- Owner may not want to sell it for FMV if prices drop 20%.
- You should calculate the cost of renting vs. the cost of buying, in many areas it will actually cost you less money per month to own than rent (especially after tax deductions and principal reduction)
- The housing market will probably not improve in 2009 however desirable neighborhoods and cities have been holding their value - the economy is strong here in Colorado which should help hold values steady
- If homes in your neighborhood are renting for approximately the same amount as a mortgage there is not much room for depreciation
- When home prices start to rise (I could only guess when that is) there will most likely be panic buying with little inventory causing a dramatic rise in prices before everything levels out
In Longmont there were 63 houses sold last month out of 422 listed giving approximately 6.7 months of inventory. History shows that when there is 6 months inventory that the market is equal (same numbers of buyers and sellers) When it is above 6 months inventory it is a buyers market (good for you prices decreasing) and if it is below 6 months it is a sellers market (bad for you prices rising).
Boulder county plains - 20 months supply
Erie - 10 months
Broomfield -11 months
Boulder - 7.2 months
Superior - 5.3 -Desirable area with prices holding
I work with a lot of investors that have similar concerns to yours. If you would like to go over some detailed numbers more specific to your situation please contact me.
This might be considered one of those outside factors...or this....http://www.bls.gov/LAU/ ...unemployment rates..
Lots of evil media reporting...http://realestatedecline.com/
It all does depend on a lot of factors so becoming aware of these things will help you better understand your market area and choices..Be informed, check the information people have given you against other sources and make a wise financial decision..
http://www.bhgrealestate.com/Views/Look/Default.aspx ...public record based info..It may all tell you to buy or not, it's your financial committment so make yourself prepared
Best of luck, Dunes..
Obviously, this question was posted a year ago and a lot has happened since then. However, many folks are probably looking forward to 2010 with new questions about the future. Residents of Boulder County, Boulder City, Lafayette, Superior and Louisville can probably breath a sigh of relief over 2009. Though the number of home sales fell, prices held up well, according to figures compiled by the Boulder Area RealtorsÂ® Association. Since the figures vary for different locations across Boulder County, I won't go into detail here, but you can download the statistics at the link below.
So, what does this year have in store for home buyers and sellers? First of all, home interest rates probably will rise. We've been at historic lows for some time and the experts are saying that upward pressure is starting to build. Second, we probably will see more home sales close in the early part of 2010 because interest rates remain low and the government is throwing in a tax credit for many buyers through April.
After April, the view gets a little murky. But we probably will see at least a short-term decline in sales during late spring because many buyers will have made their purchases while special tax credits were available. During the second half of the year, the economy should be picking up more significantly, so home sales should see a boost, at least compared to last year, which was off significantly from previous years. Unfortunately, interest rates probably will already be rising in the second half, so many buyers will have missed the best time to buy.
If you have any questions about this answer, I invite you to call me at 303.473.1926 and we can discuss the housing situation further.
Current Market Stats (Metrolist)
20,689 Properties Sold in the last 6 months
16,775 Active Listings on the Market
Absorption Rate = 4.86 months
Decrease in Inventory of 18.6%
Average Days on Market - 93
Sales to List Price Ratio
97% of current list price
90% of original list price
An absorption rate of 6 months is considered a balanced market. Less then 6 months is more of a sellers market.
This won't be a snarky post. I'm glad we are out of the woods of that terrible recession. I'm sure more than a few wish they might have been able to take advantage of the market when it was low.
I'm fond of saying: "A market exists where there is a willing seller and a willing buyer."
Today, a lot of sellers are holding on for better prices. Who can blame them? Most of us buy when things come together for us individually. My husband and I purchased our first house when it appeared there would be no end to inflation. Inflation was eating into everything. We grabbed a house when the grabbing was good.
Individual circumstances improve and couples start planning for a family and a house with a yard. We save enough money. Or we get pay raises or better jobs. Individual circumstances are usually what compels to buy - not fire sales. When the entire market is down, it is usually because things everywhere are not so good. And yes, they can get too good for homeowners if prices are pushed too far.
So rejoice. A healthier real estate market means the economy is getting there, too. Prices will head higher. The market has been roaring here. That usually means good things for all - as in more jobs, more money moving through the economy.
I hope things worked out, Kr Bang. I hope things came together for you.
That sounds like such a great deal. But I wonder if anyone is offering a lease option like that as sales have improved.
Just by way of clarification, I think Kr Bang was referring to the possible overhang of foreclosures, which may number 1 million to 2 million. Since 2009, foreclosures have slowed considerably. Government and private programs have kept homes out of foreclosure and more short sales are being approved.
During the run-up to the real estate slump, there were 3 million homes on the market annually. Inventory has hovered around 2 million homes, and builders have slowed construction to a crawl.
An improving economy will take care of a lot of those foreclosure sales. Substantial investment will take care of more. Investors have accounted for anywhere from 40 to 50 percent in many markets.
The steep downturn in real estate never showed up in most of Boulder County. Longmont still has some clearing to do. Longmont is a tale similar to others. Homes in more popular neighborhoods have not seen prices drop as much other neighborhoods. Some newer communities had more distressed sales.
Bang's strategy may have worked for him. An option gave him a strong bargaining position - or maybe not. He can tell us if he decides to return and respond.
Did the market go down another 20 percent? For convenience, I consulted the Trulia page called "Local Info." The 80501 chart for average price per square foot looks fairly flat until you get to 2012. For the three zip codes for Longmont, the chart is even better. There might have been some slipping of prices that added up to 20 percent over the period from 2007 to 2009. This year, the story is different.
For a deeper study, consult a Realtor who can perform a market analysis for you.
PML of Longmont
Home sales have been building for the last five months. Consumer confidence has been rising. But, there is something wrong with this picture. Home values should be moving up more than they have. Buyers are still wary, it seems.
On the positive side, mortgage rates remain at historic lows. For sellers, inventory is low and this could mean multiple offers.
Specific areas - Lefthand Canyon, Gunbarrel and the southeast Boulder - are looking very strong right now.
The other part of this story is rental vacancies are at 10-years lows in Boulder. It is not much better here in Longmont.
PML of Longmont, CO
720 810 0683
Investors armed with cash are in a bit of frenzy. First time home buyers are entering the market in larger numbers.
Meanwhile, some sellers are holding. On my street and streets around the neighborhood on Longmont's east side, we're not seeing a lot of for sale signs. Why? Who wants to sell into weakness? Sellers have hunkered down waiting for the real estate market to improve.
If you are a builder, the situation is not looking bright.
Now for the big however:
Whitney Tilson who was quoted in the 60 Minutes piece that a Voices Member cited in 2009 says there will be seasonal improvement - there always is from January to the fall months. Tilson says we're in the 7th inning of the real estate downturn. There is still a lot of foreclosure homes to clear out for most of the nation.
Here in Boulder County, foreclosure activity dropped by 30 percent. Industry watchers are cautiously noting that it might not signal the worst is over. Recall that the banks stopped foreclosing activity in fall.
What it all means for Longmont and Boulder County: continuing opportunities for cash-rich investors. Again, homeowners are staying on the sidelines. If the banks are going to be moving inventory off their books, homeowners seemingly are content to see the lenders sell at discount.
Prices are easing a bit. But the market is entering the typically stronger buyer season.
BTW: Tilson is fallible.
The banks still have a lot of inventory and they will be doing more foreclosures.
For would-be buyers, you might want to take a look at what mortgage rates are doing. Many expect rates will head higher.
PML of Longmont, CO
Boulder County and more specifically the city of Boulder remain strong.
Mortgage rates have been rising. We're back to the 5 percent range.
I appreciate that this question is two years old and getting older. During that time, home values have remained stable. The 20 percent drop that was feared by Kr Bang did not arrive. Longmont recorded the most home sales in the county for 2009. But to declare the market in the early months of 2011 as anything better than a buyer's market would be an exaggeration. Sellers should price their homes strategically.
If you are able to buy, then you should consider buying in Boulder County. The job picture is improving in the area. It is anyone's guess how much longer rates will hover around 5 percent. While some analysts expect job net growth will be tepid, news has been very good in this category for jobs growth here in Longmont.
UQM, the maker of motors for electric cars, is ramping up. Halliburton will be hiring in the Fort Lupton area. NASA plans to build a technology research park in the region. And eyes are on Louisville, where Conoco-Phillips will unveil its plans for a research park.
Nationally, home sales are expected to pick up over the summer season. Summer could be a good one here in Longmont as well as improving for all of Boulder County.
PML property movers of Longmont
720 810 0683
Boulder County, in general, has actually experienced a slight increase in markets like Boulder, Lyons, and Louisville. If the lending environment becomes more flexible (as is expected), home prices will increase as the buyer demand increases.
It is also important to remember that you may qualify for the $8000 first time home buyer credit if you purchase and close before November 30, 2009. First time home buyer is defined as anyone who has not owned a home in the past 3 years. The credit is actually like a tax refund in that your income tax liability for 2009 will be reduced by $8000 or, if you are to receive a refund then it would be incresed by $8000. You can use that credit toward down payment and closing costs as well.
We are chosing the lease option to buy option because of the market instability (job, housing, cost of living, 401K/investments,etc...). Interest rates are great right now but the other RISKS are too high for our situation since we own a multi million dollar business with all the tax right offs needed. We have a lot of equity in business and good debt as well.
Kurt didn't say much but what he said is powerful.....real estate markets are local in nature. There are locations where pricing is going to be stable and other areas where prices may drop 20+ percent in 2009.
If you are playing the waiting game we suggest you do so by continuing to collect information and being informed. Regardless of what you are hearing.....this is a great time to buy smart.
On a lease option, you would be betting that your market will be going up. The homeowner is trying to lock you in to a set price to purchase next year. Not many renters would make that bet right now.
Good luck on your home search, Brian