June 8, 2012 —
As we approach the midpoint of 2012, various economic trend lines actually are heading up, not down. After years of declines in the housing market – beginning in 2006 in Greeley and Weld County and bursting onto the national scene a year or two after – we might finally have seen the worst of the recent housing crisis.
What’s truly significant about the recent upticks is that improvement is so widespread, in various economic statistics: Housing appreciation, sales statistics, home building, foreclosures – virtually every indicator is pointed in the right direction.
As we recently reported in our Distinctive Homes section, inventories of homes on the market have shown dramatic improvement this year, with Boulder inventories down 32 percent in March compared with a year ago. Dramatic improvements were also seen in Longmont, Lafayette and Broomfield, which saw inventories decline by 32 percent.
Housing sales, too, are up dramatically. Through March, Boulder posted a 62 percent increase in sales activity, with one broker telling us that the city’s inventory is the lowest he’s seen since 2000. (Certain price ranges continue to be plagued with high inventories, but the overall trend is positive.)
Residential construction also is showing signs of life. As an example, the Steel Ranch development, on Colorado Highway 42 near downtown Louisville, is seeing a boom in sales, staff writer Michael Davidson recently reported. Builder Ryland Homes has already sold 70 of its 84 planned homes, and Boulder Creek Builders has sold 38 of 68. Both are expected to sell out well ahead of schedule.
University of Colorado economist Rich Wobbekind, speaking at the recent Boulder Economic Summit, said home values are appreciating in local communities, with Boulder leading the trend. While Boulder was not hit as hard as were many markets in terms of home values, the city itself is posting solid gains this year, and we’ve seen similar gains in other communities.
The rebound in the local real estate market is not limited to the Boulder Valley. Even the aforementioned Greeley and Weld County are seeing increases in value, heightened real estate sales activity and home building, and declining foreclosures.
To me, that is especially significant. Weld County led the nation in foreclosures for months on end in 2006. The problem was so severe that national media, including the Los Angeles Times and major television networks, were asking the question, “What’s going on in Weld County, Colorado?”
Looking back, we now know that Weld County was the harbinger of a national housing meltdown to come. The fact that even Weld County is seeing appreciation in home values – as well as declining foreclosures and increased sales and home building – means that, yes, it does indeed look like the housing market has bottomed out.
But we shouldn’t get complacent. Many negative economic factors could send the market declining once again: problems in the Eurozone, a fiscal “Armageddon” involving the U.S. federal budget and taxes, and a slowdown in China and India. Each of these factors could send the economy into a tailspin once again, with housing leading the way.
But come on. We can at least enjoy these numbers while they last.