Boulder

Market Update Boulder CO Real Estate
By Bruce Royer

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March 2010 MARKET UPDATE

BOULDER CO REAL ESTATE

Is there light at the proverbial end-of-the-tunnel for the local real estate market or are home sellers being lulled into a false sense of hope? As we enter the Spring and Summer of 2010, there appears to be somewhat of a renewed interest on the part of home buyers in the Boulder Valley. Is that interest spawned by the pending demise of the government’s Home Buyer Tax Credit Program, which is scheduled to end in late April? Is the prospect of rising mortgage interest rates a motivating factor? Or have home buyers simply seen opportunity in the marketplace and view now as the time to get serious about buying?

Despite the fact the first quarter sales activity for the Boulder Valley is up about eleven percent over last year (see below), listing activity is also up, about thirteen percent, which means homes are selling at about the same rate thus far in 2010 as they were in 2009. The Absorption Rate, the time it takes the market to fully turn over its inventory, assuming the same level of sales activity and no new listings becoming available, is approximately twelve months across the Northern Colorado market. That compares to thirteen months at this time last year. So, things are improving, although slowly.

There continue to be certain elements within the housing market that impact a natural flow of movement from sales of entry level properties to more expensive homes and attached units. This domino effect of buyer’s buying-up continues to struggle for several reasons. The three most prevalent are: (1) Having to sell a current property in order to buy-up. (2) Lack of available financing for upper end properties. (3) Limited number of relocation buyers to buy your home. Many of those potential buyers, who are relocating to our area, still need to sell the home they are leaving behind. Thus, the domino effect has a more widespread effect than just the Boulder Valley, it’s national.

Historically, Spring and Summer are the most active times of the year for our market area. More properties come on the market for sale and more properties are sold. We should continue to see sales activity increase over the course of the next few months, with sold properties for this year continuing to outpace 2009 figures. But, please be reminded, the Boulder Valley real estate market continues to be a “buyer’s market”. In a buyer’s mind, price will be a primary consideration. As such, property values change very quickly these days as appraisers must place more emphasis on short sale and foreclosed properties in determining market values. As a home seller, it is important to keep abreast of sales activity in your area that may impact the value of your property.

Below is a breakdown of sales activity from IRES (the Northern Colorado MLS) for the first quarter of each of the past two years for single family homes.

2009 Sales 2010 Sales

1^st Quarter 1^st Quarter

Area Single Family Single Family % Change

Boulder 76 121 +59%

Superior 17 20 +17%

Louisville 30 31 +3%

Lafayette 36 43 +19%

Longmont 157 153 -3%

Suburban Plains 57 72 +26%

Suburban Mountains 34 37 +9%

Broomfield 77 59 -23%

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Total 484 536 +11%

February 2010 MARKET UPDATE

BOULDER CO REAL ESTATE

Real estate terminology has a tendency to change over time. In the old days, title to property was transferred by a handshake and displayed in written form in an abstract. An abstract was a historical record of a property passed from owner to owner. Then came along legal contracts and title insurance… and the abstract like the handshake, became a thing of the past.

Today, more than ever before, terms like short sales and bank foreclosures dominate the real estate landscape. They are not kind terms. They are terms that have surfaced as the result of a global economy that has created havoc with many people’s lives. Terms that have dominated the business media for the past two plus years. And terms that have become part of the educational process of the real estate industry. But, like the handshake and the abstract, these terms will eventually work their way out of the mindset of the public and become something to look back on with regret for some and with delight for others. For even in the most difficult times, there are opportunities to be had… especially now!

Slowly, we are meandering our way through the first part of a new decade… one comprised of change, but also one riddled with hope. There appears to be, on the surface, a renewed sense of optimism about the future; a feeling of calm; a time of settling; and a time of reflection. People, by their innate nature, are resilient. They have the ability to reconfigure their lives, make positive changes, and once again begin the process of moving forward. That’s where we are now as a nation, a state, a community, and a family.

In that regard, the Boulder County real estate market has begun the process of moving forward on a positive path. For the first two months of 2010, there were 246 single family homes sold and 108 attached units sold in Boulder County. That compares to 2009 figures of 247 single family homes sold and 83 attached units sold; slightly over a seven percent increase (mostly because of attached units sold). Although sales are still significantly below the high water mark of 2005 for the first two months (516 single family homes sold; 163 attached units sold), this is the first time since 2005 that sales have gone up. (All figures noted above are from IRES, the Northern Colorado MLS.)

As we enter the Spring of 2010, when people and things have a tendency to perk-up, what are the prospects for the Boulder Valley real estate market? Where do we start? How about financing?

· Mortgages: There shouldn’t be any significant changes here. Mortgage interest rates should continue to be in the five percent plus or minus range for the traditional thirty-year fixed rate mortgage. Adjustable Rate Mortgages are available today below five percent per annum. Lenders will continue to require more detailed information from borrowers. Appraisers will continue to be extremely conservative in their appraisals, much to the chagrin of the sellers.

· Inventory Levels: As always, the number of homes for sale will trend-up in the Spring and peak by mid-Summer. Look for inventory levels to top 2009 figures as some degree of pent-up-demand on the part of prospective buyers will bring more seller’s into the marketplace. But, don’t look for hordes of new inventory on the market, especially in the upper price ranges where buyers are few and far between.

· New Construction: In certain geographic areas, production builders have already begun the process of building an inventory of more new homes; expect that to continue for entry level homes. Custom homes will be mainly on a pre-sale basis only. Custom spec home construction will be limited due to the lack of bank financing and most builders’ unwillingness to take a risk. But, if you are a buyer, it is a great time to look at not just building a custom home, but buying almost any home now at a reasonable price.

January 2010 MARKET UPDATE

BOULDER CO REAL ESTATE

Today we live in a world focused on the concept of time… time as it relates to the speed with which things can be accomplished. How quickly Domino’s can deliver a pizza. How rapidly a personal computer can process and display information. How quickly we return a person’s phone call, e-mail or text message. Often, though, if things don’t occur quite fast enough for us, we have a tendency to grow impatient.

The reality is that not everything has the ability or opportunity to happen swiftly. Real estate is one of those elements that takes time to right itself and to gain momentum. Home buyer’s attitudes need to become more positive; seller’s need to continue to be motivated; and mortgage lenders need to become more willing to provide financing to qualified buyers.

We are at that point where the pendulum is very slowly beginning to creep in an upward direction. It’s not a balanced market where buyers and sellers participate on an equal playing field. It’s as if sellers have glimpsed just the slightest sliver of light at the end of the tunnel, and, hopefully, it’s not a train speeding in their direction.

Here are some thoughts about the Boulder County real estate market as it relates to sales activity over the course of the past few years. Information is from IRES, the Northern Colorado MLS.

· In 2005, there were 4,728 single family homes sold and 1,662 attached units sold. In 2009, there were 2,536 single family homes sold and 1,100 attached units sold. Overall, that’s a reduction of about 43% in the total number of sales… high point of the market to low point of the market since 2005.

· From September/2008 to January/2009 (five months), there were 1,246 single family and attached units sold. From September/2009 to January/2010 (five months), there were 1,365 single family and attached units sold. That’s about a 9.5% increase in the number of sales. Not dramatic, but a sign the Boulder County real estate market may be shaking itself loose from four years of a downward spiral.

· The median price of home sales has not gone up noticeably since 2005. In fact, certain market areas have gone down. The “median price” is the point where half the sales in a geographic area are below that value and half are above. Here are some numbers for the Boulder Valley communities in comparing the 2005 median price to the 2009 median price for single family homes: Boulder ($520,000 vs. $525,000); Louisville ($310,000 vs. $355,000); Lafayette ($331,179 vs. $314,000); Longmont ($239,000 vs. $220,000); Suburban Plains ($392,000 vs. $380,000); Suburban Mountains ($341,000 vs. $360,000); Superior ($389,900 vs. $396,500); and Broomfield ($274,000 vs. $321,000). Using “simple math”, the 2005 median price of a home that sold was $349,634; the 2009 median price of a home that sold was $358,937… a 2.7% increase.

Pundits refer to the past ten years as the lost decade as it relates to personal wealth. They say we are no better off today financially than we were ten years ago. The past four years have not been generous to the Boulder County real estate market. Today, we are about where we were in 2005 in terms of median price home values. Sales? That’s a completely different subject.

December 2009 MARKET UPDATE

BOULDER CO REAL ESTATE

In a rising or declining real estate market there is always a point where the market plateaus and then begins to move in the opposite direction. The Boulder County real estate market has been on a downward path since 2005 when there were 6,390 single family and attached units sold. That was the downward peak. Over the course of the past four years the local real estate market has experienced a noticeable reduction in sales. The last few months of 2009 saw a slight upward tick in sales activity as compared to a similar time frame for 2008, which is a good indication the market has bottomed out.

2010 may be the “Perfect Storm” as it relates to the Boulder County real estate market. There are several elements in play that create an excellent opportunity for home buyers to purchase and home owners to sell.

· First, is the expanded Home Buyer Tax Credit Program which covers all potential home buyers… $8,000 for anyone who hasn’t owned a home during the three years prior to the purchase… $6,500 or 10% of the sale price, whichever is less, for current home owners. The property has to be under contract by April 30, 2010 and must close by July 1, 2010. There is an $800,000 limitation on the cost of the home.

· Second, home mortgage interest rates continue to be attractive with the traditional thirty-year fixed rate mortgage in the five (5) percent range. There is speculation that mortgage rates will trend upward as the economy begins to stabilize and the return of consumer confidence.

· Third, is the downward pressure the market has experienced in home values over the past few years. We are already seeing the lower end of the market beginning to show signs of appreciation as more first-time homebuyers and investors enter this market. Hopefully, this increase in home values will begin to work its way up into the higher priced properties.

Below is an overview of sales activity for the past two years for single family homes in the various Boulder Valley areas, courtesy of IRES – the Northern Colorado MLS.

2008 2009 % 2008 2009 %

Area Solds Solds Change Average Price Average Price Change

Boulder 747 563 -24.64% $655,378 $647,584 -1.19%

Louisville 203 202 N/C $391,306 $394,214 +0.74%

Lafayette 252 219 -13.10% $355,934 $352,667 -0.92%

Superior 120 127 +5.83% $437,818 $413,935 -5.46%

Longmont 1018 891 -12.48% $252,400 $240,902 -4.56%

Sub. Plains 443 373 -15.80% $526,399 $510,351 -3.05%

Sub. Mtns. 262 203 -22.52% $435,110 $415,567 -4.50%

Broomfield 348 353 +1.44% $396,371 $353,343 -10.86%

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Totals … 3393 2931 -13.62% $431,339 $416,070 -3.54%

November 2009 MARKET UPDATE

BOULDER CO REAL ESTATE

As we approach the first double digit year of this new century, the Boulder Valley real estate market appears to be awakening from the past few years of a gradual decline in sales activity. Figures for the past two months show an “increase” in the number of sales of single family homes and attached units as compared to 2008. Below are some sales numbers for Boulder County from IRES, the Northern Colorado MLS.

In October/2009 there were 232 single family homes sold and 91 attached units sold. This compares to October/2008 where 228 single family homes sold and 75 attached units sold. Not a significant increase, but a start. For November/2009 there were 226 single family homes sold and 78 attached units sold; in November/2008 there were 133 single family homes sold and 50 attached units sold… a noticeable increase in sales activity.

What might be some of the reasons for this potential rebirth of the Boulder Valley real estate market? Here are some thoughts.

· Affordability: It’s no secret that home values have been negatively impacted over the course of the past few years. In a declining real estate market there are fewer buyers and more sellers. When home values stabilize, the motivation of buyers begins to escalate. There’s always that fear (real or imagined) that they will “miss” the bottom of the market. Across most aspects of the local real estate market, homes are more affordable today than they were two or three years ago.

· Mortgage Interest Rates: Home mortgage interest rates have remained relatively stable for the past couple of years vacillating between 4.875% and 5.875% for the traditional thirty-year fixed rate conventional or government loan. Again, the fear that interest rates will begin to rise becomes a motivating factor in buyer’s minds.

· Government Assistance: How successful the government’s first-time home buyer assistance program has been is somewhat debatable, but it has resulted in providing a positive twist to a stagnant real estate industry. The extension of the program to include present homeowners should increase that awareness and interest.

· Investors: These are opportunity seekers. Their objective is to look for diamonds in the rough; properties that have upside potential and provide a worthwhile return on their investment. They could be a young couple buying a condo as a rental property or someone purchasing a property that requires some sweat equity and wanting to either “fix and flip” or hold long term to build equity. Then, there are the investors who purchase in partnerships, looking to hold property, and trading up and down over time. Investors are an active part of the present real estate market.

· Sales Values: Real estate is a bottom up business. When real estate markets decline, it takes time for these markets to become reenergized. They are like running in water, it takes effort to get them going and keep them going. When they do restart, as we are possibly experiencing now, the lower valued portion of the market is always the beginning point. It’s the entry level homes and attached units that need to sell in order to foster an upward shift in buyer activity. Once that portion of the market gains momentum, then, hopefully, it will create a wave of activity that flows into the selling of more expensive homes. That’s where the Boulder Valley real estate market is now, beginning to generate some positive energy.

Area Active Listings Solds Y.T.D. Absorption Rate

Boulder County 1957 1943 9.0 Months

Broomfield County 163 275 5.4 Months

Larimer County 2827 2943 8.6 Months

Weld County 1827 2441 6.7 Months

Boulder 730 536 12.2 Months

Broomfield 172 286 5.4 Months

Lafayette 142 178 7.2 Months

Longmont 632 736 7.7 Months

Louisville 79 167 4.3 Months

Suburban Mountains 380 154 22.0 Months

Suburban Plains 425 282 13.5 Months

Superior 47 108 4.0 Months

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Community Totals … 2607 2447 9.5 Months

October 2009 MARKET UPDATE

BOULDER CO REAL ESTATE

To say that 2009 has been an interesting year thus far would be a huge understatement. The true impact of a global economy has become part of the world’s consciousness. Billions upon billions of tax payer dollars have been poured into various state and government programs to hopefully stem the tide of growing unemployment. The stock market has wreaked havoc with individual’s retirement funds and future plans. Real estate values have tumbled across nearly all sectors of the American landscape. A pessimist would say the sky is falling. An optimist would say there is opportunity to be had.

A brief article in the Denver Post newspaper (11/8/2009) had the following headline: Homebuilders on the hunt for land as prices stabilize. The article talks about large production builders; i.e., Ryland Group Inc. and Meritage Homes Corp. purchasing land for new home development in areas like Southern California, Las Vegas and Orlando. These have been some of the hardest hit housing markets in the nation.

Real estate markets fall quickly and recover slowly. Two things normally signal an upbeat in real estate activity: (1) Sales trends having stabilized and beginning to move upward, and (2) New home construction increasing. For the past two months, Boulder County SOLD listings have mirrored 2008: 471 single family home sales in 2009 vs. 483 in 2008; 197 attached unit sales in 2009 vs. 186 in 2008.

During the last two years there has been minimal new home construction across the Boulder Valley. In a balanced real estate market, where there are a reasonable number of home buyers and an acceptable number of properties for sale, new home construction becomes part of the housing landscape. Homebuyers contract to have new homes built and builders are willing to take the risk of building “spec homes”, anticipating they will attract a buyer during the construction phase.

Risk versus reward is the key element in most real estate transactions and it doesn’t apply solely to the buyer and seller. Standing in the wings is a third entity and, in most cases, they are the determining factor in how this all plays out. They are the purveyor of the golden rule: He who has the gold makes the rules! Ah, yes, they are the lender.

New home construction is dependent upon financing… financing of initial construction loans and financing of permanent loans when the home is completed. Builders are at the mercy of the lenders. Most lenders today shy away from new home construction unless it is a “presale” and the lender’s risk is minimal. Want to build a spec home and get lender financing? Good luck finding a bank that will work with you without 30% to 40% down, two to three points over prime, etc. The good old days of 20% down construction loans at prime or prime plus one are history.

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Below is a brief overview of single family home values within certain geographic areas of the Boulder Valley comparing the past two years through October of each year. Information is provided by IRES, the Northern Colorado Multiple Listing Service.

2008 2009 % 2008 2009 %

Area Solds Solds Change Average Price Average Price Change

Boulder 684 466 -31.87% $653,314 $638,975 -2.19%

Broomfield 316 306 -3.16% $401,412 $355,610 -11.41%

Superior 111 121 +9.01% $441,192 $416,028 -5.71%

Louisville 191 190 -0.52% $393,709 $369,103 -6.25%

Lafayette 232 192 -17.24% $354,349 $348,488 -1.65%

Longmont 926 767 -17.17% $256,706 $241,215 -6.03%

Sub. Plains 402 308 -23.38% $524,203 $519,379 -0.92%

Sub. Mtns. 233 167 -28.32% $435,036 $404,542 -7.01%

September 2009 MARKET UPDATE

BOULDER CO REAL ESTATE

Real estate markets are always bottom-up markets. Which means? For a real estate market to sustain itself and flourish, the bottom of the market, that being the less expensive properties, must sell in a timely manner. When the bottom of the real estate market suffers, the entire market is negatively impacted.

The government’s $8,000 tax credit was designed to serve two purposes: (1) provide first-time home buyers with an incentive to buy now, and (2) stimulate the housing market by getting entry level homes sold so those present homeowners could “move-up” to more expensive properties. The result would be that life would be “breathed back” into the overall housing market.

There were some hurdles to overcome to this seemingly perfect plan. First, with the economy limping along, home values had been driven down, resulting in a loss of homeowner equity. A home seller considering buying-up at that time had less cash in their present home with which to buy-up. Second, almost overnight the home mortgage industry went from loaning money to anyone with a pulse to being much more selective as to whom they would now bless with their sacred funds. Finally, the uncertainty of the job market and the high unemployment rate has led to many potential move-up buyers deciding to rent rather than buy. This has resulted in the more expensive homes being forced under the boot of foreclosure or short sale, or they have become rental havens for those individuals choosing not to buy now or not having the ability to buy now.

Due to the government assistance program and reasonable mortgage interest rates being available, homes priced under $400,000 in Boulder County have sold reasonably well this year.

Below is a brief overview of the absorption rates for single family homes for the area counties and local communities through September/2009. The Absorption Rate is the length of time it would take for all existing inventory to sell assuming two things were to happen: (1) the rate of sales activity remains the same, and (2) no new listings come into the marketplace during that period of time (obviously, this is not going to happen).

Area Active Listings Solds Y.T.D. Absorption Rate

Boulder County 1957 43 9.0 Months

Broomfield County 163 275 5.4 Months

Larimer County 2827 2943 8.0 Months

Weld County 1827 2441 6.7 Months

Boulder 730 536 12.2 Months

Broomfield 172 286 5.4 Months

Lafayette 142 178 7.2 Months

Longmont 632 736 7.7 Months

Louisville 79 167 4.3 Months

Suburban Mountains 380 154 22.0 Months

Suburban Plains 425 282 13.5 Months

Superior 47 108 4.0 Months

Community Totals 2607 2447 9.5 Months

August 2009 MARKET UPDATE

BOULDER CO REAL ESTATE

In any type of real estate market, one thing holds true – price overcomes all objections. Price a property where it is perceived to be a great value in the marketplace and it will attract the buyers. It’s the nature of the beast; we humans being the beast; that a deal is a deal is a deal; and a deal creates interest, motivation, and ultimately, action.

An excellent example of this are properties in foreclosure; i.e., they are already bank owned or on there way to being bank owned and short sales; i.e., the bank has indicated they’ll take less for the property than the present owner owes because they don’t want to own the property. Both of these categories normally consist of properties priced well below what they originally sold for and what they would typically sell for in a balanced real estate market. Buyers of these types of homes usually fit into two categories: (1) Buyers looking for a good value in today’s market for a home in which they can live. (2) Buyers speculating on the future of the local real estate market; i.e., looking for potential appreciation. These can be either homeowners or investors.

This “new” economic age we are currently experiencing will create dynamic change for the future in the behavioral patterns of how we make decisions. Whether it’s in the purchase of a new car, a home, investing for retirement, etc., the “good old days” of unbridled economic growth and expanding net worth have been replaced by a more conservative approach to life. It will take us longer to make decisions and our decisions will be more economically based.

If this is true, what does the future of real estate hold for the Boulder Valley?

In a somewhat positive way, although it could be perceived by some as being negative, home values in the Boulder Valley did not appreciate at double digit rates from 2003 to 2007 like other areas of the country. Do I dare mention Florida, California, Nevada, and Arizona? The Boulder Valley had moderate appreciation in the 3% to 5% range during each of those years. As such, when the sky fell across the country, the Boulder Valley skies turned slightly gray.

There is light at the end of the tunnel for our market area, but it will take time for that light to be seen. We will need to weed our way through two things: (1) Reducing the number of foreclosure and short sale properties available. (2) Creating in the mind of the prospective buyer that real estate is still a good long-term investment.

July 2009 MARKET UPDATE

BOULDER CO REAL ESTATE

Life is a composite of highs and lows. There are the good times and there are the not so good times. Real estate markets possess a similar personality. When they are good, they have a tendency to flow naturally. Homes sell in a reasonable amount of time and buyers are happy to be paying fair market value, with the hope (promise) of long term appreciation. When real estate markets aren’t quite as good, they struggle. Sellers need to deal with declining home values and reduced buyer interest and activity. This second scenario characterizes the Boulder Valley real estate market for the past few years.

As an example, in 2006 there were 4,327 single family home sales in the Boulder Valley; in 2007 there were 3,790; in 2008 there were 3,168; thus far in 2009, through July, there have been 1,405. Based on the current sales rate, that extrapolates to approximately 2,177 single family home sales in the Boulder Valley for 2009. That’s almost half the number of home sales in 2006.

Between the good times and the not so good times is a period of regeneration. It’s a settling out; a regrouping. That’s where the Boulder Valley real estate market is right now. The inventory of available properties is down approximately 17% for this time of year versus the summer peak of 2006. Bank foreclosures and short sales, still an integral element in the marketplace, are slowly being sold from inventory. In this arena, first came the low end of the market (up to $400,000) for distressed properties, then the middle price range ($400,000 to $1,000,000) surfaced and now the upper end of the market ($1,000,000 plus) has made its presence known. To clear this inventory will take time, but there are opportunities for buyers now looking to “get a deal”.

In an economic stressed climate, real estate markets are the first aspect of the economy to be impacted negatively. As the economy improves, real estate markets are the last facet to return to normalcy. Today, there is some light at the end of the tunnel, but we are still a ways from standing once again fully in the light. It will take time for the Boulder Valley real estate market to become a balanced entity, where buyers and sellers exist on equitable ground.

In the future, though, things will not be the same as before as it relates to buying and selling real estate. Mortgage lenders will continue to take a sharper look at a buyer’s qualifications and financial history. Appraisers will take a more detailed approach to appraising property. Lender underwriters will require more and more documentation, etc. before they are willing to “sign-off” on a new loan package. Home sellers and Realtors will be faced with a growing list of disclosure documents, designed to protect and inform potential buyers about the condition of a specific property.

The good times that we once enjoyed will again surface, but they will be different. Buyers will be more informed and more selective. Sellers will need to be more realistic in pricing, condition, and marketing. Realtors will need to communicate more effectively and be more in-touch with market conditions. Life moves more quickly these days than at any time in history. To keep pace with change will be a challenge, but that’s what makes life interesting … the highs and lows…the good times and the not so good times.

June 2009 MARKET UPDATE

BOULDER CO REAL ESTATE

Numbers! What would the world be like without numbers? What would our lives be like without numbers? We wouldn’t know how old we are (maybe a good thing) or what time our favorite show appears on television (maybe not a bad thing) or when we were supposed to be at work (we would just show-up or not). We’d all become followers of the sun for telling time. But numbers do exist and they are an important part of our daily lives.

As they relate to real estate, numbers are certainly the most critical element with which buyers and sellers are faced. How much should I sell my home for (a number)? How much should I buy a home for (a number)? How much can I borrow (a number)? Below are representative numbers of the business of real estate. Let me try to explain simply the difference between Median Price and Average Price:

1. Median Price: The Median Price of a geographic area (subdivision, community, county, etc.) is where an equal number of sold properties are on each side of the number in the middle. As an example, in the numeric sequence 5, 9, 12, 17, 47, the Median Price (middle price) is 12.

2. Average Price: The Average Price is the value of all the sold properties added together (5 + 9 _ 12 + 17 +47) and then that sum divided by the total number of sold properties (5); that is, 90 divided by 5. Using the numeric sequence above, the Average Price is 18. In this example, one number (47) can skew the overall average. Four of the properties actually sold for “less” than the Average Price.

3. Absorption Rate: The Absorption Rate is the time it would take to sell all the homes in a geographic area assuming two things: (1) The sales rate remains the same as it has been for a specific period of time, and (2) No new listings come into the market. As an example, there are now 39 active listings in a community. Over the course of the past 6 months, 18 homes have sold in that community. Based on that sales rate (3 per month), it would take 13 months for the market to “absorb” the current inventory of homes.

Enough about numbers, let’s look at some facts. (Just imagine they aren’t numbers.) Below is a brief overview of the housing market in our area by locale for single family homes from IRES (the Northern Colorado MLS).

2008 (thru June) 2009 (thru June)

Area Average Sales Price Average Sales Price % Change

Boulder $653,092 $650,937 -0.33%

Superior $450,009 $396,996 -11.78%

Louisville $391,030 $379,142 -3.04%

Lafayette $383,741 $339,536 -11.52%

Longmont $258,168 $235,998 -8.59%

Suburban Plains $532,612 $559,990 +5.14%

Suburban Mountains $429,465 $411,478 -4.19%

Broomfield $398,679 $375,476 -5.82%

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Average … $434,403 $407,026 -6.30%

May 2009 MARKET UPDATE

BOULDER CO REAL ESTATE

As we continue the trek toward the dog days of summer, below are some thoughts about the nature of the home mortgage industry and the real estate market in general. It’s important to understand and acknowledge that the old ways of purchasing real estate are gone forever; i.e., do you have a pulse and can you spell your name, were the only criteria for acquiring a loan. Lenders, appraisers and title companies today are no longer risk oriented. They are playing by a whole new set of rules and the rules aren’t always particularly favorable to the buyer or seller.

Financing in today’s real estate market is taking longer to obtain and more difficult to close. When a lender says we can get you approved in twenty-four or forty-eight hours, that usually means we can get you approved subject to an acceptable appraisal and that you bring in every financial document you’ve ever owned for us to cull over. If your loan is being sold into the secondary market; i.e., Fannie Mae or Freddie Mac, it better be an A+ loan or the lender will have to belly-up to the bar with the funds. Fannie Mae and Freddie Mac are not in the business of being the depository for loans that may potentially go south. They have too many of those on the books right now.

In today’s economic client, most people are looking for a deal. Whether it’s the best price on a home, a car or your cable bill. This is the age of “negotiation”. As such, many lenders are willing to negotiate to get your loan. They’ll use phrases like … no problem getting you approved in two weeks … or … low/no closing costs … or … we can get you a loan 1% under the market … etc. Be cautious of lenders bearing gifts; read the fine-print; make-sure you understand the Truth In Lending disclosure. What appears on the surface to sound great, may result in not being what you envisioned or what you were led to believe.

The Boulder County real estate market continues to ebb along. The inventory of available single-family homes is down slightly over 14% this time of year versus last year. Through May, sales are off around 38% for single-family homes and the same for attached units as compared to 2008. The Spring sales push, which the market normally experiences, has not exhibited the same level of energy this year as the previous three years. Homes continue to sell and sales are increasing, but not at an exponential rate.

So, the question in most people’s minds is: Where to do we go from here if we want to buy or sell real estate? Unfortunately, there’s no simple answer to that question. People who are attuned to risk see this as an opportune time to take advantage of current market conditions and invest in real estate. They look for deals. They are willing to negotiate. They know that real estate markets have historically trended-up over time.

Other people may be much more conservative. Risk isn’t in their blood. They have a tendency to wait and see what happens rather than try to anticipate what might happen. Often the path of least resistance is not to leap, but rather to sit on the sidelines and get in the game when the timing feels comfortable. Absolutely no problem with that.

For those individuals who are willing to roll the dice and step to the starting line, now is an excellent time to give some consideration to making that move or to invest in real estate. There are opportunities out there to be had. Motivated sellers and relatively low mortgage interest rates make for good bed fellows.

April 2009 MARKET UPDATE

BOULDER CO REAL ESTATE

If you read the newspaper, watch the news on television or religiously track the ups and downs of the stock market, there appears to be a general feeling in people’s minds that things are getting better economically in this country. At least on the surface, they don’t appear to be getting worse. Who really knows?

According to the Federal Government, job losses continue, but at a slower rate than has been experienced recently. The stock market has rallied over the course of the past few months and regained a portion of its losses. Home mortgage interest rates continue to fluctuate between 4.75% and 5.25% for a fixed-rate thirty year loan. Most of us have survived the two great government revenue source days – Income Tax Day (April 15^th) and Property Tax Day (April 30^th).

One of the methods of evaluating today’s local real estate market is to take a look back in time… to compare what has happened in the past to what is happening now. An area in which many homeowners are concerned is the value of their home. How has it been impacted over the course of the past few years?

Below is a brief overview of the housing market for single family homes in Boulder County from IRES (MLS) through April of each year. Please note that the Average Sales Price over the last four years has decreased by 6.49%.

Year Active Listings # of Sales Avg. Sales Price % Change

2009 2105 570 $400,911 -8.24%

2008 2410 939 $436,938 -5.81%

2007 2408 1028 $463,896 +8.20%

2006 2410 1249 $428,726 ---------

What are some of the reasons the average sales price has decreased over the past couple of years?

The one you might initially consider is that home values have declined. There is some degree of truth to that. In a negatively impacted economic environment, more expensive homes normally feel the price pinch first. As such, the average sales price of all the homes in a particular market decreases.

Another reason for a lower average sales price is that more homes are selling on the lower end and thus the average sales price is less. This is true of the Boulder Valley real estate market as lower mortgage interest rates and government tax incentives have brought more first-time homebuyers into the market.

A third reason is the impact on values from bank foreclosures and HUD properties. These properties often, but not always, sell below area home values. This impacts the average sales price of a neighborhood and geographic area. It also affects the appraised values of other homes.

Finally, there are the occasional “fire sales”, where a homeowner desperately needs to sell. This is most often because of personal reasons; i.e., job loss, divorce, health reasons, change of life circumstances, economic conditions, etc. Basically, the seller simply needs to rid themselves of their present home so they can move-on with their lives.

March 2009 MARKET UPDATE

BOULDER CO REAL ESTATE

The first quarter of 2009 has seen the Boulder Valley housing market continue to experience lingering signs of hibernation. Although home mortgage interest rates have hovered between 4.5% and 5.25% (30-year fixed rate mortgage) for the past few months, that in itself has not grabbed the attention of enough prospective homebuyers. The government has attempted to incorporate some energy into the marketplace by implementing the first-time homebuyer credit of $8,000, designed to boost the lower end of the market which would, hopefully, invigorate the market for “move-up” buyers.

Here are some thoughts about what is happening in the current Boulder Valley real estate market as we begin the journey into the Spring and Summer, which are historically the busiest seasons of the year for home sales.

· Rental rates have been increasing over the course of the past year as many potential homebuyers have chosen to rent rather than buy. There are a variety of reasons for this from job instability, to the inability to obtain financing, to concern about where home values are going.

· A lack of in-coming relocation. Most local companies aren’t in the hiring or expansion mode right now. If they are, there seems to be enough area talent available to fill most corporate needs. The sale of the Storage Technology Corporation (STC) site in Louisville to ConocoPhillips was viewed as potentially having a major positive impact on the local economy and housing market, but ConocoPhillips has rethought their plans with the first phase of construction now projected to be completed not earlier than 2013.

· New listing inventory across the Northern Colorado housing market has declined 18.45% when comparing first quarters of each year (2008: 6,232 new listings; 2009: 5,082 new listings). There are several reasons for this from the lack of new home construction, to higher priced properties being pulled from the market and rented, to many prospective sellers choosing other options; i.e., remodeling their own home or simply waiting for the market to improve.

Below is a breakdown of sales activity from IRES (the Northern Colorado MLS) for the first quarter of the past two years for single family homes.

2008 Sales 2009 Sales

1^st Quarter 1^st Quarter

Area Single Family Single Family % Change

Boulder 152 76 -50.00%

Superior 19 17 -10.52%

Louisville 39 30 -23.07%

Lafayette 47 36 -23.40%

Longmont 210 157 -25.23%

Suburban Plains 97 57 -41.23%

Suburban Mountains 42 34 -19.04%

=== === ======

Total 606 407 -32.83%

NOTE: A comparison of the end of the first quarter of 2006 and the end of the first quarter of 2009 shows a 47.88% reduction in the number of single family homes sold for the areas noted above. (2006: 781 / 2009: 407)

February 2009 MARKET UPDATE

BOULDER CO REAL ESTATE

Here we are again, on the brink of a bright new Spring. For those of us still standing, 2008 will be remembered as one of those years that was overflowing with change, not that most of us were in favor of the change we experienced from an economic perspective. As the golf god says: “He giveth and he taketh away.” Our economic god mostly “taketh away” this past year. But, like all things in life, this too shall pass. Time will slowly move us forward in a positive direction and we will be left to deal with other elements of change in our lives.

Since this Market Update is intended to be about real estate and not solely economics, let’s take a look at change as it relates to the local real estate market. Below is information provided by IRES, the Northern Colorado Multiple Listing Service detailing listing and sales activity through December 31, 2008.

Total # Sold Median Sales Price

Location 1/1/2007 1/1/2008 %Change 1/1/2007 1/1/2008 %Change

12/31/2007 12/31/2008 12/31/2007 12/31/2008

Boulder 935 753 <19.5> $550,500.00 $538,000.00 <2.3>

Broomfield 402 354 <11.9> $304,000.00 $348.490.00 14.6

Erie 306 309 0.9 $300,000.00 $305,000.00 1.7

Lafayette 314 254 <19.1> $318,700.00 $311,500.00 <2.3>

Longmont 1109 1026 <7.5> $240,000.00 $219,900.00 <8.4>

Louisville 248 204 <17.7> $355,000.00 $350,300.00 <1.3>

Superior 169 1026 <28.9> $389,000.00 $401,300.00 3.2

Mountains 308 263 <14.6> $359,500.00 $355,000.00 <1.3>

Plains 420 308 <28.6> $509,750.00 $475,000.00 <6.8>

Total 4,211 3,583

Please visit our new listings:

13941 Westhampton Court $1,345,000

638 Lakewood Court $1,635,000

650 Lakewood Court $2,125,000

2607 Nimbus Drive $2,250,000

January 2009 MARKET UPDATE

BOULDER CO REAL ESTATE

Real estate market activity across the Northern Colorado and metro Denver market area continues to limp along waiting for the Federal government to throw a lifeline to the national housing market.

During the presidential campaign, Barack Obama said: “You can put lipstick on a pig, but it’s still a pig.” This “bail-out plan” conceived by two disparate political parties has that same feeling. Housing markets don’t magically change the path they are on my slapping some lipstick on them. They are slow moving entities composed of numerous elements; i.e., mortgage lenders, appraisers, inspectors, etc. And, not to forget, the two key elements of any housing market are buyers and sellers. What has been missing from the market over the course of the past two to three years has been an ample supply of buyers. Not lookers or maybes, but real buyers…people willing to step to the closing table and sign their name(s) on the dotted line.

What has kept them from doing this in large numbers is two-fold: motivation and availability. Motivation can be a result of several things; i.e., concern about the direction of housing values, concern about job stability, ability to qualify for financing, etc. Availability relates directly to the mortgage industry. For a period of time, mortgage lenders adjusted their strategy from lending to anyone with a pulse to lending, at an exorbitant rate and terms, only to A+ buyers. People like Bill Gates, Warren Buffet and Donald Trump come to mind.

For the housing market to stabilize and begin to move toward a more balanced playing field will require several things to happen:

1. Home values to settle. The “median price” of a single family home in the Northern Colorado market area was $208,265 (January/2009); $218,500 (January/2008); and $235,000 (January/2007). A reduction of over 11.37% in the past two years.

Boulder’s “median price” of a single family home in 2008 was $538,000 and $550,500 in 2007, a 2.27% decrease. Boulder’s “average price” of a single family home in 2008 was $656,383 and $662,642 in 2007, a 0.94% decrease.

2. Realistic number of available properties for sale. Scarcity creates demand. The Northern Colorado housing market hasn’t reached that point, although the inventory of available properties has continued to decline. In January/2009 there were 1,535 new listings in our market area; 1,940 in January/2008; and 1,892 in January/2007. A reduction of about 18.86% this past January compared to January/2007.

3. Changes in the mortgage industry. We are a country that relies to a great degree on the financing of most things we buy whether it is via credit cards, automobile leases or real estate purchases. For the housing market to shift in a positive direction, the mortgage industry needs to help create “in the mind of the consumer” that this is a great time to buy real estate. That can be accomplished by (1) increasing the maximum loan amount for conforming loans, now $460,000 for Boulder County. Most Colorado counties remain at $417,000 for single family residences. When a buyer exceeds the maximum conforming loan amount for the county in which the subject property is located, they normally have two options regarding financing – obtain a Jumbo loan (usually at an interest rate 1%+ higher than a conforming loan) or obtain a second mortgage to go with the conforming first loan. (2) Work with prospective buyers to find creative ways to provide financing that fits the buyer’s ability to qualify and make the payments; i.e., loosen the purse strings a little bit.

December 2008 MARKET UPDATE

BOULDER CO REAL ESTATE

The 2008 real estate market followed a similar pattern to the past few years with sales activity across the area experiencing a continuing decline. In 2005, there were 4,725 single-family homes sold in the Boulder Valley area; in 2006 (4,389); in 2007 (4,076); and in 2008 (3,393). Since 2005, that’s a reduction of nearly 28.19% in the number of sales over that past four year period.

For real estate markets to sustain themselves in a positive direction, they need to churn. They need to have a consistent influx of buyers and an on-going flow of available inventory. When that happens, home values remain relatively constant or increase at a reasonable rate. When the real estate market gets skewed; i.e., too many buyers, but not enough available inventory or too much available inventory, but not enough buyers, two things can happen – home values increase noticeably (demand exceeds supply) or home values decrease noticeably (supply exceeds demand).

Over the course of the past three years (January/2006 to December/2008) the Boulder Valley real estate market has seen the average sales price of a single-family home go from $440,236 (2006) to $446,742 (2007) to $431,339 (2008); an overall decrease of approximately 3.45%. Which means? The local real estate market has been relatively flat during the past thirty-six (36) months in terms of home values. Considering what has happened negatively to other real estate markets across the country, the Boulder Valley real estate market has held its values during this economic downturn.

The questions then becomes, How did this happen? It’s back to the supply and demand overview above noted. Demand decreased 28% in the past four years; supply decreased nearly 23% in the past four years. If supply hadn’t decreased, and demand remained the same, what would have happened to Boulder Valley real estate home values? Although this is possibly conjecture, it is based on other areas of the country where demand decreased noticeably, but supply continued to increase in which case home values experienced dramatic decreases.

The Boulder Valley real estate market has remained relatively stable over the past three years in terms of home values simply because available inventory has also adjusted downward. For a variety of reasons, people chose to either take their homes off the market or not put them on the market. Builders stopped building spec homes they couldn’t sell. Potential buyers became renters, resulting in homes for sale being withdrawn from the market. People decided to “settle-in” for the time being to see what would happen in the marketplace.

Below is an overview of sales activity for the past two years for single family homes in the various Boulder Valley areas, courtesy of IRES – the Northern Colorado Multiple Listing Service.

2007 2008 % 2007 2008 %

Area Solds Solds Change Average Price Average Price Change

Boulder 939 747 -20.45% $662,320 $655,378 -1.05%

Superior 169 120 -28.99% $411,125 $437,818 +6.49%

Louisville 248 203 -18.15% $392,014 $391,306 -0.18%

Lafayette 315 252 -20.00% $404,360 $355,934 -11.98%

Longmont 1118 1018 -08.94% $279,404 $252,400 -09.66%

Sub. Plains 571 443 -22.42% $587,845 $526,399 -10.45%

Sub. Mtns. 309 262 -15.21% $456,849 $435,110 -4.76%

Broomfield 407 348 -14.50% $380,019 $396,371 +4.30%

=== === ====== ======= ====== ======

Totals … 4076 3393 -16.76% $446,742 $431,339 -03.45%

November 2008 MARKET UPDATE

BOULDER CO REAL ESTATE

The 2008 real estate market can most aptly be characterized as one of dynamic change. The future will be noticeably different than the past. In the past, home owners relied on real estate to build net worth over time through appreciation. In the future, real estate will be viewed as a means for creating equity through debt reduction i.e. paying off the mortgage(s). Double digit annual increases in home values won’t be a part of the economic equation for a number of years (if ever again).

Once the housing market digs itself out of this bank foreclosure/short sale scenario it currently wallows in, real estate buyers will still take a cautious look at what they are purchasing. The days of multiple offers, driven by lower mortgage interest rates, will be few and far between. Price, location and condition will continue to be strong considerations for buyers. Value will be the major component of the “new” housing market.

People’s behavior patterns change once they are faced with a sense of scarcity. A few years ago when Colorado experienced a drought, people learned to live with watering their lawns less. They became more conservative. As gas prices escalated earlier this year, people began to drive less. Despite the lower gas prices today, people still drive less.

The same mental concept will exist in the mind of future home buyers. They will take a serious look at where they are now and ask themselves if they need a larger home, newer home, etc. Reducing personal debt will be a major focus of the economy over the next few years as people wrestle with the uncertainty of the job market and their depleted retirement accounts.

But, even in the darkest times there is light. There is opportunity. It simply takes an open mind and the willingness to explore. Here are some thoughts.

· In today’s real estate market, cash is king. Don’t have to sell your home to buy a home? You are in a strong negotiating position. Contracts conditional on the buyer needing to sell their home to buy your home are of little value in most situations. Unless you own a tepee in the far reaches of an almost inaccessible mountain valley and the only possible buyer you will ever get needs to sell their igloo in Alaska before they can buy your tepee. Then you “might” want to consider a conditional contract.

· The rental market in the Boulder Valley was strong this past summer and fall. Why? Because there was a plethora of people who couldn’t qualify to buy a home, but could afford the payments for a rental. So? Look at real estate from an investment perspective. Remember, build wealth through debt reduction.

· Real estate markets ebb and flow. It’s the nature of the beast. If home values were always increasing, it’s a no brainer - Buy! Buy! Buy! If real estate markets were always down, we’d all be tenants. That’s assuming there were actual landlords.

· This too shall pass. Time changes all things. It’s just a matter of time before the good days will be the good days again. They will be different, though. If history teaches us one thing, it’s how to avoid the mistakes of the past. Today, the government is our perceived savior. Funding billions of dollars into an economy that needs to right itself. How long that will take is anyone’s guess, but there will inevitably be change.

October 2008 MARKET UPDATE

BOULDER CO REAL ESTATE

Sometimes change comes slowly. It is almost unnoticeable. It

might be the way you feel physically or mentally. You don’t have the same energy you had before or aren’t as quick with a response. It’s a subtle change.

Sometimes change comes quickly. It is noticeable. It can be the result of a major event in your life i.e. a death or divorce or the marriage of one of your kids or your marriage. Your life is changed in an instant.

Sometimes change happens and you have limited or no control over it. That is the type of change we are experiencing in this economic climate today. Each day is different than the day before. There is no consistent pattern. No sense that things are becoming more stable. No feeling that there is light at the end of the tunnel.

One of the dynamics of this “change”, and possibly the major dynamic, is the housing market. There’s an old saying about real estate: “Real estate is the first thing to go south in a bad economy and the last to head north in a good economy.” Real estate is like a massive wheel that turns very, very slowly. To get it moving in a positive direction requires time, effort and energy. It also requires the public’s perception that it is moving in an optimistic direction.

If you want to look on the positive side, i.e. is the glass half-full rather than half-empty, the Boulder Valley real estate market has not been impacted as negatively as other parts of the country. Sure, we’ve taken our shots over the past couple of years. New home builders have strived to move standing inventory; short sales and bank foreclosures have become part of the daily jargon; availability of financing has become difficult at times to obtain.

To differing degrees, we have been down this path before. With time, this too shall pass. But where are we today? Is our local real estate market treading water, beginning to move north or still languishing in a southern direction? There’s no definitive answer. Some aspects of the real estate market are doing well in certain geographic areas. Homes priced from $250,000 to $400,000 seem to be selling at a reasonable rate. Homes on the upper end not so well. What is missing in the real estate market today continues to be, “When I sell mine, I’ll buy yours, but I have to get mine sold first.” To get the wheel of change greased, there has to be this continual movement of product within the real estate food chain. Without it, most everybody starves.

2007 2008 % 2007 2008 %

Area Solds Solds Change Average Price Average Price Change

Boulder 852 684 -24.56% $662,569 $653,314 -1.41%

Broomfield 366 316 -15.82% $380,713 $401,412 +5.43%

Superior 152 111 -36.93% $410,558 $441,192 +7.46%

Louisville 225 191 -17.80% $391,731 $393,709 No Change

Lafayette 291 232 -25.43% $408,511 $354,349 -15.28%

Longmont 995 926 -7.45% $279,754 $256,706 -8.97%

Sub. Plains 514 402 -27.86% $577,762 $524,203 -10.21%

Sub. Mtns. 278 233 -19.31% $459,896 $435,036 -5.71%

September 2008 MARKET UPDATE

BOULDER CO REAL ESTATE

Now what? How did we really get here?

In his novel A Tale of Two Cities, Charles Dickens opens with the line, “It was the best of times, it was the worst of times … .” In the economic climate we are currently experiencing across this country and across the world, it may be difficult to find any “best of times”. The past couple of years have been described as the Perfect Storm as it relates to the real estate industry. There exists a combination of stagnant or depreciating property values, HUD foreclosures, bank short sales, noted financial entities going poof in the night, the stock market vacillating between “the best of times and the worst of times” and lenders realizing that hoarding cash is the path of least resistance. All of these things are happening at the same time.

And then?

The government steps in with their “bail-out” program; pumping billions of dollars into purchasing ill-fated mortgages. The hope is that this influx of cash will loosen the purse strings of those who control the purse strings.

There’s an old saying, “He who has the gold makes the rules.” We are there. Unless you are Warren Buffet with a couple of million bucks in your wallet, obtaining financing in the future will be more difficult. Not impossible, but it may cost more and take more documentation to get.

This is a different financial market than we have experienced for many years. In the early 1980’s mortgage interest rates ramped up to over 15%. The real estate market slowed, as few buyers could afford to borrow. New home builders offered 3-2-1 buy down programs to attract buyers and help them qualify. The real saving grace for the real estate market back then were the non-qualifying assumable FHA/VA loans, seller financing and, dare I say it, undisclosed wraps of existing conventional loans. As Einstein said, “Imagination is more important than knowledge.” It was an imaginative time.

Then, the late 1980’s came loping along and the savings and loan fiasco surfaced. The government charged in and established the Resolution Trust Corporation (RTC); designed to dispose of insolvent savings and loans. Projections were that the RTC would need to dispose of the assets of over 700 institutions, totaling nearly $400 billion. Peanuts compared to what the government is facing today. Pocket change!

Which, brings us back to where we started this little narrative. Now what? Here are some thoughts:

1. The wheels of change often move slowly. Rationally pumping $700 billion into the economy will take time. Where the funds go, when they go and how they will be used will not be a quick or easy process.

2. In the future, lenders will be much more wary of who they lend money to and under what terms. There will be multiple sets of eyes looking at new loan files to insure that what is being represented is accurate and realistic.

3. Appraisers will be more conservative in their approach to valuing property. Just because the same style house down the street sold for $250,000 six months ago, doesn’t mean the subject house is worth the same or more. Real estate markets fluctuate up and down, and the access to sales information is so much quicker today than it was in the late 1980’s.

4. Mortgage financing in this country will “never” be the same again. The industry got fat and lazy during the past decade. As a result, look at where we are today. How did we get here? Do we really know?

August 2008 MARKET UPDATE

BOULDER CO REAL ESTATE

Summer is now a memory as the warm days and cool nights of Fall begin to take hold. As such, the local real estate market historically begins its gradual slowing toward Winter. This Fall promises to experience a similar pattern, with fewer homebuyers in the marketplace and many homes available for sale.

There are no signs on the horizon that the nature of the real estate market is going to change anytime soon. There are still more homes for sale than there are buyers to buy. Thus, what we continue to have is a buyer’s market.

For those homeowners who are still hopeful of attracting a sale before the Winter snows come calling, what can they do? There’s an old saying in real estate that price overcomes all objections. There is a certain truth to that. If prospective buyers perceive a specific property is priced such that it is “too good a deal to pass-up”, the seller has a good chance of making a sale. Many potential buyers in today’s market are unwilling to buy now because they are concerned about where the market is heading. They don’t want to purchase a home and in six months discover their “new home” is worth less than what they paid for it. Until the real estate market stabilizes and home values once again hold their own or begin to increase in value, buyer’s will continue to be cautious.

So, other than significantly reducing the price of a home to attract a buyer or buyers, what are some other options? For new homes there are “buyer incentives”; things like landscape allowances, appliance and window treatment packages, furniture allowances, etc. There is also the Builder Subsidy Program where the builder can pay the buyer’s mortgage for a period of time, say six months to a year. For resale homes there may be decorating allowances for carpet replacement, new paint, kitchen and bath remodels, etc. Also, financing allowances are an option to assist a buyer in purchasing.

The point is that the seller needs to do something to attract the buyer to their product; i.e., their home. It’s like the bee to honey. If there isn’t no pollen, the bee isn’t coming to visit. Sellers need to be realistic in today’s market. Price is the major consideration in a buyer’s mind, but including buyer incentives with a well-priced home could result in a sale.

Below is a brief overview of average single family home values for the Boulder Valley area for the past couple of years. Information is from IRES, the Northern Colorado MLS.

2007 2008 (Thru August)

Area Average Sales Price Average Sales Price % Change

Boulder $662,947 $660,191 -0.42%

Superior $411,125 $450,674 +9.61%

Louisville $392,014 $394,068 +0.52%

Lafayette $404,360 $365,248 -9.67%

Longmont $279,627 $258,163 -7.68%

Suburban Plains $587,845 $538,200 -8.45%

Suburban Mountains $456,849 $439,768 -3.74%

Broomfield $378,874 $398,165 +5.09%

========= ========= =======

Average … $446,705 $438,059 -1.94%

July 2008 MARKET UPDATE

BOULDER CO REAL ESTATE

As the Summer begins to ebb and Fall sits just beyond the horizon, two things normally transpire in the Boulder Valley housing market. The first is the number of available properties starts to dwindle. Homeowners begin the process of “settling in” for the balance of the year as school commences and the activities of summer are nearing an end. The second thing that happens is that sales activity peaks. Homes that have gone under contract during mid-June through July arrive at the closing table. Buyers have the same goal, to have “settled in” before school starts and Summer saunters into the sunset.

Statistically, for the Boulder Valley housing market, over sixty (60) percent of the sold properties close between March and August of each year. That doesn’t mean the housing market goes into hibernation during the balance of the year. It simply indicates there are fewer buyers in the marketplace, and fewer properties for sale.

Below is a brief chart from IRES, the Northern Colorado Multiple Listing Service. The chart reflects the percentage of residential sales vs. new listings for the first seven months of 2008.

Month New Listings Sales Sales as a % of New Listings

January 1938 649 33.48%

February 2012 768 38.17%

March 2277 1067 46.85%

April 2372 1127 47.51%

May 2330 1281 54.97%

June 2179 1285 58.97%

July 2108 1302 61.76%

==== ==== ======

Total 15216 7479 49.15%

Observations …

1. Although the number of New Listings remains relatively even each month, sales activity continues to increase. Overall sales and new listings will begin to slide in September, with the Sales as a % of New Listings for August, September and October declining slightly each month. But, an interesting thing happens in November and December, the Sales as a % of New Listings figure jumps dramatically. Say what? For the past two years, the Sales as a % of New Listings for November (2006: 67.84%/2007: 62.31%) and December (2006: 87.45%/2007: 73.38%) were the highest months of the year.

2. There are three types of housing markets: (1) Buyer’s Market where available inventory exceeds demand…the Buyer rules. (2) Seller’s Market where demand exceeds available inventory…the Seller rules. (3) Balanced Market where demand and available inventory are somewhat equitable. This is a level playing field. If you look at the percentages noted above, you would have to say that the Boulder Valley housing market is still a Buyer’s Market. New Listings continue to exceed the number of Sales.

3. How do you determine if the market is improving, has stabilized or continues to slump? It’s not always easy to tell, but here is a brief comparison. For the Sales as a % of New Listings Total for 2008 (49.15%), that figure was: 2005 (52.32%); 2006 (46.75%); 2007 (49.93%); which indicates the Boulder Valley housing market has stabilized.

June 2008 MARKET UPDATE

BOULDER CO REAL ESTATE

We have passed the half-way mark of another calendar year. This first six months of 2008 has been an interesting time. A presidential primary race that felt more like a marathon race gone bad. A stock market that is reflective of a run-away roller coaster; more ups and downs than the financial institutions have experienced in many years. A housing market that can’t seem to right itself and, as such, continues to limp along.

With the exception of a few pocket areas around the state, Colorado and the Boulder Valley have been somewhat impervious to the horror stories coming out of the housing markets in parts of California, Florida and Arizona; record foreclosure rates and plummeting home values. But that doesn’t mean we haven’t felt the effect of those areas. Our market has been impacted by both a decline in the number of relocation buyers and a perception in many buyer’s minds, right or wrong, that this is not a good time to invest in the purchase of real estate. Those two elements help lead to a stagnant real estate market.

But, there are some reasons to buy now rather than playing the waiting game. First and foremost is oil. When people think of oil, they relate that to gasoline, but petroleum plays a major part in the real estate business. Asphalt shingles, vinyl windows, etc. are dependent on petroleum for their creation. As the cost of oil increases, the result is a higher cost for the construction of a new home or the remodel of an existing home.

Will Rogers once suggested that people buy land because they don’t make it anymore. Land stopped getting made about a zillion years ago and it isn’t getting any cheaper. The cost to develop a parcel of land has increased dramatically over the past decade. When you look at everything that goes into creating a new housing subdivision; i.e., municipal/review fees and infrastructure (roads, grading, water & sewer lines, electrical & gas lines, sidewalks, curbs, landscaping of common areas, etc.), buying new can become an extremely costly and risky venture. Oh, and you say you want to build a new home? Well, let me tell you about what it is going to cost for water, sewer and building permit fees; not to mention park and school fees.

But enough about dirt. Although the real estate market has experienced better times over the past twenty years, this is still a good time to consider investing in real estate. There are fewer buyers in the marketplace. Mortgage interest rates are still reasonable. If you are an investor, the rental market is fairly healthy. Many sellers are motivated to sell so they can move-on with their lives; wherever that leads them.

Below is a brief overview of the housing market in our area by locale for single family homes from IRES (the Northern Colorado MLS).

2007 (Thru June) 2008 (Thru June)

Area Average Sales Price Average Sales Price % Change

Boulder $675,985 $653,092 -3.39%

Superior $405,602 $450,009 +10.94%

Louisville $391,624 $391,030 No Change

Lafayette $414,600 $383,741 -7.44%

Longmont $280,771 $258,168 -8.05%

Suburban Plains $584,412 $532,612 -8.86%

Suburban Mountains $502,321 $429,465 -14.50%

Broomfield $387,239 $398,679 +2.95%

======= ======= =======

Average … $455,319 $437,099 -4.00%

May 2008 MARKET UPDATE

BOULDER CO REAL ESTATE

As Spring moves into Summer, historically the local real estate market has its greatest degree of sales activity this time of year. Approximately forty-two (42) percent of the sold listings close between May 1^st and August 31^st of each year. Hopefully, we will experience a noticeable spike in the market over the next few months.

Below is a brief overview of the sales activity for residential properties for the Northern Colorado real estate market for the past nine years from IRES (the MLS for the Boulder Valley, Ft. Collins, Loveland and Greeley areas). All figures noted are through May of each year.

Year New Listings # Of Sales Average Sold % Change

2008 10,901 4,826 $295,680 -3.92%

2007 11,902 5,510 $307,277 +1.45%

2006 13,229 5,626 $302,870 +3.77%

2005 12,422 6,074 $291,845 +5.58%

2004 12,218 5,854 $276,612 +6.08%

2003 11,417 5,265 $260,762 +2.41%

2002 10,361 5,579 $254,610 +0.53%

2001 9,713 5,345 $253,271 +10.07%

2000 8,160 5,208 $230,084 ------

Some Observations …

1. Listing inventory is down 8.41% from 2007. Sales are down 12.41%.

2. The Absorption Rate (the time it takes to sell all the available inventory based on the current level of sales activity) has gone from 236 days in 2000 to 341 days in 2008. The Absorption Rate in 2007 was 326 days.

3. The average price of a Residential Property has increased 28.51% since 2000. An increase of about 3.56% per year.

Some Thoughts …

1. Real estate markets have a tendency to follow a wave pattern. Some years are up and others are down. Despite all the national negative energy surrounding the real estate market, the Boulder Valley housing market has remained relatively stable thus far into this decade, with only small adjustments in home values. This pattern should continue for the next few years as the housing market across the country begins to stabilize.

2. Average Sold Prices are not always a reflection of all aspects of the housing market. Some pocket areas of homes, both geographically and price wise, can reflect greater increases in value or more marked decreases. When the economy suffers from elements such as higher energy and food costs, and rises in unemployment, the housing market as a whole suffers. But, higher priced homes have a tendency to sell at a slower pace, because they are somewhat dependent on the “housing food chain”. Which means, lower priced homes need to sell so that prospective home buyers have the opportunity to “move-up” to more expensive homes.

April 2008 MARKET UPDATE

BOULDER CO REAL ESTATE

If you were to describe the real estate industry today, you might use the word uncertain. There is still no clearly defined direction where the market is headed. Some pundits are suggesting the so-called recession is over and the housing market is coming to life. Other noted analysts are indicating the road ahead is still laden with a number of hurdles before the housing market begins to breathe again.

At this writing, mortgage interest rates continue to revolve around six (6) percent for the traditional thirty (30) year fixed rate loan. But lenders and underwriters are now much more focused on whom they are willing to lend. Even prospective borrowers that would have been considered low or no risk at this time last year are now being scrutinized. “Better safe than sorry!” has become the mortgage industry’s maxim.

Many prospective home buyers are saddled with two issues. One is the perception, true or false, that home values will continue to slide. If they decide to buy now, are they buying at a perceived inflated value? If they wait, will they be better off? There’s that word uncertain. The second issue, which I have discussed in the past, is the “need to sell in order to buy” scenario. Many potential buyers are paddling that boat together, upstream. Their ability to buy is based on first selling and closing on what they currently own.

As we enter the spring, the housing market “normally” exhibits a renewed energy. Things warm-up and green-up, and everyone begins to display a more healthy approach to life in general. The hope is that the housing market will embody some of that new vitality.

Below is a brief overview of the housing market for the past few years for single family homes in Boulder County from IRES (MLS) through April of each year.

Year Active Listings # of Sales Avg. Sales Price % Change

2008 2410 939 $436,938 -6.17%

2007 2408 1028 $463,896 +8.20%

2006 2410 1249 $428,726 ---------

· Active listings for the first four months of each year couldn’t be more consistent.

· Sales have continued to fall, being down nearly 25% as compared to 2006. That results in an Absorption Rate of 10.3 months for 2008; 9.4 months for 2007; and 7.7 months for 2006. Which means? That it is taking nearly 2 ½ months longer in 2008 than in 2006 for the available inventory to sell. Based on the current level of sales activity, it will take over ten (10) months for all the Active Listings to sell. That’s assuming no new inventory comes into the market. Not!

· Average Sales Price is NOT always a reflection of appreciation or depreciation of home values. A drop in the Average Sales Price could indicate one of two things: more less expensive homes are selling or fewer high end homes are selling. Right now, fewer homes priced over $800,000 are selling. The Absorption Rate for homes priced over $800,000…a mere 24.3 months. That’s over TWO YEARS of inventory available NOW (homes priced over $800,000).

March 2008 MARKET UPDATE

BOULDER CO REAL ESTATE

Here we are again, spring is getting ready to, well, spring. It seems to happen every year about this time. The days get a little longer. People crawl-out from wherever they have been hibernating for the past five or six months. Birds begin to sing. Plants, trees and flowers commence to flourish. And, oh yeah, the real estate market starts to show signs of increased activity. It’s a great time to be alive.

The good old “bell curve” concept of real estate begins to take shape; i.e., more listings, more buyers, more showings and more sales. The good old “bell curve” hasn’t been kind to real estate the past couple of years. As the national economy has suffered, the ripple effect has impacted real estate activity across the country. One of the most noticeable impacts on the real estate market is the lack of a “domino effect”.

The “domino effect” occurs when there are several real estate transactions in place that all need to close, so none of the domino’s fall. As an example, Seller No. 1 needs to sell their condo to buy a starter home; Seller No. 2 of the starter home needs to sell their home to buy a larger home; the Seller No. 3 of the larger home needs to sell their home to buy a retirement home in Florida. For all of this to happen, none of the transactions (dominos) can fail.

The major problem with today’s real estate market, be it here in the Boulder Valley or across the country, is that, in this example, if Seller #1 can’t get their condo sold. As such, none of the other transactions is going to take place. It’s like running a cross country race in quick sand. It takes a lot of effort and there isn’t much progress. For the real estate market to return to a balanced level, where there are approximately a similar number of buyers and sellers, there needs to be a reasonably active “domino effect” in place. If not, then a multitude of sellers are attempting to attract a limited number of buyers.

Below is a simple breakdown of sales activity from IRES (the Northern Colorado MLS) for the first quarter of the past two years for single family homes.

2007 Sales 2008 Sales

1^st Quarter 1^st Quarter

Area Single Family Single Family % Change

Boulder 173 152 -12.13%

Superior 29 19 -34.48%

Louisville 44 39 -11.36%

Lafayette 80 47 -41.25%

Longmont 218 210 -3.66%

Suburban Plains 92 97 +5.43%

Suburban Mountains 46 42 -8.69%

=== === ======

Total 682 606 -11.14%

Note: A comparison of the end of the first quarter of 2006 and the end of the first quarter of 2008 shows a 22.40% reduction in the number of single family homes sold for the areas noted above. (2006: 781 / 2008: 606)

February 2008 MARKET UPDATE

BOULDER CO REAL ESTATE

Real estate markets are often characterized as being one-dimensional; i.e., they are up, down or flat. But, there are always pocket areas within the real estate market that are behaving differently than the market as a whole. As an example, in the automobile industry, with the recent increase in gas prices, overall car sales may be down, but fuel-efficient or hybrid cars may be selling at a positive pace.

The same is true for real estate. Homes in certain price ranges or geographic locations may be experiencing a difficult time selling, but other price ranges and locales may be doing very well. The point is that a blanket statement should not be made about the real estate market at any single moment that relates to all aspects of the market. Generally though, it can be stated that the market is up, down or flat collectively as a whole, based on historical data relating to current activity.

In the past, and to some degree today, the three words that portray real estate most were Location! Location! Location! Those are words based on emotional appeal. They aren’t necessarily facts. The two most important words in real estate today are Absorption Rate! The dictionary defines absorption as to “take in and make part of an existent whole”. In real estate terms it could be defined as “taking in homes for sale and making them part of the inventory of sold properties”. The word rate then represents the amount of time at which absorption occurs.

If one were to analyze specific neighborhoods, communities or geographic areas, the Absorption Rate could be determined for both today and the past. By going through his process, it could be established if the real estate market in those areas is up, down or flat. The same can be said on a larger scale when looking at the entire real estate market.

Therefore, below is a brief overview of residential real estate listings and sales over the course of the past few years from Boulder to Ft. Collins, and the close-in mountain communities to the eastern plains. All information is from IRES, the Northern Colorado Multiple Listing Service.

New Listings Sales Absorption

Year New Listings % Change Sales % Change Rate •

1998 15757 ------- 12913 ------- 14.64 Months

1999 17705 +12.3% 13038 +0.97% 16.30 Months

2000 18738 +5.83% 13529 +3.76% 16.62 Months

2001 22366 +19.3% 13868 +2.50% 19.35 Months

2002 24177 +8.09% 13930 +0.44% 20.83 Months

2003 25204 +4.24% 14304 +2.68% 21.14 Months

2004 26429 +4.86% 15404 +7.69% 20.59 Months

2005 27390 +3.63% 15578 +1.12% 21.10 Months

2006 28001 +2.23% 14382 -7.68% 23.36 Months

2007 25890 -7.54% 13746 -4.42% 22.60 Months

· Absorption Rate: Assuming sales activity would remain the same, and no new listings were to come into the market, this is the number of months it would take to “absorb”; i.e., sell the entire inventory of new listings for each year.

January 2008 MARKET UPDATE

BOULDER CO REAL ESTATE

Real estate markets are somewhat reflective of life: good times, not so good times…and everything else in between. If you were to characterize today’s real estate markets, as always, you would have to view it from different perspectives. The first perspective is on a national level. Admittedly, certain geographic areas of this country have seen better times. Saddled with over building and double digit appreciation for years, those areas are now faced with the reality of the “not so good times”.

If you were to look at the Colorado housing market, you would discover pocket areas around the state that are holding their own and other areas that have lost their grip. The Boulder Valley real estate market has been holding its own for the past year.

Here are some observations about the Northern Colorado housing market for 2007 relative to 2006 courtesy of IRES (Northern Colorado MLS).

· The “Average Sold Price” of a residential property in 2007 was up just under one (1) percent compared to 2006 ($311,196 vs. $308,487).

· The “Average Median Sold Price” of a residential property in 2007 was nearly the same as 2006 ($242,097 vs. $242,000).

· In 2007, there were 7.6% fewer new residential listings on the market than in 2006.

· In 2007, there were 4.5% fewer sold residential properties than in 2006.

The Federal Reserve’s recent attempts to “stave off” the possibility of a recession has been viewed as either a positive move for getting consumers back into borrowing to help “jump-start” the economy or, too little too late. The wheels of commerce take a long time to get up to speed once they have experienced a diminishing pace.

As we enter the spring housing market, most noticeably the busiest time of the year, we still need to determine what impact lower home mortgage rates, available inventory of homes for sale and stable home prices will have on the market. Characteristically, in the Boulder Valley housing market, sixty (60) percent of the residential properties sell and close between March and August.

Home mortgage interest rates have remained relatively stable for the past two years. The traditional thirty-year fixed rate loan has vacillated between 5.5% and 6.75% during that time period. With the reduction in the Federal Fund’s Rate, home mortgages have settled around 5.75%.

Here’s a question for prospective home buyers: Is now a good time to consider purchasing real estate? Some thoughts:

· Mortgage interest rates continue to be available at reasonable levels (6.125%).

· Home values have stabilized.

· Moderate levels of inventory exist within the market.

· Strong rental market, if you are an investor.

December 2007 MARKET UPDATE

BOULDER CO REAL ESTATE

One of the national media’s focal points in 2007, as it relates to real estate, was that home values across the country were plummeting. There is some truth to that for specific geographic areas. California and Florida, in particular, have suffered double digit depreciation after several years of double digit appreciation.

Thus far this decade, the Boulder Valley real estate market has experienced sensible increases in home values. This can be attributed to a variety of reasons; i.e., a manageable number of resales and new homes available; affordable home prices as compared to the coasts; and a relatively stable business/employment base.

When the availability of inventory far exceeds demand, the real estate market is upside down. In such a market, home values decline as sellers (resale and new construction) attempt to attract the few buyers in the marketplace. Buyers know the market is upside down, so they come from a much stronger position of negotiation. This upside down market has been plaguing the real estate market across the country for the past two years; fueled by a myriad of bank foreclosures, and HUD properties.

In the past, available financing could make or break the real estate market. In the 1980’s, when mortgage interest rates were at double digit levels, the real estate market nearly shut-down. That’s not evident today. Mortgage interest rates have remained reasonably stable for the past two years, ranging from 5.75% to 6.75% for a fixed rate thirty year loan. At this time for first time buyers, FHA is at 5.50% with zero points for a fixed rate thirty year loan. As such, a home buyer’s sense of urgency to buy is not based on mortgage interest rates.

Below is an overview of sales activity for the past two years for single family homes in the various Boulder Valley areas, courtesy of IRES – the Northern Colorado Multiple Listing Service.

2006 2007 % 2006 2007 %

Area Solds Solds Change Average Price Average Price Change

Boulder 990 934 -5.65% $638,642 $662,853 +3.79%

Superior 204 168 -17.64% $426,384 $410,180 -3.80%

Louisville 272 247 -9.19% $361,828 $392,463 +8.46%

Lafayette 329 313 -4.86% $395,061 $405,901 +2.74%

Longmont 1227 1110 -9.53% $289,902 $279,617 -3.54%

Sub. Plains 612 570 -6.86% $558,992 $588,480 +5.27%

Sub. Mtns. 353 309 -12.46% $415,801 $456,865 +9.87%

In the chart, you will note that the Average Price has moved up or down in single digits. No great fluctuations. What is affecting our real estate market is the lack of buyers, which impacts the number of sales.

For 2007, overall single family home sales for the communities/areas noted above were down 8.42% over 2006. The sales in 2006 were down 7.66% over 2005. Collectively, over 15% fewer single family homes sold in the Boulder Valley market area in 2007 versus 2005. Inventory levels of listings have also declined, with 7.7% fewer new listings on the market in 2007 versus 2006.

November 2007 MARKET UPDATE

BOULDER CO REAL ESTATE

If you were to characterize 2007, as it relates to real estate, you would probably think of words like bank foreclosure, sub-prime loans, and falling home values. That’s a pretty accurate description if you were looking at it from the perspective of the national real estate market. Things haven’t been that rosy across the country this year.

Nearly every day there have been negative media comments about the poor real estate market. But, there are always two sides to a coin. The glass can be half-full rather than half-empty. You can look for the good things in life and people, and real estate, if you just take the time to look.

The first thing to look at is this. We live in the Boulder Valley… in Colorado. It’s not South Dakota or Missouri or Arkansas (no offense intended to those areas). If there is a heaven, as it was suggested in the movie; Field of Dreams, it may be Colorado and not Iowa. Colorado has a certain mystique about it. It’s about the Rocky Mountains, pristine lakes, cowboys, snow, skiing, and the wide-open range.

When it comes to real estate, Colorado and the Boulder Valley are areas that conjure up words like quality of life, blue skies, clean air, friendly people, and a great place to call home. What doesn’t get mentioned often these days, as it relates to our area, are words like reasonable home appreciation, manageable foreclosure rates, sensible levels of available homes for sale, and practical amounts of new construction.

Maybe you are still in disbelief! Maybe the media painted a picture of the real estate market that is so bleak that there’s no end to the tunnel. Well, let’s look at some facts as they relate to the total Northern Colorado real estate market, compliments of IRES (MLS). Below are statistics through November for the past three years for single family homes.

% Change

2005 2006 2007 2005 to 2007

New Listings 26,240 26,922 24,578 -6.33%

Sold Listings 15,653 13,441 12,912 -17.51%

Average Sales Price $297,000 $308,487 $311,996 +5.05%

Median Sales Price $237,000 $242,000 $243,500 +2.74%

Some thoughts about the local real estate market:

· There are not rampant for sale signs wedged in yards throughout neighborhoods. Actually, there are noticeably fewer homes for sale today than two years ago.

· Overall home sales are down. The absorption rate (the time it takes the market to fully turn, which is a supply and demand relationship) was about 7 ½ months in 2005. Thus far in 2007, the absorption rate is just under 10 months.

· Average Sales Price and Median Sales Price have increased slightly over the past two years. This indicates a fairly stagnant market, but with home values holding their own.

· Home mortgage interest rates have fluctuated between 5.75% and 6.75% over the course of the past two years… affordable when compared to double digit rates in the past.

· For homes to sell in a timely manner, they still need to be in good shape, show well, be priced right, and be marketed globally via the Internet.

· Also, the rental market has improved, making now a great time to invest in real estate.

October 2007 MARKET UPDATE

BOULDER CO REAL ESTATE

There’s a concept in real estate called the “domino effect”. The domino effect is one method of measuring the degree of activity in the real estate market. If the market is slow, the domino effect isn’t very noticeable. If the market is active, the domino effect can have a visible impact on the number of sales.

So, what is the “domino effect”? Very simply, it’s the number of transactions in a sequence that have to occur for all or any of the dominos not to fall. As an example, if I need to sell my home before I can buy your home, two things have to happen: 1) I need to get my home sold and 2) I need to buy your home. This is the most basic example of the domino effect; just two transactions have to transpire.

In an active real estate market, the chain of dominos can be much longer. As an example, I need to sell my condo to buy your starter home so you can buy a larger home, so that seller of your larger home can buy a retirement home in Arizona. In this chain, four transactions have to happen in order for the domino chain to stay intact. These four different transactions need to funnel their way through buyer loan approvals, property inspections, appraisals, title/document review, and successful closings. If one of these transactions fails, the possibility exists that they all will fail.

In today’s real estate market, the “domino effect” is rarely evident. Most real estate buyers today are in either of the two following scenarios: 1) They have sold their house and they are in the market to purchase a replacement home. As such, depending on their personal situation, their motivation may be high or they may be taking a “wait and see” attitude about the market and have decided to rent. Either way, they are in a stronger purchasing position since they have nothing to sell. or 2) They have a home to sell and want to buy a replacement home, but they don’t as yet have a buyer for their home.

If you are a home seller in today’s market, what options do you have available to you to create, even on a minimum level, the domino effect? Here are some thoughts.

1. Perceived Value. Even in a slow real estate market, there are buyers looking to buy. From the perspective of perceived value, how does your home compare to similarly priced homes not just in your neighborhood, but in the general geographic area of your home. Buyers today are much more mobile today than they were ten or fifteen years ago. Today’s buyer may look at homes in our area from Denver to Fort Collins and Evergreen to Estes Park before they make an informed decision.

2. Price Overcomes All Objections. In many home purchases, price often becomes the defining factor in whether or not a sale happens. The old adage about location, location and location being the three motivating factors for a buyer to buy, still holds some truth. But, ultimately, price will become the dominant element that determines if a successful closing occurs or not.

3. Buyer Incentives. To compete effectively against new home builders and competitively priced resale homes, resale home owners need to ask themselves the following question: “What can I offer a prospective home buyer that would cause them to buy my home over the competition?”

What defines the market place as it relates to the domino effect? One word: demand. As demand increases, the domino effect expands. Only time will tell to what degree the domino effect becomes a significant force in our local marketplace.

September 2007 MARKET UPDATE

BOULDER CO REAL ESTATE

Real estate markets are often defined by two distinctly different phrases; i.e., “buyers are gold” or “sellers are gold”. Depending on which phrase is presently in vogue may define the state of our real estate market. Today, in the Fall of 2007, “buyers are gold”. The buyer rules when availability exceeds demand.

Determining whether a real estate market is a buyer’s market or a seller’s market (or even a balanced market) can be established in many different ways. One way is to listen to the media who has a tendency to extract their facts and figures on a national basis, which may have little or nothing to do with what is actually happening in our area. A second way is to have so-called “economic experts” drone on about the Gross National Product, job statistics, and the monetary policy across the globe. A better way might be to just look at some facts.

Here’s a fact. Through September/2007 there are slightly over 2,000 fewer new listings on the market this year than last year according to IRES, the Northern Colorado Multiple Listing Service. That’s about an 8.60% reduction. Sales, you say? They are down about 2.71% over last year for Northern Colorado. What about home values? Are they going up? Down? Sideways (just kidding)? Here is what IRES represents for single family homes sold through September of 2006 and 2007.

Single Family Homes

2006 2007 % Change

AREA Average Price Average Price 2006 vs. 2007

Boulder $639,154 $661,244 +3.45%

Louisville $366,482 $389,455 +6.26%

Lafayette $400,497 $411,876 +2.84%

Superior $431,247 $409,849 -4.96%

Longmont $289,700 $279,916 -3.37%

Suburban Plains $541,986 $565,164 +4.27%

Suburban Mountains $428,400 $463,709 +8.24%

Broomfield $334,436 $381,823 +14.16%

======= ======= ======

Average … $428,987 $445,379 +3.86%

Here are some facts about the geographic areas noted above (again through September of each year).

· In 2006, there were 3,441 single family homes sold; in 2007 there have been 3,281 single family homes sold through September…a change of less than five (5) percent.

· The total closed volume for single family homes in 2006 was $1,510,213,223; for 2007 that number is $1,495,589,210 through September 2007…a reduction of less than one (1) percent.

· As noted, the local real estate market is relatively stable. With the exception of Broomfield (appreciation fostered by new home construction), home values are appreciating at a somewhat “sensible” level.

August 2007 MARKET UPDATE

BOULDER CO REAL ESTATE

You can always tell when the final days of summer are approaching. It’s when those large yellow vehicles with the words “School Bus” stenciled on them begin to appear on neighborhood streets. As such, many people begin to shift their focus away from the elements that make summer…well, summer. Things like family vacations, trips to the zoo, Rockies games and to some degree, the purchase of real estate.

Thus far, this has been an interesting year for the real estate market across the country and throughout the Boulder Valley. This has been a year defined by words like “foreclosure”, “sub-prime loans”, “interest only loans”, “depreciation”, etc. Those are not good real estate words.

In real estate, perception is everything. Regardless of facts or figures, in the mind of the individual home buyer and home seller, what they perceive to be “is” their reality. What they believe to be true “is” their truth.

When one is inundated daily with the media bemoaning the state of the real estate market, the tendency is to believe the sky is falling. In some areas of this country, there is some truth to that. The so-called “bell weather states” like Texas, Florida and California are perceived to be “visionary” states; i.e., what happens there paves the way for what is going to transpire across the balance of this country. That may be the perception, but it isn’t always true.

Those of us who call Colorado home, and particularly those of us who live throughout the Boulder Valley, are often sheltered from the happenings in those large states. While those states have been previously experiencing annual double digit appreciation of home values, and now presently annual double digit depreciation, the Boulder Valley real estate market has been meandering along at a somewhat reasonable but sporadic pace of appreciation for the past few years. And so, Mr. and Mrs. Homeowner, everything is still pretty "good" in your local world.

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July 2007 MARKET UPDATE

BOULDER CO REAL ESTATE

The information age is upon us and will forever be a part of our human experience. As such, much of what we come to believe is based on the information we allow into our lives and how we process that information. Thus, perception and reality can often be two different things; i.e., what one believes “is” may not actually “be”.

As an example, much has been discussed about the state of the mortgage industry as it relates to bank and HUD foreclosures, sub-prime loans, etc. As the negative energy around mortgage financing has evolved, the impact to the national housing market has been noticeable. On the surface, there appears to be fewer buyers in the marketplace, but significantly more homes to choose from for those buyers who view this as an opportune time to buy.

That’s the perception and, there is some truth to that. However, from the perspective of reality, here is a brief overview of the real estate market for single family homes for each of the past seven years from IRES, the Northern Colorado MLS, through July of each year.

Compared To Compared To

Previous Year Previous Year

Year New Listings % of Change Sales % of Change Absorption Rate

2007 17,063 -8.51% 8,461 -3.00% 14.1 Months

2006 18,652 +4.89% 8,723 -6.24% 15.0 Months

2005 17,782 +2.75% 9,304 +0.76% 13.4 Months

2004 17,306 +6.05% 9,233 +9.74% 13.1 Months

2003 16,318 +8.91% 8,413 No Change 13.6 Months

2002 14,983 +6.99% 8,426 +1.88% 12.4 Months

2001 14,003 ----- 8,270 ----- 11.9 Months

Some Observations …

1. Average number of single family homes sold per month (per day) for each year from January through July: 2001: 1181 (39); 2002: 1204 (40); 2003: 1202 (40); 2004: 1319 (44); 2005: 1329 (44); 2006: 1246 (41); and 2007: 1208 (40).

2. The Absorption Rate is defined as the time it takes for the market as a whole to turn-over; assuming there are no new listings, and the sales rate stays the same. This rate has improved thus far in 2007 over 2006. (14.1 to 15.0 months). That’s a good indication that the real estate market, at least ours, is on the upswing.

3. The number of new listings thus far in 2007 is down about 8.5% over 2006. The number of sales is down 3.0%. Fewer listings overall, but sales off only one home per day through July of this year.

Our real estate market isn’t quite as bleak as it might be perceived. But, there is still room for improvement before the market becomes more balanced, where buyers and sellers interact on a level playing field. Home sellers need to continue to be realistic and aware of market conditions, the competition, and the power of Internet Marketing. Buyers still rule, to some degree.

June 2007 MARKET UPDATE

BOULDER CO REAL ESTATE

It’s officially summer! The kids are out of school. The weather’s heating up. Air conditioners and sprinkler systems are working overtime. And the real estate market, how is it doing?

Not much has changed over the past few months in the local real estate market. The somewhat anticipated “surge” in sales activity hasn’t materialized. Home sales are continuing to occur, but at a reasonably steady pace. Mortgage interest rates have trended up slightly over the past month, but still sit under seven percent for the traditional thirty-year fixed rate loan.

With the on-going saga with bank and HUD foreclosures, and sub-prime loans, there are some noticeable changes happening in the lending arena. Appraisers are becoming even more detail oriented in determining real estate values. Lenders are becoming more persistent in the documentation they are requiring from prospective borrowers. Loan closing files are much more extensive these days, with numerous disclosure documents required of both the lender and the borrower.

To get a feel for how this year’s real estate market compares to previous years, below is an update on the Northern Colorado real estate market for single family homes. The information is courtesy of the IRES MLS and is through June of each year.

Year Number of Number of Average Average

New Listings Sales Sales Price Price Change

2007 14,564 6,983 $312,462 +1.72%

2006 16,128 7,328 $307,154 +4.04%

2005 15,168 7,728 $295,224 +5.83%

2004 14,813 7,595 $278,950 ______

When you look at the numbers, a few things are evident: 1. The number of sales is down, but so is the number of new listings. 2. The average sales price isn’t growing in “leaps and bounds”, but it isn’t going down either. The average single family home has increased in value approximately 12% over the past three years; only about 4% per year. Which means? The local real estate market has remained fairly stable.

What isn’t evident from these numbers is the pace of the market. Which means? How quickly are things selling? The best method of determining overall market conditions is the absorption rate. That is, how long will it take to sell the existing inventory at the present rate, assuming nothing new comes onto the market? Right now, the absorption rate for single family homes thus far in 2007 is about 12.5 months. That compares to 13.2 months for 2006; 11.8 months for 2005; and 11.7 months for 2004. Which means? The local real estate market has performed at a similar pace for the past four years.

And, what does the future hold? Most likely, things will remain much the same. There is no “double digit” home appreciation on the horizon. Home mortgage interest rates will go up and down slightly. Home sales will continue at a similar pace, with buyers having a variety of choices and sellers needing to be knowledgeable about the market.