Are you worried about losing the equity in your home as values decline? If so, you're not alone.But Boulder real estate tends to hold its value over time, thanks to ongoing demand (people will always want to live here) and limited supply (sprawl is kept in check by our geography and our government). We are somewhat immune to the extreme market fluctuations of the rest of the country -- what is known as the Boulder Bubble.
I hate to burst anyone's bubble, but Boulder home prices are declining. The good news is that they're not plummeting, and they are likely to start rising again before other markets in the US. As I wrote in an article, "Home Sales Slow, Somewhat Stable," for the Boulder County Business Report, median sales prices in Boulder fell about 5% for the third quarter of 2008, compared with the previous year. As the chart above shows, when seen over a 10-year period, the decline in median prices is barely a blip.
Sales volume (the number of home sales) fell even more -- 13% -- in the same period, indicating an overall slowing in the market. Would-be buyers are taking a "wait and see" attitude, hoping prices will continue to decline, or waiting to make sure they don't get laid off before making a major investment. But would-be sellers are also holding back, afraid they'll be selling at the bottom of the market, thereby creating a lack of available inventory. The result is a sort of stalemate.
There are lots of reasons to break the stalemate. Qualified buyers will find motivated sellers and attractive interest rates (yes, mortgages are very available). Sellers will find less competition on the market because inventory is down. Several items in President Obama's stimulus package may also help get buyers and sellers off the fence. If you decide to hop off, I'd love to help list your home or buy one.
