Lenders are fickle beings. They control the keys to the vault. When someone wants to get in (a borrower) they ask for everything but the person's blood type for identification. In the good old days (around 2005) having a pulse was the only prerequisite to getting a loan. Times have changed, but so have mortgage interest rates.
Back in late 2005, when the real estate market started its free-fall, the traditional thirty-year fixed rate loan could be had for 5.89%. Between now and then the rate dropped to a low of 3.31% (November/2012). Today it resides at 4.40%.
The average price of a single-family home across the Boulder Valley and Northern Colorado was $297,364 in 2005. Through June/2013 the average price this year is $317,587. Average price for attached units were/are $205,421 (2005) and $219,037 (through June/2013). Lenders and Realtors talk about home values returning to 2005 figures (when the local real estate market peaked). That has occurred, but it took over seven years to get there.
The Boulder County real estate market continues to perk along, although it has begun to slow as summer fades. Through July 2013 single-family home sales in Boulder County are up 6.80% compared to through July/2012 (2103 vs.1969). Attached unit sales are up 13.98% for the same time periods (799 vs. 701). The combined market is up 8.69% (2902 vs. 2670).
How does 2013 compare to that magical year of 2005 in sales? Through July 2005 single family home sales in Boulder County were 2,608. That's 19.37% more than through July/2013. Attached unit sales through July/2005 were 982. That's 18.64% more than through July 2013. The combined market through July 2005 was up 19.17% compared to through July 2013. When comparing the two timeframes, home values have rebounded, mortgage interest rates are lower today, but sales still have some ground to make up.
All good or bad things don't always happen quickly. Sometimes there's a process that needs to take place. In 2005, the local, regional, and national real estate markets were riding high. Mortgage interest rates were at a reasonable level, home values were increasing (up 4.89% in 2005 compared to 2004 in Boulder County), buyers were buying, and sellers were selling.
It was a perfect world.
And then... that perfect world changed.
So here we are, seven plus years later, faced with a real estate market that has fought its way back through the plethora of bank foreclosures and short sales; through the fraudulent lending practices; through the negative impact on neighborhoods where homes stood vacant for lengthy periods of time.
If there is any good that came from these years of a real estate market spiraling south it's that the past doesn't necessarily foreshadow the future. Lenders and the government have set in place guidelines and rules that make lending more difficult to obtain, but also more realistic. Appraisers, title companies, mortgage lenders, and the real estate community are now held to a higher standard when conducting the sale of real estate. Penalties are stiffer for those who choose to take the "path already taken."
Lenders will continue to be fickle beings. It's in their nature.
BoulderHomeSource ...It's A Lifestyle