While the latest real estate data for Boulder County reflects a not-so-surprising downhill trend, it continues to show the strength and stamina that have sustained it while other markets have been in freefall for months or longer.
“I’ve still got to feel good about our overall market, our market compared with Colorado’s and Colorado’s compared with the nation’s,” Ken Hotard, vice president of public affairs for the Boulder Area Realtor Association, says.
Boulder County – and Boulder, in particular – is showing strength in property values, and giving “an absolutely amazing performance in the real estate market given state and national economic conditions. I’m not sure where you would go to find a better looking set of data in any housing market,” he says.
One bright spot is the reduction of homes on the market, which has sustained average and median sales prices, he says. In many Boulder markets, prices either increased or dropped only slightly.
“We’ve continued our decline in sales volume,” Hotard notes. “We’re not sure we’ve seen the end of that. We do believe 2009 is the year we’ll bottom out. We’re not sure when it will happen, though I suspect it will be in the second half.”
When the situation has hit rock bottom, chances are it won’t skyrocket back up, he says. “Sometimes you hit bottom and get a big bounce, but the nature of this downturn suggests the bounce isn’t big, but it’s sustainable.”
Year-over-year sales are down, and lending is still a problem, Hotard says. Credit is available to people with A-plus credit, a job and a down payment, but a “huge portion” of qualified, potential buyers don’t fit that profile and tight credit has eliminated them from the market. “Breaking credit free is key to recovery,” he adds.
Whether the foreclosure trend will continue as 2.5 million mortgages adjust this year and 3 million next is in question, as many borrowers may renegotiate their loans and avoid foreclosure or receive assistance from the federal government, Hotard says. “The first quarter (of this year) will be very telling in terms of understanding how various stimulus packages are going to be applied and what the likely and potential effects are,” he says. “The picture’s not quite clear.”
Another bright spot the data doesn’t reflect: the interest rate has dropped to as low as 4.75 percent for 30-year fixed mortgages and likely to fall more, Hotard says. Such “clearly historic low” interest rates will potentially attract buyers, though they will still have to qualify and have a down payment, Hotard says.
“Personally, I think there’s pent-up demand for automobiles and for real estate,” he says. “Credit is the question. When it’s addressed, we will have a much better picture of what emerging from a recession might look like. The positive side is there are some unbelievable opportunities for individuals who are interested in investing today, first-time homebuyers and parents wishing to buy property where their kids are going to college. There are tremendous opportunities where a short three- to four-year investment could produce solid returns.”
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