Home sales in Boulder continued their upward trend in June, giving hope that perhaps the real estate market has finally hit bottom and is headed in the opposite direction.
"Sales held up very well in June, probably continuing with the impact of the homeowner tax credit for first-time and move-up buyers," observes Ken Hotard, senior vice president of public affairs for the Boulder Area Realtor Association.
Until Congress recently extended the deadline for closing on a home purchase to the end of September, buyers had to close by the end of June to qualify for the tax credit. Boulder County saw 370 single-family homes and 131 townhomes and condos close in June, compared with 357 and 147, respectively, in June 2009. From June 1, 2009, through May 31, 2010, 3,418 single-family homes and 1,356 townhomes and condos sold, compared with 3,140 single-family homes and 1,184 townhomes and condos during the year before.
"For the first time in a quite a while, sales increased year over year and quarter over quarter," Hotard says. "That’s a good sign that suggests we’ve actually hit the bottom and leveled out and starting that slow crawl back to more historic sales volumes in the future."
And while June's market statistics are an improvement, they are far from where the market was a decade or so ago. "These numbers look better than they are because we're comparing year-to-year numbers," Hotard says, noting 2008 was the worst year on record. "We’ve leveled out and we've begun that slow climb out of the recession. We are by no means moving into a rapid economic expansion and a robust period of growth."
However, the climb up could still have some bumps and dips.
Job growth – a major player in the state of the real estate market – is still in question, with University of Colorado economists recently revising statewide job numbers estimates substantially downward. But Vestas is adding employees to its Colorado locations – as many as 1,000 jobs at one facility – and other businesses announcing plans to locate along the U.S. 36 corridor, bringing moderate job growth to Boulder-area markets, Hotard says.
Interest rates remain at historic lows, which should spur buyers but restrictions on credit are making mortgages somewhat difficult to come by, he notes. A regulatory bill now in Congress will reign in abusive practices of some lenders but will do little to free up credit.
"The numbers look very strong all around," Hotard says of the June sales statistics, noting that the downward pressure on home prices and sales volume has stabilized. Realtors have told Hotard that activity slowed in July compared with June, but whether that's reflected in the volume of closings won't be known until August.
"I think some people are expecting a real serious drop but I'm not of that mindset," he says, adding he expects to see a mild correction but not a dramatic reduction in home sales.
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