While sales of Boulder-area homes fell from October to November, the drop was insignificant compared with the year-over-year increase, perhaps indicating the market ended 2012 on a strong note.
“We’ve got a lot of positive going on right now,” says Ken Hotard, senior vice president of public affairs for the Boulder Area Realtor® Association. “It (the month-over-month decline in sales) is typically what you expect to see in good times or bad times. The month before we did get a surprise because we got a boost that suggested that we would have a pullback in November. It wasn’t unexpected. I would have liked another solid bump, but this is not bad.”
Hotard says it’s typical to see sales drop 5 percent to 7 percent from month to month in the winter.
In November, 298 single-family homes sold, representing a nearly 42 percent increase over the 210 homes that sold in November 2011. And the sale of 89 condominiums and townhomes in November is a 14 percent increase compared with the 78 that sold in November 2011.
Hotard describes the increase as a “very strong improvement” and the decrease in sales from October to November – a 5 percent dip for single-family homes and about a 7.3 percent drop for condos/townhomes – as “nothing too drastic.”
The main concern with the state of the market remains inventory – or the lack of, he says.
“Inventory continues to run in the same pattern we’ve seen in the last six months,” Hotard says, noting the number of single-family homes on the market in November (1,233) was 25.4 percent fewer compared with the same month a year ago (1,655). And the condo/townhome inventory fell 35.5 percent between November 2011 and November 2012.
“That’s a whopping drop,” he notes.
Compared with October, single-family inventory dropped 15 percent in November and attached-units inventory fell 11.6 percent.
“The pattern of increased sales volume trend coupled with declining inventory seems to be holding,” Hotard says. “It can’t go on forever.
“At the core of it are, in my judgment, historically low interest rates on mortgages, keeping buyers in the marketplace while sellers are reluctant to get in the market with the uncertainty in the economy still out there.”
For 2013, Hotard says experts are suggesting modest improvement in unemployment.
That should boost confidence enough to continue incremental economic improvement as the real estate market moves into the balance of winter and the beginning of spring, he says.
And although it appeared that Congress was going to allow America to jump off the “fiscal cliff,” Hotard says it was a bigger issue in the media than in reality and he was not concerned about the impact it would have had on the market.
“The price was too high for members of Congress not to resolve it,” he says, calling it a “nonissue.”
Hotard says he doesn’t expect the reinstatement of the payroll tax – about a 2 percent increase on most wage earners – to impact the market, either.
“World events can change on a dime, but if patterns continue the way they’re going, it would not be surprising to see a 10 or 15 percent increase in sales throughout next year, and improving prices,” he says.
Boulder-area home sales prices held their own in November, with a median sales price drop in only one community (Broomfield, 3.3 percent) and an average price drop in three communities (Boulder, 0.3 percent; Broomfield, 2.6 percent; and Plains, 3.7 percent), but those decreases were insignificant, Hotard says..
Single-family homes in the $500,000 and below price range are selling the quickest, but homes in the $750,000 and up range are starting to gain steam, as well, Hotard says.
“At this time of year, that’s pretty good,” he notes.
RE/MAX of Boulder, Inc