Kearney Realty News Market Update Locally, we began to see improvement in the local real estate market in September 2009. A direct result of the Homebuyer Tax Credit which was initially scheduled to expire at the end of November but has since been extended and expanded.
Winter 2010 begin to rise. If you have been considering a purchase or a refinance, now is the time! The attached chart shows mortgage interest rates since 1972. Right now is the bottom.
What was designed to be a stimulus for first time homebuyers now includes homebuyers who have lived in their current home for at least five of the past eight years. First time buyers who place a contract on a home on or before April 30th and close on that home on or before July 1st are eligible for federal tax credits in the amount of $8,000. Move up buyers have the same deadlines but the tax credit amount is $6,500. Sales during the fourth quarter of 2009 were up 17% in Boulder County compared to 2008. During the entire year sales were down just under 15%. So far in 2010 the early year activity has been strong. Buyers and sellers, who traditionally wait for spring have been spurred on to a winter start by the tax credit and low interest rates. Showings in our office are up considerably and contracts on homes have picked up dramatically in February. We all know that interest rates are a very important piece of the home buying process. A one percent rise in interest rates can make a huge difference in the affordability of a house. During this difficult economic crisis we have been lucky to have had interest rates in the 5% range. This will not last forever. In fact, the Federal Government has kept down interest rates by buying mortgage backed securities. The money for this program is nearly out. By the end of March, many experts expect rates to
While our market has not been stellar over the past few years, it is good to keep the relative strength in our market in perspective. The national media focus have been on the markets that have been the hardest hit. Our local market has been much more stable. It would be a much different scenario locally if home values would have dropped significantly. As it stands, we are down just a few percentage points over the past few years and relatively few homeowners who put down a 10 -20% down payment are “upside down� in their mortgage. See the chart below to see the strength in our local market over the past three years. Boulder County continues to be a good place to invest and own real estate.
Over the past 4 years, the appreciation in Boulder County has been an accumulated 6.11%. You may find it helpful to compare this to a few other selected markets around the country. During 2006 many of these areas were still seeing very high positive returns. Over the past three years Boulder ranks second out of this group. The areas in yellow are in Colorado. For updated real estate information, photos and related links- visit www.NeilKearney.com
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Sales Trends The two charts to the left paint a broad picture of the real estate market in Boulder County over the past thirteen years. The top chart shows trends in home prices throughout the county. Over the past dozen or so years we have seen gains in the median prices in Boulder County. Substantial within the City of Boulder and more modest in Longmont. Since 2007, median prices are down roughly 7.5% county wide. Not nearly the 50% loss that has been seen in Las Vegas or Phoenix but a milestone nonetheless. The chart also reflects the increased proliferation of expensive homes within the City of Boulder over the past decade. In 1997, just six homes sold with prices over $1 million. Since then values have increased but many of the houses have been improved dramatically. The late 1990’s and early 2000’s were a remodel and building boom of sorts. In some neighborhoods the housing stock has upgraded significantly and with it the average price. The second chart shows the total sales of residential homes and condos in Boulder County since 1997. The dot com bust in 2001 and 2002 is readily seen with the recovery in 2003 and 2004. The current recession is much more severe and has hit housing hard. My hope is that we start seeing the sales numbers climb. I think it will take quite awhile to get back to 2004 and 2005 levels because credit will most likely never be so easy for so many people.