The Summer Slowdown Continues
July real estate in the city of Boulder reflected what's typically a slower season for buying and selling. Fewer new listings came on the market and the month ended with inventory remaining relatively flat month-over-month. However, the number of home sales increased while prices decreased, possibly indicating that sellers were motivated to sell.
Let's dig in. The number of new single-family homes for sale decreased from 153 in June to 124 in July. Meanwhile, sales increased from 89 in June to 97 in July. The median sales price was $1,275,000 last month, down compared to the month prior and 6.6% below July of 2022. Sellers are now receiving 97.5% of their asking price whereas they averaged 98.1% in June.
Another interesting statistic is that days on the market until sale decreased significantly month-over-month, from 58 in June to 46 in July. So, the market picked up its pace, there was less inventory and more sales, yet prices dipped. This is likely the continued effect of higher interest rates creating room for negotiations.
By the close of the month, there was a 3.7-month supply of homes for sale in the city of Boulder. That number has been creeping up but seems to be holding for now. Again, 6 months of inventory typically signifies a balanced market and Boulder is over halfway there.
As for townhomes and condos, new inventory dropped as well but median prices actually increased from $492,500 in June to $504,750 in July. Sellers there are receiving 99.5% of their asking price and inventory actually decreased ever so slightly from 2.6 to 2.5 month's supply.
Looking at Boulder County as a whole, the median single-family home price inched up from $839,000 in June to $840,000 in July. That's even 1.7% higher than 2022 prices of $826,000. So, sellers did pretty well last month.
Also across the county, the number of sold listings decreased month-over-month while inventory increased slightly. Still, the final count at the end of July kept the supply of inventory flat month-over-month at 2.8 months supply. That's 21.7% higher than in 2022, so buyers are likely enjoying some leverage when it comes to negotiations and requesting seller concessions.
The standout in Boulder County was Louisville where the median single-family home price jumped from $816,500 in June to $1,075,000 in July. This is where just 10 new listings went on market and 23 sold—though such a big jump is likely an anomaly with a luxury sale skewing the data.
Meanwhile, in neighboring Lafayette, there were more new listings and fewer sales. The median single-family home price there decreased from $890,000 in June to $725,000 in July. Sales also slowed in Longmont where prices dipped from $629,500 in June to $608,500 in July. Meanwhile, prices in Erie increased month-over-month but remain 1.9% below 2022 figures.
And finally, in Broomfield County, prices came back down after surging in June. Single-family homes there were going for $665,000 yet selling 10 days faster than the prior month. The month closed with just 1.3 months of inventory which is actually 38.1% below 2022 inventory. So, if things pick up come fall, there could potentially be another jump in home prices.
As the data showed last month, the Boulder County market is becoming more balanced while buyer demand continues to drive prices up in prime areas. Whether you're buying or selling a home, the nuances of today's market make it incredibly important to work with an experienced real estate agent who understands micro-markets and has the experience to help you achieve your real estate goals.
Understanding the Mortgage Rate Buydown
As a buyer, you’re likely worried about affording to buy right now. If you’re a seller, you may wonder how rates will impact your ability to sell quickly and without having to drop your asking price. While rates will come down eventually, there are financial tools available to help you now.
One option is a mortgage rate buydown where a lump sum is paid upfront to temporarily (or even permanently) lower the interest rate, and thus reduce monthly payments, during the early years of a loan.
A popular option is a 2-1 Buydown that lowers interest during the first two years of the loan term. The rate increases from one year to the next until it reaches its permanent rate in year three.
Based on a 30-year loan for $400,000 with a fixed interest rate of 5%, the buyer would pay an interest rate of 3% the first year, 4% the second year, and 5% from years 3-30. At the original 5%, the buyer would have a payment of $2,147.29. Here are the savings from a 2-1 Buydown.
*Principle and interest only.
Pros and Cons to Consider If You're a Buyer
- May qualify for a higher loan amount
- More affordable payments at the start
- Seller can pay the buydown for you
- Offsets new home ownership costs
- Allows time for income increases
- Can possibly refinance without penalty
- More predictable than an ARM
- Out-of-pocket cost if the seller won't pay
- Income doesn’t keep pace with increases
If you're selling your home, offering a buydown can help you incentivize and attract more buyers as soon as you go on the market. That can even lead to selling your home faster. It can also net you a larger profit versus a dropping your selling price. On the flipside, the buydown fee must be paid at closing, so you'll see that money come out of your profit.
Other options include a 3-2-1 Buydown and a permanent buydown. You can read more about them here, or get in touch with your PorchLight real estate agent to discuss further. They can also connect you with trusted financial professionals who can bring even more financial tools to the table!