February’s market stats show signs of spring, emergence of selling season

While February's home sales statistics for the Boulder area were nothing to throw a party over, they were an improvement over the month before, and they were in line with sales at the same time last year.

Boulder County saw 158 single-family homes sell last month and 67 condos and townhomes sell, compared with 127 single-family homes and 56 condos and townhomes in January. February's single-family home sales were the same as in February of 2008, but only 46 condos and townhomes sold a year ago.

Ken Hotard, senior vice president of public affairs for the Boulder Area Realtor Association, notes that the increase of inventory – from 1,768 single-family homes on the market in January to 1,976 for sale in February; and from 668 condos and townhomes for sale in January compared with 760 in February – is also promising.

The more homes available, the more buyers have to choose from, he says. And the increase in inventory as well as sales show that people are no longer sitting on the fence: they are deciding to sell or take advantage of the market and buy.

Median sales prices for homes in the Boulder area are headed in the right direction overall compared with January, as well, but it was condos and townhomes that had the healthiest showing in median and average sale prices in February.

Hotard describes the statistics for February as showing "classic improvement as you move through the year and closer to the buying season," adding that the area should have a strong March and April.

Nonetheless, sales are still sluggish compared with historic market trends as a result of tight credit and the lack of job growth factoring into the pace of sales, he says.

And the expiration of the extended first-time buyer and existing home owner tax credit at the end of April will not help the market, Hotard says. Any home buyers looking to take advantage of the credit must have their homes under contract by the end of April and close on them by July 1.

"I think it would present some more difficulty for the market as a whole," Hotard says. "Congress should extend it at least until the end of this year. It's been very helpful to move the market along over the past year. It has provided some strength to the overall economy and really should be extended."

The National Association of Realtors has been lobbying President Obama's administration and Congress to extend the credit, he says.

Signs of stabilization mean growth could be around the corner

While year-to-date home sales in the Boulder market were still down through October, sales for the month were better than they were in October 2008 – good news for the local real estate market.

In total, 276 single-family homes and 96 attached homes in Boulder County sold in October, compared with 250 single-family and 86 attached homes in October 2008. During the first 10 months of the year, 2,942 single-family homes sold, compared with 3,750 in the same period last year; 1,145 attached homes sold this year, compared with 1,395 through October of 2008.

Ken Hotard, senior vice president of public affairs for the Boulder Area Realtor Association, called the statistics “good news.”

“We’re seeing really good signs of market stabilization when we look at sales in October 2009 compared with October 2008,” he says. “It’s up about 5 percent marketwide on single-family homes. From September to October 2009, we’re right on track – there’s no decline. We’ve seen stabilization of the year-to-year data in sales volume decline.

"We are looking to turn the corner on growth before heading into the second half of 2010."

In September, 274 single-family homes sold and 108 attached homes sold. Sales prices, though still down, held steady in October, as well. In fact, Erie and Louisville saw slight increases in median sales prices, while Boulder saw only a 0.9 percent drop in its median price.

He says he expects the extension of the first-time homebuyer tax credit to have a positive impact on the Boulder County market. Congress recently extended the $8,000 tax credit for first-time homebuyers through May 1, as well as added a $6,500 tax credit for buyers who have been in their homes for five consecutive years in the last eight years, and increased the income limits for a qualifying single individual to $125,000 and for a couple to $225,000.

“Those are all signs the stimulus will continue to support market stability, as the economy begins to recover,” he says. “Hopefully that will be a launch to a healthier overall market and economic condition for the second half of next year.

“There’s no question about it; affordability is at an all-time high,” Hotard adds. “There are a lot of people who have been sitting on the fence and this will be exactly what they need to move off of the fence and into the game.”

However, two things could dampen progress: continued tight credit, particularly in the jumbo loan area, and weak job growth, he says. “Those could be factors that hold us back a bit."

And through the first half of 2010, the market will favor buyers, Hotard says.