Monday, December 13, 2010

Economic Snapshot

Economic Snapshot


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



December/2010



The end is near. Another year is about to hike over the horizon and a new year will magically make its presence known. The years seem to slip by more quickly these days as we try to keep pace with the newest cell phone, computer or television. Technology has made things smaller, more efficient and quicker. We would die of boredom waiting for an old IBM 286 to boot up; all fifty pounds of it.

Despite all the changes in technology over the past couple of decades, the purchase and sale of real estate has remained pretty much the same. It is still a hands-on business. Ultimately, all the final decisions are made by humans, not computers.

The pace of a real estate market isn’t defined by the human element, though. Statistics rule here. How many homes have sold this week, this month, and this year? How does that compare with last year or the year before that? Are home values going up or down? How many homes are on the market for sale? All questions requiring statistical answers.

Here are some area statistics compliments of IRES (Northern Colorado MLS). The year 2005 is used as a benchmark, since that has been the most active year for sales activity for the past six years throughout Northern Colorado.



• Boulder County: In 2005, there were 4,193 single family homes sold. For 2010, there will be approximately 2,560. That equates to about a 39% drop in the number of sales.

• Boulder County: In 2005, there were 1,602 attached units sold. For 2010, there will be approximately 1,030. That equates to about a 36% drop in the number of sales.

• Northern Colorado: Through November/2005 there were 26,239 New Listings. Through November/2010 there were 19,724 New Listings. That equates to about a 25% drop in the number of New Listings.

• Northern Colorado: Through November/2005, the Medium Sales Price was approximately $237,500; Average Sales Price was approximately $296,521. Through November/2010, the Medium Sales Price was approximately $230,000; Average Sales Price was approximately $286,704.



Statistics can be confusing at times. They can also be manipulated to represent a specific position. If looked at solely from the perspective of what the numbers are, they don’t lie. So, what do the numbers above tell us?

1. Sales are down noticeably from 2005. They have trended down every year since 2005 for Boulder County, but the numbers for 2010 will be equal to or slightly above 2009 sales figures.

2. The number of active listings has dropped off significantly since 2005. Sellers have decided to (a) stay where they are and not move; (b) wait for the market to improve and then move; or (c) rented their home and moved.

3. Real estate market values have not improved since 2005. In actuality, they have dropped slightly overall. The upper end of the market i.e. over $600,000 has experienced the greatest negative impact from the economy. The lower end of the market has sustained itself.

4. Finally, the Boulder County single family Absorption Rate for 2005 was 7.5 months. Through November/2010 the Absorption Rate is 7.06 months.