Just an FYI, the FHFA (Federal Housing Finance Agency) formally known by the acronym OFHEO just released their latest HPI (House Price Index). Acronyms abound but I promise to keep it to a minimum for the rest of the post. Let me start again… The government office responsible for keeping track of house values nationwide, recently released their latest report. Nationally, re-sale home prices fell 6% between Sept. 30, 2007 and Sept. 30, 2008. The annual decrease represented “the largest four-quarter drop in the history of the index, which extends back to 1975.” Obviously, housing is in the midst of the financial crisis in which we find ourselves but we still need to remember that real estate markets are local and a 6% decline was not the case in all markets. Some fared better and some fared much worse.
First let’s look at our local market – the Boulder/Longmont MSA (Metropolitan Statistical District – I can’t stop, they are everywhere). Over the previous four quarters prices have increased 2.38% in our area. Let me repeat, houses have on average increased in value during the past year. Let’s see how that stacks up nationally. Back at the end of June in 2006 our one year appreciation rate was 3.6%. Not bad, but nationally, that ranked us 73rd worst out of the 291 of the largest areas. This most recent report has us ranked 38th best out of the 291 areas with appreciation of 2.38%. Clearly, we have not had any spectacular changes in our market, good or bad over the past 2 years. While much of the country is experiencing a drastic boom and bust cycle we are plodding along. The attached chart shows the annual appreciation in Boulder County compared to that of the nation as a whole.
Our market really has not been overrun by foreclosures and the inventory of homes on the market has fallen faster than the sales declines. This means that locally, homes are more scarce than they were a year ago. What we are challenged with is a consumer who is uncertain of the future and filled with caution. I believe our market is poised for a great gain once people decide that is okay to buy again. The interest rates are great, there are deals to be had and our overall economy is looking pretty good compared to other areas. I believe there is pent-up demand just waiting for some good news. While I would love to see more activity in the market, I am very grateful for our market conditions.