The Boulder Area Realtor Association has collected the figures for 2014, and there aren't any surprises as to how the year ended for us.  As I've noted in the last several newsletters, it's certainly been a great year to be a seller, and a frustrating one to be a buyer.  There just has not been any inventory to buy, which has resulted in our continual strong sellers market in Denver, Boulder, and The Front Range.  

Boulder County ended up having fewer Single Family home sales this year in 2014 than we did last year in 2013 (see chart below noted in blue); although our Condo/Townhome sales did increase over last years figures (see chart below noted in red).  In a typical year we'd expect to see about 1,500 single family homes for sale in Boulder County, we currently have about 400.  Denver has averaged under 2 months of inventory all year long, currently Denver has a single month of inventory available for its Buyers.

The Real Estate Market is considered to be well-balanced when there is a 4 to 6 month absorption rate (supply of homes) for Buyers to review.  When we exceed 6 months' supply of homes, we're considered to be in a buyers' market, while a 1 to 3 months' supply of available homes is considered a sellers' market.  While demand is certainly very strong to buy, lack of supply is holding back our number of homes that are sold, so we're recognizing a dip in overall sales in 2014 as noted in the chart above; and we still haven't recovered to previous sales figures in years past.

The Denver Post on Friday, February 13, in an article entitled Home limbo: How low can supply go? notes that historically home inventory generally builds in the winter, and that isn't happening this year.  Rental rates are continuing to climb, demand remains strong, and sellers are experiencing high multi-offer sales scenarios.  It's a great environment to be an owner or landlord, and certainly a great environment to sell in.   

So, why are we still in this position?  There certainly isn't a single definitive reason for us to point our finger at, but rather a group of scenarios that continue to retain our strong sellers market:

• Sellers are concerned or unable to purchase their next home after they sell their primary home, so they stay put and don't add their home to our inventory position.
• Sellers may still be unaware of how strong our market is, and are unaware of their homes value and the potential for it to be sold quickly if priced to market realities.
• Sellers are concerned about the economy and still aren't confident enough in our recovery metrics to want to sell and upgrade in case a downturn occurs.
• Sellers are unable to qualify for a new mortgage for their next purchase. 
• Self educated Sellers hoping to cash in on their homes have an unreasonable understanding and expectation of what our market realities are, and price themselves far too aggressively over what the market will support.  This activity results in stale, untenable inventory that for all intents and purposes shouldn't be recognized as "available" inventory, as homes are priced over appraisal values negating buyers who are leveraging bank loans.  I've run into 3 of these this year with Buyers.  Shortly after I've had conversations with the Listing Agent regarding just how serious their Seller was in selling to market demand-turns out they clearly weren't- the listings were removed.  It's not uncommon to find Sellers "fishing" for unreasonably high sales figures that have absolutely nothing to do with market reality, they just list at a high figure to see if they can get them, with no thoughts to actually sell at a reasonable, market driven figure.     
• New Buyer demand is so high locally that we can't build homes quick enough to meet current demand, let alone pent up historic demand over years past.  As soon as reasonable inventory is introduced to the market it is sold fast, often with multiple offers. 
• Builders are catering to higher income buyers demanding larger homes, there is minimal entry level new builds breaking ground or going up regionally.      

The chart above shows that from 2012 to present our inventory of single family homes in Boulder County has continued to decline, with a sharp drop off in inventory to begin 2014.  We have a long way to go to recapture our For Sale inventory position to previous years levels, and I expect 2015 to be very similar to 2014 regarding demand and activity. 

The Boulder Area Realtor Association, BARA, has recently released their February 2015 Statistics for our region. Once again all the Year-to-Year trends are positive overall for us regionally, with only a few misses here and there.  Certainly there's not anything to be alarmed about or would note the beginning of a negative trend signaling an overall change to our market as a whole.  Our Single Family Home median prices have all increased year over year across the board.  Condo's and Townhome median prices have increased also with the exception of Broomfield being down 1.5% and the Mountain region down 13.8%.

I'm working with several buyers and investors now, some from last Spring.  It's very challenging to find property, particularly for homes below the $300,000 level; and it looks like it won't be getting much easier in the year+ ahead of us.  If you're thinking about selling let me know.  I'm happy to complete a market analyses for your property, and we can review my analyses to see if it makes sense for you to sell when the tenants lease expires.  With some additional data from you I can complete an Estimated Sellers Net Sheet to provide more definitive financial information for your decision making process.