Cold temperatures in February put a freeze on housing market

While February’s home sales didn’t follow the upward trend of recent months, it wasn’t any surprise that a lack of real estate activity followed the freezing temperatures Colorado experienced.

“February really kind of resulted in a bit of a flattening out of the market, in part driven by the extremely cold weather that struck people down for about two weeks,” says Ken Hotard, senior vice president of public affairs for the Boulder Area Realtor Association.

While the 158 single-family homes sold equaled those sold in February 2010, the 54 condominiums/townhomes that sold was down from the 67 that sold a year ago.

While Hotard attributes the lack of more sales of single-family homes to the cold weather that “took people out of home buying experience,” he says the drop in sales of attached units is consistent with that market’s performance in recent months.

“We’re seeing weakness in sales volume year over year in particular market areas, including single-family homes, but it’s more pronounced in condo/townhome sales that have been weak for some time now.”

However, while home sales are lackluster, the average and median single-family home prices are anything but in most Boulder County communities. Every Boulder market showed an increase in median sale prices, while only the city of Boulder showed a decrease – 2 percent – in average sale prices.

“In the midst of that (slow sales), average and median sales prices in single-family (market) have not only held up but dramatically improved in most markets year over year,” Hotard says. “They’re looking very solid.”

As if providing a lesson in contrast, the average sale price of condos/townhomes in five of the nine Boulder communities dropped in February, and the median sale price of attached units fell in three of the communities. Louisville and Lafayette were the only two communities that saw a decline of both their average and median sale prices of condos/townhomes.

“One thing not helping right now is inventory has shrunk to a point in which some buyers are seeing limited choice in type of housing product they’re looking for,” Hotard says, referring to the overall real estate market. “We’re still seeing demand but not seeing the product available for particular buyers.”

Other hindrances to the expansion of the Boulder area’s real estate market include the lack of job growth, he says.

“We continue to see very modest improvement (in jobs) and similarly with credit availability, but not enough to push us into a rapidly expanding market” or even a more aggressive market than the current one, Hotard says.

And while the more recent world events of the natural disasters and nuclear dangers in Japan as well as the United Nations’ actions against Libya may not have a direct link to the local market, they may have an impact, nonetheless, he says.

“Unfortunately, worldwide events at this time are creating uncertainty, which is always an uncomfortable thing for markets, particularly real estate markets,” Hotard says.

He adds that the growing unrest in the Middle East and rapidly rising gasoline prices “clearly signal uncertainty, and that has the potential to discourage consumers from making major decisions.”

Yet Hotard says he is still confident that current events won’t be enough to cripple the local market.

“I anticipate continued improvement in the market as we move through the spring and into the summer,” he says. “All indications are that the economy is slowly but surely recovering.”