REAL ESTATE MARKET UPDATE

An Information Service of RE/MAX Alliance/Boulder Valley

March/2006

Boulder Valley real estate has changed dramatically in the past twenty-five years.  In 1980, Louisville and Lafayette were burgeoning communities … just starting to feel their oats.  If you wanted to see a movie, buy a new shirt or go to the bookstore … you had to drive to Boulder or Denver.  Production homes by builders such as Wood Brothers and American Home Builders were being built “over the hill” i.e. Davidson Mesa … in those two communities.

Now, two and a half decades later, other area communities either have followed a similar path or are on their way there.  Superior, so small that most people didn’t know it existed, has grown-up and out.  Erie, Fredrick, Firestone and Dacona are now more than dots on a map.

So, what does this all mean?  Two things … first is the fact that buyers today have many more options as to where to live than they did in 1980.  (I didn’t mention all the growth in Broomfield County, Longmont and north Denver.)  Secondly, and most importantly, the more options a buyer has to select from, the more competitive those options have to be.  Huh?  Simply put … if you are a home seller you need to be aware of the competition in the marketplace and … no big surprise here … you need to be competitive. 

There is an old saying in real estate, “You only have one chance to make a good impression.”  (I am not talking about blind dates.)  Buyers today are comparison shoppers.  How does one home measure up to the next one on the list?  And … again, no big surprise here … it isn’t always about price or the three distinctive words that characterized real estate in the past … location, location, location.  There are more variables involved today, because there are so many more options.  (There it is again, that word … “options”.)

Buyers now evaluate schools, medical and recreational facilities, transportation corridors, property tax structures, etc. as part of their decision making process.  Yes … ultimately their decision to buy is based on the style, condition, price, seller incentives, etc. of the house they are going to call home.  But … to get to that point of signing on the dotted line … it takes more than spending a little time probing the Internet.

Below is a brief overview of real estate listings and sales over the course of the past few years from Boulder to Ft. Collins and the close-in mountain communities to the eastern plains.  All information is from IRES … the Northern Colorado Multiple Listing Service.  This will provide an insight into how the real estate market has shifted over time.

                                         New Listings                             Sales                    Absorption
Year
           New Listings        % Change              Sales          % Change           Rate *   

1998             15757                 -------            12913          -------           14.64 Months

1999             17705                 +12.3%            13038           +1.00%         16.30 Months

2000             18738                 +5.83%            13529           +3.76%         16.62 Months

2001             22366                 +19.3%            13868           +2.50%         19.35 Months

2002             24177                 +8.09%            13930           +0.44%         20.83 Months

2003             25204                 +4.24%            14304           +2.68%         21.14 Months

2004             26429                 +4.86%            15404           +7.69%         20.59 Months

2005             27390                 +3.63%            15578           +1.12%         21.20 Months

Absorption Rate: Assuming sales activity would remain the same, and no new listings were to come into the market, this is the number of months it would take to “absorb” i.e. sell … the entire inventory of new listings for each year.

Observation:  No surprise here … since 1998, the new listing inventory has increased by nearly 75% … sales have increased by nearly 21% … and the absorption rate has increased by 45%.

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