Boulder real estate market remains cloudy with a few bright spots

At first glance, the home sales statistics for the communities of Boulder County look bleak. After all, overall sales are consistently down 12 percent to 14 percent in most markets and the average sales price is down in every market.

But comparing those stats with past years reveals some bright spots. For example, three Boulder communities saw an increase in median sales prices: in fact, Broomfield’s median price increased 5 percent. “Certain markets are performing pretty well, especially in the right price points," says Ken Hotard, senior vice president of public affairs for the Boulder Area Realtor Association. "If the price is below $400,000, sales are pretty brisk, and values are holding up pretty strong.”

Even though the average sales price dropped in every Boulder community, most of them did so by less than 5 percent and those that dropped more did so by less than 10 percent, Hotard points out.

And that 12 percent to 14 percent drop in sales is still a lower adjustment than in the previous two years, he says. “ The decline in sales volume has slowed and is likely to level off in the second half of 2010, potentially beginning modest growth in early 2011,” Hotard says. “While that may be a bit optimistic, it is definitely within reach.”

Nationally statistics show a 9.4 percent increase in home resales in September 2009 compared with August 2009. “Much of that activity is related to, at least we believe, folks moving quickly to take advantage of the $8,000 first-time homebuyer tax credit before it expires at the end of November,” he says. “Nonetheless, sales are sluggish. In much of our market areas, a lot of that is related to tight credit, particularly in the jumbo loan category.”

BusinessWeek recently named Boulder the strongest housing market and the Federal Housing Finance Authority said it has the 11th highest appreciation in the nation, but Hotard says that such news may give people the wrong idea about the area’s real estate market.

“It scares me to hear that,” he says. “I know we have some pain and suffering yet to feel here and to have those kinds of rankings gives me pause. We are still in an unprecedented economic situation with an unclear end and an uncertain understanding of what the future looks like. People may get a misimpression and have unreasonable expectations that make it difficult to succeed in their transaction.”