Tuesday, August 16, 2011
August/2011 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. It is truly an age of information. Real estate has become part of this information age with a variety of Internet sites available to obtain current housing information. These 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 entails 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 increased 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 as seller’s sell and buyer’s buy. In 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 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 are at zero origination fee and no discount points. Lender buy downs are available for lower 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 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.