Strong sales in November encouraging

Boulder home sales in November may not have been as strong as they were in October, but they were stronger than the previous two Novembers, and that has Ken Hotard looking forward to the New Year.

The senior vice president of public affairs for the Boulder Area Realtor Association called November’s sales-volume figures "encouraging" compared with past Novembers. Last month, 252 single-family homes sold compared with 149 in November 2008 and 246 in November 2007. The attached-housing market also had a positive November this year, with 84 homes selling versus 50 a year ago and 46 in November 2007.

"That’s the second consecutive month that we've seen gains, and these gains are even stronger than we saw last month," he says.

Hotard attributed the impressive figures to historically low interest rates and the extended and expanded tax credit bringing first-time as well move-up buyers into the market. "Those are all really positive signs," he says.

Sluggish job growth will continue to affect the market, though the government is working on another stimulus program that would provide $100 billion to small businesses and state governments to spur hiring. "So hopefully it will move job growth in the right direction and, with the other factors, we'll see strong growth in sales volume in 2010 consistent with what we’re seeing this quarter," Hotard says.

Home sales were down compared with October, but he says that’s a natural seasonal adjustment.

Although average and median prices are generally lower throughout Boulder County, some communities continue to show improvement and, overall, they prices are holding steady.

"It’s still a buyer’s market and there continues to be downward pressure on prices," Hotard says. "But there are limits to that, beyond which the market just isn’t going to respond. Prices are holding up well in the middle to low end. The high end has the greatest pressure and least availability to credit. Jumbos are still hard to find and difficult to qualify for. Folks are steering away from adjustable rate loans, and that’s mostly what’s out there."

Hotard says the dynamics of the Boulder market have not changed substantially except for the increased buyer participation and sales volume, and that’s good news.

"Does this point to a recovery? Not necessarily. But it is certainly encouraging," he says. "Buyers are returning to the market, albeit with some encouragement from our government."

But if there was ever a time to buy a home, it is now, when prices and interest rates are low and the government is offering incentives like never before. Hotard warns that these conditions won’t last for long.

"I think prices are going to start going up," he says. "We’re going to start seeing that recovery in the second half of 2010. I think folks should really consider that if they’re thinking about getting in the market at all. This current market offers a significant opportunity."