Don’t look now, but the Boulder-area real estate market may be on the verge of recovery – albeit a mild one that’s taking its sweet time.
The 422 single-family homes and 145 condominiums/townhomes that sold in May represent increases of 41 percent and 46 percent respectively compared with May 2011, when 299 single-family homes and 99 attached homes sold. And that makes 11 out of the last 12 months the Boulder-area markets have experienced improvements in home sales.
Ken Hotard, senior vice president of public affairs for the Boulder Area Realtor Association, points out that May was the fifth consecutive month that Boulder-area markets had seen growth in home sales.
“It’s reasonable to conclude that the market has likely bottomed out and is on that slow track of steady of improvement,” he says.
Nonetheless, the changes in average and median sales prices – primarily decreases – reflect the larger elements of today’s market in which people can’t buy the homes they could in the early 2000s: credit is still difficult to get, so buyers are getting less of it, and down payments are higher, so they are spending less.
Hotard says 314 of the 422 single-family homes that sold in May sold for $700,000 or less and 262 sold for $500,000 or less; and 95 of the 145 condos/townhomes that sold did so for $400,000 or less, and 79 sold for $300,000 or less. Only six of the attached units sold for more than $400,000.
He adds that 24 of the single-family units that sold for more than $900,000 and 18 of 145 attached sold for more than $400,000.
“I think the market’s fairly mixed,” he says. “There’s more competition for anything $500,000 or less in good condition – it will move quickly and has the potential for multiple offers. On ones (priced) above $700,000, there’s not as many offers or extremely fast sales, but (that market is) well ahead of last year.”
But with Boulder’s home-price appreciation increasing 2.35 percent for the first quarter of 2012, landing it 10th on the Federal Housing Finance Authority’s House Price Index, Hotard is confident that the Boulder-area market will continue to show steady improvement.
Quite a few more homes sold in May than a year ago, yet Hotard sees plenty of room for more houses on the market: 2,406 single-family homes and 884 attached units made up the inventory in May 2011 compared with 2,009 single-family and 580 attached homes this year – decreases of 16 percent and 34 percent, respectively.
“I think we’ve experienced a fundamental change in the housing market, and many of the factors existing today are likely to continue for an undetermined and lengthy amount of time,” Hotard says.
Those factors include low inventory, particularly in the low to median price categories; home owners not wanting to sell houses for less than they need to be whole; people not wanting to take on more debt by moving up in homes; home buyers exhibiting more caution; and tighter credit that will remain so, he says.
“We’re not returning to the 2000s – that’s not going to happen,” Hotard adds. “Credit will loosen some but don’t get your expectations up.
“The regulators won’t allow lenders to take on excessive risks to boost home sales and home ownership; the days of giving mortgages to people who can fog a mirror to qualify are over.”