Economic Snapshot

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

April/2012

            With the advent of spring, there appears to be a ray of sunshine for the Boulder County real estate market. Through March/2012 single family homes sales are UP approximately 11% year-to-date versus 2011; attached unit sales are UP approximately 7% year-to-date versus 2011; the overall market being UP approximately 10% year-to-date versus 2011. Assuming the local real estate market keeps a similar pace over the balance of the year, there will be approximately 4,000 single family homes (73%) and attached units (27%) sold in 2012. This would be somewhat comparable to sales activity for 2008 (4,270 sales), but still considerably below 2005 figures (5,795 sales) when activity peaked. 

            Below are some sold numbers for single-family homes for various geographic areas throughout the Boulder Valley. Information is courtesy of IRES (the Northern Colorado MLS).

                                                           2011 Sales                2012 Sales

                                                          1^st Quarter               1^st Quarter          

                         Area                        Single Family          Single Family       % Change

              Boulder                                        92                             138                  +50%           

              Erie                                              46                             50                    +9% 

              Superior                                       15                             19                    +27%                       

              Louisville                                     35                             28                    -20%

              Lafayette                                     36                             43                    +19%           

              Longmont                                    140                           172                  +23%           

              Suburban Plains                           99                             89                    -10%

              Suburban Mountains                   31                             34                    +10%           

                                                                   ===                          ===                 ====

                  TOTAL                                  494                           573                  +16%

            In the April/2012 issue of RISMedia’s Real Estate Newsletter, they listed outside influences that may have an impact on real estate.

1.      The Election: Will economic conditions improve as the President seeks to remain in office or will there be upsets with a change in leadership?

2.      The Job Market: The overall employment picture is improving, but the pace and direction it takes is critical to the housing market.

3.      The Weather: Did the calm winter rob sales from the spring and summer and frontload stats for 2012?

4.      The Banks: Credit standards have strangled many would-be homebuyers. If and how much the criteria loosens this year will have a direct impact on housing.

5.      The Investors: Many feel investors will play a big role this year. Their impact on decreasing excess inventory could provide an unanticipated boost to home values.

6.      The Renters: A big benefactor of the housing decline, the rental market has been booming. However, recent stats show that rising rents combined with low home prices has now made owning a home more affordable than renting one.

Boulder County Economic Snapshot

Economic Snapshot

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

March/2012

            As is characteristic of this time of year, the inventory level of available homes starts to expand. For Boulder County, active listings are up 18% through February/2012 compared to the end of 2011. Sales of single family homes and attached units are up 4% for the first two months of this year compared to the first two months of 2011.

            After four years of a declining real estate market (2006 to 2009) and the past three years having reached a plateau in sales activity (2009 to 2011), there appears to be a renewed buyer interest in the Boulder County real estate market. This can be attributed to a variety of reasons.

·         Home Values Have Stabilized: Through February/2011 the median sold price for a single family home in Boulder County was $365,000 and an attached unit was $198,202. Through February/2012 those values were $370,000 for a single family home and $195,000 for an attached unit.

·         Home Mortgage Interest Rates: Who would have thought mortgage interest rates would hold at historic lows for as long as they have. The traditional thirty-year fixed rate loan continues to hover around 4%. Adjustable rate mortgages (those dastardly fiends that caused many people to lose their homes) can be had for fewer than 3% with the first five years fixed.  Interest only loans (also a bane of the past) are still available, but not as attractive as they once were.

·         Real Estate Is A Bottom Up Business: When a real estate market begins to churn in a positive direction it always starts at the bottom. Less expensive properties fuel the fire. This activity creates the opportunity for the domino effect to surface. Low end sellers buy more expensive homes causing a chain of sales to occur. Lack of available inventory can hamper this cycle as sellers wishing to move-up can’t find what they want.

·         New Construction:  In the movie Field of Dreams, the voice in the cornfield whispers: “Build it and they will come.” That is true of new construction. Activity begets activity. The sound of boom boxes and hammers pounding is like a moth drawn to a light, they attract buyers. Production builders have seen the light with new homes being constructed in pocket areas across Boulder County this late winter/early spring.  

·         Short Sales and Bank Foreclosures: These continue to play an active part of the real estate market as banks and the Federal Government continue to work their way through this process. When this mess is finally put to bed, we would hope the financial institutions and the government have learned their lesson and we won’t find ourselves treading down this path again – ever. 

·         Unemployment Rate: Jobs fuel the economy. The current unemployment rate for Colorado is running around 7.9%. At the beginning of 2011 it was at 8.9%. When the Boulder County real estate market peaked in 2005 the Colorado unemployment rate stood at 5.2%.

            There are a lot of positives in the Boulder County real estate market as we head into the spring. It continues to be a buyer’s market, especially in homes priced above a million dollars, but we are gradually moving toward a more balanced marketplace, which is good for both buyers and sellers.