Boulder Real Estate News & National Statistics – July 23, 2021

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The local market last week behaved within historic normals.  Nationally, cash purchases have been rising.

Last week we had 114 new listings come to market, as compared with 120 in 2018, 105 in 2019, and 104 in 2020.

99 properties went under contract, vs 91 in 2018, 105 in 2019, and 135 in 2020.

That segment of the market is likely feeling pretty thin.

$2.5mm+ should feel pretty good to buyers, as there has been more inventory coming to market than buyers going under contract for the last few weeks

That’s up from 25.3% during all of 2020 and represents the largest share since 2014, when 30.6% of homes were purchased with all cash.

Cash purchases are on the rise as Americans reap the benefits of a strong stock market. The S&P 500 Index has gained 36% in the past 12 months alone, as of July 14, 2021.

Additionally, remote work has allowed homeowners in expensive cities including San Francisco and New York to sell their homes and move to less expensive areas, where they can often afford to buy properties in cash.

Investors, who often pay in cash, are wading back into the housing market after pressing pause at the onset of the pandemic. U.S. home purchases by investors rose 2.7% year over year in the first quarter, marking the first period of growth since the coronavirus pandemic began.

The rise in all-cash home purchases is posing challenges for many first-time and lower-income homebuyers, who are having trouble competing with cash offers. While competition is easing slightly, about two-thirds of home offers still face bidding wars.

Cash buyers are some of the most frequent to terminate contracts, because they have an advantage getting under contract.

To note, the Denver metro area had 23.6% cash purchases between Jan-April of 2021.

$2.5mm+ should feel pretty good to buyers, as there has been more inventory coming to market than buyers going under contract for the last few weeks

Low rates prop up homebuilders

Stagflation is the biggest worry out there

Housing Inventory July 19th Update: Inventory Increased 5% Week-over-week, Up 27% from Low in early April