I wanted to give an update on a statistical trend I started to notice last year. The high percentage of the homes available in the Boulder County market that are condos. When I first charted this percentage last fall, condos made up just over 30% of our active inventory. As you can see below, that percentage spiked all the way to just over 37% at the end of last year. At that level, I think we’d need to decipher what had changed in our market. Luckily, I don’t have to decipher that market move as the percentage has fallen ever since and we are down to 27% last month, within the range of long-term normality.
When we see an anomalous movement in a metric like that, I used to always want to know why. The longer I’ve analyzed our market, the more I’ve come to the conclusion that sometimes there are just weird market movements that don’t have any easily explainable causation. Theories I’ve heard, but don’t wholeheartedly agree with, COVID effects, downturn starting with condos, changing market preferences, and not enough single family homes being listed. When there isn’t an easily identifiable cause to a market movement, the most likely cause is probably some very complex combination of the above and other unknown factors. Ultimately, that is what makes real estate different than fungible commodities. An investor or buyer doesn’t care what specific share of IBM stock, they receive, they’re all the same. Real estate though is very specific. Buyers/investors do care about very small, sometimes not easily identifiable differences between property A or property B. Some buyers also will care about a specific attribute of a property while other buyers will disregard that attribute as irrelevant. These tiny differences can lead one home, property type or market area, to far outpace another home, property type or market area. All part of what makes the real estate market so interesting.
Be healthy as we head into the end of year holiday season!