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Boulder
November 2011 MARKET UPDATE
BOULDER CO REAL ESTATE
As a new year peers over the horizon, the hope is that 2012 will bring a more prosperous year for the Boulder Valley/Northern Colorado real estate market. Since the peak year of 2005, overall sales activity has dwindled each year, with the years 2009 through 2011 having reached some level of stability.
Home mortgage interest rates have trended down over the course of 2011. The traditional thirty-year-fixed-rate loan peaked at slightly over 5% in February and presently resides at around 4%. Using the average sales price of a single family home in Boulder Valley/Northern Colorado ($271,125) with a 5% down payment ($13,555), the difference in the monthly principle and interest payment of the resulting loan amount ($257,570), between 5% ($1,382.69) and 4% ($1,229.68) is $153.01. At 4% interest, a buyer could borrow $289,620, with a monthly principle and interest payment of $1,382.69; $32,050 more than they could have borrowed at 5%.
Home values have stabilized. Mortgage interest rates have declined. The end result is that a home buyer’s purchasing power has increased.
Below is statistical information from IRES (Northern Colorado MLS) through November of each year for the Boulder Valley/Northern Colorado real estate market.
· Single Family Sales: 10,778 (2011); 10,379 (2010); 10,409 (2009)
· Single Family Average Sales Price: $281,883 (2011); $286,335 (2010); $271,125 (2009)
· Single Family Median Sales Price: $225,000 (2011); $230,000 (2010); $221,315 (2009)
· Attached Unit Sales: 2,213 (2011); 2,176 (2010); 2,356 (2009)
· Attached Unit Average Sales Price: $196,796 (2011); $204,693 (2010); $204,575 (2009)
· Attached Unit Median Sales Price: $163,000 (2011); $167,500 (2010); $168,900 (2009)
The number of new active listings continues to drop across the Boulder Valley/Northern Colorado real estate market. Through November of each year the number of new listings for single family homes was: 17,134 (2011); 19,756 (2010); and 18,652 (2009). The peak year for new single family home listings was 2006 with 26,930 listings through November. For attached units, the numbers are: 3,552 (2011); 4,401 (2010); and 4,220 (2009). Again, 2006 was the peak year for attached unit listings at 6,464.
The Colorado Division of Housing recently reported that foreclosure filings are down nearly 28% and foreclosure sales are down approximately 20% thus far this year compared to 2010. Mesa County (-35%) and Denver County (-32%) experienced the largest declines; Boulder County (-26%) and Larimer County (-27%). Pueblo County (-12%) reported the smallest decline across the state. On the surface this bodes well for the Colorado housing industry as bank foreclosures and short-sales have had a noticeable impact on real estate market activity and neighborhood home values for the past few years.
Look for 2012 to mirror the past three years with sales activity continuing to stabilize; mortgage interest rates remaining at reasonable levels, and new home construction expanding as inventory levels of available properties remain low. Bank foreclosures and short sales will be a viable part of the market as financial institutions continue to purge them from their books.
October 2011 MARKET UPDATE
BOULDER CO REAL ESTATE
The Boulder County real estate market has remained relatively stable for the past three years. Sales of single family homes and attached units have been on equal footing, so to speak. Home values have trended-up in some price ranges (mostly at the entry level), but have experienced a downward shift in others (homes priced over a million). As 2011 winds to a close, it appears this year will continue as a similar pattern to 2009 and 2010. Sales activity will be down slightly compared to those two years (about 6%), with single family home sales settling around 2,600 units. That would compare with 2,612 single family homes sold in 2010 and 2,536 in 2009. Those numbers are substantially lower than the peak year of 2005 when 4,193 single family homes were sold.
One of the noticeable changes Boulder County has experienced this year is the growth in new home construction. Production builders like Meritage Homes, Ryland Homes, Toll Brothers and Richmond have either developed new parcels of land or purchased “in-fill” lots from other builders, banks, etc. Most of these homes would be considered “start-up” homes for first-time buyers or buyers moving-up from a smaller home or attached unit. Prices are in the $325,000 to $550,000 range after design center “add-ons”.
The Daily Camera newspaper recently ran an article updating the status of bank foreclosures throughout Boulder County. The article states foreclosure filings were down 28% for the third quarter of 2011 compared to the third quarter of 2010 (25% statewide). Foreclosure sales were down 25% when comparing the two time frames (30% statewide). Based on those numbers, one would surmise things are improving on the foreclosure front. They may be, but there could be a couple of reasons why those numbers are suspect. First, the article suggests banks and mortgage companies may be holding off pursuing foreclosures due to the “robo-signing” controversy. A second thought is lenders are suggesting/recommending/advising borrowers to consider a short-sale solution rather than going through the foreclosure process, which can potentially be more costly to the lender.
Short sales are simply defined as a lender who is willing to accept less than they are owed on a property in lieu of ending-up with the property through the foreclosure process. It’s a “cut your losses and move-on with your life approach” that benefits the lender and provides the borrower with a way out that may not have as great a negative impact on his/her future credit worthiness.
As we drift from Fall into Winter, expect mortgage interest rates to continue to remain around the 4% level for the traditional thirty-year fixed rate mortgage. Adjustable rate mortgages with fixed three, five and seven year terms, and fifteen-year mortgages can be had for a lower rate. Obtaining financing can still feel like having your teeth pulled, but lenders do have funds available and are willing to work with qualified buyers; the key financing word being “qualified”. The key borrower words being patient and flexible.
Look for the Boulder County real estate market to experience its normal quiet period as the holidays take precedence over finding the perfect house. But, there will still be buyers out looking and, hopefully, buying this time of year. There will just be fewer of them. If so, these buyers will be very serious. Also, inventory levels will soften as sellers decide to wait for Spring to start the process.
September 2011 MARKET UPDATE
BOULDER CO REAL ESTATE
The economic climate these days is reflective of a yo-yo. One day it’s up, the next it’s down. I believe we would all be a little happier if it would stay about the same from one day to the next…preferably up.
The Boulder County real estate market has remained relatively stable the past few years. According to IRES, the Northern Colorado Multiple Listing Service, in 2009 there were 3,665 single family/attached unit sales in Boulder County. There were 3,660 sales in 2010. Through September of this year that number is tracking about 6.5% behind last year, which would equate to around 3,425 sales for 2011.
Home mortgage interest rates have dropped to the lowest level in decades, which has impacted the refinance market, but not so much the resale market of homes. As is characteristic of this time of year, the inventory of available properties continues to decrease. This pattern will sustain itself into the Spring of 2012.
If you are a home seller, where do you go from here in a real estate market that may continue to soften? A market where there are fewer prospective buyers, but also fewer options for those buyers who are actively in the market. There’s an old saying in real estate: “Price overcomes all objections.” That statement holds most true in a declining real estate market…a buyer’s market. Advanced and aggressive Internet Marketing by an experienced Seller’s Agent is of the utmost importance.
The Boulder County real estate market has struggled to right itself since 2005, when the local market peaked. There were 5,795 single family/attached unit sales that year. That’s a huge difference from where we are today. Admittedly, the Boulder County real estate market hasn’t felt the significant negative impact in housing values that other parts of the country have experienced, but it still has been affected by the economic environment.
The Absorption Rate for Boulder County (single family homes) at the end of September 2011 was 7.7 months or 233 days. If you are attempting to sell a home priced at over one million dollars, the Absorption Rate averages 24.8 months or 756 days. That’s a long time to wait for a buyer and a successful closing.
As we wind our way through Fall toward Winter, there doesn’t appear to be a white knight perched on the horizon that is going to magically lift us out of this somewhat stagnant real estate market. Jobs are the proverbial white knight. They are at the core of the economy. As jobs are created, the economy will shift in a positive direction, which will benefit the housing industry.
So, if you are a home seller looking for that one buyer, you need to be the best value not only on your block, in your neighborhood or in your community; you have to be the best value from the perspective of that one buyer. Buyers have many options to choose from and are willing to wait for the right opportunity.
Real estate is a little different from many other types of business. It is a business of negotiation, pitting buyers against sellers; each wanting to garner the “best deal”. That is where the Boulder County real estate market is today. At the moment, buyers have the upper hand. They call the shots. Sellers who aren’t willing to play in what seems like a “zero sum game” can be left standing on the sidelines; hoping for that one illusive prospective buyer to come their way.
August 2011 MARKET UPDATE
BOULDER CO REAL ESTATE
If you take a realistic look at the Boulder Valley real estate market, it’s a perfect scenario for prospective homebuyers. Some reasons why:
Home mortgage interest rates are at historical lows. At this writing, a traditional thirty-year fixed rate mortgage is vacillating around 4% with no origination fee or discount points. Want to go lower? The 5/1 Adjustable Rate Mortgage (where the first five years are fixed) is at 2.875% with no origination fee or discount points; and pay a 1% origination fee and that rate drops to 2.375%.
Home values have stabilized in most price ranges and geographic areas. As noted below, across the market the average year-to-date single family home sold value is comparable to 2010. Total single family home sales through August/2011 for the market areas noted below is 2,118. This compares to 2,164 single family home sales through August/2010; a reduction of 2.13%. But, the market is trending-up over the course of the past ninety days when compared to the same time frame in 2010; expect single family home sales in 2011 to outpace single family home sales in 2010 for the Boulder Valley real estate market.
Despite the inventory level of available properties continuing to decline, which is characteristic of this time of year; stabilizing home values and exceptionally low mortgage interest rates…sellers are still motivated to sell. Many sellers are willing to provide buyers with financing assistance; willing to cover certain closing costs. Price negotiation in the upper price ranges (over $500,000) is more evident than homes priced under $500,000, as there are fewer buyers in the market for those more expensive homes.
As the late Summer/Fall real estate market winds down, there are opportunities to be had in the market. If you are a buyer considering a move-up or move-down, this may be the perfect occasion for you to get proactive in the market. If you are a seller, pricing your home competitively and Global Internet Marketing by an experienced Seller’s agent are still a priority. Please contact us.
July 2011 MARKET UPDATE
BOULDER CO REAL ESTATE
The pace of things is much quicker these days and much more sensitive. Technology is the culprit with its Internet, smart phones and social networking. Want to know something about anything and it’s only a few keystrokes away on a computer, phone or electronic notebook. We are truly in an age of information.
Real estate has become part of this information age with a variety of Internet sites available to obtain present housing information. These sites would include the inventory of homes for sale, home values, mortgage interest rates, foreclosures and bank repossessions. Possibly everything a potential home buyer or seller would need is available somewhere on-line.
What is missing is the human touch.
Finding a home to purchase is part of the process. Determining how to purchase it is the part that challenges the human aspect. From negotiating a contract to procuring financing to getting over inspection and appraisal hurdles, and making it to the closing table, without going insane, requires the support of Realtors, lenders, appraisers, and inspectors.
Today’s real estate market is teeming with anxiety. Seller’s are dealing with a buyer’s market. Buyer’s are unsure if now is a good time to buy or should they wait. Mortgage lenders are faced with changing regulations and an increase in qualifying requirements. Appraisers are conservative in their appraisals. Realtors are working with sellers to price properties realistically. In the end, it all seems to work… especially, when seller’s sell and buyer’s buy.
When looking at the Boulder County housing market, things are beginning to improve. For July/2011, single family home sales were UP 26% compared to July/2010; attached unit sales were UP 28%; overall the market was UP 26.4%. Year-to-date (compared to through July/2010), the Boulder County housing market is down 7% for single family home sales and 27% for attached unit sales; overall it is down 13%; but the market should continue to improve over the balance of the year compared to 2010.
In evaluating the Boulder County housing market, one of the key focal points is the Absorption Rate; i.e., how long does it take for the market to turn. The Absorption Rate characteristically peaks at the beginning of the year and then declines as sales activity improves. For 2010, the ending Absorption Rate for Boulder County was 6.3 months. At the end of July/2011 the Absorption Rate stood at 8.9 months for Boulder County. That rate was down from 9.5 months in June/2011.
Home mortgage interest rates continue to remain reasonable: 30 year fixed rate at 4.5%; 15 year fixed rate at 3.75%; 5/1 ARM at 3.125%, and a 7/1 ARM at 3.375%. All of these rates are at zero origination fee and no discount points. Lender buy-downs are available for lower interest rates. Like everything else these days, mortgage rates vacillate up and down on a daily basis.
As the balance of the summer drifts away and we head into the “cooler” days of Fall, the Boulder County real estate market will hit its traditional peak in sales activity and then begin to naturally slow. Sellers who need to sell now will need to take a serious look at how realistically their home is priced relative to the market. Buyers will need to take advantage of moderate mortgage interest rates and recognize that now is a good time to buy.
June 2011 MARKET UPDATE
BOULDER CO REAL ESTATE
During the past few years there has been a great deal of discussion and debate in the economic arena about the national real estate market. Most of it hasn’t been pleasant. When something positive surfaces i.e. sales are improving, home values have stabilized, etc. it can be viewed from the perspective that the real estate market is beginning to shift. The days of doom and gloom are behind us and sunny days are the new norm.
Real estate markets have traditionally followed that scenario. They bottom-out at some point and then begin the arduous task of righting themselves and slowly (very slowly) gaining momentum. Buyers are once again actively engaged in the process. Sellers are once more receiving reasonable value for their homes. Realtors, mortgage lenders, appraisers, home inspectors and insurance companies feel the impact of the change. New home construction gears-up. The sound of hammers, saws and "boom boxes" once again fill the air.
The real estate market we have been experiencing for the past five or six years is slightly different. At times it offers the promise of a renewed enthusiasm. At others not so much. If you follow the stock market, it’s a roller coaster. One day it’s up based on some newly published economic index. The next day it’s down based on some foreign country threatening to default on their loans. The housing market can feel much the same. According to MetroList (MLS), real estate contracts for the Denver Metro area written in June/2011 are up 22.5% compared to June/2010. That’s a positive. Available homes for sale in June/2011 are down 15.7% compared to June/2010. That’s a positive. More sales; less inventory; scarcity creates demand.
The hope is the Denver Metro/Boulder Valley real estate market will sustain itself through the balance of the summer and into the fall. That home buyers and investors will see this as an opportune time to buy. Sellers will view this as a favorable time to move-up, move-down or move-on.
May 2011 MARKET UPDATE
BOULDER CO REAL ESTATE
In some obscure way, a healthy real estate market mirrors life; it seeks balance. It trends toward a market where there are a practical number of homes for sale, an adequate number of home buyers, reasonable mortgage interest rates, and an acceptable level of appreciation in home values. When all of these elements are in alignment, tranquility exists. When they aren’t? Then some degree of confusion and uncertainty prevails.
The Boulder Valley real estate market has not experienced a "balanced housing environment" for the past few years. Inventory levels of available properties have declined as many homeowners have decided to either stay where they are and not sell their home or they have rented their home and moved on; themselves often renting somewhere else. Homebuyers have become less visible these days. Through May/2011, Boulder County single family home sales are down 18% and attached unit sales are down 34% when compared to the same time frame for 2010. The overall market is down 23%.
In today’s real estate market, there are certain considerations at play. (1) Buyers are bargain hunters. They want the maximum return on the dollars they are investing in a home. They don’t want to lose money. They believe in the old adage, "Buy low, sell high.", but they aren’t always confident what low is or what high might be. (2) Price overcomes all objections. There’s a price where everything will sell, even if the seller needs to bring funds to closing. That’s one of the issues facing the housing industry today; it’s an upside down world. Many homes are worth less than what is owed on them. The solutions to that dilemma are to stay the course and hope housing values improve, let the bank have the property or belly-up to the bar at closing with cash in hand, if you’re the seller. (3) He/She who has the gold makes the rules. Mortgage companies and banks are the pathway to the great American dream; home ownership. Unfortunately, that pathway is strewn with stringent governmental and banking regulations, conservative underwriters and appraisers, and difficult qualifying requirements. Mortgage rates have continued to hover in the 4.5% to 5.0% range for the traditional thirty-year fixed rate loan. (4) Seller’s are unrealistic regarding pricing. Real estate markets are like sifting sand; they change quickly. New neighborhood sales reflect on neighborhood values. What sold down the street three or six months ago may not be an accurate representation of what a seller’s home may be worth today. (5) Consumer awareness is at an all-time high. Home buyers have immediate access to a plethora of housing information on the Internet. Some of it isn’t always accurate, but it’s there. More consumers today begin their search for a home, car, appliances, etc. on-line than ever before. They do their homework. When they show-up to purchase, they are educated about the nature of the marketplace.
On the bright side, homes are continuing to sell. Median home values for the Northern Colorado housing market have remained relatively stable for the past few years, only off seven (7) percent when compared to 2005 [slightly over one (1) percent per year on average]. Much better than what has happened in some of the bell weather states where double digit depreciation has been the norm.
April 2011 MARKET UPDATE
BOULDER CO REAL ESTATE
Residential real estate has historically served two purposes: (1) a place to call home and, (2) as an investment vehicle to build equity over time. There have been occasions when the real estate market was impacted negatively by the economy, but the market ultimately bounced back. Homeowners simply needed to be patient and they would be rewarded financially in the near future.
Things are a little different these days when it comes to residential real estate. To begin with, it’s important to recognize that real estate markets are like lumbering dinosaurs. They aren’t extinct, but they move slowly. Once they’ve started heading South it takes time and energy to get them redirected and headed back North. There has to be something to motivate these markets to make the shift; i.e., exceptionally low mortgage interest rates or plummeting home values can provoke change, but the one factor that tends to outweigh all others is simply “personal need”.
Today’s home buyers and sellers appear to be more mindful of making calculated decisions regarding their real estate needs. Do they need a larger home or is it time to downsize? Can they remodel their existing home and stay where they are? If they buy a home today, will it be worth more (the same) three, five or ten years from now?
When it comes to buying or selling a home in today’s real estate market, it isn’t an impulse/knee-jerk decision. Buyers and sellers have access to an abundance of housing information; from a wide selection of general public Internet sites (who’s values aren’t always accurate) to Realtor websites (ours is www.ColoradosBestBroker.com ) and marketing materials. Buyers and sellers will take their time and evaluate their “needs” before making a decision.
As the Spring blossoms, the Boulder Valley real estate market normally begins to strengthen. Inventory levels of available homes ratchet-up and buyers shake-off the doldrums of Winter. The days become longer; the nights shorter; and people’s attitudes brighten.
Thus far this year, Boulder County sales of single family homes are off approximately 17% through April/2011 versus April/2010. Attached condo/townhome sales are down about 34%. To some degree this drop in sales activity can be attributed to the missing Federal Home Owner Tax Credit Program, which was in place for the first few months of 2010.
Another factor to consider in measuring the level of sales activity is the Absorption Rate for a specific geographic area or price range. The Absorption Rate is based on the rate of sales activity versus the number of available properties. (As an example, let’s assume there are 200 homes available for sale in Tiny Town, Tennessee. There have been 50 homes sold in the past sixty days. The Absorption Rate would be 240 days or about 8 months. That’s assuming the rate of sales activity remains the same and no other properties come into the market.)
For Boulder County, the Absorption Rate at the end of April/2011 was 349 days or about 11.5 months for single family homes. Homes priced from $1,000,000 and up had an Absorption Rate of 1,056 days or about 35 months. The message here is that pricing a home for sale and Global Internet Marketing is extremely important in today’s market. Maybe more so than at any other time since the mid-1980’s when the market tanked.
There’s an old saying that goes like this: “Price overcomes all objections.” The house needs painting? Yard needs work? Carpets are shot? Highway is right outside the front door? IDM – It Don’t Matter! If the price is right…the property will sell and close. That saying holds true in good real estate markets and bad real estate markets.
March 2011 MARKET UPDATE
BOULDER CO REAL ESTATE
Spring hasn’t quite sprung, as the last remnants of Winter continue to meander across the Boulder Valley. This time of year is a time of change and uncertainty when it comes to the weather and the local real estate market. Spring and early Summer are characteristically the busiest times of year for home sellers and buyers. The real estate market generally starts its pattern of increased listings and emerging sales as the weather improves. The marketbegins to de-hibernate, so to speak.
This year should be similar to past years as home sales tend to peak in June and July; and then begin to drift lower during the balance of the year. The question becomes: Is there anything different this year than the past few years in the local real estate market?
For Boulder County, sales activity through February/2011 is comparable to sales activity through February/2010. But, last year the The Worker, Homeownership and Business Assistance Act of 2009 was still in place for the first part of the year. Sales in the March/2010 through June/2010 timeframe were up noticeably (+36% for single family homes; +32% for attached units) over the same time period for 2009. For 2011, expect sales numbers to be lower than 2010 for those months since there is no “government funded” buyer incentive program available this year.
Mortgage interest rates have trended-up slightly over the past few months; now residing around five (5) percent for the traditional fixed rate thirty-year mortgage. Lenders are willing to lend, but they require borrowers to provide a horde of financial information. The old days of having a warm body and firm handshake was all you needed to get a loan are … the old days. He who has the gold makes the rules is the new path to acquiring the lender’s money.
Entry level single family homes, those priced from $100,000 to $400,000, will continue to be the most active part of the market. In 2010 they were 57% of the total sales for Boulder County. Thus far in 2011, they are 58% of the single family market. Homes priced from $1,000,000 and up were 5% of the single family market in 2010; they are the same so far this year. The Absorption Rate for homes priced $1,000,000 and up in 2010 was approximately 25 months. The overall market ended 2010 with an Absorption Rate of 6.3 months.
There are pockets of new construction occurring throughout the Boulder Valley. Louisville is doing some in-fill projects. Lafayette is showing some renewed interest in a couple of their existing new home subdivisions. There is sporadic building in some of the other areas, but overall there is no rampant new construction going on like there was six to eight years ago.
This Spring look for the Boulder Valley real estate market to continue to be a buyer’s market. Home sellers will need to be knowledgeable of present market conditions, as it relates to home values, as the inventory level of available properties begins to rise. Pricing will be one of the key elements a home seller must make. Pricing a property above present market value and saying “bring me an offer and I’ll negotiate” is a waste of everyone’s time (usually).
Unlike gas prices, where the price for a gallon of gas increases while you’re pumping it, mortgage interest rates move more gradually up and down. Economic forecasts are for rates to remain around their current levels for the rest of the year. Interest only and adjustable rate mortgages have become less popular as fixed rate loans have become more reasonable.
February 2011 MARKET UPDATE
BOULDER CO REAL ESTATE
Before a declining real estate market can recover, it must reach a plateau. This market must halt its negative momentum and begin the arduous process of turning around itself. This can often take an inordinate amount of time, because it is contingent on a number of factors. There needs to exist favorable mortgage interest rates, motivated and somewhat plentiful buyers, reasonably priced properties and acceptable levels of available inventory. There must be a timely transition from a buyer’s market to a more balanced buyer/seller market.
The Boulder Valley real estate market has struggled for the past five years as the national economy drifted into somewhat of a a chaotic state. For Boulder County, overall sales activity for single family and attached units dropped 42% during this five-year period; an average of 8.40% per year at which time a buyer’s market prevailed.
The Chinese calendar for 2010 was known as the “Year of the Tiger”; for Boulder County 2010 may be remembered as the “year of the plateau”. Real estate sales last year for Boulder County were comparable to 2009… less than a one percent difference.
2011, the “year of the rabbit” in the Chinese calendar, has gotten off to a quick start. Boulder County single family and attached unit sales for January/2011 are UP nearly 19% over January/2010. That’s without any government assisted first-time homebuyer program being available. Hopefully, this isn’t a tortoise and the hare tale, where the hare takes a nap midway through the course its running or the real estate market slumps in the second half of the year.
Here are some things to digest as we venture down this precarious real estate path through the rest of 2011.
1. Mortgage Interest Rates: Back in the late 1980’s and early 1990’s, home buyers would have literally killed to get a thirty-year fixed rate loan for 4.75%. It would have felt like they were stealing money from the banks. They would have been lined-up for blocks; drooling on themselves. In today’s economic climate 4.75% doesn’t generate the same level of enthusiasm. It’s nice, but it doesn’t get home buyers salivating. Mortgage interest rates have risen slightly over the course of the past few months. If the housing market rights itself, look for interest rates to continue this pattern.
2. Available Inventory: That black cloud perched on the horizon is composed of bank foreclosures, short sales and HUD properties. It’s unclear how many of those little devils are out there. They keep popping their heads up. In the past couple of years many of them have been purchased by savvy investors, first-time homebuyers or, on a more limited basis, buyers looking to take advantage of a price sensitive marketplace and make a move-up. Lack of inventory creates motivation in the mind of buyers. Unfortunately, high inventory levels of available properties have been the norm the past few years. BUT, that may be changing. New residential listing inventory for the Northern Colorado real estate market for January/2011 is down 20% compared to January/2010. Is there a pattern developing here; i.e., more sales and fewer listings?
3. Residential Home Values: Finally, for a plateau to exist there needs to be stabilization in market values. For Northern Colorado, the median priced residential property sold in January/2011 for $225,000; for January/2010 that number was $212,000; for January/2005, the year when Northern Colorado sales activity peaked, it was $227,000.
Market data statistics are from IRES the Northern Colorado MLS.
January 2011 MARKET UPDATE
BOULDER CO REAL ESTATE
Before a declining real estate market can recover, it must reach a plateau. This market must halt its negative momentum and begin the arduous process of turning around itself. This can often take an inordinate amount of time, because this turnaround is contingent on a number of factors. There needs to exist favorable mortgage interest rates, motivated and somewhat plentiful buyers, reasonably priced properties and acceptable levels of available inventory. There must be a timely transition from a buyer’s market to a more balanced buyer/seller market.
The Boulder Valley real estate market has struggled for the past five years as the national economy drifted into somewhat of a a chaotic state. For Boulder County, overall sales activity for single family and attached units dropped 42% during this five-year period; an average of 8.40% per year at which time a buyer’s market prevailed.
The Chinese calendar for 2010 was known as the “Year of the Tiger”; for Boulder County 2010 may be remembered as the “year of the plateau”. Real estate sales last year for Boulder County were comparable to 2009… less than a one percent difference.
2011, the “year of the rabbit” in the Chinese calendar, has gotten off to a quick start. Boulder County single family and attached unit sales for January/2011 are UP nearly 19% over January/2010. That’s without any government assisted first-time homebuyer program being available. Hopefully, this isn’t a tortoise and the hare tale, where the hare takes a nap midway through the course its running or the real estate market slumps in the second half of the year.
Here are some things to digest as we venture down this precarious real estate path through the rest of 2011.
1. Mortgage Interest Rates: Back in the late 1980’s and early 1990’s, home buyers would have literally killed to get a thirty-year fixed rate loan for 4.75%. It would have felt like they were stealing money from the banks. They would have been lined-up for blocks; drooling on themselves. In today’s economic climate 4.75% doesn’t generate the same level of enthusiasm. It’s nice, but it doesn’t get home buyers salivating. Mortgage interest rates have risen slightly over the course of the past few months. If the housing market rights itself, look for interest rates to continue this pattern.
2. Available Inventory: That black cloud perched on the horizon is composed of bank foreclosures, short sales and HUD properties. It’s unclear how many of those little devils are out there. They keep popping their heads up. In the past couple of years many of them have been purchased by savvy investors, first-time homebuyers or, on a more limited basis, buyers looking to take advantage of a price sensitive marketplace and make a move-up. Lack of inventory creates motivation in the mind of buyers. Unfortunately, high inventory levels of available properties have been the norm the past few years. BUT, that may be changing. New residential listing inventory for the Northern Colorado real estate market for January/2011 is down 20% compared to January/2010. Is there a pattern developing here; i.e., more sales and fewer listings?
3. Residential Home Values: Finally, for a plateau to exist there needs to be stabilization in market values. For Northern Colorado, the median priced residential property sold in January/2011 for $225,000; for January/2010 that number was $212,000; for January/2005, the year when Northern Colorado sales activity peaked, it was $227,000.
Market data statistics are from IRES the Northern Colorado MLS.
Decemeber 2010 MARKET UPDATE
BOULDER CO REAL ESTATE
The first decade of this new millennium was one of contrasts. It began on loose footing with the dot.com fiasco and the events surrounding 9/11. Then, the years of unbridled economic growth followed, where people’s thoughts were centered on early retirement, travel abroad and procuring more adult toys. The decade limped to a close as the government attempted to pump new blood into an ailing economy by offering tax credits to homebuyers and salvaging the banking industry; home mortgage interest rates fell to historic lows. The question that begs an answer is “Where are we ten years later?”
Let’s take a quick look back to see where the Boulder County real estate market was ten years ago relative to today. In January/2001 the traditional thirty-year fixed rate mortgage was at 7.07%. In December/2010 that same loan was at 4.86%. The average sales value of a single-family home in 2001 was $361,833. In 2010 the average sales value of a single-family home was $442,694. That equates to a 22.34% increase in the average sales value; approximately 2.23% per year. Using the above figures, with a 20% down payment, the principle and interest payment for the average home in 2001 was $1,939.45. In 2010, that number would be $1,870.99. Things have improved incrementally over the course of the past ten years.
The Boulder Valley real estate market appears to have weathered the economic storm and reached a point of stabilization. Boulder County sold properties in 2010, single-family homes and attached units, was 3,660. This compares to 3,665 sales in 2009. The inventory of available homes for sale still exceeds the number of potential buyers, with the Absorption Rate presently standing at 6.26 months.
Per the chart below, the average home values of sold properties have improved over last year in most market areas. This should continue as buyers who have been standing on the sidelines view this time (now) as an opportune time to purchase homes in the higher price ranges.
Home mortgage interest rates have trended-up slightly over the course of the holidays. As the economy continues to show signs of improvement, expect mortgage rates to vacillate around the 5% mark as we head toward Spring.
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.
2009 2010 % 2009 2010 %
Area Solds Solds Change Average Price Average Price Change
Boulder 563 622 +10.48 $647,584 $650,280 +0.42
Louisville 202 194 -3.96 $394,214 $440,512 +11.74
Lafayette 219 229 +4.56 $352,667 $357,377 +1.33
Superior 127 107 -15.75 $413,935 $426,358 +3.00
Longmont 891 831 -6.74 $240,902 $256,175 +6.34
Sub. Plains 373 449 +20.37 $510,351 $549,796 +7.73
Sub. Mtns. 203 230 +13.30 $415,567 $411,662 -0.94
Broomfield 353 338 -4.25 $353,343 $380,074 +7.56
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Totals … 2931 3000 +2.35% $405,363 $433,427 +6.92%
© Copyright 2004-2007 by Bruce Royer
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