Last month we reported on the local real estate sales for September and noted the big improvement in sales for the month and for the third quarter compared to the previous six months. A few late reported sales actually turned September from a 1.7% decrease to a 2.9% increase and the third quarter ended up less than 1% down from the previous year. We also noted that almost 30% of the listings under $250,000 were under contract, no doubt many of them due to the $8,000 first time home buyer tax credit which was due to expire at the end of November 2009 and suggested that this could provide a nice boost for the final quarter and might carry us to a sales increase for the final quarter; something we have not had since the last quarter of 2006.

 

Well it happened! October home sales were up a very welcome 41.5% compared to last year and a lot of thanks has to go to the tax credit since almost 80% of these closings were for homes priced under $250,000 compared to a normal 65%. The average selling price was down slightly to $238,021 but that is welcome also compared to the 8.9% drop in September and the 10% drop in August. In the two months since the end of August the decrease in home sales has improved from 16.3% to 10.1% and the increased sales have come without a reduction in the average selling price.

   

 The 41.5% increase in the Fort Collins area sales for October also stands out compared

to our neighbors. The Loveland area reported 149 closed sales in October, just about even with the 150 last year and Weld County had 275 closed sales, a drop of 9.5%

 

The median price for October was $213,000 and is $210,000 for the year to date compared to $212,500 last year. Days on market for October closed sales averaged 112 days compared to 118 days last year and the inventory of homes for sale dropped 8.2% to 1,713.

 

And there is more good news. As of this writing, both the Senate and the House have passed a bill and sent it to the President extending the $8,000 first time home buyer tax credit all the way through to include homes placed under contract by April 30, 2010 and contracts closed by July 1, 2010. For those procrastinators or those who were not ready or not yet qualified this gives you another six months to take advantage of the $8,000. Plus the proposal would raise income limits for the credit to $125,000 for single buyers and $250,000 for married couples. It also appears that other home buyers will get a bonus as there is a $6,500 tax credit approved for home owners who decide to sell and buy another home, as long as they have owned their current home for five years. Naturally there is some fine print with both of these proposals that we will review as soon as the details are finalized.

 

On top of all this good news is that mortgage rates, which increased slightly over the last couple of weeks, are headed back down – and are again just under 5%. The decision of the Federal Reserve Open Market Committee at their meeting on November 4, 2009 to maintain the federal funds rate at 0 to 0.25% and to purchase a total of $1.25 trillion of mortgage backed securities will continue to provide support for mortgage lending. Coupled with the extended and expanded tax credit we expect the housing market to continue to improve.

 

Maybe it is time to go find the band wagon!

This entry was posted on Saturday, November 7th, 2009 at 3:00 pm and is filed under Market Information. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.