Last week we reported on the disappointing October home sales for the Fort Collins area: units down 20.3% and the average selling price down 9.3% leaving the year to date home sales down 13.4% and the average selling price at a very slim 0.065% increase over 2007. We also speculated that we might see an actual decrease in the average selling price for the year, the first decline in the thirty-two years of record keeping.

But, as disappointing as our recent sales have been, we wanted to give you some information on how other areas are faring that shows just how solid our market is compared to most. Our closest neighbors, in Loveland and southern Larimer County posted a 5.2% decrease in the number of homes sold in October and have a 9.4% drop for the year to date. The average selling price was off 1.3% in October and for the year to date it stands at $259,627, a 4.2% drop from 2007. In Weld County, October sales were down 2.1% and for the year to date the decrease is 9.9%. The average price in October was down 12.3% and is at $192,618 for the year to date, an 8.4% decrease. In the Larimer and Weld – tri-cities area, the total sales of 7,260 homes is a 10.8% decrease for the year to date and the average price of $228,212 is down 4.2%.

In the Denver Metro area October sales of resale homes totaled 4,265, up 11.3% compared to October last year and the average price of single family resale homes was down 13.8% and is now at $274,528 for the year to date, a 13.3% decline from 2007. There has been a significant drop in the number of homes on the market, with the 23,120 listings at the end October representing a 20% drop from a year ago. The inventory has not been this low since January 2005. In the third quarter that ended in September, sales of new single family homes were down 42.4% compared to a year earlier but the median price improved 4.4% to $348,995. Both closings and starts are down dramatically with the number of building permits down 35.5% as the industry has worked through most of the standing inventory while starting a lot fewer homes

On a national basis, the October sales will not be reported until November 25th. The last report covers sales to the end of September. Existing home sales were up 5.5% on a seasonally adjusted annual rate to 5.18 million in September compared to 4.91 million at the end of August and were 1.4% higher than the 5.11 million-unit pace in September 2007. This was the first time since November 2005 that home sales have been above year-ago levels. The national median price for all housing types was down 9.0% from a year ago. Total housing inventory at the end of September was down 1.6% to 4.27 million existing homes, which represents a 9.9 month supply, down from a 10.6 month supply in August. This marks two consecutive monthly declines since inventories peaked in July. Lawrence Yun, the chief economist for the National Association of Realtors said “The sales turnaround which began in California several months ago is broadening now to Colorado, Kansas, Minnesota, Missouri and Rhode Island.”

New home sales also turned up in September, posting a 2.7% increase to a seasonally adjusted rate of 464,000 units, according to U. S. Commerce Department numbers released last month. The report also indicated that builders are making substantial progress in winnowing down the months’ supply of unsold homes on the market. The national median selling price for new homes was $225,700 in the third quarter, down 7.6% from last year. Generally it looks like activity is starting to pick up; inventory levels are becoming more manageable and prices will start to move up.

The same applies to our local market. We may not finish 2008 with an average annual price increase but we can feel pretty good compared to the year to date decreases elsewhere: Fort Collins +0.1%, Loveland -4.2%, Weld County -8.4%, Denver Metro -13.3%, national resale – 9.0% and new -7.6%. Neither our inventory nor prices spiraled out of control during the boom and now, while other areas are experiencing the downside, we have a manageable inventory of homes for sale and prices are very stable. For those buyers who are on the fence, we recommend that this is the time to take a look at what’s available. It is apparent that we are not going to have a sharp price decrease and generally the homes that are available for sale are well priced and well turned out by motivated sellers plus there is lots of mortgage money available at very favorable rates. Things are looking up – don’t miss the boat!

This exercise is called ‘one step forward, two steps back’. Just when we thought there was a little momentum to carry us out of the doldrums we get slapped back down. In the Fort Collins area October closed home sales were a dismal 188 units, down 21.7% from last month and 20.3% compared to October last year. And last year was poor compared to the previous year; the 236 sales in October 2007 were off 17.8% from 2006 so the two year drop is almost 30%. For the year to date we picked up a few late sales in previous months, including seven in September, but the decrease is now at 13.4%.

Not only were sales way down, we were hit with the worst month over month price decline that we can find – ever. The average selling price of the 188 homes in October was $244,356, down 8.0% from last month and 9.3% compared to last year. In August and September, the average sales price benefited from the mix of homes with 45 newly constructed single family homes sold at an average price of almost $500,000. In October, there were just 14 new homes at an average price of $314,800. This coupled with the fact that the average selling price in October last year was the second highest monthly total of the year plus the low volume of sales somewhat explains the large decline in price but we have to take the good with the bad.

The average selling price for the year to date is now a very slim 0.065% increase and the median price for October was down 3.0% and is now at a 0.9% decrease for the year. It is now looking like we will fail to post an average selling price increase for the year. The 2007 average sales for the next two months were higher than normal with $275,333 in November and $263,781 in December to raise the average for the year to $253,545. With the way sales are going this year, we can expect closed sales to total around 350 units for the next couple of months and these sales would have to average an unlikely $270,000 to bring the 2008 total to an increase over last year. This potential decrease in the average selling price would be the first time this has happened in thirty two years of record keeping back to 1976.

The inventory of homes for sale continues to decline in step with the drop in sales. There were 1,743 homes for sale at the end of October compared to 1,809 at the end of September and 2,015 in October 2007. This is a decrease in supply of 13.5%, almost exactly the same as the 13.4% drop in sales. With an average monthly demand of 265 homes over the last twelve months, the inventory is equivalent to a 6.6 month supply which is considered a balanced market. The slower demand is having an affect on marketing times. The homes sold in October were on the market an average of 118 days, up from 114 days last month and 108 days last year. For the year to date, the closed sales have average 111 days on market compared to 114 last year.

In spite of the poor numbers recorded in October, our local market is still performing better than most other areas of the country and we will review the regional and national data in our column next week.