Louisville, CO

REAL ESTATE MARKET UPDATE

An Information Service of RE/MAX Alliance/Boulder Valley

November/2009

To say that 2009 has been an interesting year thus far would be a huge understatement. The true impact of a global economy has become part of the world’s consciousness. Billions upon billions of tax payer dollars have been poured into various state and government programs to hopefully stem the tide of growing unemployment. The stock market has wreaked havoc with individual’s retirement funds and future plans. Real estate values have tumbled across nearly all sectors of the American landscape. A pessimist would say the sky is falling. An optimist would say there is opportunity to be had here. A brief article in the Denver Post newspaper (11/8/2009) had the following headline: Homebuilders on the hunt for land as prices stabilize. The article talks about large production builders i.e. Ryland Group Inc. and Meritage Homes Corp. purchasing land for new home development in areas like Southern California, Las Vegas and Orlando. These have been some of the hardest hit housing markets in the nation.

Real estate markets fall quickly and recover slowly. Two things normally signal an upbeat in real estate activity: (1) Sales trends having stabilized and beginning to move upward, and (2) New home construction increasing. For the past two months, Boulder County SOLD listings have mirrored 2008: 471 single family home sales in 2009 vs. 483 in 2008; 197 attached unit sales in 2009 vs. 186 in 2008.

During the last two years there has been minimal new home construction across the Boulder Valley. In a balanced real estate market, where there are a reasonable number of home buyers and an acceptable number of properties for sale, new home construction becomes part of the housing landscape. Homebuyers contract to have new homes built and builders are willing to take the risk of building “spec homes” anticipating they will attract a buyer during the construction phase.

Risk versus reward is the key element in most real estate transactions and it doesn’t apply solely to the buyer and seller. Standing in the wings is a third entity and, in most cases, they are the determining factor in how this all plays out. They are the purveyor of the golden rule: He who has the gold makes the rules! They are the lender.

New home construction is dependent upon financing; financing of construction loans and financing of permanent loans when the home is completed. Builders are at the mercy of the lender. Most lenders today shy away from new home construction unless it is a “presale” and the lender’s risk is minimal. Want to build a spec home and get lender financing? Good luck finding a bank that will work with you without 30% to 40% down, two to three points over prime, etc. The good old days of 20% down construction loans at prime or prime plus one are history.

-------------------- Below is a brief overview of single family home values within certain geographic areas of the Boulder Valley comparing the past two years through October of each year. Information is provided by IRES, the Northern Colorado Multiple Listing Service.

2008 2009 % 2008 2009 %

Area Solds Solds Change Average Price Average Price Change

Boulder 684 466 -31.87% $653,314 $638,975 -2.195%

Broomfield 316 306 -3.16% $401,412 $355,610 -11.41%

Superior 111 121 +8.26% $441,192 $416,028 -5.71%

Louisville 191 190 --------- $393,709 $369,103 -6.25%

Lafayette 232 192 -17.24% $354,349 $348,488 -1.655%

Longmont 926 767 -17.17% $256,706 $241,215 -6.035%

Sub. Plains 402 308 -23.38% $524,203 $519,379 -0.990%

Sub. Mtns. 233 167 -28.32% $435,036 $404,542 -7.00%

Are you starting to think about hanging up your holiday lights this year? Consider trading your old lights in for new energy efficient LED lights!

City of Louisville
Holiday Lights Exchange Program
for Louisville Residents
Turn-in your strings of old Incandescent Holiday Lights for recycling and get a $5 Discount Coupon per
string (limit 4), for new LED Holiday Lights you can purchase at participating Louisville Merchants!
Turn in your old lights at the Louisville Recreation Center, Saturday, Nov 7th 2009, 10am-2pm. Please
bring proof of your Louisville residency to receive coupons, since this program is only for Louisville
residents. We have a limit of only 400 coupons, so don’t wait too long!
LED lights use an average of 90% less energy than mini-incandescent lights, and can use only .6% of the
energy draw of large incandescent bulbs (C9). So using LED holiday lights can significantly reduce the
amount of energy you have to pay for during the holiday season. And that can be helpful when you’re
trying to reduce your expenses, especially with all the other costs you have during the holidays.
The following chart compares the energy usage and operating cost of LED holiday lights to both mini and
large incandescent holiday lights in your home.

Now that the last snow has melted and uncovered your fall leaf collection, are you thinking of raking and disposing of them?

Perfect timing! See below:

Leaf Collection 2009, November 2 - November 20

Louisville Sales To Inventory Ratios

I was looking at Boulder's Sales to Inventory Numbers and was just inputing the numbers I have been tracking since 2005 and was pleasently surprised to see how well Louisville, CO is doing. Louisville was looking tough in May, 2009 with a reduction of 50%, but has come back extremly strong in August with only a 1.47% fall for year over year absortion rates.

As I stated in my Boulder, CO post, September 15, 2009 was a true downturn in our market with the fall of Lehmen Brothers. Many Buyers in our market put a brake on moving forward. With the strong numbers Louisville is posting we should expect to see good things from the Louisville market going forward into 2010. At 26.14% absorption Louisville is ony 3.3% points away from being a Sellers Market. Wow who would have Thought back in May.