How’s the Market? Better Than You Might Think.
Boulder
County’s real estate market is healthier than you might think. Indeed, since the economic recession of 2001, our local real estate market has defied expectations year after year. Which continues to be true--even now in the summer of 2008. And that is reassuring to know in a national climate of much uncertainty. With interest rates at continued low levels, with ConocoPhillips in line to provide a major employment boost, with a rental market better than we’ve seen in years, with a significant wealth-based demographic that adds to our market strength, and with a stable housing market compared to bubble-markets elsewhere, our real estate is well aligned for the future.
Until recently there has been a general feeling of unease in our local marketplace. This disconnect lies in the fact that, to a great extent, we see what we are told to see. If you’re a media junkie, as a lot of people are, you are absorbing an endless litany of dire economic predictions and real estate bubble-bursting articles. However, if you pay close attention, you’ll see that they are usually reporting on markets elsewhere. Since these articles appear in our local media as well, the implication is that our local market in
Boulder
County must be in trouble too. But the fact is we have not yet experienced a general downturn in real estate here locally. Bubble-bursting stories in
California,
Arizona, and
Florida don’t automatically apply to the real estate market here. The market in every locale is different, just as the
Denver real estate market is different from that of
Boulder
County. Once one understands the differences, there are many reasons to be positive.
The Summer 2008 Risk Index published by PMI Mortgage Insurance Company ranks the top 50 metropolitan areas nationwide according to the likelihood that home prices will decline in the next two years. This risk analysis states that, “In general, risk continues to intensify in many of the metropolitan areas where home price growth had significantly exceeded historical norms during the housing boom, but (risk) continues to decline in many other areas across the country.” The PMI report shows the risk of price declines in the
Denver metro area is less than 1%, making our market one of the most stable in the country.
But in spite of predictions, the only thing we can know for sure is what’s happening now. So how do we measure to see what’s really going on in the market here locally?
While there are pockets of our market that aren’t selling well (the upper-range in Longmont, parts of Lafayette and Superior), overall the number of homes sold throughout Boulder County is down only 4% over the past year compared to the year before. That means over 4100 homes sold throughout
Boulder
County over the past year.
Compare this with the fact that there are 17% fewer homes on the market in
Boulder
County now than there were two years ago. 17%!! Now that’s a significant change. The market isn’t flooded with houses; quite the contrary.
Median sales prices averaged countywide when measured year to year are, on average, unchanged. With the exception of
Lafayette (down 6.7%), the rest of
Boulder
County has remained within previous levels—several areas are even up slightly.
But what about all the foreclosures? What about all the turmoil in the national mortgage markets? What about my neighbor down the street that can’t sell his house? Our local market is indeed painful for people who are overextended economically for one reason or another; who perhaps borrowed too much, or bought their houses recently and now need to get out. Real estate has never been a reliable short term investment here or anywhere.
Could our market go down? Could it go up? It’s not possible to make an accurate prediction. Prediction and accuracy are often uneasy bedfellows. As Yogi Berra, that most beloved of American philosophers says, “The future isn’t what we used to think it was.”
Overall, our real estate market is showing remarkable strength in the face of much uncertainty. Since 2001 this has been the case year after year. We have not experienced the housing boom and resultant bubble-burst that have been so well publicized elsewhere. Housing inventory is down, prices have been and remain stable, interest rates are still good, and there are still thousands of homes being bought and sold. That makes
Boulder
County a smart place to continue investing in real estate. Hmmm. What was that we were worried about again?
The reports and statistics cited in this article were obtained from www.ofheo.gov; www.pmi-us.com ; and www.baraonline.com
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