Local real estate market keeps to its slow pace in October

October’s real estate statistics for Boulder County offered both good news and bad news, depending on your point of view.

“The bad news is the market hasn’t changed much from last month,” says Ken Hotard, senior vice president of public affairs for the Boulder Area Realtor Association. “The good news is the market hasn’t changed much from last month.”

With 230 single-family homes and 66 condos/townhomes selling in October, compared with 227 and 72, respectively, selling in September, sales are holding steady though at a low level, he says.

If that “good news” isn’t good enough, Hotard points out the “solid improvements and minor declines” of Boulder area average and median home prices.

The average sales price dropped in only three communities, and then only slightly, and the median sale price dropped in only two communities – again, only by a slim margin. That means home values increased in most Boulder communities last month.

Hotard also notes that inventories of homes for sales of decreased over the last several months, which means it takes fewer months for the houses on the market to sell and keeps prices stable or improving slightly.

“That’s good news, that the market has taken that shape, because it helps to maintain values,” he says.

But for homes priced at $1.5 million or higher, the absorption rates begins to climb into the double digits (10 months or more), Hotard says.

New home construction projections recently fell almost 12 percent from 600,000 units annually to 519,000, nationwide. That helps bolster the resale market by keeping the supply low and absorption rates in balance, he says. “Buyers looking for homes today are most likely looking at re-sales.”

For people considering putting their home up for sale, “they’ve got a stable market in which they should have an opportunity to sell a quality home that’s priced well. They won’t see as many low-ball offers from buyers trying to take advantage of a weak market,” Hotard says.

Hotard points to the lack of mortgage financing and the over-tightening of credit standards nationally to the lackluster performance of the real estate market.

“It’s gone beyond point of credit tightening for good reason to the point of credit tightening just for the sake of credit tightening,” he says.

Quoting Bloomberg.com, Hotard says, “'We’ve gone from silly to stupid,'” captures lenders’ recent behavior."

For the time being, not much will change, he says.

“I’m not encouraged that the outcome of the recent elections will yield much in the way of dramatic action to improve our economy in the short run,” Hotard says. “I think we have a real possibility of gridlock and inaction for a period of time.”

Hotard says he expects some reduction in sales volume through the end of 2010, but inventories will continue to decline and prices will hold well.

“The first quarter of next year will be very instructive as to what to expect going into springtime when markets usually accelerate,” he says. “I don’t think we’re out of the woods yet. This downturn has been deeper and longer than has been expected by the best experts and has exceeded my expectations as to its duration.”