Economic Snapshot: March 2013
A look at the current real estate market, provided by RE/MAX ALLIANCE
Two months plus into this New Year and the Boulder Valley real estate market continues to show strong activity. Through February single family home sales are up 18% for Boulder County over last year for the same time period; attached unit sales are up 19%. The inventory level of available single family homes inched up 9% in February from January, but sold listings were up over 200% month-over-month. Sales continue to outpace the growth of listing inventory.
The US Department of Labor (Bureau of Labor Statistics) recently released their unemployment rates for the country and by state. Nationally, the unemployment rate stands at 7.7% at the end of February. Last year at this time the rate was 8.3%. Colorado is currently at 7.5%. The state with the highest unemployment rate is Rhode Island at 9.9%. Not far behind are Nevada and California at 9.8%. The state with the lowest unemployment rate is North Dakota at 3.2%. For a point of reference, the unemployment rate for the Great Depression peaked at around 25% in 1933. In 1929 the unemployment rate was 3.2%.
On the home mortgage scene, interest rates have trended up slightly since the first of the year. The traditional thirty-year fixed-rate loan has moved from 3.35% to around 3.75% depending on the lender and closing/loan costs. Sometimes an advertised lower interest rate can mean higher closing/loan costs. Buyers need to make sure when they are looking at getting a loan they are comparing apples to apples.
From a financial perspective, there are still those ankle biters out there in the real estate market, bank foreclosures and short sales. There aren’t as many as there were a year or two ago, but like weeds, they keep popping-up.
Spring is that eternal time of year when everything looks brighter. Days are getting longer; nights are getting shorter. Flowers and trees are beginning to bloom and bud. The gray days of winter are fast becoming a distant memory. It’s also the time of year when a plethora (large number) of home sellers and buyers begin the process of becoming actively involved in the real estate market.
The next few months are the time when the Boulder Valley real estate market begins to accelerate. Active listings will increase, but so will sales activity. Home values, especially in the lower price ranges, have been improving. Appraisers are aware of this and are making pricing adjustments accordingly. There has been a slight up-tick in sales activity in the higher end homes. For Boulder County, there have been 21 homes sales above one million through February. That’s a good sign for the overall market, since real estate markets strengthen from the bottom up.
New construction continues to play an important part of this renewed housing market. It started with production builders building starter homes, mid-range homes, and attached units. The market has slowly evolved to where custom builders are dusting off the cobwebs and seeing some activity. Spec inventory on expensive homes? Don’t see that coming anytime soon. Banks and builders are too wary.
As late winter and spring days vacillate between snowstorms and record highs, look for the Boulder Valley, Denver Metro, and Northern Colorado real estate markets to remain on the current pace. Available inventory will be the key to sustaining the rate of growth across all market areas.