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2009 Local Market Reports - 3rd Quarter Every housing market is unique. These Local Market Reports (LMRs) — which reflect data available through 3rd Quarter 2009 — provide insights into the fundamentals and direction of the nation\'s largest metropolitan housing markets. Each downloadable report evaluates a number of factors affecting home prices, including: The health of the local job market Foreclosure rates Housing inventory Debt-to-income and mortgage-servicing-costs-to-income ratios
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Boulder AreaLocal Market Report, Third Quarter 2009
Local Trend
Prices are down compared to a year earlier and continue to weaken
0 5%
$358,300 $177,9001-year Appreciation (2009 Q3) -11.7%
2 5%
Today's Market…
Current Median Home Price (2009 Q3)
U.S.Price Activity
-0.9%
Boulder
$0$50,000
$100,000$150,000$200,000$250,000$300,000$350,000$400,000$450,000
-15%
-10%
-5%
0%
5%
10%
15%
20%
2009 Q3
Q12008 Q3
Q12007 Q3
Q12006 Q3
Q12005 Q3
Q12004 Q3
Q12003 Q3
Q12002 Q3
Q12001 Q3
Q12000 Q3
Median Price (Red Line) and One-year Price Growth
Sales growth during the third quarter remains sluggish compared to the
national average5.9%
U.S.
$3,467
$867
$729,250
Colorado
*Note: the 2009 loan limits for FHA and the GSEs were extended through 2010.
-14.1%
Real estate remains a long-term investment: those who bought early in the
boom still hold some equity-$45,900
Local Median to Conforming Limit Ratio
Not all buyers have access to government-backed financing in this
k t78%
-$9,2003-year (12-quarter) Housing Equity Gain7-year (28 quarters) Housing Equity Gain
3-year Appreciation (2009 Q3)
9-year (36 quarters) Housing Equity Gain
0.5%
NA$46,600
State Existing Home Sales (2009 Q3 vs 2008 Q3)
not comparable
Conforming Loan Limit* $460,000
-2.5%
Home Sales and Construction Growth
$0$50,000
$100,000$150,000$200,000$250,000$300,000$350,000$400,000$450,000
-15%
-10%
-5%
0%
5%
10%
15%
20%
2009 Q3
Q12008 Q3
Q12007 Q3
Q12006 Q3
Q12005 Q3
Q12004 Q3
Q12003 Q3
Q12002 Q3
Q12001 Q3
Q12000 Q3
Median Price (Red Line) and One-year Price Growth
0
20
40
60
80
100
120
140
160
-25%-20%-15%-10%-5%0%5%10%15%20%25%30%
2009 Q3
Q12008 Q3
Q12007 Q3
Q12006 Q3
Q12005 Q3
Q12004 Q3
Q12003 Q3
Q12002 Q3
Q12001 Q3
Q12000 Q3
State Home Sales (Red Line) and Sales Growth1,000s
national average( )
$0$50,000
$100,000$150,000$200,000$250,000$300,000$350,000$400,000$450,000
-15%
-10%
-5%
0%
5%
10%
15%
20%
2009 Q3
Q12008 Q3
Q12007 Q3
Q12006 Q3
Q12005 Q3
Q12004 Q3
Q12003 Q3
Q12002 Q3
Q12001 Q3
Q12000 Q3
Median Price (Red Line) and One-year Price Growth
0
20
40
60
80
100
120
140
160
-25%-20%-15%-10%-5%0%5%10%15%20%25%30%
2009 Q3
Q12008 Q3
Q12007 Q3
Q12006 Q3
Q12005 Q3
Q12004 Q3
Q12003 Q3
Q12002 Q3
Q12001 Q3
Q12000 Q3
State Home Sales (Red Line) and Sales Growth1,000s
Job losses are a problem and will weigh on demand, but layoffs are declining which could help buyer confidence
Unemployment has risen since the same period last year, but Boulder's labor
market has been more resilient than the national average
not comparable12-month Sum of 1-unit Building Permits through Sep 2009 (1,000s) 122 The current level of construction is 89.3%
below the long-term average
Long-term average for 12-month Sum of 1-Unit Building Permits (1 000s)
The economy of Colorado is weaker than the rest of the nation, but improved
modestly from last month-1.1%
Excess supply reduction could result in price escalation over the longer-term if, in
the future there is rapid and robust
Weak compared to other markets
U.S.
U.S.
36-month change (2009 - Sep)
-4.3%
not comparable
Local Fundamentals
Not Comparable
-3.1%
5.5%4.1%
Not Comparable
9.8%6.2%
12-month change (2009 - Sep)
3-year Job Change (Sep)
Year-ago Unemployment Rate
-3.2%
1,137
1-year Job Change (Sep)
-0.3%
Boulder
-5.8%
-6,000
Boulder
Drivers of Local Supply and Demand…
Colorado
Current Unemployment Rate (Sep)
Local Economic Outlook
1-year (12 month) Job Growth Rate
1-year Job Change (Aug) -11,500 Not Comparable
U.S.State Economic Activity Index
-9,800
Building Permits (1,000s)
Low construction will help to maintain a tight supply and to stabilize prices
the future, there is rapid and robust increase in demand
-34.9%
p,
Single-Family Housing Permits (Sep 2009) 12-month sum vs. a year ago -39.9%
0500
1,0001,5002,0002,5003,0003,5004,000
Construction: 12-month Sum of Local Housing Permits (Historical Average Shown in Red Dashed Line)
0500
1,0001,5002,0002,5003,0003,5004,000
Construction: 12-month Sum of Local Housing Permits (Historical Average Shown in Red Dashed Line)
17.0% 15.6%21.0%
Boulder
Affordability
Historical Average
18.8% Historically strong and an improvement over the second quarter of this year
Monthly Mortgage Payment to Income
Ratio for 2009 Q3Ratio for 2008
23.2%
U.S.
Good relative to the nation
19.5%
0%
5%
10%
15%
20%
25%
20082006200420022000199819961994199219901988198619841982
Affordability - Local Mortgage Servicing Cost-to-Income (Historical Average Shown in Red Dashed Line)
0%
5%
10%
15%
20%
25%
20082006200420022000199819961994199219901988198619841982
Affordability - Local Mortgage Servicing Cost-to-Income (Historical Average Shown in Red Dashed Line)
0%
5%
10%
15%
20%
25%
2009 Q32009 Q22009 Q12008 Q42008 Q32008 Q22008 Q12007 Q4
Recent Trend - Local Mortgage Servicing Cost to Income(Historical Average Shown in Red Dashed Line)
0%
5%
10%
15%
20%
25%
20082006200420022000199819961994199219901988198619841982
Affordability - Local Mortgage Servicing Cost-to-Income (Historical Average Shown in Red Dashed Line)
0%
5%
10%
15%
20%
25%
2009 Q32009 Q22009 Q12008 Q42008 Q32008 Q22008 Q12007 Q4
Recent Trend - Local Mortgage Servicing Cost to Income(Historical Average Shown in Red Dashed Line)
Local affordability has improved and is below the historical average
Median Home Price to Income
More expensive than most markets
6.8
Historical Average 7.5Ratio for 2009 Q3
7.1Ratio for 20086.26.8
Boulder
7.2
U.S.
0.01.02.03.04.05.06.07.08.09.0
20082006200420022000199819961994199219901988198619841982
Ratio of Local Median Home Price to Local Average Income(Historical Average shown in Red Dashed Line)
The spread between the 30-year fixed rate mortgage and the 10-year Treasury bond fell again in the third quarter and stands close to the historic average. This decline of the spread suggests that the financial markets view the risk on
mortgage debt as close to a "normal" state and that the private sector will buy up excess demand if yields rise. Consequently, the Fed is likely to phase out its program of buying up mortgages in the secondary market to keep rates low, leaving the private sector to fill the void. Mortgage rates are likely to rise in first or second quarter of 2010 as the Fed exits
the mortgage market.
The Mortgage Market
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2.02.53.03.54.04.55.05.56.06.57.0
2009 Q3Q12008 Q3Q12007 Q3Q12006 Q3Q12005 Q3Q12004 Q3
30-year Fixed Mortgage Rate and Treasury Bond Yield (%)
Spread (left axis) 30-Year FRM (Right axis) 10-Year Treasury Bond (Right Axis)
0.01.02.03.04.05.06.07.08.09.0
20082006200420022000199819961994199219901988198619841982
Ratio of Local Median Home Price to Local Average Income(Historical Average shown in Red Dashed Line)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2.02.53.03.54.04.55.05.56.06.57.0
2009 Q3Q12008 Q3Q12007 Q3Q12006 Q3Q12005 Q3Q12004 Q3
30-year Fixed Mortgage Rate and Treasury Bond Yield (%)
Spread (left axis) 30-Year FRM (Right axis) 10-Year Treasury Bond (Right Axis)
0.01.02.03.04.05.06.07.08.09.0
20082006200420022000199819961994199219901988198619841982
Ratio of Local Median Home Price to Local Average Income(Historical Average shown in Red Dashed Line)
BoulderMonthly Market Data - August 2009
Looking Deeper….
U.S.Th B ld k t h l h f
0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%4.5%5.0%
State Total Foreclosure Rate vs. U.S Average(U.S. Average in Blue Dashed Line)
Source: Mortgage Bankers' Association
8.1% 12.3%
91.9% 87.7%
8.1% 12.3%
0.7% 2.3%
0.5% 1.7%
12.3% 18.0%
9.4% 18.8%
4.5% 14.5%
3.6% 12.1%
Compared to the national average, today's local rate is low
There was a substantial increase versus July of this year
Source: First American CoreLogic, LoanPerformance data
The "foreclosure + REO rate" is the number of mortgages, by metro area, that are either in the foreclosure process or have completed the foreclosure process and are owned by banks divided by the total number of mortgages for that area.
Locally, today's foreclosure rate is low relative to the national average
There has been a large local increase versus a year ago
ALT-A: Foreclosure + REO
Rate The August rate for Boulder is low compared to the national average
SUBPRIME: Foreclosure + REO
Rate
Market Share: Prime (blue) vs.
Subprime + Alt-A
A large local increase occurred compared to July of this year
PRIME: Foreclosure + REO
Rate
The Boulder market has a lower share of subprime loans than the average market,
but rising prime foreclosures are becoming a problem
0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%4.5%5.0%
State Total Foreclosure Rate vs. U.S Average(U.S. Average in Blue Dashed Line)
Source: Mortgage Bankers' Association
0.7%
0.5%
Aug-09Jul-09
2.3%1.7%
Aug-09Jul-09
12.3%9.4%
Aug-09Jul-09
4.5%3.6%
Aug-09Jul-09
18.0%
18.8%
Aug-09Jul-09
14.5%12.1
%
Aug-09Jul-09
91.9%
8.1%
87.7%
12.3%
