by neil kearney | Dec 22, 2009 | Boulder County Housing Trends, Uncategorized
Sales up 69% during November. Is it to be believed? The numbers have been checked twice and it has been confirmed. But what does it mean? Is this the end of the slump? Have we broken the trend? Shall we brush up on our karaoke version of “Let The Good Times Roll? Not so fast.
After a few years of month upon month of same month declining sales we have now had two positive
months. But before we get too excited we should answer the ever present question “why”. The way I see it there are three main reasons why we have seen strong sales over the past few months. Those three reasons are: Stimulus, Confidence and Comparison. I will tackle them in order.
The stimulus plan, more specifically the homebuyer tax credit, has been around since the first quarter of 2009 but this was an easy one to procrastinate on. The original deadline before it was extended in early November was November 30th. As we got closer and closer to that deadline more and more first timers were racing the clock in order to take advantage of once in a lifetime money. Many argued that these people were going to buy a house anyway but the credit and the deadline that went along with it condensed the sales. The argument was that we were borrowing next year’s sales now. Now that the tax credit has been extended and expanded we might just see a new round of stimulated sales ending in April.
After more than a year of gloom and doom we are starting to see some signs that we are coming out of what has been dubbed “The Great Recession”. Many sectors seem to be recovering however; housing is not on the short list. In Boulder County the recession took its toll but it certainly was not as deep and painful as many other areas. Unemployment in the county is currently in the 6’s while nationally it is around 10%. Jobs drive homeownership. There are many reasons why people move but most of those reasons can be put off if all is not quiet on the job front. If the vast majority of people are still employed what caused our sales to drop more than 50% over the past few years? Much of the difference can be attributed to confidence. When your company is laying off and you could be next you don’t buy a house. When your salary has been cut 10% you lose the drive to take on a new mortgage. When you see your neighbor lose their house to foreclosure you tend to hold on to what you already have. In a word consumer confidence has taken a big blow and we are just now starting to see some of those people who have been putting off those buying decisions come out of the woodwork. As the economy becomes brighter, more and more will feel that it is safe to make a decision.
I’m a sports fan and after many years of watching our local teams one thing has become very clear. For a mediocre team (and we have seen our fair share lately), results are directly tied to the quality of the competition. If the Buffs are playing the College of the Grand Prairie State we tend to look pretty darn good and when we play say, Texas we tend to look like a high school team. And so it is with statistics. For 27 months in row our sales figures were lower when compared to the year before. At some point what you’re comparing to is so bad that anything looks decent. Remember a year ago, November sales were hamstrung by the economic backwash that was causing banks to fail, companies to go bankrupt and mortgages to disappear. So while it is great for sales to be up 69% it is sort of like the Buffaloes beating Fairview High School 77-0 in a game. Good news but not all that impressive.
Last month the Boulder Daily Camera declared that home values had fallen for the first time in 25 years and that the average homeowner in Boulder had lost $40,000. This is another reason why you can’t believe everything that you read. Yes, median prices have gone down. According to FHFA.gov median prices had fallen .56% from 3rd quarter 2008 to 3rdquarter 2009. IRES statistics show a decrease of 3% in the county through the end of November. But $40,000? Where did that come from? Each month BARA reports the median prices of the homes that sell in each locale during that particular month. During October the median sales price of homes in Boulder happen to be $40,000 lower than October of 2008. It is not scientific, it proves nothing and the sample size was just 36 homes sold.
It will be an interesting year ahead. I expect a quick start and am hoping that consumer confidence and jobs begin to surge just as the stimulus expires.
by neil kearney | Dec 7, 2009 | Boulder County Housing Trends, Statistics
http://viewer.docstoc.com/
November 2009 Boulder Real Estate Report –
The report above are the latest market statistics for the Boulder Real Estate Market and it includes multiple charts with annotations. The numbers include sales from all of Boulder County including: Boulder, Louisville, Lafayette, Longmont, Superior, and unincorporated Boulder County. Just click on the slide presentation and take a look, no registration required, just good information.
The highlights for the real estat market this month are a huge increase in the number of sales compared to last November. We are at levels very similar to 2007.
by neil kearney | Nov 25, 2009 | Statistics
The top headline in the Boulder Daily Camera this morning was:
“Boulder County home values see first annual drop in 21 years
Boulder median price falls $40,000 since last October”
The top headline was technically correct but the sub-headline was very misleading and did not correspond with the first statement. Here’s the deal. According the FHFA the government agency that tracks home values, Boulder County’s home stock lost an average of .056% over the past year. True, this was the first time since 1988 our fine county has seen red figures, but at just over 1/2% this corresponds to just over $3,200 based on an average price last year of $573,000. This percentage still ranks us well above the national average of -3.76% over the past year and ranks us 80th out of 297 metropolitan areas they track.
So where does the $40,000 drop come from? The Boulder Area Realtor Association releases statistics each month and last October the median price of sales that occurred during October was $573,000. During October of this year the sales mix just happened to have a median price in the within the city of $533,500. Taking one month of data and drawing broad conclusions is not a good way to go about reporting statistics. During the same month sales were up 11% from the previous year, but it would be preposterous to say that “sales are up 11% since last October”.
I’m not saying that some sectors in the Boulder area real estate market are not losing value. The high end especially is under price pressure. I’m just saying that letting the public believe that home values have dropped $40,000 based on 1/12 of the data needed to make an informed reporting is just not correct.
Below is a chart that shows historical data from FHFA.gov and compares Boulder County appreciation to the Nations.
by neil kearney | Nov 24, 2009 | Boulder County Housing Trends
I write a monthly column for the Boulder Area Realtor Association which accompanies the statistics for the month. While it is written for an audience of fellow Realtors, I thought I might share it here as well.
For 26 months I have been finding different ways to tell the same story. The story has been one of 
fewer sales. Month after month, last years numbers better than this years. Like a giant staircase heading down into a medieval dungeon. Until now! October was the first month in over two years where Boulder County had more closings in our market area than the same month the previous year. And it wasn’t just by a few. Sales were up 11%!
Okay, the streak has been broken, but is this just a temporary reprieve before resuming the downward march? I don’t know for sure, but here are my thoughts. Remembering a year ago, it’s not hard to imagine why sales in October 2008 were not that hard to beat. If you recall, we were in the midst of a financial hurricane. The stock market was falling by hundreds of points a day, banks were failing and being bailed out, jobs were being lost by the bushel (more on this later), and we Americans began to super-glue our wallets shut. October 2008 was the first month of real estate sales that began to feel the effect of the economic crisis that has played havoc since then. When you compare that uncertainty to now maybe not much has changed on the macro level, but I think as a collective whole we have become a whole lot more comfortable with it. After living through report after report saying that the “sky is falling, the sky is falling” we eventually figure out that the sky isn’t actually falling and for many, it might just be a good time to pry open that wallet.
There are a few core reasons why people buy or sell real estate and those reasons are tied to change. Some reasons are urgent and can’t wait for a better time in the market. Some reasons are more discretionary and tend to simmer until it feels like the right time. Some people are just in the right place at the right time. There are many reasons that turn the wheels of a market but none are as strong or as broad as job creation. During an economic downturn, the power behind the real estate market is hampered by job losses. As jobs are lost, general confidence of coworkers, neighbors, and relatives (who still have jobs) decreases.
Lately, we have been getting the news that technically the recession is over. The GDP has risen. While we are far from being “out of the woods”, it seems we may be bouncing off of the bottom. In my opinion, it will be a modest recovery until the economy begins to create jobs in a big way. But from what I have been seeing personally, people who have been putting off a decision are starting to think hard about taking advantage of the current market. We should be see our trend of higher sales on a monthly basis continue at least through spring. We may have turned the corner, albeit slowly.
by neil kearney | Sep 25, 2009 | For Buyers, For Sellers
I write a monthly article for the Boulder Area Realtor Association . I thought I would post it here as well.
We are living in the information age. Some of the information comes to us unsolicited and some we 
actively seek out. We get information via email, websites, newspapers, friends, family, television; the list goes on and on. The problem isn’t enough information, it’s too much information. Many times the information conflicts with other input we have received, and it is up to us to sort through, digest, decide and react to it all.
This syndrome is especially true for information on the real estate market. The consumer is bombarded with a variety of “sources”; national news, their neighbor who has their house on the market and HGTV are just a few examples of how market perceptions are formed. An individual forms their opinion based upon the aggregation of all of this information. Lately the overall opinion has been, well, negative. Let’s be honest, we haven’t had the strongest market lately; sales are down, foreclosures are up, short sales are in the news and consumers have shut down on making large purchases. So what’s wrong, the message matches the reality, right? Wrong!
The myth is that the market has disappeared with the economy and that there are no buyers out there. The myth is that you can get a house for 20% off the list price in Boulder County. The reality is that there is still a market for homes that are very well priced. The reality is that a home needs to be in good condition in order to compete. The reality is that the market is strong for homes that are in areas and price ranges targeted by first-time homeowners. The reality is that there are quick offers and multiple offers out there for homes of sellers who understand and have reacted to the market we are in. The reality is that we are in a market where smart buyers can make a good investment. The reality is that there are many people who would like to move but feel like it is a bad time to do so. The reality is that our prices have been very resilient. The reality is that the real estate market is cyclical and you cannot panic at the bottom or get overly exuberant at the top.
So, what about the statistics? Numbers don’t lie but they do only look one way, backwards. If you focus too much on the fact that sales were down 19% in August from a year ago you lose sight of the fact that there are opportunities in every market. A smart Realtor is the one who sees opportunities in the market and communicates those opportunities to everyone they meet. The market in Bend, OR was a boom town until, all-of-the sudden, prices fell 20%. Now Realtors are super busy helping buyers who love the idea of buying a house at a discount. Everyone needs a place to live, we are not selling widgets. The market for shelter cannot disappear. The numbers are ugly, but that doesn’t mean that the future will follow. Yes, we have some challenges yet to overcome and some hard work ahead, but let’s make sure our personal message to the public includes some of the positive realities of the local market.
