Boulder real estate market heading into cooler times.
Earlier this summer, many local real estate experts surmised that our 2020 'selling season' was simply delayed due to the Coronavirus pandemic, rather than decimated. However, we are seeing a quick drop in inventory this fall across Boulder County, suggesting that the 'delayed season' has also been cut short. It is clear that the looming fears of both a Covid-19 winter and the presidential election are weighing on sellers' psyche as we head into November.
Though we did not see as high a peak in the number of single family homes for sale this summer as in 2019, Boulder did see a significant spike in inventory around May when we started to get comfortable with Covid-19 procedures and precautions. This peak, however, was brief. And since then there has been a steep drop in inventory, indicating that sellers are staying put.
RESIDENTIAL (SINGLE FAMILY HOMES)
On the other hand, attached dwellings continued to present buyers with options through the month of September, followed by a decline starting this past month. Inventory remained relatively high in this category, indicating that sellers were ready to get out from under these properties. Some of these sellers have been investors looking to free up capital prior to an unsteady time in the U.S. economy. Others may be in a lower income bracket, and are unable or uncomfortable with their current monthly mortgage payments because of Covid-19 related losses. Still others may be moving for a range of seemingly normal reasons, such as needing more space, getting a new job, trying to live near family, etc.
We have heard two sides to the story regarding this uneven supply curve between townhomes and condos. Some believe that this is an early indicator of a declining real estate market at large. While others argue that the macro-pattern of townhome/condo sales is cyclical and therefore has reached a predictable high. At this point, we believe it is too early to tell. If townhomes do foreshadow single family homes in the real estate market, we predict a strong supply spike come spring/summer 2021, across all property types. Prior to then, we predict that people will want to stay put through the winter months and the early part of the next presidential term to see what happens.
Uncertainty typically causes stock market decline, which causes the real estate market to follow. However, with the recent stimulus of the U.S. government and the all-time-low interest rates, we have been living in a world where the traditional patterns aren't exactly reliable predictors. Boulder (and all of Colorado) remains an extremely desirable location for Americans, giving us a leg up on any market-stressors that may be coming our way.
With election day upon us, we are all eager to learn the direction our country will take these next four years. The results and the subsequent effects of which, may take months to present themselves, and will linger through next summer and fall. So, if you're considering a real estate transaction anytime in the next year, remember to stay calm and work with what is on your side. If you'd like to discuss the details of how to set yourself up for success, please reach out to us for a free consultation.
If you want to learn more about supply & demand in real estate, CLICK HERE to read our S&D blog post.
Thank you for reading today, and get out there to VOTE!
-The Baldwin Bain Group