Market stats reflect sobering economic conditions

The economy is just barely chugging along, and the local real estate statistics reflect it.

Ken Hotard, senior vice president of public affairs for the Boulder Area Realtor Association, says that 227 single-family home sales for Boulder County is “a fairly revealing number. Things really did slow down quite a bit after the homebuyer tax credits expired this spring.”

During the second quarter of this year, 1,103 single-family homes sold, compared with 765 during the third quarter – a 30 percent drop. And 416 townhomes/condos sold in the second quarter while only 225 sold in the third quarter.

Boulder – along with the state and nation – will face ongoing challenges as the government continues to struggle financially, he says.

“It’s not clear what this, now temporary, foreclosure freeze will do in the market; it could have an additional dampening effect,” Hotard says.

He notes that 31 percent of home sales nationally in the third quarter were homes that were foreclosed on. It is important to keep the processing and sales proceeding and to move these distressed properties out of the market. Recently, Bank of America and GMAC lifted their freezes, debunking negative speculation regarding processing oversight.

“I also think the election coming up has had an effect on the economy and real estate market because of uncertainty about future federal policy,” Hotard says. “Hopefully whoever prevails in the elections nationally will instill confidence in consumers and markets, providing a positive boost to economic health and housing nationally as we enter 2011.”

Virtually nonexistent job growth – unemployment nationally is at 9.6 percent and may drop to 9.2 percent next year – and the lack of an economic expansion also will take its toll on the real estate industry, he says.

“I don’t think anyone ought to panic,” Hotard says. “No one is anticipating a double-dip recession. While we’re not experiencing a rapid expansion, for months we’ve been on a slow and measured positive trend in terms of economic growth. It’s just very, very slow.”

Despite the low home-sales volume, Boulder’s home values and sales values remained solid across the market in September, “reflecting stability even in the face of challenging financing and rising numbers of foreclosures that we have seen in Colorado and nationally,” Hotard says.

Another bright spot is that “historically low, unbelievably low” interest rates are available on mortgages. “Mortgages couldn’t be cheaper,” Hotard says.

Hotard also sees a positive energy from area Realtors who are “retooling, reorganized, more efficient and expanding services,” instead of reducing them, to bring more value into transactions.

“It’s really encouraging to see how the real estate professionals are responding to the challenges this market is presenting to them,” he says. “From my exposure at national and state meetings, while there are fewer Realtors, there is an energized level of professionalism and value in the industry and confidence that profitability will return as a result.”