Inventory starting to climb?

One of the signs I’ve been watching for that could indicate our market is changing is an increase in available inventory. As you can see in the chart below, we’re starting to see that increase. 2017 is the first year in which we have not set new lows in the number of homes available for sale across Boulder County.

A definite change in the market, but determining the significance is more challenging. If the number of homes available for sale peaks and then drops back into the range of 2015 & 2016, I think we can say this was a temporary quirk of the market this year. If instead we see the # available continue to climb throughout the year that would be more troubling. If we see the # available leave the red zone and start transitioning back towards the blue zone of the years 2005 through 2011 that would be even more concerning for continued price appreciation. It is also hard to tell if this increase is due to larger numbers of sellers or fewer numbers of buyers snatching properties off the market. More sellers would be better for the health of the market than fewer buyers.

There are some long term trends occurring within Boulder County however that make comparisons to previous years more difficult. We may have transitioned to an era where we may not get back up to those higher inventory levels.  Generally higher interest rates, lack of substantial new construction, continued population growth, and very low unemployment may all combine to create a market where we won’t again see the high levels of inventory we saw from 2005-2011 as people are more likely to stay in their homes. If this is true and the red zone is our new normal, than a move back to the top of that area may be concerning enough. This is one I’ll be watching throughout the summer.