A recent discussion between a few of us market watchers concerns our data integrity and what sources we should be using. Should we use data only from the IRES system or should we use data from both systems with the de-duplication system enabled. In most of my stats, I only track IRES data. This is a vestigial decision from the days before it was a possibility to include data from both systems. With IRES only data going back to 2004, some of which cannot be re-created, I’m hesitant to now include REColorado data with duplicates removed as that may invalidate some comparisons to previous years.

After my recent discussion, I felt I should at least look at how much data I might be missing by ignoring RECO data. How many duplicates is the IRES auto de-duplication system missing and why? How much of what is happening locally is being reported only in REColorado? Like most of the stats questions I ask myself, the answer is muddy and harder to reach the more closely you look at the data.

The first surprise, the problem of duplicates in the system seems to have gotten much better since the last time I took a detailed look. Less than 1.4% of the homes on the market are duplicated between the systems and not automatically removed by the de-duplication algorithms. This is much better than my recollection. I wonder if this can be attributed to the better data share agreement between the two systems and brokers feeling they no longer need to belong to both and enter homes into both. When looking at the Q1 2023 sales and current listings, there were only 29 duplicates not removed that should have been, an error rate of 1.22%. When I looked at the reasons for these erroneous duplicates not being removed, the most common reason was bad data entry by brokers, then the mismatch between A/B and P statuses between the two systems and finally Attached Homes were more likely to have duplicates due to how the two systems sometimes format addresses differently.

The dividing line between the two systems remains Broomfield, where just more than 75% of the listings and sales are reported solely in REColorado. Areas with more new home sales have higher percentages of REColorado only listings. Charts for Active listings and Q1 sales by category below.

I still feel that the long-term record of IRES only data I have is worth maintaining. The somewhat large numbers of RECO only listings and sales though has me continuing to ponder that decision. I’ll probably keep the status quo for now and take another look in the future and see how the mix is changing over time. Someday there will be a big enough change of some sort to have to give up on the idea of data consistency and take a more expansive, but possibly less accurate, view of our local market.

Nice to see everything outside starting to turn green, a good sign!

FHFA’s HPI index is our best source for overall market appreciation data. The dilemma, the data is very delayed. We now finally have Q4 2022 data, although it would include some sales that went under contract in Sept. 2022. So, we can use this data to see where we’ve been, but the data to show the most recent changes to the market really won’t show up until this summer. So, with those caveats, here is the Q4 FHFA HPI Data.

From the most recent HPI report– U.S. house prices rose 8.4 percent between the fourth quarters of 2021 and 2022, according to the Federal Housing Finance Agency (FHFA) House Price Index (FHFA HPI®). House prices were up 0.3 percent compared to the third quarter of 2022. FHFA’s seasonally adjusted monthly index for December was down 0.1 percent from November.

“House price appreciation continued to wane in the fourth quarter” said Dr. Polkovnichenko, Supervisory Economist in FHFA’s Division of Research and Statistics. “House prices grew at a much slower pace in recent quarters amid higher mortgage rates and a decline in mortgage applications. These negative pressures were partially offset by historically low inventory.”

Significant Findings

• Nationally, the U.S. housing market has experienced positive annual appreciation each quarter since the start of 2012.
• House prices rose in all 50 states, while prices declined in the District of Columbia between the fourth quarters of 2021 and 2022. The five areas with the highest annual appreciation were 1) Florida, 15.2 percent; 2) North Carolina, 13.4 percent; 3) South Carolina, 12.9 percent; 4) Hawaii, 12.8 percent; and 5) Maine, 12.2 percent. The areas showing the lowest annual appreciation were 1) District of Columbia, -0.8 percent; 2) California, 2.3 percent; 3) Idaho, 3.1 percent; 4) Oregon, 3.6 percent; and 5) Washington, 3.7 percent.
• House prices rose in all but six of the top 100 largest metropolitan areas over the last four quarters. The annual price increase was greatest in North Port-Sarasota Bradenton, FL at 20.1 percent. The metropolitan area that experienced the greatest price decline was Oakland-Berkeley-Livermore, CA (MSAD) at -4.3 percent.
• Of the nine census divisions, the South Atlantic division recorded the strongest four quarter appreciation, posting a 12.4 percent increase between the fourth quarters of 2021 and 2022. Appreciation was weakest in the Pacific division, where prices rose by 2.9 percent.

Trends in the Top 100 Metropolitan Statistical Areas are available in our interactive dashboard: https://www.fhfa.gov/DataTools/Tools/Pages/FHFA-HPI-Top-100-Metro-Area-Rankings.aspx. The first tab displays rankings while the second tab offers charts.

Here’s a look at how these numbers played out for the MSA’s in Colorado compared to the 258 other MSA’s across the country (that made this report) and how Colorado compared to the other states plus the District of Columbia. Boulder County remains in 4^th place for appreciation since 1991 across the entire country, but has slipped in the other standings as other areas of the country have seen greater short term appreciation. The chart below is sorted by the 1 year appreciation rankings. Unusual to see Pueblo leading the state and how differently they are performing than the Springs!

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. Another chart that shows the dramatic reversal in our market mid spring last year. Once we get 2023 data, I wouldn’t be surprised to see a pause in this drop based on the feel so far of the spring 2023 market.

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

It will be very interesting to revisit the FHFA HPI stats later this year. The Spring market remains active for many, yet also slow for last year’s holdovers. It seems like activity accelerates and decelerates based on the latest twitches in the mortgage rates. Many of us are waiting to see what happens once we get through the typical stronger spring and into the typically slower summer months. Enjoy, hopefully, the last signs of winter!

The last thing I like to look at each year for the previous year’s final numbers is the strength or weakness of the market in terms of sales price versus list price. Here I’ll be looking 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 there’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.

Keep in mind that the charts and graphs below are summaries for the entire year and don’t show the dramatic shift we experienced throughout 2022. As you’d expect, we have moved off the highest levels for the percent of homes receiving asking price or better, down to an annual average of 55.36% for single family and 59.67% for attached homes. With this downward move, fewer single family homes are getting asking price or better offers than attached homes, making 2021 the one year since I tracked this metric where single family outperformed attached.

When I pull this over asking price 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 at or over the asking price. The 2022 numbers do show the softening of the market, with only 52.33% of the single family homes going under contract in the first week and of those homes, just under 81% went for asking price or better. These two numbers are 8-10 percentage points lower than we saw in 2021. In 2021, we had such strength that I felt the need to add additional detail on the homes that sold for over 105% over asking. That detail is included below, but with our retreat from the hottest market frenzy, I’m not sure that detail remains warranted for the sales past the first week.

As per usual, I also take this same data and plot it in separate colors denoting the week in which the property went under contract. Last year I had expanded the detail beyond 105% over asking which I kept and which is likely no longer needed. I also keep the vertical scale on these charts constant year over year so they can easily be compared. This year, you can see that sales did not approach the top of the scale as they have in the past, which was due to a combination of much lower sales numbers and fewer sales in the first week. Also, last year, no matter which week on the market the property went under contract, the most common result was asking price or better. This year we can see that only occurred in weeks 1, 2 and 6. Homes that went under contract in weeks 3, 4 & 5 most commonly sold for a less than asking price, generally 97-98% of asking price. Slower market times for sure.

Now, let’s look at these same stats for attached homes. As in 2021, just a touch softer than the single family home data, but a strong year with just over half of the attached homes going under contract in the first week and of those homes, 82% selling for asking price or better. As in previous years, the strength over asking price didn’t extend as far above asking price as it did for single family homes. For 2022, as in the single family chart, I kept the more detailed info for prices over 105% over asking, but may pare that down in the future if we see less need for this data.

Here again is the plot of the above data. The blue spike in the 1^st week being less dominant and not extending as far to the right as we saw in the 2021 chart. Unlike the single family chart, we continued to see the highest number of sales every week at asking price and the peaks are all lower than the 2021 chart due to lower sales volume.

The slower start to 2023 has me interested to see what these charts and metrics will look like in 2024. Will our current weakness (with some surprising exceptions) extend throughout the year or will rates drop and we’ll be strengthening throughout the year. Only time will tell. Stay warm!

This is generally my happy time of the year with lots of numbers and data to look at. This will be the first of several articles talking about how the 2022 Boulder County real estate market played out. 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 still don’t feel comfortable including any REColorado data. I remain hopeful that someday we’ll have figured out a way to easily report all sales for our area.

The 2022 market changed so dramatically during the year it actually felt like two different years or markets. These numbers are for the entire year and may miss some of the nuance of the changed market after mortgage rates jumped in spring 2022. The highest-level observation I can make is the dramatic drop in total sales, down almost 27% from 2021.

               After coming out of the Great recession in 2012, we’ve bounced around 4,800 annual sales for 10 years (green line above). 2022 definitely broke that trend. The drop on the chart is impressive and interestingly, shows our 2022 sales levels were below the levels we saw during the Great Recession (orange line above). I have not seen a level of sales this low since I started in the business. What may be even more amazing with such low sales, the market feels generally slow but stable and maybe even has popped in activity for the first several weeks of January 2023.

This dichotomy, lowest sales in 25 years, but a slow but stable market can be attributed to the other side of the supply and demand equation. Our Available Inventory in Boulder County is off the historic lows, but just barely. As of Monday, January 23^rd, we only had 234 single family homes available for sale across the entire County. Compare that to the 1,653 we had for sale in the same week back in 2006. Our inventory is so low, it is masking the effects the low annual sales we saw above.

This is the battle I’ll be watching in 2023. Who returns to the market in force this year. Will it be buyers, sellers, both or neither? Our supply and demand remain relatively balanced, just at levels a fraction of past patterns. If more supply arrives in relation to demand, prices may drop. If more demand arrives in relation to supply, prices may strengthen. I think the most likely scenario will be a constantly shifting balance point between these two forces across different prices points and areas. Localized events like layoffs or new development may have an outsized effect this year in the areas those happen in. It will be interesting to watch, and I’ll remain vigilant. Be well all!

Well, we’ve almost made it through 2022. I’m writing this article the last week of the year and while we don’t have final numbers yet, I don’t foresee these numbers changing dramatically in the final 4 days of the year.

Our market made a dramatic shift late spring this year. Up until that time, multiple offers, bids well over asking and cash deals were the norm. Then mortgage rates rose more quickly than practically anyone can remember, 3.5% to over 7% during the course of the summer for a 30 year fixed loan. The market power quickly shifted from sellers to buyers, but buyers weren’t sure they were interested in transacting at these high rates. Thankfully, rates have come down a touch through the end of the year, but as you can see below, our Under Contract and Sales numbers are down about 28% compared to the same time in 2021. While Available homes are up 174%, that is off such a historic low point, that we still have generally constrained inventory

My forecast for next year isn’t clear yet. The dilemma, this strange market we’re in today has very low numbers of sellers and buyers. I don’t foresee a huge increase in the numbers of sellers due to their generally strong equity positions after years of high appreciation, locked in low mortgage rates and fear of the future locking them in place. Buyers have been chased off by high rates, but if rates continue to trickle down, we could see a relatively strong spring. Next year will likely be another year of low transaction numbers as we’ll mostly be helping people who have to transact due to combining households, death, divorce, job change, etc. I don’t foresee large numbers of people moving by choice, upsizing, downsizing, moving to better neighborhood, etc. Of course at the beginning of 2022, we weren’t expecting an almost 4% point jump in rates either, so always hard to forecast a market which can be as variable as ours!

Hope everyone has a happy, healthy and prosperous 2023!

FHFA released their numbers for their House Price Index for the Third Quarter of 2022 and there were many interesting nuggets.

U.S. house prices rose 12.4 percent from the third quarter of 2021 to the third quarter of 2022 according to the Federal Housing Finance Agency House Price Index (FHFA HPI®). House prices were up 0.1 percent compared to the second quarter of 2022. FHFA’s seasonally adjusted monthly index for September was up 0.1 percent from August.

“House prices were flat for the third quarter but continued to remain above levels from a year ago.” said William Doerner, Ph.D., Supervisory Economist in FHFA’s Division of Research and Statistics. “The rate of U.S. house price growth has substantially decelerated. This deceleration is widespread with about one-third of all states and metropolitan statistical areas registering annual growth below10 percent.”

Significant Findings

• Nationally, the U.S. housing market has experienced positive annual appreciation each quarter since the start of 2012.
• House prices rose in all 50 states and the District of Columbia between the third quarters of 2021 and 2022. The five areas with the highest annual appreciation were: 1) Florida 22.7 percent; 2) South Carolina 18.4 percent; 3) Tennessee 17.9 percent; 4) North Carolina 17.4 percent; and 5) Georgia 16.7 percent. The areas showing the lowest annual appreciation were: 1) District of Columbia 1.8 percent; 2) Oregon 7.6 percent; 3) California 7.6 percent; 4) Minnesota 7.7 percent and 5) Louisiana 8.3 percent.
• House prices rose in all but two of the top 100 largest metropolitan areas over the last four quarters. Annual price increase was greatest in North Port-SarasotaBradenton, FL, where price increased by 29.2 percent. Two metropolitan areas that experienced price declines are San Francisco-San Mateo-Redwood City, CA and Oakland-Berkeley-Livermore, CA, where prices decreased by 4.3 percent and 0.6 percent, respectively.
• Of the nine census divisions, the South Atlantic division recorded the strongest fourquarter appreciation, posting a 17.0 percent gain between the third quarters of 2021 and 2022. Annual house price appreciation was weakest in the Pacific division, where prices rose by 8.3 percent between the third quarters of 2021 and 2022.

Trends in the Top 100 Metropolitan Statistical Areas are available in our interactive dashboard: https://www.fhfa.gov/DataTools/Tools/Pages/FHFA-HPI-Top-100-Metro-Area-Rankings.aspx. The first tab displays rankings while the second tab offers charts.

Here’s a look at how these numbers played out for the MSA’s in Colorado compared to the 257 other MSA’s across the country and how Colorado compared to the other states plus the District of Columbia. Boulder County has lost its top dog spot for annual appreciation since 1991 a couple of reports ago and continues to fall, now 4^th in the nation behind Austin, TX, Missoula, MT and Salt Lake City, UT. Interesting University towns seem to rise consistently to the top for appreciation.

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. Q3 data finally showing the market change we’ve all felt.

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

Be healthy everyone and finish 2022 strong!

As we get closer to the one-year anniversary of the Marshall Fire, I wanted to give everyone a look at the progress of the sales of lots where homes were lost. These figures were pulled on Oct. 27^th.

Anecdotally, it seems like closed prices for lots are dropping. I don’t have hard numbers on that, but that could be a reflection of rising interest rates, lot quality (best lots sold first), fulfilled buyer demand, or other factors so far un-identified. I hope we may see better lot sales moving forward as the ash and debris fades in our memories and many of these areas start looking more like neighborhoods again as greater numbers of homes begin the process of rebuilding.

I’m also keeping a close eye on the countywide Percent Under Contract numbers. This metric has had a larger, faster change this year than at any time since I began tracking these numbers back in 2004. We hit the high mark for the year on March 28^th, when 66.15% of the homes in the County were under contract. Since that time, we’ve had an almost straight line drop to the 29.89% under contract number we had on Oct. 24^th. There was a 3-week sideways wiggle at the end of August, but then the drop re-asserted itself. This is the first time we’ve been under 30% under contract since 2012. For those that weren’t around or don’t remember, 2012 was our transition year where we came out of the effects of the Great Recession and entered the hot market we’ve enjoyed since. To me, the impact of my words isn’t as strong as the visual confirmation in the chart below where you see how violent and unprecedented a move this has been.

The big question this chart asks, “Have we hit the bottom yet?” The raw data behind the 6-week average in the chart above is showing some hopeful signs, but they are very similar to the signs we saw at the end of August which ended up not being the bottom we were hoping for.

A spooky look at the market, hope everyone has a good Halloween!

I’m seeing an interesting pattern develop in the Percent of Single Family Homes Under Contract across all of Boulder County. In a typical year, we hit the low point in the seasonal cycle sometime in late summer or early fall and then start moving upwards towards the high point of our seasonal cycle which usually occurs late spring or early summer. Also, in a typical year, we have a small dip in this number right at the first of the year when many listings expire or get re-listed.

This year has been different. We started with the typical rise from last year’s bottom and had our typical New Year’s dip. What’s been unusual is that now, since mid-March, we’ve been wobbling around 65% under contract at a time when we should be going straight up.

Couple of possible explanations for this atypical pattern. Since mid-March, mortgage rates have risen dramatically. Another possibility is that we’re at the very upper end of where this metric has ever been. When you’re flying in thin, rarefied air, stalls are more likely. This is one metric I’ll be keeping a sharp eye on. If it starts dropping instead of wobbling, that would be a signal of a change.

What makes this changing pattern harder to decipher, there are so very few homes for sale right now. As you can see in the chart below, we have never seen such low numbers of homes for sale in the last 17 years I’ve been tracking these numbers. In our most recent “new normal”, 2013-2020, we were seeing around 1,000 single family homes for sale at the end of April. During our last poorer market period, 2005-2011, we were seeing maybe 2,400 homes on the market towards the end of April.  At the end of this April, we had 402 homes for sale in Boulder County. Always disconcerting when you run a search and don’t receive any results. Do you have a criterion wrong or is there really nothing for sale?

Anecdotally, I’m hearing the market has decelerated since mid-April, but so far not seeing much confirmation of that in the stats. As always, I’ll keep watching the ebbs and flows in the numbers and the metrics.

Hoping for a wetter May!

This should be the last of my slightly delayed looks at the 2021 market numbers. Here I’ll be looking 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 there’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.

The Boulder County market apparently hasn’t noticed that we remain in the midst of a global pandemic and the strength of the 2021 rebound in this metric is stunning. Of course, any local buyers and their agents are all woefully familiar with this phenomenon. For an annual average of 67.8% of all Single Family properties to sell for over asking price is stunning and higher than we’ve seen since I began tracking this metric back in 1997. Also interesting, for the first time, more Single Family homes are selling for over asking price than Attached homes.

When I pull this over asking price 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 at or over the asking price. The 2021 Single Family numbers were substantially stronger than the 2020 numbers, with almost 62% of the homes going under contract in the 1^st week and more homes selling at greater premiums over asking price. Almost 87% of the Single Family homes that went under contract during their first week on the market ended up selling for over the asking price. The over asking price numbers were so strong that I needed to create a new table to show the strength for over 105% over asking price sales.

I also take this same data and plot it in separate colors denoting the week in which the property went under contract. This was another chart that had such strength that I had to change the scale on the horizontal axis. I used to end this chart at 120% or greater over asking price but I was getting a misleading spike there with my old axis. Now I go out to 135% or greater over asking. The blue spike has lost much of its height compared to 2021, but has made up for it with much more mass to the right with solid sales numbers, over 50 sales, all the way out to 113% over asking price. Also amazing, no matter what week the home went under contract, the most common outcome was an at asking price sale. In prior years, in weeks 2 and beyond we would see the largest number of sales in the below asking price range.

Now, let’s look at these same stats for Attached Homes. Just a touch softer than the Single Family home data, but a very strong year with almost half of the Attached Homes going under contract in the first week and of those homes, almost 84% selling for asking price or better. The strength over asking price didn’t extend as far above asking price as it did for Single Family homes though and I probably could have kept my original horizontal scale and ended the table and chart at 120% or greater over asking price.

Here again is the plot of the above data. The blue spike in the 1^st week being more dominant and extending further to the right than the 2020 chart. Same pattern as in the Single Family chart, the highest number of sales in every week was at asking price.

While the strength of the 2021 market was stunning, the strength we’ve been experiencing so far in 2022 is even more surprising with the locally impactful Marshall Fire, rising interest rates and a Russian war further disrupting international markets and supply chains. Someday, hopefully soon, I want to be writing about a boring market! Be well everyone.

Mike Malec – RE/MAX of Boulder, Inc. – 303-588-5716

Time to take a look back at the 2021 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 the MLS system such as some new home construction sales, for sale by owner, off market sales, etc. Due to the duplication problems between the MLS systems, I am not including any REColorado data and remain hopeful that someday we’ll be able to reliably include that data.
An interesting drop in sales in 2021. A year that saw an incredibly frenzied market, but a distinct lack of sellers. That lack of product to sell, did result in over 400 fewer single family home sales in Boulder County. Attached homes logged an extra 13 sales from the year before. Last year I was watching a tick up in years-end sales numbers during COVID and thought that may have been the start of a new upward trend and the drop in sales squashed that notion. We’re still wobbling around 4,600 total annual sales and have been since 2012. Sales so far in 2022 are below the 2021 numbers, so maybe this year is the confirmation of a downward trend in sales or maybe just more wobbling? We’ll keep watch on this as the year progresses.

Sales may be down as we start 2022 due to the fact there is very little to sell. As you can see in the chart below, we’ve hit new historic lows in the number of homes available for sale and not under contract. This remains the metric I watch most closely. If we see this number start to climb, that would mean we have worked through the buyer demand out in the marketplace. From what I have seen and heard so far in the first two months of 2022, that isn’t happening yet! With all of the cash buyers competing over properties, I’m not sure the increased mortgage rates are going to provide much drag. Hard to believe that in 2022, the ongoing COVID global pandemic is down the list of top worries for our market. Mortgage rates and Marshall Fire effects seem to be playing larger roles so far in 2022.

More 2021 stats review next month. The percent of homes that sold for over asking was staggering and yet that appears to being outdone by this year’s activity. Lately the local real estate market has seemed to say, “You thought that was crazy, here, hold my beer!” We’re all waiting and watching for the next development that we never thought we’d see. Be well everyone.