Higher interest rates have slowed down the real estate market in Boulder County and the results of the slow down are interesting. Earlier this year I reported that the inventory of available listings had increased dramatically since last year (up 232% in March). Now that we are almost halfway through 2023, a different trend has emerged. The number of single family home listings is down 11.5% compared to a year ago and the number of attached townhouse/condo listings is down 5.4%. The number of sales is also down with single family home sales down 24.5% and townhouse/condo sales down 12.7%. You might assume that higher interest rates and a slower market would lead to a dramatic drop in home values, but the limited inventory has kept prices pretty stable. The median sales price of single family homes is down 5% from a year ago and the median sales price of townhouse/condos is down 3.4%. I would consider these 3.4% to 5% price decreases we are seeing today very modest, since one year ago was the top of the market after 10 years of appreciation.
So, what is happening? The Boulder County real estate market is very stable. Traditionally, periods of rapid appreciation are followed by periods of prices being flat. During flat periods, we generally don't see many distressed sales where sellers are taking a huge loss. Many sellers in Boulder County are financially able to wait if the market conditions are not right for a sale. As a result, many sellers will pull their home off the market if they don't get their price. This is contributing to the decrease in available listings and the decrease in the number of sales. Another factor leading to the decrease in listings are the interest rates. A homeowner with a 3.25% mortgage may hesitate to sell and buy a new home if their new mortgage rate will be at 6.75%.
The factors mentioned above will lead some sellers to stay put for awhile. Over time, some homeowners will decide to sell at a lower price than they had wanted because they are simply ready to move on or are excited to start their next stage of life. The Boulder County real estate market is very stable and is still very strong. For those who want to sell, they will just need to be a bit more competitive and patient in the current market than in the last few years. It's impossible to time the top of the market, but now that we know the market has peaked, I would encourage sellers not to feel bad about selling for close to what they could have gotten at the peak. Selling for 95% of peak market value still represents a huge profit for most homeowners in Boulder County.
For buyers, there are good opportunities in the current market. Buyers may not have a huge number of available homes to choose from, but they have more time to make decisions and more negotiating power.
As always, there are opportunities for both sellers and buyers. Please contact me to discuss how to make the current market work for you. Also, I hope you enjoy the upcoming July 4th Holiday and Happy Summer!
All the best,
Rich