Summer is finally here, bringing market improvements and optimism with it

The month of June brought no surprises as far as Boulder area real estate market statistics.

While the overall market is down compared with a year ago, it is starting to make the upward swing that usuaslly arrives in the spring, according to Ken Hotard, Boulder Area Realtor Association senior vice president of public affairs.

"We’re seeing continued growth," he says. "Home prices are holding well, and we’re continuing to see strength building from quarter to quarter."

In the second quarter of 2009, 807 single-family homes sold – an approximately 62 percent increase over the 499 that sold during the first quarter of the year. And the attached-home statistics are even more impressive: 176 homes sold in the first quarter compared with the 329 that sold in the second quarter – an 87 percent jump.

Hotard says that steady prices are a result of lower increases in inventory, supporting continued accurate and appropriate pricing, and the loosening of the lending market is helping the market, as well.

"Lending is opening up a bit and adding to the opportunity for buyers to get into a great market," he says. "I believe we will see strength in sales for the rest of the summer and into the fall."

Hotard says lending institutions are realizing that if they don’t lend money, they can’t make money, so they are becoming more comfortable in assisting buyers who can and will pay their mortgages on time and in full in securing loans. That, in turn, has opened the door to a larger pool of buyers who have been shut out of the market because of uncertainties in those credit markets.

"Rates are great, and home prices are driving buyers into the market," he says. "There’s great deal of opportunity for folks who have decent credit and can get into that marketplace. We’re seeing people get into that, and lenders are helping."

As they should, lenders are making more pragmatic decisions regarding loans and borrowers, and common sense more than fear if playing a big factor in those decisions, Hotard says.

"Data shows across the board the market is improving," he says. "We were kind of expecting that."

Delayed spring activity could mean improved summer, fall market

The Boulder area real estate market is moving at an “anemic pace,” but it is improving modestly from month to month, according to Ken Hotard, senior vice president of public affairs for the Boulder Area Realtor Association.

Nationally, home sales increased 2.4 percent from April to May. “That’s similar to what we’re seeing,” he says.

The Boulder market is also experiencing modest growth in inventory of homes month over month, but Hotard says he expects the peak in inventory and sales that normally comes in April or May to not arrive until July. The late arrival of that cycle could equate to a better fall market.

The volume of single-family home sales from May 1, 2008, and April 30, 2009, is down between 11 percent and nearly 40 percent in every Boulder community compared with the previous year, and the volume of multifamily sales is down between 9 percent and 42 percent. But Realtors are reporting more buyer activity and an increase of homes under contract, Hotard says. Next month’s statistics should show whether that activity and contracts result in more closings.

Several markets experienced an increase in average and median home prices – including a 9.4 percent increase in median price and a 3.4 percent increase in average price in Broomfield – in May, but some had significant declines. Hotard attributes the latter to what’s selling – more lower-priced properties – versus the value of real estate across the market. And with a lack of lending availability, especially of competitive jumbo loan products, that trend is likely to continue.

In the communities where prices are improving, such as Broomfield, Boulder and Superior, it’s a result of a combination of price point, location and product, Hotard says. For instance, Broomfield has a supply of newer houses priced appropriately for this market, “so it’s no wonder you’re seeing some good strength there,” he says.

“It’s rational and realistic to say that this continues to be a difficult market,” Hotard says, adding that “hopefully it’s setting up to be a productive fall season.”

With moderately priced housing and an $8,000 first-time homebuyer tax credit, he is optimistic that that is exactly what will happen.