Home prices are beginning to show some signs of life, with some areas of Northern Colorado seeing higher median sale prices, more interested buyers and shorter times on the market than last year.

Figures compiled by Re/Max Alliance for September showed 148 single-family homes sold in Fort Collins compared to 153 for the same month in 2008, down by 3.27 percent. But the better news for Fort Collins was that 15 new homes were sold in September with a median price of $329,178, compared to 10 new homes sold in September 2008 with a median price of $240,364.

That's a 50 percent increase in new homes sold and a 37 percent increase in median price.

Those figures are music to the ears of residential real estate brokers, developers and home sellers after more than a year of down numbers.

"It's even more encouraging than you think," notes B.J. Johanningmeier, who reports on market conditions for Re/Max Alliance. "We don't have the supply of homes (to sell) that we had last year."

A gloomy residential picture has started to brighten generally across Northern Colorado, with homes selling for $250,000 or less picking up steam. "Anything under $225,000 is selling best, without question," said Kathy Arents, with The Group Real Estate Inc. "As far as inventory, anything under $250,000 has stabilized nicely."

The $8,000 federal tax credit for first-time homebuyers has been particularly effective in getting houses sold in lower price ranges. Congress earlier this month voted to extend the credit, which had been set to expire on Nov. 30, through April 30, 2010. It also added a new $6,500 tax credit for homeowners who want to move up to a new residence if they have lived in their existing home for at least five of the last eight years.

"Reloading that ($8,000 tax credit), plus the additional $6,500, is doing nothing more than ratifying that anything under $300,000 is a pretty good way to go right now," Johanningmeier said.

Greeley/Evans has also shown a boost in local home-selling activity. "I actually think we are experiencing a bit of an upturn," said Chalice Springfield, CEO and managing broker for Sears Real Estate in Greeley. "I think what's very encouraging is the median sales price. Greeley's median sales price has gone up just about every month in 2009."

More homes have been sold in Greeley in 2009 than in Fort Collins through September, according to Information Real Estate Services, although the average price in Greeley is about $70,000 less than Fort Collins.

"For Greeley, under $100,000 is the hottest price range and then under $150,000," Springfield said. "I think we're heading out of the slump with that kind of affordability."

Springfield also notes that the price of single-family homes in Greeley/Evans has increased 14.2 percent from January through September compared to only a 2 percent rise in Fort Collins and a 21 percent drop in Loveland.

 

Still an uphill climb

Despite the improving news in some Northern Colorado home markets, there are still plenty of obstacles to getting the residential real estate market back on track.

Foreclosure rates remain high and increased in both Greeley and Fort Collins-Loveland in September, according to First American CoreLogic Inc. For Fort Collins-Loveland, the rate of foreclosures on outstanding mortgage loans was 1.15 percent, an increase of 0.56 percent over the same month in 2008.

For Greeley, the rate of foreclosures was 2.45 percent, up 1.07 percent over September 2008.

"Foreclosures have played a good and bad role," Arents said. "It devalues properties in neighborhoods, so it can make it more difficult to sell your house for what you think it's worth. On the other hand, it's made it easier for some people to get into homes they maybe wouldn't have otherwise been able to."

Even though mortgage interest rates are near record lows, prime selling time has passed, with winter and the approaching holidays putting the snooze alarm on active home sales until spring.

Two things are needed to get residential sales back into high gear, observers agree. The first and most important is for an improved jobs outlook, with businesses hiring and workers feeling more confident about their employment prospects.

The second is a home market that's more in tune with changing times. Aging baby boomers want to downsize their homes, and fewer buyers are looking for that sprawling house in the suburbs.

One thing most residential real estate observers emphatically agree on is that credit should not be loosened simply to accommodate more sales.

"I think we're back to the place where people need to qualify, and that's a good place to be," Springfield said. "People need to have a positive credit history and a good job, because loose credit is why we are where we are."