It’s a pretty crazy Real Estate Market these days. Just look around and you’ll see how few homes there are for sale. In our neighborhood there were no houses for sale until one came on 2 days ago. Consequently, buyers are having a really hard time finding a house at all and then when a nice house comes on the market…..you guessed it…..it’s multiple offer time.
As you can imagine, this having an impact on prices. It’s actually surprising that it hasn’t had a greater impact on prices already, since inventory has been steadily shrinking for several years. Here are some simple stats to illustrate:
Comparing the month of February for the last 3 years in the city of Boulder, (the situation is much the same throughout the County):
February Inventory – Boulder:
2011 – 366 Homes
2012 – 311 Homes (15% decline)
2013 – 207 Homes (35% decline)
So, the inventory of detached homes is almost half today what it was just 2 years ago!
February Number of Home Sales – Boulder
2011 – 32 Homes Sold
2012 – 38 Homes Sold (20% gain)
2013 – 43 Homes Sold (13% more than 2012 and 34% more than 2011)
So, there were 34% more homes sales compared to 2 years ago, while there were 45% fewer homes for sale. How is that even possible? But that’s not all…
February Median Sales Price – Boulder
2011 – $566,000
2012 – $625,000
2013 – $654,000
It’s obvious that prices are on the up, though this exaggerates it somewhat. (February gets some of the highest prices of the year interestingly enough.) But, the low inventory is causing sale prices to rise.
Of course you have to wonder where this is headed. If inventory keeps dropping, the overall number of sales will have to start shrinking. But the demand is still high, with the low interest rates and buyers that want to buy. So, prices are bound to keep heading up. It’s a real drag for buyers and a great market for sellers.
It would be great if more sellers would start listing their homes for sale. That would be good for sellers, since demand is high and prices are up. It would be great for buyers, who’d have a decent chance of buying a home. And it would be great for the market to balance things out and prevent artifically high price spikes that lead to price declines on the other side of the roller coaster.