hasn’t always felt great.
It is our hope that as more people are vaccinated and feel like they can list their homes safely, we will see more inventory in the market, providing more options for buyers and sellers who want to sell their homes and move. We will have to see how this plays out over the next couple of months. We don’t have a playbook for post-pandemic real estate so only time will tell!
For the time being, buyers should act quickly, have all of their financing ducks in a row, and act aggressively to get the homes they want. There are opportunities and ways to be creative in this market. If you have questions about how to succeed in this market, don’t hesitate to reach out.
Sellers who list their homes should be ready for lots of showings. If sellers want to purchase and stay in the area, they may need to move twice as contingent sales are challenging at the moment. Again, there are ways to strategize this. Give us a call with questions.
Until next time!