Questions and Answers:
This week I was contacted by the Boulder County Business Report so that I could provide some quotes for an upcoming article on the local housing market. I’m sure a quote or two will show up in the next issue of the paper but I thought it would be helpful to you, the reader if I provided my answers in their entirety. I hope this gives you a good idea where the market is right now. Properties of all types and price ranges are selling. Just today two properties of over $2 Million went under contract in Boulder. I’d love to hear from you if you need real answers and solid representation.
Please summarize where the Boulder County housing market gone recently.
Year to date sales are down roughly 13%. This continues a downward trend that began in 2006. Median prices have been mostly flat, increasing in some areas and decreasing in others. Inventory is down roughly 17% when compared with last year. The lack of inventory has allowed prices to remain stable.
Which areas within Boulder County have seen the most extreme, and the least, fluctuations, and why?
Louisville and Superior are relatively small markets which have shown good stability lately. Both areas are mostly built out so there is little competition with new construction. The prices are reasonable when compared to Boulder and are well located for commuters. Sales in the mountain areas have been weaker than most areas over the past five years with longer times on the market and more inventory sitting on the market at any given time.
Longmont has had the most foreclosures in Boulder County and this influence as well as the ample inventory have affected prices there more than most areas in the county. Boulder’s high end is seeing softening while the prices below $600,000 in the city are still selling fairly well.
How will the credit crunch affect sales?
It is no coincidence that the years with the most sales were the same years that credit was easy. Despite rumors to the contrary money is still available. It is available to those with good credit, a verifiable job and a down payment. This tightening in credit has been affecting us for a year or so. Much of the upper end of our market is not affected by the credit crunch. Much of Boulder is wealth based not income based. This has allowed the Boulder area to have a larger than normal high end market. As the stock market has dropped this year the wealth based buyer has felt, well… less wealthy. This has slowed high end sales. The entry level market is still moving but the move-up market is slowed due to high jumbo rates and lack of confidence. More people are staying put because of negative perceptions of the market. It has become a self fulfilling prophecy.
Where do you see the Boulder County home market headed in 2009?
I see a lot of pent up demand. People who have wanted to move, but have decided to delay a move until the “market gets better”. As soon as we start seeing some good news in the media we will start seeing a turnaround. The fundamentals of our area are still strong. I can’t predict when this will happen but it is all cyclical and depends on consumer confidence. Right now it seems like people are hunkering down.
Is there a “silver lining”?
This is a great time to buy! It is easy to buy when everyone is feeling good about the market, but this is the time real money is being made. The rental market is also strong.
What do you think will happen in the new residential construction market in 2009?
Overall there are fewer projects under way. Builders and their bankers will be keeping inventories low and keeping spec homes to the minimum. Incentives will be seen rather than price drops. When the market turns we will have a lack of new construction and the lack of inventory will cause prices to rise.
What types of homes ARE selling in this market — i.e. price range, green homes, etc.?
Entry homes in every market are still selling. This price is higher in Boulder than it is in Longmont but across all markets homes below the conventional limit of $417,000 are moving better than those above. Homes above $1 million are moving very slowly regardless of area. Right now buyers are looking for homes that are in great condition and are willing to look at many homes to find just the right one.
Anything else you’d like to add?
Real Estate markets are local and our area is doing much better than most of the country. Many national experts have named the Denver Metro Area as one of the first areas that will come out of the current market slide. It is a historically great time to buy and when you hear that the market is on the way up it will be too late to make a great profit. Now is the time!