Uncertain times make future of housing market a moving target

Unprecedented economic difficulties and uncertain outcomes of efforts to revive the economy mean the task of forecasting the future of the housing market virtually impossible.

Yet Ken Hotard, vice president of public affairs for the Boulder Area Realtor Association, can still see bright spots in the Boulder area market, which include solid appreciation and consistent sales numbers.

While sales are down in every Boulder market, homes are still selling, and median sales prices increased in four out of nine areas in both single-family and attached-dwelling markets. In fact, Broomfield had a 12.2 percent increase in median sales prices for single family homes from Feb. 1, 2008, through Jan. 31, 2009, while Louisville saw a nearly 5 percent increase – a “good, solid run,” Hotard says.

Average days to contract also declined in nearly every market, including 11.6 percent in Longmont, 10.3 percent in Superior and 9.9 percent in Broomfield. Hotard attributed the steady decline to homes in the right price range that are ready to sell, noting some homes are getting multiple offers.

“High-end homes are not selling well at this time; they are the weakest part of the market,” he says. “Homes between $275,000 and $600,000 that are competively priced and in good condition are going to sell quickly in this market.”

Another bright spot is that virtually every brokerage Hotard hears from reports that interest in real estate is increasing, he says.

“A lot of churning is going on,” Hotard says. “More buyer interest is expressed, and inventories are increasing a bit as we go into spring and summer. I expect to see sales improve, as well.”

He says he is encouraged to see lenders coming forward with new products, particularly for jumbo loans for higher-priced homes, which will encourage buyers to get into the marketplace. And those with solid credit scores and a down payment of 15 percent to 20 percent, proving they can afford the mortgage, will be able to buy.

One drawback, however, is consumer confidence, Hotard says. “It remains low. It’s hard to gauge – not just in real estate but in retail, as well. People are holding back.”

But people’s savings rate is up, which will provide assets that banks can then loan out, he says.

“We are generally in the same place; haven’t really lost ground but haven’t gained any at this point,” Hotard says.