Weekly Market Update, Real Estate Statistics & National News – June 9, 2023

By Catherine Uncategorized June 9, 2023

Friends,

BUYERS:

Take advantage of the current market with reduced competition and the potential for lower prices. Mortgage rates are expected to decrease in the near future. Our Boulder realtors recommend acting quickly for a great property before competition increases.

SELLERS:

There is low inventory in most categories, and buyers are active across the board. Consider offering turn-key properties to attract buyers looking to roll expenses into their mortgage. Contact the Boulder real estate agents at Burgess Group | Compass to learn about features buyers are willing to pay a premium for in the current market.

Click anywhere below to check out Burgess Group | Compass Boulder realtor team’s current exclusive listings

LOCAL MARKET TAKEAWAYS

BUYERS

Although rates are around 7%, competition is largely down, which is extremely unusual in this market. Depending on the price category and property, buyers may find sellers willing to accept lower asking prices and/or willing to make inspection concessions. Mortgage rates are projected to come down in H2 2023/H1 2024, bringing buyers back. Your opportunity to get a great property with minimal competition is still available and will not last forever.

SELLERS

Sellers, in most categories, inventory is low. And buyers are buying in all categories.

Please note that because money is more expensive right now, many buyers are looking for turn-key properties, so that they can roll all of their expenses into their mortgage.

If you’re wanting to sell in a market with a lot of inventory (luxury right now), get in touch with a Compass Boulder realtor at Burgess Group at your earliest convenience to understand the specific features and conditions that home buyers are currently willing to pay a premium for.

Local Market Nitty Gritty – Boulder County

Boulder County realtors report on 123 new listings coming to market last week, vs 121 in 2018, 142 in 2019, 127 in 2020, 143 in 2021, and 155 in 2022. Our low inflow of inventory continues. Sellers take note.

71 properties went under contract last week, compared with 68 in 2018, 92 in 2019, 133 in 2020, 90 in 2021, and 88 in 2022. The current figure is significantly lower compared to our stronger previous years. Typically, Memorial Day weekend doesn’t have a lot of real estate transactions, though, during the pandemic, it did. Let’s see if next week’s number is any better.

Total year-to-date purchases show the difference in this year’s market:

We’ve had 1,504 year-to-date sales. 2018 YTD sales = 1839; 2019 YDT sales = 1931; 2020 YTD sales = 1688; 2021 YTD sales = 1945; 2022 YTD sales = 1697. Overall, the 2023 low sales correlate with both low inventory and lower demand because of interest rates.

Remember that 2020, 2021, and 2022 were exceptional years and should be considered outliers. To gauge our real estate market’s historical norms, refer to 2018 and 2019.

Activity By Price Band and Price Reductions- Boulder County

ACTIVITY BY PRICE BAND

Properties in all price ranges are still selling. Boulder realtor sell-through rates show that buyers may be more in the driver’s seat in certain parts of the market.

PRICE REDUCTIONS

There are a seasonally appropriate number of price reductions happening in the marketplace right now. We may see more later in the year, as our inventory started coming later in the year, and there is a correlation between days on market and price cuts. If interest rates go down and buyer demand increases, we may not see those price cuts.

National Market Takeaways

Shadow Demand and Shadow Inventory:

What is meant by the terms ‘shadow inventory’ and ‘shadow demand’?

Shadow inventory is homes that are ready to come to market, but that are waiting for what potential sellers feel is a more propitious time. Similarly, shadow buyers are fully vetted potential buyers who are sitting on the sidelines, waiting for inventory to appear and rates/prices to drop. These conditions are also sometimes called pent-up supply and pent-up demand.

This shadow inventory and shadow demand doesn’t show up in mortgage purchase applications or showing history,

Nationally, the new home market is doing extremely well. New home sales in May rose to a 13-month high, demonstrating underlying shadow demand.

Nationally, there are very few active sellers. We started out the year with 70% more inventory than last year; now, it is at just 16%. If we continue at the same pace, by mid-July we’ll have negative year-over-year inventory growth. Negative inventory Y-o-Y may translate to rising prices in the following year.

Nationally, we started the year with 35% fewer homes under contract Y-o-Y. Demand has been climbing and inventory has been restricted; now there are 13% fewer homes under contract Y-o-Y. This is a notable trend, attesting to rising demand without a correlating increase in supply.

National Price Reductions:

Nationally, 30% of homes on the market have had a recent price reduction, which is totally normal for this time of year. Because inventory is so restricted this year and demand has remained sufficient, fewer sellers are cutting prices than we usually see this time of year. We may see more price reductions in the second half of the year, since inventory bottomed in April, not Jan/Feb, this year.

Below you’ll find the types of homes our buyers are currently seeking. Do you know someone who is on the fence about selling their home? Perhaps you’ve been considering it?

Please let the Compass Boulder realtor team at Burgess Group know if you or anyone you know has a home that might fit. We’d love to help!

Existing home prices down $25k from June 2022 peak to $388,800.

Single-Family Construction Slowdown Less Pronounced in Lower Density Markets

Year-over-year Rent Growth Continues to Decelerate; Asking Rents Likely to be Down year-over-year in June or July

Early Look at Local Housing Markets in May

[email protected] | 303.301.4718 | burgessgrouprealty.com

[email protected] | 303.506.5669 | burgessgrouprealty.com

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