This should be the last of my 2020 market review articles where I look at the percentage of homes selling for asking price or better and how that metric has trended over time. The data I used for this chart has had any sales concessions deducted from the sales price and is for the ratio of last listed MLS price to sales price, IRES only data for Boulder County. Original listed price is not a downloadable field from IRES and with over 5,200 sales in Boulder County in 2020, that’s too much data to try and hand scrub through it all and find original listed prices so I’m stuck using last MLS asking price.

I remain amazed that COVID reversed the trendlines in many of our charts and that reversal was a positive for price appreciation and not a negative. As you can see below, 2020 numbers are up sharply and if the 2021 market remains as strong as it has been through the first two months, I’d expect this metric to continue its upward trend. As for the 2020 numbers, 42.95% of single family homes and 41.12% of attached homes sold for asking price or better last year.

When I pull this data, I look at the sales price to asking price ratios and how those ratios change depending on how quickly the home goes under contract. As you would expect, the more quickly the home goes under contract, the more likely the sales price was to be at or over the asking price. The 2020 numbers were stronger than the 2019 numbers, with more homes going under contract in the 1^st week and more homes selling at greater premiums over asking price. The number selling for greater than 5% over asking price almost doubled the rate during 2019, again, the paradoxically strong COVID market.

I also take this same data and plot it in separate colors denoting the week in which the property went under contract. Compared to 2019, the blue spike of the 1^st week sales has grown. With the buyers now accustomed to the need to act quickly, we’re not seeing as much strength in the 2^nd week and I wonder if by the 3^rd week we’re starting to see some price change effects. Also interesting, how few sales have very large discounts. Sellers rarely taking low offers and instead working their way down to market value with price reductions and then selling for somewhat close to their asking price.

                Now, let’s look at these same stats for Attached Homes. Most of us have felt the Attached market cooling which has some confirmation in the numbers, but not as much as I expected. As in 2019, the highest percentage of attached homes go under contract in the 6^th Week and on, although the performance in the 1^st week was up from 28.29% in the previous year.

Here again is the plot of the above data.  The blue spike in the 1^st week being more dominant than last year.

While the strength of the 2020 market during a global pandemic was surprising, the strength we’ve been experiencing so far in 2021 is, perhaps, even more surprising. Many of our traditional seasonal patterns still feel disrupted by COVID, its financial effects, and the changes to the daily pattern of life for so many people. Hopefully, later this year, when everyone who wants a vaccine will have received one, greater predictability based on past patterns will return to our market. Be well!

Time to take a look back at the 2020 sales numbers for the Boulder County real estate market. As is usual, these stats are IRES data only and may miss sales only attributed in REColorado and any sales not reported to an MLS system. Due to the duplication problems between the MLS systems, I am not including any REColorado data. Hopefully soon, we’ll be able to reliably include that data in our stats.

In looking back at my Feb. 2020 article, I remember a song lyric from the late 90’s, “The real troubles in your life are apt to be things that never crossed your worried mind. The kind that blindsides you at 4 p.m. on some idle Tuesday.” Not sure COVID officially hit on a Tuesday, but pretty sure that the novel Coronavirus wasn’t on my list of worries at the start of the 2020 real estate market. Having effectively lost our two busiest months, it’s amazing we ended the year with annual sales up 4.5%. Most of that gain was in Single Family sales although Attached sales eked out 7 extra sales in 2020 compared to 2019. We’ve been wobbling around 4,600 total annual sales for 8 years now and maybe are starting to see the formation of an upward trend in the number of annual home sales, stay tuned.

                After we all got back to work in early May, we had a very active market with showing activity quickly exceeding the pace of the previous year and staying mostly 20% above the 2019 levels. Multiple offers were commonplace although Attached Homes were softer than Single Family. The big story going into 2021 is the lack of Single Family homes available for sale across Boulder County. In the chart below you can see we are at new historic lows. It gets a little silly in some of the individual cities. On the morning of Jan. 25^th, there was 1 Single Family home in Louisville and 3 in Superior that were available for sale and not under contract. Interestingly, in the Cities of Boulder, Louisville, and Lafayette, there are more Attached homes available for sale and not under contract than Single Family homes.

The number of homes available for sale and not under contract, in the chart above, is the metric I’ll be watching most closely as we move through 2021. If this number stays at the current historic low level, the buyer feeding frenzy will remain in place. If we move back into the middle of the pink area in the chart above, we’ll return to just a strong market. My gut feel for this year is that we’ll stay somewhere between feeding frenzy and a strong market through the summer. Hopefully by the fall we’ll have much better feel for the effectiveness of widespread COVID vaccinations and the return of normality which in my mind will have more to do with the return of consumer confidence in close-quarters, social consumption as actual medical safety.

Be well!

Hope everyone had a wonderful holiday season and New Year’s! I wanted to give everyone a quick update on the how the market fared as we have most of the 2020 numbers in. I’ll be collecting, digesting, and analyzing the full 2020 numbers once they have all been reported in January of 2021. I have been repeating this for the last three months, but I’m still shocked that our Boulder County Single Family home sales have topped our 2019 numbers after we lost two of our busier months this spring to COVID lockdown, red circle below! A truly notable recovery.

Since 2020 has been such an outlier of a year, stats in 2021 may be interesting as we struggle to figure out how to compare this year’s numbers to the past. Do we compare to 2020, 2019, or possibly a long-term average? If we just compare to the previous year, the 2020 COVID distortions will be carried forward into 2021 and I think everyone would agree we want to move past 2020 as quickly and permanently as possible.

Wishing for everyone to have a remarkably successful 2021!

Hope everyone had a fabulous Thanksgiving! This month I wanted to share the latest FHFA Third Quarter data for their House Price Index (HPI) and also the new conforming loan limits for 2021.

From the HPI report:

U.S. house prices rose 7.8 percent from the third quarter of 2019 to the third quarter of 2020 according to the Federal Housing Finance Agency House Price Index (FHFA HPI®). House prices were up 3.1 percent in the third quarter of 2020. FHFA’s seasonally adjusted monthly index for September was up 1.7 percent from August.

“House prices recorded their strongest quarterly gain in the history of the FHFA HPI purchase-only series in the third quarter of 2020,” said Dr. Lynn Fisher, Deputy Director of the Division of Research and Statistics at FHFA. “Relative to a year ago, prices were up 7.8 percent during the quarter – the fastest year-over-year rate of appreciation since 2006. Monthly data indicate that prices continued to accelerate during the quarter, reaching 9.1 percent in September, as demand continues to outpace the supply of homes available for sale.”

Significant Findings

• House prices have risen for 37 consecutive quarters, or since September 2011.
• House prices rose in all 50 states and the District of Columbia between the third quarters of 2019 and 2020. The top five areas in annual appreciation were: 1) Idaho 14.4 percent; 2) Arizona 11.1 percent; 3) Washington 10.8 percent; 4) Utah 10.7 percent; and 5) Tennessee 10.0 percent. Idaho has been the leading state for the last 8 quarters. The areas showing the lowest annual appreciation were: 1) North Dakota 4.0 percent; 2) Iowa 4.7 percent; 3) Louisiana 4.8 percent; 4) Alaska 4.9 percent; and 5) Hawaii 5.2 percent.
• House prices rose in all the top 100 largest metropolitan areas in the U.S. over the last four quarters. Annual price increases were greatest in Boise City, ID, where prices increased by 16.4 percent. Prices were weakest in Baton Rouge, LA, where they increased by 2.1 percent.
• Of the nine census divisions, the Mountain division experienced the strongest four quarter appreciation, posting a 9.6 percent gain between the third quarters of 2019 and 2020 and a 3.8 percent increase in the third quarter of 2020. The Mountain division has been the leading region for 12 consecutive quarters. Annual house price appreciation was weakest in the West South Central division, where prices rose by 6.5 percent between the third quarters of 2019 and 2020.

Here’s a look at how these numbers played out for our local areas. Boulder, still the tops for annual appreciation since 1991, but our short-term appreciation has decelerated recently which isn’t necessarily a bad thing. Interesting that the Denver MSA is doing better than Boulder on a short-term basis. I’ve heard and agree that Boulder County is starting to catch demand slopping over from the Denver metro area, an interesting reversal from past patterns.

Here is a graph comparing the annual appreciation rates for the Boulder MSA (all of Boulder County), the Denver MSA (the City and County of Denver, Arapahoe County, Jefferson County, Adams County, Douglas County, the City and County of Broomfield, Elbert County, Park County, Clear Creek County, and Gilpin County) and the US.

Two last charts. Map of new confirming loan limits in January 2021. Interesting to see this graphically and where the high cost areas are!

The national map color coded by appreciation over the preceding 12 months.

Data share is back between the two local MLS systems, hoorah!  Data share is back between the two local MLS systems, oh crud, there goes my confidence in all of the statistics! Let me start by saying that having the data share back between IRES and REColorado is objectively a wonderful thing for all local real estate brokers and their clients and I thank IRES and RECO for all of the hard work they both put in to get us to this point. Having said that though, there are some things to be aware of as the two systems start showing each other’s data assuming you are mainly using IRES to see RECO data.

We have a mismatch between the two systems in how we describe a property that is under contract. In IRES, most properties are marked A/B to show the property is under contract and accepting backup offers.  In REColorado, there isn’t an A/B status, so under contract properties instead get marked as P to show the property is Pending. The de-duplication algorithm in the IRES system does not remove the duplicate properties from REColorado since the status is different. So, the number of properties showing as under contract in the IRES system just made a dramatic jump if you include the REColorado data. A quick search on Oct. 26^th of single family homes in Boulder County found 216 extra properties listed as under contract that were duplicates that shouldn’t have been counted ( I just corrected for differing property statuses and am sure I didn’t catch all of the duplicates that should have been removed). Depending on how you count those extra 216 properties, you can come up with a UC Percentage ranging from 55.8% – 64.2% under contract. So, a possible 8.4% error in the under contract rate, not good.

When we look at Attached Dwellings, we have the same status mismatch issue as well as an additional problem with how addresses are interpreted for both systems. As an example, there is a condo for sale in Country Club Greens. IRES calls that home 7431 Singing Hills Dr D-7431 and REColorado calls that home 7431 Singing Hills Dr D7431. Since the addresses don’t match, because of a hyphen difference, the automated de-duplication systems don’t catch the duplicate and that home would count as two active listings in our stats even though it really is only one home, which again, is not good. I didn’t take the time to see how many address mis-matches there are, but in my experience the address issue is very common.

Be careful when pulling stats. If you pull current stats and include RECO data and compare that to stats from a year ago that only contained IRES data, you’re likely to get indicators of the market that are more reflective of the above issues than any substantive change to the market itself. Eventually these issues will get resolved, either through once again comparing apples to apples (IRES to IRES or IRES+RECO to IRES+RECO) or possibly through further changes to the two systems, possibly an agreed upon set of statuses for both systems and work on the addressing issue.

Even with these issues, data share is a good thing! On Monday, we were now seeing 111 single family listings in Boulder County in IRES that up until data share was turned on could only be found in REColorado. I’m sure some of these glitches will get resolved as both systems work further on the details of the data share systems. Thanks again to getting us to this point!

Be healthy everyone!

Lately, as I’ve been watching my daily hotsheets, I’ve noticed an apparent shift in the number of condos for sale in Boulder County with many more attached homes showing up than what feels like normal. Whenever I notice something like this, my first step is actually look at our market data to see if the data actually supports my subjective feel. If the data does support my subjective feel, then I want to try and figure out what the meaning is of the shift I’m feeling if possible.

So, are there more condos for sale in Boulder Cunty than normal? Yes and no. There are more condos for sale than there have been since 2016 and their percentage of the total market has also increased, see the chart on the next page. If we look back further into the past however, we see that the total number of condos for sale back in the period from 2003 through 2011 was much higher. Interestingly, the percentage share of condos on the market back then is about what we’re seeing today. So, a change from the recent past but more of a return to older patterns than the establishment of a totally new pattern. If condos continue to increase their percentage of what is available on the market above the levels we’re at now and have seen in the past, that would signal something new.

Some people are saying this perceived surge in condos onto the market right now is a COVID effect, but if you look at the chart below, this trend started back in 2016 and has been rising steadily since then and any COVID effect should only have started this spring. I’ve debated with others if this is the start of a downturn with condos leading the way but am not sure that’s the right answer either. Hard to say this is the start of a downturn if it has already been happening for over four years. I wonder if it may just be a reflection of the general quality of attached homes in Boulder County, with most of that inventory existing in older, tired complexes. We are seeing buyer preferences shift towards homes that are turnkey and require no updating prior to occupancy and that doesn’t describe many of our local complexes. It also might not be any of the above but just a return to an older pattern for condos while the pattern for single family homes hasn’t adjusted yet. If we consistently breach the level where condo listings are 35% or more of the total available homes in our market, we’ll have to further debate and explain this new phenomenon.

As always, we’ll be watching the market movements to see where we’re headed. Be healthy!

I thought I’d take a break from COVID this month and look at the FHFA HPI data for the Second Quarter of 2020. This is the most recent dataset which was just released and probably has some COVID effect in the numbers but not the full extent of the COVID downturn or resurgence. I find the FHFA HPI numbers to be the best large-scale indicator of overall market appreciation. To recap, the reason I like the FHFA data so much is that they use paired transactions to derive their numbers. They are always comparing multiple sales of the same house over time, not using averages, medians or some other broader market measure. https://www.fhfa.gov/DataTools/Downloads/Pages/House-Price-Index.aspx

Here is how our local area has fared. You can see that our local MSA’s have been underperforming the rest of the nation in the short term but far outpacing the nation in the longer term. Of the 244 MSA’s in the dataset, the Boulder MSA still ranks #1 for appreciation since 1991 but is almost at the bottom of the rankings for one quarter appreciation with a negative 0.43% drop.

               Here’s the performance for the Denver MSA, Boulder MSA and overall US graphically. You can see that the Boulder and Denver MSAs have been decelerating in their appreciation rates since hitting their peak at the start of 2016. Annual appreciation decelerating, but still positive for both MSAs. As a reminder, the Boulder MSA is composed of all of Boulder County while the Denver MSA is composed of the 10 Metro Counties: the City and County of Denver, Arapahoe County, Jefferson County, Adams County, Douglas County, the City and County of Broomfield, Elbert County, Park County, Clear Creek County, and Gilpin County.

               Lastly, I have a map of the entire US showing the appreciation for every state. Idaho leads the way with 10.8% appreciation over the last 12 months and W. Virginia and N. Dakota tie for the bottom at 1.1%. Strength across the map with every state showing positive appreciation.

We’ll be watching this index and our other metrics to continue to analyze how COVID is affecting the market. Hope everyone has a great end to their summer. Be well!

For many price points and areas, the typically slower summer remains red-hot in Boulder County. Surprisingly, in the middle of a global pandemic and a divisive election year, the County is seeing a higher percentage of homes under contract than we’ve seen since 2016 and we may still be climbing! We did have a strong start to the year and then a dramatic COVID lockdown drop followed by a strong release of pent up buyer demand. Here’s the % UC chart.

I believe a lot of this market strength can be attributed to the very low levels of homes available on the market, only 500 single family homes available for sale in the last week of July, a lower point for this time of the year than I’ve never seen . With fewer sellers and strong buyer demand, the market reacts. Another aspect of the low levels of home sellers, buyers are fighting over the available homes, and with the special homes, the competition can become fierce. This strong buyer demand is helped by the very low mortgage rates and our very strong, pre-pandemic employment levels.

Like the Federal Reserve though, I get a little nervous about making predictions of where we’re headed compared to reading the pulse of where we stand today. From the most recent FOMC statement, “The path of the economy will depend significantly on the course of the virus.” I strongly believe in the stability of the Boulder County market but this fall and winter will make for very interesting market watching as we possibly move into terra incognita. I don’t necessarily mean this as a negative, some of our metrics are moving into territory signifying market strength that we’ve never seen before. Always interesting to jump off into the unknown.

Be well and watchful!

We continue to ride the COVID roller coaster with its dizzying plunges and upward swoops. Below is another look at how four metrics are tracking this year compared to last year; the numbers of single family homes Sold, Available, Total Listings and Under Contracts.

Some thoughts on this chart. All of these metrics are comparing this year to last year, not the absolute numbers of each category. The dramatic rebound in the Under Contract numbers tells the story of how it feels to most buyers out there. In most price points, competing offers are the norm for new properties, which feels odd in the middle of a pandemic and at a time of the year which is typically less frenzied.

This feeling of strength is also driven by the continued decline in the number of available homes. This can get a little complicated, as the number of available homes has been flat in absolute numbers over the past month, but this flat trajectory is being compared to the steeper upward trajectory of a typical year or last year which results in the declining red line above. With an average number of buyers for this time of the year chasing a below average number of sellers, the market feels strong.

Lastly, one other good sign for our market, we’ve seen the number of sales hopefully start its rebound off the bottom. Due to the delayed nature of a sale, happening 1 to 3 months after a contract, our sales numbers have been the last to show recovery from the shutdown. I’ll want to continue to see this metric climb rather than rely on just one week’s upward motion, but with the large rebound in under contract numbers, sold numbers have to increase eventually.

Another statistician I was listening to last week talked about how these wide scope charts can hide more localized effects. The roller coaster ride for the national numbers is different than the ride for the statewide numbers, and I would take it even further to say, the ride for the individual city numbers and possibly even the ride for different price points and neighborhoods. With the lower numbers of sellers in the market, any sudden influx of buyers into a price point, area or neighborhood can have strong localized effects. I’m hearing many stories of fierce competition, but also other stories of people getting very little showing interest from buyers. Essentially, we’re all riding our own roller coasters and experiencing our own rides. You can see this a little in the chart below showing the different percentages under contract for the different cities within Boulder County. Someone riding the Louisville roller coaster is experiencing a much different ride than the person riding the City of Boulder roller coaster..

Be well everyone!

I think many of us are surprised by the strength in the local market during this time of COVID. I know I keep sifting and analyzing the tea leaves of the numbers trying to determine the direction we’re headed. Recently, I decided to take a look back over the last year and compare the number of new listings entering our market versus the number of homes going under contract. These metrics are proxies for the number of active sellers and active buyers. If those two numbers were to head in opposite directions, that would portend big changes for our market. If those two numbers were to generally track together, that would portend the continuation of the status quo.

As part of this look back, I struggled to re-create the timeline of COVID restrictions on our ability to show homes so that I could mark that onto the chart.  To the best of my recollection, this was how it played out.

March 10^th – Colorado state of emergency declared

March 13^th – National state of emergency declared

March 25^th – Statewide Stay-at-Home order – we thought showings allowed

April 6^th – Real Estate Showings officially clarified as not allowed

April 27^th – Safer-at-Home enacted statewide – Boulder County continues Stay-at-Home orders

April 29^th – Boulder County vacant home showings allowed

May 9^th – Boulder County In-Person showings allowed

Once I created this chart, I was comforted by how closely the seller and buyer activity was tracking together. Slight seasonal differences, where we see more sellers relative to buyers during the -summer and more buyers relative to sellers over the winter, but overall, remarkably similar tracks. It was especially interesting to see buyers and sellers both react to COVID restrictions similarly on the way down and the way back up. Most importantly, so far, the numbers are tracking together nicely which implies we’re continuing with the status quo, which so far, is a fairly robust market for all but the highest price points. As with many of my charts, I’ll be keeping an eye on this one, looking for periods where these two metrics strongly diverge as that may signal a market change, but so far, as we all adjust to the new normal of masks, gloves and an obsession with sanitization, the market just keeps chugging along.

Be healthy everyone!