Going Up…! 2nd Quarter Boulder County Real Estate Market Update

house going up jpg

The Housing Market is Taking Off!
With or without the use of balloons, the housing market across the country is going up dramatically this year and our area is no exception. We’re seeing significant price increases this year though the number of sales is not that much higher than last year because our inventory levels have been so low. Here are some simple stats to illustrate this.

Sale Prices – 2nd Quarter 2012 vs 2013
The chart below shows the increases in prices across the board in the County.

2012-2013 Change Median Sale Price
Boulder Up 18.5% $663,500
Broomfield Up 5.6% $342,000
Erie Up 4.6% $339,900
Lafayette Up 6.8% $399,000
Longmont Up 8.8% $260,000
Louisville Up 1.6% $391,000
Superior Up 21.5% $441,000
Mountains Up 8.2% $378,000
Plains Up 7.4% $529,000

Pretty amazing all around. Boulder and Superior have been crazy. We can attest to that, as we’ve been working with buyers in both locations who are trying to find homes. Multiple offers have been the rule.

house not for saleInventory Woes – starting to shift? Housing price increases have been driven by Low Inventory Levels. Inventory has been dropping steadily for several years in the wake of the housing bubble and bust. Inventory levels are still 17% lower than last year at this time…..However ……last month Inventory was 21% lower than the same time last year.

So, ever so slowly, but steadily, we’re starting to see more houses coming on the market. That’s what the market needs now to level off a bit. Looking into the crystal ball…..Most likely, we will see a steady increase in inventory, moderation in price increases and an increase in  the overall number of sales as more houses come on the market. Time will tell!

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Buying a House with the least amount of cash

Home on a hand“What’s the least amount of cash I need to purchase a home?”
This is a question that comes up a lot in the home buying process. We asked one of our favorite Mortgage Brokers, Patrick  Forrestal at Myers Funding for his take on this and here’s a summary of his response.

There are several options available, the most common being FHA loan programs that are sponsored by the federal government. There are also Conventional low down payment loan programs. Lets look at these two.

FHA loans offer the lowest down payment option, just 3.5% of the purchase price of the home and lower interest rates than conventional loans. However, they come at a hefty price, namely Mortgage Insurance. When you buy a house with less than 20% down, you have to pay for Mortgage Insurance (lenders require it for their protection). With FHA loans currently there is 1.75% upfront Mortgage Insurance fee Plus a monthly Mortgage Insurance fee of 1.35%.

Here’s a table comparing the costs of FHA vs. conventional low down payment loans for a $300,000 home purchase:

FHA Conventional
Loan Rate 3.5% 4%
Monthly Loan Cost P&I $1,300 $1,361
Minimum Down 3.5% or $10,500 5% or $15,000
Upfront Fee 1.75% or $5,066 NA
Mortgage Ins Monthly 1.35% or $326/mo .78% or $185/mo
Total Monthly Cost $1,626/month $1,546/month

So, you can see that even though the FHA loan rate is lower, the monthly cost of the Conventional loan is almost $100 less. In addition the FHA loan has the $5,066 upfront Mortgage Insurance fee. Also, the mortgage insurance can never be removed from an FHA loan. With a conventional loan, it can be removed if your home appreciates in value and the ratio of the loan to the value of your home (LTV) equals 80% or less. For instance in this scenario, where you purchased the home for $300,000 and have a loan of $285,000 the home would have to increase in value to about $356,000 to eliminate the mortgage insurance.

Another option we just discovered is a Wells Fargo loan product that has a low down payment with NO Mortgage Insurance. It’s available for home buyers with moderate to low incomes. The income ceiling level varies by location. For more information on that, email us or give a call.

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Boulder Market Update

boulder_overviewIt’s June, and after all of our late snow and rain it’s still so nice and green everywhere! Today was the first really hot day and the real estate market seems to be getting hotter every day too. It’s truly amazing to see how things have turned around in the last year and a half.  To get a little perspective, here’s a bit of recent history.

Overview of the Boulder Real Estate Market in recent time

The Real Estate market in the City of Boulder was stagnant from about 2007 through 2011. The median home price bounced around a bit during that time but it was roughly $535,000 at the beginning and end of that 5 year cycle.

In 2012 prices and the number of sales started to increase and in 2013 prices have really started to take off, rising about 10% so far this year compared to the same time period last year. Here are a few statistics to illustrate that. These figures are for the period January through May for the last 3 years in the City of Boulder.

2011 – 235 Sales     $530,000 Median Sales Price

2012 – 327 Sales     $570,000 Median Sales Price

2013 – 316 Sales      $632,000 Median Sales Price

That’s a pretty dramatic increase in the median sale price of about $100,000 in 2 years! Some of that may be explained by the larger number of high end sales, which pulls that median figure up but even so, it’s a big increase of 15% or more.

Also note that the number of sales so far this year is actually less than last year. This is explained by the low inventory levels we are experiencing, not just in Boulder but throughout the country for that matter. There are about 25% fewer homes for sale right now than there were last year at this time. And last year there were 20% fewer than there were for  sale in 2011. As you can imagine, this is forcing prices up because there are a lot of buyers looking to take advantage of low interest rates to buy a home.

This is creating an extremely strong seller’s market. It’s completely the norm these days to put your house on the market, get a flood of showings on the first day, receive multiple offers and sell your home for above the list price. While that may be great for sellers, it’s a drag for buyers.  It’s hard enough to find a house because there are so few for sale and then you have to compete with 10 or 20 0ther people to get the one you want. My how quickly things change…..it was just a year or two ago when buyers could call the shots and sellers had all they could do to sell their home.

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Super Low Home Inventory, Sales Up, Prices Rising

sold-signIt’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.

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2012 – A Turnaround Year in the Real Estate Market!


Housing was a Bright Spot in the Economy in 2012
After suffering through 6 years of downturns in the housing industry, things really started to turn around in 2012. Nationally, prices were up over 4%. You may have heard of big turnarounds in places like Las Vegas and Phoenix and different parts of California and Florida. Those of course were areas that took a huge nosedive in 2007 and  had nowhere to go but up.

The Denver area has had some troubles but our market has been much more even keel compared to much of the country. We never dropped that low and our prices have been coming back gradually too. In the Denver metro area, prices are up 7% in the last 12 months, which is a big increase. Performance in Boulder County has varied and has been up in all areas of the County. Here’s a a brief summary of the Boulder/Broomfield County markets City by City in 2012 as compared to 2011.

Sales – Up 28% (Number of Sales of Detached Homes)
Prices – Up 5% (Median Sale Price)
Inventory – Down 32%  (Number of Detached Homes for Sale)

Sales – Up 21%
Prices – Up 4%
Inventory – Down 21%

Sales – Up 25%
Prices – Up 11%
Inventory – Down 38%

Sales – Up 20%
Prices – Up 6%
Inventory – Down 21%

Sales – Up 38%
Prices – Up 8%
Inventory – Down 13%

Sales – Up 8%
Prices – Up 1%
Inventory – Down 43%

You can see that the number of sales are up acrossboulder_winter_mountains the board in the County, in most cases  20% to over 30% more sales than 2011. That’s pretty amazing when you see that the number of homes for sale has dropped so dramatically, 20, 30 and even 40% less than last year in Broomfield! There’s not a lot to choose from at the moment.

Given the low inventory, it makes sense that prices would finally start to move upward. Broomfield is the one exception, where the number of sales is only slightly higher than last year and the median sale price is up just 1% this year.

For Buyers, it’s been a challenging year. With the low inventory, we’ve seen a lot of multiple offer situations. It’s been hard to find houses at all and then when a nice one comes along, everyone wants it.

For most Sellers, it’s been a great year. If your house is in nice condition and it’s priced appropriately, it’s been easy to sell. In fact, we’ve seen lots of multiple offer situations. However, Buyers are still cautious and particular and don’t want to overpay. Consequently, houses that are priced too high, don’t sell.

It should be an interesting year. With inventory at all time lows and prices moving upward, it’s a great time to sell a home. Buyers are hoping that more sellers will put their homes on the market so they’ll have something to choose from. We’ll see how the year unfolds.

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A Few Ramblings on the Market

Things are looking up in the Housing Market

A friend wrote me an email this morning asking about the state of the market I said…..

 It’s really a pretty amazing situation when you think about it….Inventory is low, Interest rates are ridiculously low and there are qualified home buyers looking to buy. What you’re friend didn’t mention directly that prices are also up….about 5% on average or more this year in our area.

Up till now, many sellers have been sitting on the sidelines waiting to list their home for sale, thinking the market is still bad….thus the low inventory. Also, because people are moving less frequently (because the economy has been slow, fewer job changes/moves). The declining inventory has been going on for a few years but it’s just this year that it’s finally kicked in and affected prices in the normal way of supply and demand…..by going up!

I’d expect that in 2013, if the economy continues to slowly improve, more people will list their home for sale, there will be more sales, etc. Then we’ll start to hear more in the media about the market is changing, sales are happening, etc etc and I hope it doesn’t get crazy and swing up too fast and get out of whack.

I think people don’t realize just how low interest rates are and how affordable it makes it to buy a house right now. It’s an historic opportunity between the low rates and deflated prices. It won’t last too much longer…there’s only one place for rates to go and prices are already starting to trend up.


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Boulder County Real Estate Market Update – Wow…what a Year so far!

Here we are in September, summer is over…sigh, kids are back in school, the weather is actually feeling cooler..yay! And how about Peyton Manning and them Broncos!!…..But, you wanted to know what’s happening in the real estate market? Right??

Here’s a brief summary from around Boulder County. Overall, it’s been a pretty incredible year so far. Sales are up….. way up in some places, Prices are up and inventory just gets lower and lower. All the stats are comparing this year to last. Sales and Price data is through the 2nd quarter, Inventory compares July of 2012 with July 2011.

Sales – up over 20%
Prices – up over 5%
Inventory – down almost 30%

Sales – up 17%
Prices – up 1.5%
Inventory – down 30%

Sales – up over 30%
Prices – up 10%
Inventory – unchanged

Sales – up 35%
Prices – up over 20%
Inventory – down 40%

Sales – up 14%
Prices – up over 5%
Inventory – down 30%

Sales – up 72% !!
Prices – down 1%
Inventory – down 10%

It’s pretty amazing that sales have been up so much, even 72% in Louisville, while there are so few houses on the market. It’s not like inventory was high last year, and this year it’s even lower. It’s kind of odd that Louisville is the only town where prices actually dropped but virtually everything that comes on the market there sells.

Lafayette and Erie had a nice rebound this year. Broomfield has had increased sales but no significant price increases. Longmont is having a pretty good year and Boulder keeps chugging along.

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