First glance at the November real estate statistics for Boulder County indicates the local market is following the downhill trend much of the nation has been on for a while. After all, sales have dropped by double digits year-over-year for all but two market areas, and many communities saw a reduction in both average and median sales price.
But Ken Hotard, senior vice president of public affairs for the Boulder Area Realtor Association, says that while the picture will probably grow worse before it gets better, Boulder continues to show strength that will allow it to sustain the stormy weather still to come.
“I’ve been telling you for some time that things are going to get worst, and they have,” Hotard says. “It’s not going to be fun over the next 12 months, but we’ll get through it.
The communities suffering the most from the current market conditions include Lafayette, which saw an 18.8 percent drop in sales from January through November 2007 compared with January through November 2008; the plains, which had a 28.8 percent drop in sales; and Superior, with a 29.1 percent reduction in sales for year over year. In the city of Boulder, 17.5 percent fewer homes sold from January through November compared with the same period last year.
“Those are troubling numbers,” Hotard says.
However, the inventory of single-family homes on the market has remained steady in some markets and shrinking in others. In the city of Boulder, the inventory had decreased by 11 percent from October, while it dropped 5 percent in Longmont and 13.7 percent in the mountains.
“That ought to keep people positioned to move toward a more balanced market as we get into probably the second quarter of next year,” Hotard says, noting these conditions create sales opportunities, he doesn’t expect to see a significant increase in sales activity during the first half of 2009 and maybe not even before the end of next year.
Four out of nine of the county’s market areas saw decreases in both average and median sales prices for the year, but most of those decreases were still relatively small – the exception being Superior’s 12.3 percent decrease in average sales price – and the remaining five markets actually saw increases in both categories, he points out.
Inaction at the federal level is holding up improvement in the real estate market, Hotard notes. “There’s still some uncertainty of what our federal assistance programs are actually going to look like and do. We’re hearing of more investment of the fed to spur job creation and that will bring a lot of positive movement, but we need to get the credit market freed up and moving again” for significant improvement.
The most recent announcement by the Federal Reserve to reduce the prime interest rate by three-quarters of a point will translate into lower mortgage interest rates, opening doors of opportunity, Hotard says. For example, anyone with an adjustable-rate mortgage should consider refinancing within the next 90 days.
“While all real estate is local, all financing is individual,” he says. “For folks out there with good credit and equity in their homes, it will create an opportunity for increased refinancing. With prices down or steady, there are opportunities for home buyers, investors and those looking to change their lifestyle,” whether it’s moving up, downsizing, changing locations or going from renting to owning.
“In an overall sense, you can’t sugarcoat the current situation,” Hotard says. “What you can do is look for opportunity.”
On that note, Hotard sends to all RE/MAX of Boulder E-zine readers his “best wishes for a joyous holiday season and a prosperous New Year.”
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