Real Estate Market Whiplash [Analyze This]

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by Osman Parvez
It's time to wake up and smell the coffee.

After several years where buyers had the leverage, almost overnight the Boulder real estate market picked up.   Starting early last spring, it's been a sellers' market.   As the summer selling season reached its peak, bidding wars became the routine - not the exception - especially for homes valued under $600,000.   It wasn't just the entry level, even luxury homes saw a large pick-up in sales volume (see High End Roars).

If you thought the market would cool off this Autumn and Winter, guess again.  Take a look at the following chart.


This chart needs a little explaining, so bear with me.  You're looking at the change in Months of Inventory (MOI) compared to a year ago.   MOI is a metric based on average sold volume over average inventory.  It's one of the best measures of market activity. The chart above covers all of our local market areas through the end of October.

What does the chart show?    It shows a massive decline in MOI across the region, ranging from  -24% in Erie to -57% in Superior.       For buyers, here's the bad news.    Rather than seeing a seasonal rise, MOI dropped further downward in October - in every single market.     Clients who are listing property or actively searching to buy, you always take priority but if there's a lull in my personal business, this data will be in the next Silver Fern Report.    

TIME TO ADJUST YOUR STRATEGY
Sellers
I typically advise my clients who are considering selling to time the market for peak absorption and counsel being very conservative on pricing.     In this hot market, I recommend you let me list the house as soon as we've gotten the home ready to sell.   You don't need to wait until the market picks up in the late spring.    Let's list it now, but only if it's ready and we've done our homework on pricing.    We can also price towards the upper end of my recommended range with confidence.   This is in contrast to the last few years where I recommended pricing towards the lower end of the recommended range.   The current market is far more forgiving.

Buyers
It's more important than ever for you to see inventory, track sales, and educate yourself so you are ready to pull the trigger.   In addition to seeing lots of houses with me, we should also spend time reviewing market conditions on my laptop.  Let me walk you through a snapshot of market activity in your price range and location.

Doing our homework means knowing the difference between a great deal and a so-so one.    In some cases, it means having initial conversations with architects or builders as some of the houses we see might need updating.  It also means getting pre-qualified by a local lender.

---Note: Our goal is to provide exceptional service to our clients. The ideas and strategies in this blog post are the opinion of the writer at the time of publication. Silver Fern Homes recommends careful and complete due diligence before buying or selling real estate or other investments. Consult with your professional advisers before making financial decisions. This article is not intended as legal, tax, or investment advice. Silver Fern Homes will not be held liable for investment choices derived from this article.