November was another good month for local real estate with 205 closed sales representing a 39.5% increase from last year. This was supposed to be the last month for the first time home buyer tax credit and no doubt this deadline motivated many people to close on the purchase of a home to receive the $8,000 tax credit. The average selling price again took a bit of a hit due to the fact that over 70% of the sales were for homes priced under $250,000. In the last couple of months home sales have increased 42% compared to the same two months last year and have improved from a 14.6% drop to a 7.5% decrease in year to date sales. But before we get too carried away, we should put this performance in perspective. The 347 homes sold in October and November of 2008 was far and away the lowest in a very long time. The average October sales from 2000 to 2007 were 267 homes and for November 253 for an average two month total of 520, a long way from the 347 last year. The two month total this year of 493 is respectable but certainly not worthy of banner headlines trumpeting a 40% sales increase.

The final quarter of the year averaged 756 sales from 2000 to 2007. In 2008 there were 528 so that quarter last year was down 30% from the average. The sales in the first two months of the final quarter this year total 493 and if we at least equal last years December sales we will finish with around 675 sales for the quarter and 2,900 for the year which is a lot better than it looked just a couple of months ago. Still, this total takes us back all the way to 1995 which is the last time sales were under 3,000. In fact, for the ten year period from 1998 to 2007 Fort Collins home sales averaged 3,848 per year.

The median sales price has held steady for the last few months and is at $210,000 for the year to date compared to $212,000 last year. The average days on market for the November closed sales was 119 days compared to 112 last month and 126 last year. The inventory of homes for sale is the lowest it has been all year with 1,539 active listings at the end of November compared to 1,713 last month and 1.693 last year.

With the extension of the first time home buyer tax credit and a new $6,500 tax credit for qualified repeat buyers, together with 30-year mortgage interest rates under 5% plus the encouraging national housing data and economic news we remain hopeful that housing sales have bottomed out and we will see an improvement in sales and prices entering the new year. The biggest challenges facing our market will be making a dent in the inventory of homes priced above $450,000 plus dealing with the so-called ‘shadow inventory’. These are homes that are not yet on the market, either held in foreclosure or owned by the hundreds of home owners who would like to sell but have not listed their homes due to the very difficult market. As buyers gain more confidence and home sales improve we will have a lot of inventory to work through to get back to a normal market balanced between buyers and sellers.

This entry was posted on Thursday, December 3rd, 2009 at 3:40 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.