Signs of better times? Home sales for April paint positive picture of future market

Apparently April was the right time to buy a house in Boulder County – especially with the first-time and move-up homebuyer tax credit expiring at the end of the month.

Regardless of the mad dash to qualify for the tax credit, the sales volume for the month was impressive, says Ken Hotard, senior vice president of public affairs for the Boulder Area Realtor Association.

According to BARA, 346 single-family homes and 144 condos and townhomes sold in Boulder County in April, compared with 204 and 86, respectively, in April 2009. That’s a nearly 70 percent increase in single-family home sales and a 67 percent increase in condo/townhome sales.

"As we expected, home sales increased substantially along with inventory, both of which are good things," he says, noting more inventory gives buyers more choice. "The expiration of the tax credit is going to have a moderate dampening effect on buyer and sales activity this summer, but we’ve seen an uptick in job growth nationally as well as in Colorado (nearly 300,000 jobs added in the nation last month). That suggests that the pull back on buyer activity will be modest but sales volume will continue growing modestly (compared with normal summer sales)."

Average and median sales prices remain lower than a year ago in most Boulder communities, but none have dipped as much as 10 percent, and Louisville's has even increased.

The values of homes are "holding well in our market, certainly in light of what we’ve seen in other parts of the country," Hotard says.

While the statistics indicate that Boulder is well on its way to turning the corner toward a more stable housing market in the second half of the year or early 2011, as Hotard predicts, it’s not there yet, he warns.

"The housing market is fragile. Jumbo loans are still difficult to get, and the second-home market is going to be soft, at least until the end of 2010," he says.

Federal mortgage enterprises Fannie Mae, Freddie Mac and FHA have stepped up to bolster housing markets and are making a difference, but private lenders need to start lending money, as well, to balance the mortgage markets, Hotard says. And that could be affected by what Congress does to reform the mortgage finance process later this year.

"Going forward, job creation will continue to be the key to economic rebound," Hotard says, adding jobs will help stabilize home prices and limit future foreclosures.

"Our market is showing really good signs of turning the corner," he adds, noting it would probably take a national or international crisis to stop or reverse this trend toward economic recovery.

In all Boulder communities, Hotard says he sees consumer confidence returning not only through increased home sales and inventory, but through growing tax revenues.

"It’s been a long time since we’ve had encouraging news," he says. "There likely will be better times ahead."