Thursday, May 07, 2015

Available Inventory Finally Rises, but Not for Town Homes or Condos [Analyze This]

by Osman Parvez
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Intelligent real estate decisions are based on an in-depth understanding of market conditions. 

Does it feel like you're flying blind? Get a better real estate adviser

Time for an inventory update.   

The following is a broad analysis of the Boulder real estate market. If you're thinking about buying or selling (and you're not under and exclusive agreement with one of our competitors) call us to discuss market conditions relative to your price range, property type, and location. Ph: 303.746.6896.  



Total inventory continues to climb. 197 houses (blue) and 154 condos and town homes (orange) are on the market, up 28% and 27% from a month ago, respectively. 



Inventory under contract remains shockingly high. 68% of town homes and condos and 54% of houses are under contract. In normal markets, only 15% to 20% of inventory is under contract at this time of year. 




For town homes and condos, the number of available properties (red line) has trended slightly down since early March. For buyers, this means selection has remained stubbornly low and competition among buyers for the most desirable properties is fierce. 




For houses, availability has increased substantially since early March. As of this writing, 90 houses are available for purchase (not under contract), an increase of 58%. 

Anecdotal Market Observations

1. The current pattern is for new listings to appear towards the end of the week, often with showings delayed until the weekend to create buzz at the open house. In response, we're blocking weekend showing time slots in advance for our clients.  

2. Offer submission deadlines tend to be Sunday through Tuesday, with desirable properties going under contract officially by Wednesday. Buyers need to be fully prepared to not just know their maximum price for each house, but also an understanding of what contingencies they're willing to waive.

3. Even moderately attractive listings are going under contract immediately, often at prices substantially over asking and with severely curtailed buyer contingencies. See last month's analysis of over/under for a breakdown

4. Less desirable properties are also finding willing buyers. This is a good time to dump property that doesn't meet SmartRegs or would be otherwise difficult to sell in a normal market.   

5. We're now in the business of advising clients on property selection with an eye to avoid bidding wars on subpar assets. It's critical to understand which properties are worth a premium and to what extent you're willing to prepay appreciation. During the last downturn, buyers who paid a premium for the wrong properties saw their asset values plummet. In some cases, the peak to trough was around 50%. Choose your Realtor carefully. 

6. The ability to negotiate well by highlighting the advantages of clients' offers has become a competitive advantage.  


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The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties.   We strongly recommend conducting rigorous due diligence and obtaining professional advice before buying or selling real estate. 

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