Economic Snapshot For Boulder, Weld and Larimer Counites

A look at the current real estate market; provided by RE/MAX ALLIANCE



October/2010



Over the course of the past eighteen months, the Federal Government implemented the Homeowner Tax Credit Program. The Federal Reserve lowered the Federal Funds Rate for member banks to borrow funds to nearly zero percent. Home mortgage interest rates have fallen to the lowest level in more than fifty years. Now, members of the banking industry are taking a sabbatical by not foreclosing on homes. All of these factors were/are designed to stabilize and stimulate the housing industry. Despite all these efforts, the housing market continues to quietly drift along.

There have been spurts of activity. The Boulder Valley real estate market was UP in sales activity at the end of June/2010 as compared to the end of June/2009 for both single family homes (+36%) and attached units (+34.5%). But those numbers have dropped since the Homeowner Tax Credit Program ended in late April/2010. Through September/2010, single family home sales are UP 13.5% Y.T.D. compared to Y.T.D. 2009; and are comparable for attached units. Thus, the Boulder Valley real estate market hasn’t sustained itself.

One of the best indicators of real estate market activity is the time it takes for the market to absorb itself. A healthy real estate market is thought to be around six months of available inventory. That time frame provides buyers with an adequate selection of homes and sellers with a reasonable amount of time to sell. The “absorption rate” for the Boulder Valley real estate market has vacillated between nine and ten months for most of 2010. Through September/2010, the absorption rate stands at 270 days; nearly nine months. As we enter the fall and winter, the absorption rate should remain around the same level as both inventory levels and sales dwindle.

The question now becomes, “What’s next?” What magic elixir can the Federal Government and banking community pull out of their proverbial hat? The answer isn’t putting more lipstick on the pig, because you still have a pig. The answer always comes back to one four-letter word; the word that drives the economy and fosters the housing industry. That word is “jobs”. Jobs are the Holy Grail; the path to redemption; the pot of gold at the end of the rainbow. Without them, you have a stagnant economy, which naturally leads to a declining housing market.

Below is a brief overview of the absorption rates for single family homes in a number of the Boulder Valley areas through September/2010. Thanks to IRES, the Northern Colorado MLS, for all their magic numbers.




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


Boulder County              1946                                     2054                                    8.5 Months
Larimer County               2777                                    3066                                     8.1 Months 
Weld County                  1836                                     2341                                    7.0 Months

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Boulder                           652                                         646                                    9.0 Months

Lafayette                         169                                         187                                    8.2 Months

Longmont                        601                                         720                                    7.5 Months

Louisville                         105                                         157                                     6.0 Months

Suburban Mountains        380                                         182                                   18.7 Months

Suburban Plains              455                                          347                                   11.8 Months

Superior                           52                                            82                                     5.7 Months

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Community Totals:           2414                                       2321                                   9.4 Months