Early spring sales show promise of new life in housing market

If you compare March’s real estate statistics for Boulder County with March 2010, you might think things are worse off than they really are.

But if you recall that at this time last year, the first-time and move-up tax credit was bringing potential home buyers out of the woodwork, you’d understand what an unfair comparison that is.

However, compared with the last year without a tax credit influencing sales – 2009 – March 2011’s home sales are improving, says Ken Hotard, vice president of public affairs for the Boulder Area Realtor Association.

Sales of single-family homes, 212 in March, exceeded the 193 sold in March 2009, though the 75 condominiums and townhomes that sold in March fell below the 87 sold two years ago. Compared with February, single-family home sales were up from 158 and condo/townhome sales increased from 54.

In March 2010, 272 single-family homes sold and 119 condos/townhomes sold.

“We’re basically continuing the trend we’ve seen in recent months,” Hotard says. “We’re showing good improvement over 2009, but we’re still not matching the 2010 numbers when we had the tax credits in place.”

The condo/townhome market continues to struggle, thanks to an excess supply for the demand that’s out there, he says.

While the current market stats aren’t reaching stimulus-level activity, the single-family market is showing increased sales and price stability month over month, Hotard says.

“We’re getting a little of that spring bump and hopefully that’ll continue,” he says, noting he is hearing from area Realtors that listing activity is more brisk, though inventory is not increasing evenly across submarkets.

Average and median sales prices on single family are continuing to improve throughout the Boulder market, much in part to the fact that the area didn’t experience inflated prices in the early 2000s, he says. The current prices reflect the real value of homes in the Boulder area markets.

Hotard says another positive sign that will impact the market in time is an improvement in local communities’ sales and use tax receipts, which shows “potential improvement” in consumer confidence and spending.

However, he says, “the drags that are still out there. The overall economic health remains weak, and while job growth is improving, it’s not at a pace to significantly reduce unemployment.”

Tight credit, the national debt and talk about requiring 20 percent down to obtain a mortgage are adding to the uncertainty people have about the real estate market, though, in the end, lenders will adopt more reasonable qualifications for lending, Hotard says.

On the bright side, new home construction went up 7 percent nationally in March, he notes, which means homebuilders are expressing more confidence.

“There certainly could be pockets in certain market areas where increasing the supply of new housing makes sense,” Hotard says.