My New Blog

Homes for a million or more are common in our corner of Colorado.  While the most expensive properties in Boulder County tend to be located in the City of Boulder, there are a substantial number of them throughout the rural areas of the county including Niwot.  I thought it might be interesting to see what this real estate and financial mess is doing to the high end market and here is what I found.

Since the beginning of the year 103 homes have sold throughout Boulder County for more than $1 million.  This means about 10 homes per month are selling.  The median price of these sales is $1,450,000. 

To put this in context I looked at previous year sales to compare.  In 2005 160 homes sold or about 13 homes per month with a median price of $1,250,000.  In 2006 185 homes sold at a median price of $1,340,000.  In 2007 204 homes sold or about 17 homes per month at a median price of $1,360,000. 

You might say, "Wow, 10 homes, 17 homes for more than $1,000,000 selling per month.  That is a lot".  I don't disagree but lets look closer at what the trend is in 2008. 

Compared with 2007 the median price is up by 6.6% but adjusted sales will likely be down by 40%. 

A more concerning number may be the current demand curve for homes over one million dollars.  As of today there are 297 homes available on the market.  However, only 11 are under contract.  That means only 3% of the market is under contract.  A healthy market for sellers would see about 25% under contract. 

The rate of absorption for the million dollar plus market for the year is 10 homes per month meaning that there are 2.5 years of inventory!  I expect this to increase to 3 years by years end. 

What is effecting this?  There are many factors but the big two are huge losses in wealth in the stock market and a general fear of making large ticket purchases until the economy settles down.  Another factor is the expense and difficulty of borrowing "Jumbo" amounts of money. 

So what does this mean for you? For sellers it really depends upon what micro market your home is in.  Are you on Uni Hill, Newlands, Mapleton?  How about Somerset, Legend Ridge?  Each of these markets has its own dynamics which effect home values and sale-ability. 

In general the numbers suggest a slowing market that is heavily favoring the buyer.  You will probably see median and average prices decline over the next twelve months.  I expect inventory to decline as well as homeowner's "give up" and remove their homes from the market. 

If you are a buyer and you have the means and need to move, this is your chance to buy it right.  Don't forget you have been waiting for this moment.  It is your turn to take advantage of the market.