Market review + a few predictions

The big story of 2013 was that the real estate market in Boulder County was hot. After a huge recovery in 2012, the market continued to gain steam. The number of single family home sales in Boulder County was up 10% from 2012 even though inventory was down 20%. Likewise, attached dwelling sales increased 20% over 2012, with inventory in this category down 34%  -- a recipe for appreciation. With demand outpacing supply, the median price went up:  9.3% for single family homes and 4.1% for attached dwellings. The 30-year fixed interest rate increased from 3.375% a year ago to 4.5% today, but this did not slow the market since rates are still near historic lows. 

I think 2014 may look a lot like 2013 - low inventory coupled with low interest rates resulting in a competitive buying environment and more appreciation. I'm predicting a very active first quarter, based on pent-up demand and low inventory. The first quarter is traditionally the best time for sellers to be on the market and 2014 should be no exception. If you know anyone who is considering selling or buying, I'm happy to help. 

I hope you had a great 2013 and I wish you and your family a happy holiday season as well as a healthy and prosperous New Year! As always, thank you for your business and friendship.

• Housing starts are less than needed based on population growth. The last down economy made builders extra cautious.

• The population is increasing because of immigration and births plus echo boomers (kids of baby boomers) are beginning to buy.

• Boomerang Buyers -- people who lost their homes in foreclosure are becoming buyers again.

• Dormant Sellers -- sellers who don't know that the market has improved are staying put for now.  In fact, the last down economy increased the length of time people are staying in their homes from 6 years to 9 years on average.

• Homeowners who bought at the top of the market have been hesitant to sell because their home is not worth enough to pay off their loan and cover transaction fees.   

• Renters are becoming buyers due to the improved economy and low interest rates.

• People are living longer.