Real estate markets and economies are trend oriented. They have a tendency to follow specific paths. Sometimes those paths are a gently rolling road merrily going along. Other times those roads are fraught with hurdles i.e. rock slides, floods, snow storms, etc. When those occur, it takes time to clean-up the resulting mess.
That’s where the real estate market and economy are today; in a clean-up mode. Cleaning-up a financial market not fraught with rock slides, etc., but with fraudulent business practices, greed and stupidity. Many people have suffered. Others have prospered. There is always money to be made in difficult times.
The Federal Reserve has attempted to expedite the clean-up by pumping a gazillion dollars (that’s a lot) into the economy. All that is left for them to do now is to start giving money away. I would surmise the “free money” line would be slightly longer than the current unemployment line.
After the clean-up has occurred, life isn’t the same. Things have changed. People’s perceptions have changed. They have become more astute, more aware and more conscious of the circumstances of their lives. They are more analytical and patient. A knee-jerk reaction is no longer their immediate response. They attempt to think things through more clearly before they make a decision, be it to buy a home, buy a new car or even where to eat dinner.
In many ways, that is how the Boulder Valley real estate market has evolved. It is a collective group of buyers and sellers attempting to make wise decisions. Is this the best time to sell my home? Is this the best time to buy a home? Will mortgage interest rates continue to improve or will they “trend” up? These are all legitimate questions.
The Boulder County real estate market for 2010 appears it will have a similar number of sold listings as compared to 2009; single family home sales should be UP about 4%, but attached unit sales will be off around 8%. The net result is a wash.
For October/2010, the number of active listings was down about 9% from September figures. The 2010 year-to-date Absorption Rate for single family homes dropped from 270 days at the end of September to 249 days at the end of October. Single family homes priced from $300,000 to $500,000 are now selling the quickest; averaging 176 days.
As we enter the fall i.e. Indian summer and the winter, real estate activity typically begins to wane. As we have already seen, sellers decide to take their home off the market for the holiday season and regroup next spring. Buyers continue to look for bargains, but they have one foot in a hibernation mode.
There are some positives to consider in the road ahead for the Boulder County real estate market. Although the number of sales for 2010 will be comparable to 2009, it is the first time since 2006 that annual sales have not gone down. It is possible the real estate market has reached a plateau; the final clean-up is in sight. That’s not to say there still aren’t some rock slides or snow storms (maybe) out there waiting to wreak havoc, but the dark days appear to be less frequent as the national and local economies regain their footing.
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