Nearly 25 percent more single-family homes sold in August compared with the same month in 2010, making it the third month in a row that sales have surpassed those of the previous year.
In August, 335 single-family homes in Boulder County sold, compared with 267 in August 2010.
And, perhaps more surprising and promising, the attached-unit market is starting to show strength: nearly 71 percent more condominiums and townhomes sold in August – 118 total – compared with the 75 sales in August 2010. That’s the first substantial improvement in the attached-unit market in some time.
“I continue to be encouraged,” says Ken Hotard, senior vice president of public affairs for the Boulder Area Realtor Association. “We had another positive month of improved sales over the same month last year – a substantial boost, in fact. … To see three consecutive months hold up and show improvements compared with last year suggests the market will very likely continue this pattern through the end of the year.”
He says he still expects the sales volume of 2011 to exceed that of 2010, “which, to me, would be a really strong statement that this market bottomed out in 2010 and is moving into a positive direction that is stable.”
Last year, 3,161 single-family homes and 1,121 condos/townhomes sold in Boulder County. So far this year, 2,142 single-family homes and 685 homes have sold.
However, average and median sales prices were more volatile in both markets in August, Hotard points out. He suggests that appraising issues may have more to do with changes in selling prices than sellers adjusting for market conditions.
“Overall, the market continues to show good stability,” he says “Inventories are balanced in most market areas.”
Hotard says one relatively small cloud on the horizon is the fact that conforming loan limits readjusted downward on Oct. 1 since Congress chose not to intervene. Conforming limits were set at 125 percent of the area median sales price, but that dropped to 115 percent.
As the federal government steps back from its involvement in the secondary mortgage market via Fannie Mae and Freddie Mac, the two GSE’s won’t buy mortgages exceeding those caps, Hotard explains.
On the other hand, less government involvement in the secondary markets is likely to bring in more private capital, but at a higher cost to borrowers: they will have more access to credit but likely will pay higher fees and face higher interest rates.
The fact that the economy is still not gaining traction, with job growth remaining sluggish in Colorado and flat nationally, could further stunt progress in the real estate market, he says.
“If we can’t get the economy moving, it’s hard to anticipate increasing numbers of people making long-term investments in housing,” Hotard says.