Good news, bad news reflected in latest market stats

Given the recent events in the economy, it’s no surprise to Ken Hotard that the real estate market produced a mixed bag of statistics in September.

“There are two really big things that jump out at you: one is positive and one is negative but to be expected,” says Hotard, senior vice president of public affairs for the Boulder Area Realtor Association.

First, the number of homes sold is significantly down in nearly every category of dwelling unit and in almost every Boulder County community from Sept. 1, 2007, through Aug. 31, 2008, compared with the previous year. That is directly related to credit tightening in the mortgage industry, Hotard says.

“To me, that’s what those numbers reflect,” he says. “Folks are not able to get mortgages. People with good credit still are, but people right on the margin are finding it difficult and more costly to get (mortgages).”

On the other hand, the latest statistics show that the inventory of available homes in many parts of Boulder County is down. For instance, Longmont, which had a 12- to 13-month supply only a few short months ago, now, with 501 on the market, has only a six-month supply, Hotard explains. The owners of some of the homes for sale previously have taken them off the market, but others are selling.

Boulder’s September statistics were an exception to that trend, though, with only 51 homes selling in the month. It could take eight months to absorb the 401 homes on the market at that rate, Hotard says. A low absorption rate is unusual for Boulder and relates more to sales volume – the city historically sees 80 to 100 sales a month – than with inventory of homes on the market.

But he says with the current market conditions, it’s not likely that the sales volume will pick up anytime soon. “This tight-credit thing is serious,” Hotard says.

Another positive aspect of the latest statistics is that average sale prices remained steady throughout Boulder County and even climbed slightly in all but three communities – Lafayette, Longmont and the mountains, he notes.

Hotard says it’s hard to say how the current economic situation will play out, as it’s a new experience for all involved.

“Don’t we wish we had a crystal ball?” he asks. “For a lot of people, this (the government’s solution) looks an awful lot like guesswork. We’re going to have to ride this out for a while until the picture clarifies for us. Those with money in the stock market have to hold their breath and ride this thing out.”

In the meantime, those with good credit and ready to buy real estate may get a good price now, but some buyers believe prices will drop even more if they wait, Hotard says. And even borrowers with great credit won’t likely find mortgages for nothing down; they should be prepared to bring 10 percent – if not 20 percent – of the loan to the closing table.