REAL ESTATE MARKET UPDATE
An Information Service of RE/MAX Alliance/Boulder Valley
May/2009
If you read the newspaper, watch the news on television or religiously track the ups and downs of the stock market, there appears to be a general feeling in people's minds that things are getting better economically in this country. At least on the surface, they don't appear to be getting worse.
According to the Federal Government, job losses continue, but at a slower rate than has been experienced recently. The stock market has rallied over the course of the past few months and regained a portion of its losses. Home mortgage interest rates continue to vacillate between 4.75% and 5.25% for a fixed-rate thirty year loan. Most of us have survived the two great government revenue source days - income tax day (April 15th) and property tax day (April 30th).
One of the methods of evaluating today's local real estate market is to take a look back. To compare what has happened in the past to what is happening now. An area that many homeowners are concerned about is the value of their home. How has it been impacted over the course of the past few years?
Below is a brief overview of the housing market for single family homes in Boulder County from IRES (MLS) through April of each year.
Year Active Listings # of Sales Avg. Sales Price % Change
2009 2105 570 $400,911 -8.24%
2008 2410 939 $436,938 -5.81%
2007 2408 1028 $463,896 +8.20%
2006 2410 1249 $428,726 ---------
What are some of the reasons the average sales price has decreased over the past couple of years?
The one you might initially consider is that home values have declined. There is some degree of truth to that. In a negatively impacted economic environment, more expensive homes normally feel the price pinch first. As such, the average sales price of all the homes in a particular market drops.
Another reason for a lower average sales price is that more homes are selling on the lower end and thus the average sales price is less. This is true of the Boulder Valley real estate market as lower mortgage interest rates and government tax incentives have brought more first-time homebuyers into the market.
A third reason is the impact on values from bank foreclosures and HUD properties. These properties often, but not always, sell below area home values. This impacts the average sales price of a neighborhood and geographic area. It also affects appraised values of other homes.
Finally, there are the occasional "fire sales", where a homeowner desperately needs to sell. This is most often because of personal reasons i.e. job loss, divorce, health reasons, change of life circumstances, economic conditions, etc. Basically, the seller simply needs to rid themselves of their home so they can move-on with their lives.
Compliments of RE/MAX Alliance-Louisville, CO
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