Increase in short sales give market a little breathing room

Increase in short sales give market a little breathing room

Boulder Valley Economic Snapshot

October/2011

            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 out 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 drop.  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 will naturally continue to soften? Where there are fewer prospective buyers, but also fewer options for the 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.

            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 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.

            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 white knight.  They are at the core of the economy.  As jobs are created, the economy shifts in a positive direction, which benefits 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 out there from the perspective of that one buyer. Buyers have other options to choose from and they 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.  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 another prospective buyer to come their way.

Longmont has the best real estate values in Boulder County!

Looking to relocate to Boulder County? Of course, it's a great place to live and offers many opportunities for recreation with its open space, bike trails, hiking trails and fun events. The city of Boulders median price for a single family home is around $550,000 and $273,000 for attached homes!! Louisville's single family home median price is $389,000 and about $220,000 for attached homes. Lafayette's is $309,000 for single family homes and $179,000 for attached. Longmont's prices are a bargain in comparison!! Median price for a single family home is about $225,000 and about $168,000 for an attached property! Having lived in Longmont for 28 years, I can tell you the city is a great place to live. Longmont's population is about 85,000 and offers wonderful amenities, such as parks, bike and walking trails, fun festivals and events year round. Contact me if you would like more information on the housing market in Longmont Colorado!

Economic Snapshot August, Boulder County

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.

Economic Snapshot for Boulder Valley Real Estate

Economic Snapshot July/2011 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. Below is a brief overview of the housing market in our area by locale for single family homes from IRES (the Northern Colorado MLS). 2010 2011 (Thru June) Area Average Sales Price Average Sales Price %Change Boulder $649,726 $672,072 +3.44% Superior $426,358 $419,758 -1.55% Louisville $440,176 $398,612 -9.45% Lafayette $357,129 $362,301 +1.45% Longmont $256,222 $246,738 -3.70% Suburban Plains $549,136 $532,562 -3.02% Suburban Mountains $412,176 $387,946 -5.88% Broomfield $379,432 $338,805 -10.71% Average … $433,246 $426,783 -1.49%

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  Hey, Presidential Candidates: Where are the New Ideas to Fix Housing?

  Fixing the housing market is perhaps the most important step toward fixing the economy, so you would think those who want to win the next presidential election would be talking about how housing creates jobs, the ways consumer confidence is tied to home prices, and what the heck they will do to fix the housing market and turn the economy around. Read

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Copyright 2011 NATIONAL ASSOCIATION OF REALTORS®

Economic Snapshot for Boulder Valley Real Estate

Economic Snapshot

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

June/2011

            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.