Single family home prices fell throughout Boulder County compared to last month except in Erie. With the dramatic increase in interest rates and the accompanying lowered buying power, I foresee a continued decrease in sold prices.
Even with more homes for sale, days on market (DOM) averaged 30 or fewer across the county. This indicates cash buyers are still the norm or else lenders are processing loans extremely quickly.
Boulder home prices led the way, as usual. They became slightly more affordable this past month and were up an average of almost 14 percent YTY. The number of homes for sale were also up considerably compared to April and YTY.
Erie led the way being the only town surveyed that had an increase in price compared to April. Erie almost caught up with Longmont with its large number of homes on the market.
The average sold price in Lafayette decreased approximately $300,000 between April and May. And, prices were down almost 2 percent YTY.
Prices in Longmont decreased 6 percent this past month, but were up 4 percent YTY. Longmont continues to have one of the largest inventories of homes for sale in Boulder County.
Once again Longmont led the way in the number of homes sold in Boulder County in April 2022.
Niwot saw a wild fluxuation in price with its handful of sold homes. Get out your checkbook if you want to live there, as the average sold price was $2,000,000.
Buying power for people who get a loan to purchase their home has significantly decreased with the increase in interest rates. Assuming a down payment of 20 percent and comparing interest rates of 4.5 versus 6.0 percent buyers have lost significant purchasing power.
A buyer who qualified for a $700,000 home with 20 percent down at 4.5 percent interest now qualifies for a home worth $613,180 with an interest rate of 6.0 percent.
A buyer planning to spend $900,000 on a house can now only spend $788,000 on their next home.
Similarly, a buyer who found a $1,750,000 home can now only afford a $1.500,000 home if they want to keep their payment the same as it would have been with an interest rate of 4.5 percent.
This decrease in buying power for people who need a loan to purchase a home will cause home prices to fall significantly. The caveat is the change in interest rates dosen’t adversely affect cash buyers.