If ever there was a year tailor-made for Boulder County home builders, 2014 may be (probably will be) it.
The reasons are simple. Inventory of existing houses and "attached dwellings" has tumbled well below historic levels. Meanwhile, buyers have returned to the market in numbers larger than we have seen since before the 2008-2009 recession.
As a result, bidding wars are common. Existing home prices are rising. Buyers are settling for less. Sometimes potential buyers are deciding to stay where they currently live.
And new home construction is starting to boom.According to the Boulder Area Realtors® Association
, house sales in Boulder and Broomfield Counties rose 8.6 percent during 2013 on a year over year basis, while the sales of attached dwellings rose 16.9 percent.
The increases occurred despite strong headwinds. According the the Colorado Association of Realtors®, 2013 Inventory of available Boulder County houses hit its yearly peak of just 1,390 units in June. There were just 411 attached units available at the yearly peak in May.
In recent Boulder County history, house inventory regularly rose above 2,000 dwellings during the summer while attached dwelling inventory usually topped out at more than 800 units.
Unfortunately, nothing suggests inventory of existing dwellings will improve this year. In fact we've heard a number of potential sellers say they are staying put because finding a new home will be too hard after they sell or end a lease.Which brings us back to new construction
It is booming throughout Boulder County. And it offers buyers an important escape from the uncertainties of searching in the existing residential market.
Construction at recently initiated projects, like Steel Ranch in Lafayette, moves along briskly these days.
Recently we've seen regular reports of new projects in local media. It was announced this week that Markel will build 53 homes at W. South Boulder Road and Cimarron Dr. in Lafayette
. A 31-home project
in North Boulder was unveiled in December.
Additionally, we noticed on the IRES MLS that McStain has started building new homes at the Triple Crown Meadows subdivision in Niwot. Triple Crown builders fell on hard times during the recession, but the situation clearly has improved recently.Of course, new construction is not for everybody.
New home buyers often must sign a purchase contract before construction starts, making the move-in date feel like a distant dream. It can be hard to predict what the homes will sell for once the builder (or builders) leave the subdivision. Even with model homes to walk through, visualizing a new home with different finishes can be challenging. And some builders simply do better work than others.
For these and other reasons, hiring a knowledgeable real estate agent is good advice for buyers of new homes.But buying a new home can be the right answer for many.
Today's new homes generally are among the most energy-efficient ever built. They come with a builders' warranties. Buyers often can pick their own finishes. Builders sometimes offer reduced-interest mortgages and other incentives. Construction periods give new home buyers time to prepare current homes for sale.
So there are good reasons to consider new homes. And we expect more buyers to explore new construction this year because the market has made "new" more appealing.Ron Rovtar, dba Front Range Real Estate, Ltd., is a broker associate at Berkshire Hathaway HomeServices/Real Estate of the
Rockies in Boulder, CO. Please call Ron with all your questions. He can be reached at 303.981.1617. To learn more about Ron, please visit his website.
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