Thursday, February 25, 2016

Boulder Market Update: Inventory Up, Sales Slow [Analyze This]

by Osman Parvez
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If I were to base my analysis of market conditions on my brokerage's business, the Boulder real estate market is scorching hot. I have a healthy number of clients and many are now under contract and heading to closing.   

That's how most Realtors talk about the market. They base it on their personal business or what they hear from their colleagues at the water cooler.   


Don't believe the hype. Ignore the hand waving and happy talk from my competitors. The market is starting off cooler this year. Let's look at the analysis.



Inventory for Boulder houses is up 18.1% year over year.    

The chart shows inventory has risen more rapidly this year but also shows a typical inventory pattern for last year. Total inventory peaked in June and available inventory peaked in September. In other words, competition between buyers peaked in June and selection peaked a few months later.   




Houses under contract has slipped from 57% to 45%, year over year. This is still far above normal (15%-20% under contract) but it's also a clear sign of cooling. The chart above also shows a slide from May of last year to now. In a normal year, absorption should peak in June or July but the last few years have been far from typical.   

Let's Talk Strategy

Sellers: If you're planning to sell this year - meet with your Realtor now for a market based approach to maximize your sale price. You should plan to have your property on the market by April at the latest. This gives you two full months to adjust your marketing plan (including price) if you overshoot. I recommend an asking price that leads the market, but only if you get it on the MLS by April. After that point, a more conservative approach is advisable.  

Whatever you do, don't test the market with a ridiculous price or sign up a Realtor who pitches you wishful thinking pricing. Some agents simply want your listing and they'll say anything to get it. You'll pay the price with a lower sale and longer time on market (i.e. higher carrying cost, more hassle).   

If you're shopping listing agents, call me first. ph: 303.746.6896 I may already have a buyer for your house.

Buyers: The good news is that the market is cooling. Depending on your location and price range, you may not have to give up everything to get it under contract (i.e. inspection and appraisal rights).   

If this is a more typical real estate season, inventory (and thus selection) will continue to increase until about mid summer. Competition between buyers will also increase but should begin to drop in late June or July.  

If you have a lease ending soon, I currently have a short-term rental available for you to bridge the gap and buy you more time. Committed clients can have it at my carrying cost. Call me for details. 

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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. 

3 comments:

  1. Thank you for being a Realtor who creates content! Love the analysis!

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  2. Good analysis and good advice Osman. One thing I am noticing this year, though, is that my pool of pre-approved buyers is bigger too. Possibly a bigger increase in buyers than of inventory. If that's the case, the market will be tight, again. Where did the new buyers come from? I've seen a marked increase in people who have emerged from the Bankruptcy/Foreclosure/ShortSale waiting period and are hot to buy again.

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  3. I'm a potential buyer and have noticed houses in Boulder staying on the market longer and a few having their sale prices reduced. Not sure if this is temporary, but does give us buyers a little relief!

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