For the first time ever, the average price of a home in Longmont exceeded half a million dollars last month. We all knew it would happen sooner or later, but this is much sooner than expected. Last month saw the previous highest monthly average price ever at $481,378. Mark August of 2018 in your memory because in that month, the average price of a home sold in Longmont was $500,134. This is a significant milestone for sure, but the overall average price for the year is still much closer to $450,000.
The number of closings of single family homes in Longmont don’t seem to be affected by the higher prices. The 134 sold in August is the highest monthly total (any month) since August of 2015 when there were 153 sales. If you look at the average and median prices in all areas of this report you will see what amounts to significant demand. Yes, there are fewer homes on the market, but, you’d think at some point the homes become too expensive and people choose to buy elsewhere. In fact, many of us have predicted that for some time now, and it’s happening to some extent, but obviously the market in Longmont is stronger than expected.
Prices going up, up, up is not the wave of the near future. Sales start to slow after the kids go back to school for obvious reasons. Simply put, families are too busy to mess with moving with all the kid activities and sports. And really, who wants to list and show their house during the holidays and move during a snowstorm? That’s right, nobody, except the people who need to for one reason or another, like a job change or relocation. Also, prices are generally leveling off as I had predicted about 18 months ago. It’s more of a plateau than a reversal. There are about 9 million articles out there explaining how there is no real estate bubble. They are being written by peoples’ natural fear of “what goes up, must come down”. Interestingly, I haven’t seen any articles predicting a real estate crash.
Some of you may wonder about the graph in this month’s stats report. The legend shows three years of data and the graph shows three columns, but there are only two numbers. The graph was getting too crowded, so I only displayed the actual numbers from 2016 and 2018 while leaving the column for 2017 as a reference point. This information is at the bottom of this post. What you will see in the data sheet is that the volume of homes sold below the $350k-$400k price range in 2016 is now about equal to the number of homes sold above that range in 2018. And the fewer homes sold above the $350k-$400k price range in 2016 is now about equal to the number to the number sold below that price point in 2018. That’s a long-winded couple of sentences to say that the numbers have flip flopped. What does that mean to anyone? There were 65% fewer single family homes sold below $350,000 in 2018 vs 2016…that’s what.
This is a seemingly perilous place for us to be when it comes to home affordability. Good thing we aren’t in Boulder where the average price of a home is still hovering around $1.3 million! Boulder has all the requisite affordable housing projects in place and even a commercial linkage fee (really it’s a tax on commercial new construction of $32/sf to fund their affordable housing program that has managed to crush the commercial construction business in Boulder, but that’s another discussion altogether) and their prices have skyrocketed…I wonder what will happen when Longmont brings back their inclusionary zoning (deed restricted, affordable homes)? Actually, I’m being sarcastic. I know exactly what it’ll do to prices in Longmont and the answer is the opposite of lower.
Here are a few parting gifts:
First American Title will be releasing a new secure portal for communicating with buyers and sellers. This will be a game changer and much safer for everyone. All title companies should have a secure portal…but they don’t.
Longmont Active Development Log – This is where you can find out what all those construction projects are going to be.
Business Coach Alex Gil will be giving a 90-minute workshop at Steps Real Estate in downtown Longmont on Wednesday, September 12 at 3 pm. Mindset for Success is the topic and well worth the $20. I know Alex personally and you will not be disappointed. Click Here to Register.
Below is the data table for this month’s graph. I removed the $350k-$400k from the calculations since it has stayed very consistent. The main point I was making is that the numbers highlighted in red have flip-flopped. The numbers in blue have somewhat flip flopped as well. You can also see the 2017 numbers that I was unable to squeeze into the graph. You can clearly see a trend downward in the section at the top when reading left to right. In the lower section you can see the opposite, an upward trend in activity in the higher price ranges from 2016 to 2018.
I see a lot of fun and exciting things in this month’s sales statistics report. I also uncovered and updated a couple of other tidbits for your reading pleasure. But first of all, I want to thank everyone who came to the Grand Opening and Ribbon Cutting at the new First American Title office. We had well over a hundred guests, great food and fun was had by all in our beautiful new space. Thank you.
There hasn’t been a monthly report with this many red numbers on it since 2009 or 2010. But honestly, it’s not all bad news. This is just a one month snapshot, so it doesn’t tell the whole story, but it surely can tell some of it. One number that isn’t red is the average sales price for Area 5 ($1,041,830!!!). Last year’s average price in July was the previous highest number typed into this report. This year it’s even bigger and for the first time in 13 years of producing this report, we have an average sale price of over a million dollars. And yes, for reference, I pulled up the averages for the City of Boulder to compare. Year to Date, the average sales price of a single family home in Boulder is $1.269 million and the average price of an attached home is just north of $588k!
As you can clearly see, the red numbers in the Longmont Single Family section are just slightly lower in: monthly sales, yearly sales and days on market, but WOW on the decrease in inventory. To have these negative numbers and still have the median and average sales prices go up is incredible. This is a clear indication of steady demand. Yes, there is a correlation to low supply, but I’d have guessed that the demand would wane a bit with our previous price increases. It’s the proverbial wind being taken from the sails, but that’s not happening.
I see some interesting numbers in the Longmont attached sales too. It looks like a large drop in sales, but the 2017 sales were buoyed by, among others, the 8 condos on Charles Dr that sold in the $400k range. There were only 2 new construction attached sales in July of 2018…so it’s easy to see where that decrease came from. We don’t do negative median and average, or at least we haven’t for the past several years, so why the negative median sales price in attached homes? It’s really just a blip caused by the lower sales volume as discussed above.
Please take a look at the graph I created this month. Industrywide we have been noticing “it’s just a little slower than it was” for some time now. The graph shows monthly sales totals for each month for the past 6 years. It also shows the average for those 6 years. The only month in 2018 when the monthly sales total exceeded the average was March. Also, March and January were the only months where the monthly sales total exceed that of last year. Overall, this is clearly a declining trend. In fact, just this morning, a wise, local sales manager (Rodney Carlson) suggested we are seeing a return to a normal market. The only problem with that assessment is that normal is going to mean something different to a long-timer than it is to an agent who has been in the business less than 6 years.
The Carbon Valley is quietly putting in huge numbers. Their monthly sales have been steady and their YTD sales are not declining like in Longmont. They are also facing the similar challenges with lower inventory and rising prices. Somehow, their median and average prices don’t seem to be climbing as fast as those in Longmont. There is a lot of new construction east of I-25…I wonder if that has anything to do with it.
I have a new resource in my stats world so things may be changing. One of the top sales reps in the state has decided to join our team here at First American Title. Her name is Megan Aller and many of you may know her from her real estate statistical presentations in the Denver Metro area. I am going to promise her a beer or two to help me update some of what I do here for you. More to come on that later.
First American Title is proud to announce we have moved our Longmont office to a new location. As of July 3rd, 2018 our office will be located in one of the premier office buildings in all of Longmont, The Roosevelt Building. We would like to thank Keith Burden of Burden Inc, the buildings’ owner and landlord and Christian Bordewick of Bank of Colorado for making this possible. We have tripled the size of our office and now have the room to expand. Our office is located at the corner of Longs Peak and Coffman and the address is 636 Coffman St, Suite 101 Longmont CO 80501. Our email and phone numbers did not change.
Thank you also to Kelli Flores, First American’s Statewide Escrow Manager, Brandon Smith, our Statewide Sales Manager, and Ryan Swed, First American’s State President for believing in our group and making this happen. We will miss our first office because it holds a special place in our hearts as that is where we launched our Longmont presence. First American signed the lease on our space on 4th Ave on July 3rd, 2017, 14 days later, on July 17, we were open for business. The one year anniversary of that momentous days is fast approaching, so look for some fun stuff from us. We are proud of our progress and happy to be able to deliver the best customer service possible to our clients.
Our new location provides much better parking options, three fantastic options to eat, drink and gather with friends and clients. Quick note, Bin 46 opens at 3:00 so plan your closings accordingly. Also, since we are located in a former bank, we have a very secure drop box where your clients will be able to drop earnest money checks after hours. I will have envelopes ready for this feature to be used by the end of this
week. And lastly, thank you to all of our wonderful clients. All of this would not be possible without you and your support.
As for the stats… it’s kind of the same old thing… prices up and inventory down. However, there is one thing I’d like to bring to your attention that isn’t readily apparent in the stats report. I see the new listings every day and I am astounded by how many of them are being listed by out of town agents and offices. I’ve looked at these numbers several times and done the math several different ways, but it always comes up the same. Currently, 63.5% of all active single family home listings in Longmont are held by out of town offices. This percentage means that Longmont agents are only capturing 36.4% of listings on their home turf!
I’ve been presenting this information to agents for a few weeks now and I keep getting asked: Why? I think it’s simple, local agents are getting outworked by their competitors. Those agents are doing a better job staying in touch with your clients. It’s pretty much a self-inflicted problem that needs to change. It isn’t the discount brokers taking all the listings either. My research shows only 10 listings in town held by the discount group. There are about 1,000 yearly sales in Longmont, which equals 2,000 total sides; and 63.5% of the business is going out of town that leaves about 730 sides for 500 local Realtors to live on.
I know if I had 63.5% of my potential business walk out the door, I’d do something about it. What are you going to do? If you don’t have a plan, maybe we should meet. I’m a small business consultant and I’m here to help you build your business. Text or call me at 720-534-8355 or email me at email@example.com
First American Title is proud to announce our move to one of the premier office buildings in Longmont. The Roosevelt Building was built by and is still owned by Cotton Burden of Burden Inc. and RLET Properties, in 2002. The space First American occupies was most recently occupied by Bank of Colorado before they purchased AmFirst Bank and moved to their current location at 916 S. Main. We want to thank all those who assisted us with this move. It went flawlessly and we are open for business. Mostly, we would like to give a heart-felt thank you to all our clients. You were the ones who truly made this move possible because of your continued support.
Stop by and say hello. We’d love to see you and show off our new space. The parking options are much and we think you’ll like it.
We are moving!
We’ve outgrown our starter space (as expected) and now we get our big-boy office. The integrity of the people at First American Title is simply amazing. They made promises to us when we opened a year ago and this is the fulfillment of that promise. We will be open July 3rd in the new space.
If you don’t recognize the address, it’s the Roosevelt Building at the corner of Longs Peak and Coffman. The parking is great. There is even free, covered parking on the north side of the Roosevelt Place Apartments…or Bin 46, however you choose to look at it. Hot closing tip – Bin 46 opens at 3pm, so set your closing time at 2 so you can walk across the street to celebrate. I’m not sure when the new signage will be up, so in the short term it’ll look like the photos below and we will be in the old Bank of Colorado space.
Please click on the desired city below in the map or scroll down and click on the name of the city in the list to obtain Colorado Single Family and Condo Statistics.
If you have any questions, please feel free to call, text or email.
We meet here, month after month, year after year. We watch and talk about the increasing prices in Longmont. We are now solidly into the $450,000+ average price range, so I thought it would be a good idea to graph the year-to-date sales by price point. I’ve done this in the past, but this one is just a bit different. For the first time ever I included both single family and attached homes, plus this version has several more price categories. I think it tells a bit of a story.
As prices march north and buyers gasp at the averages and call Longmont an expensive place to live, I think we should consider the information presented in this month’s graph. To have only 14 homes sell below $250,000 isn’t a surprise…because we know lower priced homes disappeared over the past few years. The one thing that did surprise me was that only 21 homes sold for over $700,000, with the top sale at $1,180,000. It seems every time I look at listings and sales there should be more transactions in this upper end. After I did a little math on these numbers two specific items of note became clear. The first is that 66.2% of all sales (342 of 517) are below the average of $450,000. This is a good example of how large sale prices can influence the average upward. The other item is good news because 32.7% (169 of 517), or darn near one third of all sales, are in the affordable range of under $350,000.
Welcome to June! June is the new, new-listing month. Five years ago May was the top month of the year for new listings, but over the last two years the month of June has taken top honors. More good news, I hope, is that May of 2018 was higher than the past two Junes for new listings, so if June continues its dominance we should see a bunch coming on the market soon. This could be great for buyers struggling to find the home of their dreams.
Take a look at the crazy numbers for Longmont attached dwellings. If you watch these stats regularly the results here don’t make much sense. We talked before that rising prices and low inventory are affecting the sales totals, but those prices and days on market seem off. It turns out there were 3 new construction attached homes on the market for 126-219 days and priced from $483k – $676k. If you take those outliers out of the equation, days on market goes back to mirror the rest of the pack at 33 and average price drops to $311,000.
Speaking of looking odd, what’s the deal with the average days on market in area 5? We know higher priced homes usually take longer to sell and there are typically a bunch of them in that area, but 73 days seems excessive when compared to Boulder with its $1.238M average price and 44 days on market. There were 9 homes sold in area 5 last month that were on the market for over 200 days and of those 9, 5 were under $1 million priced from $396k and $763k. If you take all 9 out of the equation, days on market in area 5 drops to a reasonable 46 days. Interestingly, that $396k sale was a mobile home on two acres and active for 304 days. Hmmm.
A string of final thoughts. Firestone, Frederick and Dacono had a total of 2 homes sell below $300,000. Longmont had 6. **In May, the average price per square foot of a home sold in Longmont came in at $201/sf (first time ever over $200/sf), but it’s clear that buying a smaller and less expensive home is not much of a bargain on a price/sf basis. The buyers of those 6 homes sold for an average price/sf of $307! **The least expensive home to sell in Area 5 was a 1,200 sf, no basement home for $375,000.
I hope your summer is off to a great start.
It’s finally starting to feel like spring! There’s so much going on around town and I’m excited to write this stats piece this month. There are a couple of other gems in here for you as well. Let’s start with a recent announcement that First American Title was named Best Places to work in Canada for the fourth year in a row. However, in Canada we are known as First Canadian Title…makes sense I guess. So, not only are we in the Forbes 100 Best Places, and the Denver Post Top Places in Colorado, but also the Best Places to work in Canada. This really is an amazing company.
I saw this next piece floating around somewhere, but I want to make sure to share it with you. It’s an interactive map of all the oil and gas wells in Colorado. I think this is worth saving in your bookmarks in your browser because you never know when you will need it for a client. People are getting very selective about buying property that might be near an oil or gas well. Click on this link to see it on the Denver Post web site.
Now to the stats. Yes the average price of single family and attached homes in Longmont keeps rising. When only 4 single family homes sold last month for under $300k it makes sense that the average would tend to rise. Given our long term trend of rising prices and low inventory, rising prices are simply no surprise. What if I told you there were only 7 attached homes that sold last month for under $300k? It’s true, and I’m as surprised as you are. Even more surprising is that one of those new townhomes out by Silver Creek was resold for $531,000.
The Boulder County plains area looks like it might be taking a breather, but it’s not. It’s as hot as anywhere else with Year-to-Date sales exceeding last year by 8.4%. The lowest sale in this area last month was $363k and it had 11 sales for over $1 million. The highest sale was a $3.5 million spread that was only on the market for 10 days!
The Carbon Valley is also full steam ahead. Of their 54 closed sales last month, 14 of them were new construction. The average price of those closed new construction homes is $465k. Year-to-Date closed sales out there are still ahead of last year’s pace and their average price is still increasing. It’s looking like this could be another robust summer of home sales if inventory keeps pace.
For this month’s graph, I updated one on inventory from two years ago. I dropped the 2007 data so we could see this year better. The high point in ’07 was nearly 900 listings in July of that year. Can you believe we are at only 236 now? When we say historic lows, this current inventory level really is shockingly low. Of those 236 listings, 135 are under contract and 27 are unbuilt new construction. That leaves us with a grand total of 74 active resale homes on the market. No that’s not nearly enough, especially when there were 84 sales last month. That’s less than a 1 month supply of homes.
I know these rising prices are not good for everyone, but we really don’t have it so bad. Just for grins I took a peek at what’s happening in Boulder. So far this year they have sold 191 single family homes, with an average days on market of 64, and a whopping average sales price of $1,255,790. That’s for the entire year and their highest sale was only $5.2 million. On the attached home side over in the People’s Republic 178 were sold so far this year at an average price of $590k and 61 days on market. Surprisingly, the highest priced closed condo was more expensive than the highest priced single family home at $5.5 million.
Let me know if I can help you with your real estate business. I’m a small business consultant, a former magazine publisher, an idea guy and your personal marketing assistant. All you need to do is call, text or email and we will find a time to have a confidential meeting. 720-534-8355 or firstname.lastname@example.org.
I’ve been getting a lot of positive response to our Altos Report that goes out monthly in the Eagle Examiner. I will try to publish it here whenever it comes out. This report is a little different because it looks at listing data. My other report looks at sold data. Sold data is historic in nature and is useful for appraisals and comps and such. Listing data is forward looking. This can be more of a litmus test as to where the market is heading. It’s good to keep both in your pocket.
|Click the map below to direct you to links for Colorado Statistics or use the links below to view your Revised and Updated Colorado Statistics by city.|
I’m a small business consultant. I have a background in media, marketing, web design as well as a published author and magazine publisher. Call me any time if you’d like assistance with building your real estate empire.
Last week I was interviewed regarding a sad anniversary in our community. A house exploded in Firestone a year ago due to a gas leak. This story aired last night on the 1 year anniversary of the explosion that killed two men on April 17, 2017.
I am happy to report that there is no discernible impact on housing prices for this neighborhood. This is great news for a community that has already been through so much.
Give me a call if you want the details.
Results usually don’t match expectations. What result would you expect from having significantly lower inventory this year than last? Fewer sales? I would guess the same since that’s what happened last year and the year before. Year over year inventory has declined in each of the first three months of 2018. Now go figure out how monthly closings are up each month for the same three months with an overall increase of 21.5% more homes closed in the first quarter of 2018 versus 2017.
My first instinct was to pin this phenomenon on new construction. My research says: maybe. In March there were 14 closings listed in IRES of new construction with an average sales price of $467,128, a low price of $390,000, and an average days on market of 210. Still curious, I looked up the number of new home sales since January 1, 2018 and there were 34…nearly the same as the difference between last year’s first quarter sales volume and this year’s. That might be part of the story, but in no way can be all of it since there were 19 new home sales in the 1st quarter of 2017.
The 215 closings in the first quarter of 2018 is the 3rd highest, first quarter total in the past 11 years. If you couple those results with rising prices and interest rates, they are even more eye-catching, so what’s propelling this market? If the velocity were increasing the average days on market wouldn’t have increased for the month and the quarter… so that’s not it. I would’ve expected to see days on market drop to indicate houses are just selling faster.
Residential Sales Stats
Let me know if you have an explanation for the higher closing numbers for the year so far. I know a lot of REALTORS® who would say it doesn’t feel like the third busiest first quarter in the past eleven years, but then again, I know a few who would. Now let’s take a look at some other things before I run out of steam.
In the Longmont attached section we see that sales volume is down and prices are up. The high average price for the month is mostly due to the four attached homes that sold for over $400k. They were all new attached homes and the highest priced one sold for $687,444 down in Prospect. That has to be an all-time high for an attached home in Longmont. Somebody look that up and get back to me please.
The Boulder County Plains area is heating up again. They had 11 sales this past month of over $1 million. They also had one sell for over $3 million. That’s pretty hot for any March, let alone one with our low inventory. I also believe that our mild winter has brought buyers out a little earlier than normal. It’s the sellers we need to get with the program to make this a busy year.
Short and sweet this month. I have a rant all teed up for next time. Until then, have a prosperous month.
The 2017 Longmont Housing Affordability Review has been released. You will notice the measuring stick for affordability has been updated since the market had outpaced our static numbers established in 2013. Yes indeed, prices are going up. New information and studies show that homes are relatively more affordable than in the past. Please read the report here: http://bit.ly/2GbH8LO
For questions, please contact either Kyle Snyder or Amy Aschenbrenner using the information below.
First American Title
Longmont Association of Realtors
It was almost exactly 1 year ago when we lost data sharing. Ever since, we’ve been comparing 2016 data that included both IRES and REColorado data to 2017 IRES only data. I’m done with that and I’m not holding my breath for it to come back. Data share or the big merger may happen at some point, but I’m moving on. Until further notice I will pull data for the previous month and then pull the same month the previous year. This will give us the best apples to apples look at what’s going on in our market.
I’m in the final stages of the annual Affordability Study. For that supplemental report I’ve pulled both IRES and REColorado data, combined columns, merged the data sets, de-duped and visually inspected the data. The results showed there aren’t enough REColorado-only users in our area to be concerned with this small piece of missing data. About 8 years ago I researched how many Longmont sales were from MetroList only. This was at the height of the recession and before data sharing. At the time, 12% of Longmont listings didn’t show up in IRES – that was a statistically significant amount, so we went out of our way to include them. Last year only 64 or 5.3% of our listings were not listed in IRES. Interestingly, when combining data from both MLS’s, the average home price drops by $2,443 and increases the number of homes sold under $350k (I’m using that metric in the Affordability Study) by 34. So a side note here is that if you are looking for a less expensive home for your clients, don’t forget to check REColorado.
As far as this month’s data goes, we are still pretty early in the year and there are no real trends that raise concern. At this stage in the year the data set is still so small that small changes can create large percentage changes (check out the Total # Sold-Month for BoCo Plains as an example), so let’s talk more about the numbers next month as the trends will emerge soon enough. I’m just thankful we are up YTD on total sales of single family homes in Longmont. It’s been a while since we’ve seen that in positive territory.
There is one HUGE thing that I’d like to briefly cover. If you take a look at the chart I created, the price increases in the local towns in our region are pretty self-evident. This year Dacono took top honors of having the highest increase in average price at nearly 18%!!! You’ve all heard “drive until you qualify“. This is an excellent example. In fact, this chart is almost perfectly in reverse order of the average price data. If you think people don’t gravitate toward value, you are wrong. And, Boulder may have its second consecutive $1 million plus average price, but it actually declined! Maybe there really is a ceiling when you have affordable housing in nearby communities.
The real oddball in this chart is Berthoud. How can a tiny town like Berthoud have a declining average price amongst all these giant increases? Loveland to the north and Longmont to the south each increased 9%, so how can there be a 14% difference? The time to make your guesses has passed… It’s new construction. More specifically, it’s new construction of moderately priced homes. Berthoud had only 201 sales in 2016. Last year they had a 139.3% gain in homes sold to 481 units…and it lowered the average sales price. Hmmm, do you think that would work in other places? This supply of new homes may not lower prices in all cases, but it would surely help stabilize them because it would relieve the upward pressure of demand. This is basic economics folks, not rocket science.
My prediction from about two years ago is that this is the year that we will finally see some relief from skyrocketing prices. With interest rates finally on an upward march, what would have been higher prices is going to be offset by the increased cost of money. It’s my prediction we will probably only see a 5%-7% increase in prices in 2018. That increase is going to be held back by the fact that it’s going to cost buyers more to borrow. Don’t think this will be a slow-down, prices will just be rising less rapidly, and the rest is business as usual.
Another month and another record setting average sales price. I’m guessing that at least once this year we’ll see the average Longmont single family home break the $450k price mark. It has to happen if we can post an average of nearly $448k in January. Additionally, I predict we’ll see the average attached home exceed $350k. While I’m on a roll, I’ll go ahead and throw this one out there too: the Carbon Valley will see its first $400k monthly average. I’d like to say these are bold predictions, but they aren’t. The two I made for Longmont are only a smidge away in the slowest month of the year and the median price in the Carbon Valley is at exactly $400k this month, so they will all come true, it’s just a matter of time. What would be very surprising is if none of them come true.
Speaking of predictions… I still keep up with my custom built sales predictor. For years, this marvel of mathematical engineering has been called The Predictor. Recently we named it Henrietta. And Henrietta was off by 5 sales for the entire year of 2017. One day someone will figure out how to make money with such accurate information. Let me know if you have an idea and you’ll be able to rename it.
One thing we don’t need Henrietta to predict is the lack of inventory at this time of year. If you look at the chart in the middle of the stats page, it clearly shows a dip in inventory at this time of year… every single year. We understand this is a result of the weather and holidays. If we take a peek into the current inventory numbers we’ll see there are only 60 active listings that aren’t under contract and 23 are still under construction. It’s pretty tough to find a home for a buyer to move into immediately with only 37 active listings on the market. Spring is coming and this situation will improve, but to what extent?
There are two things that give me a bit of hope when it comes to inventory this upcoming year. The first is depicted in the graph. The surge in inventory last year was higher than the previous year. This was despite higher prices, so it screams excess demand. Our current inventory situation is simply a winter thing that needn’t be over-explained. Let’s get a show of hands of who wants to move during the winter. Seeing none, we can agree that it’s simply more convenient and comfortable to move in the summer.
The other thing that gives me hope is the continued new construction of single family homes and apartment complexes. My research show there were about 250 new homes added to town last year. And of the 1,800 apartments on the books to be built, about half of them have been completed with many of the rest to be completed this year. The capacity and opportunity for turnover new construction brings to the market will result in a year similar to the past three. That’s if interest rates don’t run away from us. Fingers crossed.
Rant of the Month
When Realtors talk about their employment status they usually say they are an Independent Contractor. Technically this is true, but really, that job status is an IRS definition of how they are not an employee of their brokerage. This status gives them freedom from “reporting to work” and defines how they are taxed, but I’d argue that it’s time for a change in this thinking.
You won’t get the IRS to change your classification, but a change in mindset might be beneficial to your business and income. Try on this hat and see if it fits: Solo-prenuer. Yes, it’s a real word used to describe people who run their business single handedly and take full responsibility for the outcomes. Sound familiar? A Realtor isn’t an entrepreneur because they don’t have a marketing team and accounting team and a distribution or manufacturing system… you typically work alone. In the case of a team, it’s still typically being directed by a single person.
Solo-prenuer embodies the lone-wolf nature of a Realtor, the creative brilliance of your research, the personalized marketing and the individuality of your brand are the trademarks of your business. You put on your “me against the world” clothes every day, personalizing everything from head shots to listing presentations. You’ve already accepted the fact that nobody’s going to do it for you, your income is uneven, and both good and bad decisions rest squarely on your shoulders. So, own it! Be your own boss, reprimand yourself when you need it, reward yourself excessively if you deserve it. Your schedule is flexible and you don’t have to worry about HR reprimanding you for wearing tattered jeans. You can hire and fire clients at will and your decision-making doesn’t include several levels of management. You can pivot on a dime and you have a higher earning potential than an hourly worker. Embrace the insanity of your “job” and BE the boss you always wanted to work for.
Happy New Year to you all. I hope 2018 is your best year yet. Thank you for reading my monthly stats reports. I hope to continue to be informative throughout 2018. This is the final regular stats report covering 2017, but you will see some additional reporting in the coming weeks. First, I will be updating all 2017 reports by adding REColorado data to that of IRES, which is all we’ve seen for most of the year. Also, the annual Housing Affordability Report will be coming out near the end of this month. Both of those will take a little extra time due to the lack of data share.
If you recall, a year ago I promised to eat my sock if our average price increase was under 8% (here is a link to the proof: http://bit.ly/2wcGjcd). I got called out by a number of people who thought I was crazy. The rising prices, low inventory, rising interest rates and lack of job growth were all reasons why I was supposed to get used to the taste of dirty socks. Cutting to the chase, I cleared it by 2.2%! Yes folks, another 10.2% climb in average sales price puts us at a 37.8% price increase since 2014 and that’s just for single family detached homes. The average sales price of a home in Longmont in 2017 was $421,836, up from $382,766. That is nearly a $40k increase. Yes, I know, it’s got good and bad written all over it, but consider this, the average price in Boulder only went up about $1,000 to $1.094M. I’d argue that Boulder is suffering more from rising prices, low inventory, etc., than we are.
If you are amazed at the average price growth of single family homes, then you will be floored by that of attached homes in Longmont. That average price only grew by 8.6% over the past year, but to put it in perspective, those prices have risen by a whopping 48.2% over the past four years. As in the paragraph above, I want to point to what happened in Boulder, the average price of an attached home over there FELL this year by about $28,000 to approximately $465k.
I’m interested to see the results of the upcoming Housing Affordability Study. My experience tells me that Longmont will again, be proven to be the most affordable town with the most available affordable homes in Boulder County. The interesting part will be the results of the other towns in the county, which I predict will see a bit of a leveling off of prices like in Boulder. Why? Value. When you can buy a 1,000 sf shoebox in Old Town Longmont for $400k and you think it’s crazy; those things are going for $600k and $800k in Lafayette and Boulder. There is a point when people look at the price difference and think Longmont still has value, comparatively speaking. But I fear we are finally reaching our own price ceiling. The next great value movement will be in the Carbon Valley. All that new construction will really start attracting homebuyers who see the difference in price and think that an additional 10 minutes of commute time is nothing when they can save 2, 3 or $400,000.
2017 was an exciting year for many reasons. I have several personal milestones and achievements to reflect upon. Not only did I make a move to First American Title with Jennifer Engelking and Lenise Jacobs, I turned 50, played Pebble Beach for the first time and didn’t have to eat a sock. I hope you all reached your goals in both life and business. My wish is for your continued success. Whether you use First American Title or another company for your title and closings, we are all in this business together. If there is anything I can do to help you with your business, please feel free to give me a shout, maybe one day I can earn your business too. Thank you, from all of us at First American Title for the support and friendship you’ve shown to us. Our success is a reflection of your success.
Peace to All,
It’s beginning to feel a lot like Christmas…except for the green grass, warm weather and no snow. Wait for it…winter is coming.
In January of this year, we started off at 19.3% fewer sales for the month/year, compared to 2016, and it looks like we will end up in roughly the same place when this year is over. That deficit in total sales eventually crept back to being only down by 7.3% in August, only to see the gap widen since then despite strong October sales. In fact, there have only been two months this year (May & October) where we have registered more single family closings in a month compared to the previous year. And we all know the total sales are about 5% fewer than they should be due to lack of data share. I was hoping to have that back on by now to go back and add those numbers in to get a real apples to apples comparison. Nonetheless, we still have an extremely strong market that will show about a 10% average price gain over 2016 when all the numbers are in.
Longmont Single Family and Attached
The biggest surprise in the numbers this month are the decreases in median and average sales price of attached homes in Longmont. We haven’t seen negative numbers in a long time. So what’s up? It’s very simple, there were no sales of those higher priced attached properties in the SW by Silver Creek HS, nor any from the 55+ community at near Hover and Mountain View. The SW project is nearing its end and you will see a bunch of those close soon, so these numbers will go back up despite the fact that the Hover project is closed out. Of the 30 closed attached sales last month, exactly 15 of them were the latest addition to the Summerhawk condos at 9th and CR1. And of the 69 total listings I show in the report, there are 46 (or 67%) of them under contract, leaving just 23 active attached listings in Longmont and 9 of those aren’t even built yet. Yes, just 14 active attached homes available in Longmont that you can move into in 30 days. This is about 3 weeks of inventory at this time of year.
Longmont’s single family inventory is almost just as tight, but the prices keep climbing on a year-over-year basis. The solid nature of the single family prices this month are extraordinary. In November, 12 homes sold for $300k or less, which is tied for the most in a month this year. Just that alone should bring the average price down just a bit, but couple it with only one home that sold for over $1 Million and an average of 99% list-to-sale price, you can see how the average and median are not being bolstered by a bunch of high sales either. Demand is still very strong in Longmont. Of the 226 active and U/C listings in my report, only 81 is not under contract and about 14 are to be built. Yes, 67 active single family homes in Longmont that you can move into in 30 days. This is about 30 days of inventory for this time of year.
Boulder County Plains and Carbon Valley
The stats that come out of the Boulder County Plains are always a surprise to me. Their prices have more peaks and valleys than Colorado has 14ers. Their peaks are determined by how many $1M+ homes sell each month. In November there were 8, which is about average, and only one was over $2M. The interesting thing about this area is the floor. In November, the least expensive house sold was $360k. And it usually has the highest inventory. Right now, of the 231 active and U/C, 165 of them are not under contract, which is about 4 months of inventory.
And last but not least, the Carbon Valley. Of the 51 closed homes, four of them (or 7.8% of closings) were under $300k. Compare that to Longmont’s 12.6% of closings for the same price point. Also interesting: 13 of 51 closings (or 25.4%) in Carbon Valley were brand new homes and 72 of the 144 actives are not under contract – about six weeks of inventory.
Last week I attended the Boulder Valley Real Estate Conference that BizWest put on every year. As always, it was excellent. Lawrence Yun, Chief Economist from NAR spoke and addressed real estate bubble concerns head on. On top of reiterating the fact that this market is built on wealth and not credit, he also pointed out we have 30% fewer sales and 53% fewer housing starts than we did before the crash in ’08. John Covert of Metrostudy backed up Yun’s comments with a great talk about vacant developable lots throughout the region. It’s impossible to summarize all he said, but townhome construction is making up a bigger percentage of new starts than ever before and because Boulder County is one of the more constrained areas for housing, things are not going to get any easier.
Rant of the Month
New feature. Hoping to help you with your business.
I have overheard several Realtors engage with potential buyers and sellers recently. Those potential clients still ask the worst question possible “How’s the market?” The problem I have is the response I keep hearing from Realtors. They respond with a head drop and an eye roll and say “Sloooow”.
Slow is a relative term and it means nothing to the consumer. If this is a seller, does this mean they shouldn’t list now because it’s slow? If they are a buyer, does that mean they have plenty of options out there because it’s slow? Is it slow compared to summertime or fall or what? Slow tells them exactly nothing besides the fact that the Realtor they are speaking to isn’t doing much business at the moment.
The fact is, I have plenty of clients who are NOT slow, and in fact they are very busy. The market is normal. It’s normal for this time of year. It’s normal for the current economic climate. It’s normal if you consider the interest rate environment. It’s even normal for the lack of inventory.
I challenge everyone who reads this to think twice before answering this question from potential clients. How about “How’s the market?” You answer: “There is a lot of opportunity out there, why do you ask?” There are opportunities to list and sell your home. There are opportunities to buy if you are qualified, have a down payment and are patient. There are new home opportunities. There are opportunities to buy the home of your dreams. Investment opportunities are a little thin right now, so patience is the key on this front.
Think of the positive aspects of the market we have. Nobody can do anything to change the current market, so embrace the challenge of securing a new client who may buy or sell with you. Prove to them you are the right person to help make their dreams come true. Now, go back and re-read the stats, get those numbers in your mind and head out to a bunch of holiday parties and take advantage of the opportunities you have to secure buyers and sellers for the upcoming year.
Since there isn’t much to cheer about in regard to our beloved Broncos, let’s just focus on the real estate and all we have to be thankful for. One thing I’m thankful for and look forward to receiving is the yearly NAR Profile of Home Buyers and Sellers. It was just released and you will do yourself a huge favor to read (or at least flip through) it. NAR collects tons of data and they are getting much better at making it meaningful. I noticed several new and changing trends in my first quick look, but I’ll have to add this 144 page document to my holiday reading list.
In our local real estate market, I’m thankful for a strong market where prices are still trending up, days on market are settling in at around 60 days, and active listings are somewhat stable, albeit low. The attached October report clearly shows our markets are doing well. Last month I was looking at the data and seeing some discrepancies I promised to research. One was new home sales. Well, pulling data from the county records didn’t help. We have more new home sales reported in IRES than I could find in the county records. The more I looked, the more I realized that many of those homes sold are still categorized as vacant lots because their tax status hasn’t been updated. Nonetheless, we have nearly 90 new home sales reported through IRES. I’m sure that is lower than the actual total, so I’m thankful we have some representation in our numbers.
Each area in the stats report shows an increase in both median and average sales price. Home owners and sellers like seeing this trend. Buyers… not so much. The good news is that in Longmont single family home sales in October, there were actually 8 homes that closed for under $300k and the highest was only $807k, so the average isn’t being skewed by several $1M+ homes like we’ve seen in the past. The Longmont attached homes are just about the opposite. Three of them sold for over $500k with the most expensive at $659 and the least expensive being $195k.
I am always thankful for the graphs I’ve created for you in the past. I can update them or put a new twist on an old graph. I updated this months from a couple years ago. It shows the monthly average sales prices for Longmont versus the Carbon Valley. The graph starts in January of 2015, the only month on record where the average in the Carbon Valley was higher than Longmont. You can see the average prices climb for each area, but I also added a linear trend line that clearly shows the Longmont prices outpacing those in Firestone, Frederick and Dacono. Most reasonable people would attribute this to Longmont being in higher demand due to its proximity to Boulder. If you think otherwise, let me know.
It’s less than two months until the New Year. We all know that listings and sales start to drop off for the winter at this time. We also know that now is a great time to start reflecting on the results from the past year and plan for next. When you start your planning and want to kick your business into a higher gear, feel free to bring me into your research and planning. I’m a small business consultant with many avenues, ideas and tools for you to consider. First American Title is a company that partners with several marketing companies to bring you new ideas, reasonable prices and streamlined processes to your marketing efforts. Feel free to contact me any time to see if I can bring some fresh ideas into your business.
Happy Monday and Happy Fall y’all! The stats are ready and I have a couple of other things for you that may be of interest. Grab another cup of coffee and get ready for a beautiful week ahead.
There is so much red (negative numbers) on this month’s report, it looks like it’s bleeding. Red colored numbers are good when they are next to the Days on Market results, but not so much on the rest of the report. The numbers are so drastic I am going to have to look into a couple more items for next month because something just doesn’t seem right. The things I’ll bring to you will be a look into the amount of new home sales and I’ll even take a peek at the sales only being reported in REColorado.
In the meantime, the biggest topic of discussion is how things are slowing down and what an odd year it’s been for home sales. The market is moving in fits and spurts, and completely unpredictable. Remarkably, this is the first month since January that the average sales price of a single family home in Longmont has dipped below $400k. And even more amazing is that it is exactly one year ago when the September 2016 average price first broke $400k to set an all-time high water mark. Overall, average and median prices are still strong and higher than last year in all areas of this report… they just aren’t rising as fast as we’ve seen in the past four years.
We are still three months until the end of the year, but I want to point out one thing about this months’ graph. The graph is only showing the number of closed sales each month over the past 10 years. The first thing that’s easy to notice is the height of each of the peaks. The height this year, compared to last, is not much different. The last two years, compared to the previous four, are obviously lower and we attribute this to both rising prices and lower inventory. But if you look at the width of this years’ data, it’s very narrow. If you could see the data behind the graph, you’d see that it’s actually the lowest Year-to-Date total since 2011.
Where is this market headed? Obviously I don’t have all the answers and there is no magic pill to understand it. However, there is one yearly event I never miss to help in my understanding of what our future holds. If you’ve not been to the Boulder Valley Real Estate Conference put on by BizWest, you are surely missing out on the very best event of the year. This can’t-miss event always has a very light showing of Longmont area Realtors and I just don’t know why. Yes, it’s in Boulder, but it covers every part of our market and every town in Boulder County. It isn’t a bunch of CE classes, it’s in-depth analysis of what drives our residential and commercial markets. Every professional should be there. Believe me on this one and get your tickets here: http://bit.ly/2wBx1aX.
The last item I have for you has to do with the possibility of Amazon coming to Colorado. I’ve thought about what would happen if they moved to the proposed Louisville location. That move would turn this region on its head. Here is a good news story that will make you think about the depth and breadth of the possibility: http://bit.ly/2yucjOT. The Denver Post had a great article on this topic that you can read here: http://dpo.st/2hReCEr. We are now possible victims of our own success.
Enjoy the snow,
Happy September to all. It’s football season again and that means we get to see our beloved Broncos back in action. Just like kids going back to school, it seems to come earlier every year.
Last month we reviewed the noticeable slowdown of sales. Remember, this is a slowdown in sales volume only, at this point. With low inventory plaguing us for the past three years or so, overall sales have resembled a sluggish economy instead of an expanding one. Granted, employment rates are at their highest point in several years and incomes have not risen in tandem. Maybe that will come next because a normal reaction to high employment (or low unemployment) is that employers need to pay more to retain good employees. This happens mainly because it’s cheaper to retain a good employee than lose their productivity and go through all the hassle to find and train their replacement. Fingers crossed on this happening.
The graph I recreated this month is a follow up to last year’s graph from September, except this time, I included the data from both years. The results are very interesting and I think they graphically show what we all have been thinking about home prices in the area. If you look at the graph and focus on the 2016 numbers, it almost appears they have all shifted up one price range for 2017. In essence, this means that in 2017, sales have increased in every price range by about $50,000. This data is for the full year 2017 from January through August.
Since I had the data right in front of me, I updated the Year-to-Date (YTD) average sales price for single family homes in Longmont for 2017. As of the end of August, the YTD average sales price in Longmont is $425,758. As you may recall, back in January of this year, I made a prediction about the market and what it’ll do (look at the last paragraph from my post: http://bit.ly/2wcGjcd ). I said I’d eat my sock if we had only a 5% increase in prices over the course of this year. At this point we are sitting at an 11.23% increase. I guess all of you who told me to invest in some sock butter better think of your penalty for doubting.
As far as our local markets go, the biggest story is the continued rise in Longmont attached dwellings. A year ago we saw higher inventory and days on market due to all the new construction of townhomes being priced so high and sitting on the MLS for a long time during construction. Well, listings are way down and so are days on market. Prices are still climbing and so is the overall sales activity. As stated before, these homes now represent the affordable end of the market. This fact is proven by the higher sales totals every month and YTD. The shocking part of this is that the average price is still hanging around $340k!
I hope you enjoyed the summer. Mine was an interesting one that simply didn’t have enough golf involved. I’m OK with that because the move to First American Title has been nothing short of amazing. Jennifer, Lenise and I would like to thank those who have chosen to use First American for their title and closings. The support has been heartwarming and we are all settled in to our new office. Stop by some time for a quick tour and maybe we can grab a cup of coffee a couple doors away at Ziggy’s. You can find us at:
First American Title
512 4th Ave, Suite 102
Longmont, CO 80501
Every month, in the days leading up to the time to put stats together, I ponder what kind of new chart to create to compliment or display the data the best. Sometimes, when hurried, I’ll just update the chart from the previous year. Other times, I’ll have something in mind, but the chart from last year is actually a better idea than the one I had. What you’ll see in the stats report this month is an updated chart from last year that shows almost the opposite of what was going on a year ago. This makes my job so much easier and more interesting.
Last year, when I first published this chart, it was titled “Show me the Slowdown”. It was specifically built to show how there was no discernible slowdown in sales… even though many people felt that way. Last year, the chart clearly showed our monthly single family sales totals were at or above the 5 year average for the first seven months of the year. It’s a different story in 2017. In six out of the first seven months of this year, our monthly sales totals are below that of 2016 AND all seven months are below the trailing 5 year average.
There are a couple of obvious reasons for the sales totals to be trending downward. The first probably has less impact than the second reason I’ll propose. The first is declining inventory levels. We are still trending downward in inventory, so the market is still getting tighter. New construction now makes up about the same percentage of the active market as it did last year, so that piece isn’t as much as an impact factor as it was in 2016 since new construction was just coming online about a year ago. Pricing is most likely the biggest factor in the slowdown of sales we are seeing. Median and average sales prices are still outpacing 2016 even though the average sales price for the month is less than it has been for the past several. When wages aren’t increasing it makes it tougher and tougher for people to buy more expensive housing, so they are just not participating as much.
Inside some of the numbers you see in the price grids you can find some interesting information. For starters, and I don’t usually lead with info from Area 5 or the Boulder County Plains, but look at that average sales price. It’s just a fuzz under a million dollars. This average of $928,733 is bolstered by 17 homes that sold for over $1M. Additionally, there was a 13,000 sf home on 20+ acres, just west of Hygiene, that sold for $5.9M!
Surprisingly, of the 108 total sales of single family homes in Longmont, 83 of them closed for $300k or less. That is one of the highest totals of lower priced homes selling in a month for quite a while. This activity in the lower (who’d ever thought we’d refer to under $300k as the lower end of the market?) end of the market is the primary impact factor in dropping our monthly average sales price down about $20k from its recent high in May of this year. Even with the impact of lower price homes selling, the monthly average in July approximates the YTD average home price.
We’ve spoken before about the ever increasing sales and sales price of attached homes in Longmont. The continued impact of new construction in this product is the primary driver in the significantly higher sales price. There were 6 new condos sold over at Hover Place that closed between $381k and $441k and a single, what appears to be a half-duplex that closed for $520k in Prospect. Those seven sales represent half of all sales that exceeded the average price for the month.
As promised last month, I updated the YTD sales totals in each area to reflect the monthly clean up that IRES does at the end of each month. And, we are still kind of not looking too closely at the Carbon Valley market since it doesn’t include a significant number of closing due to the lack of data share with REColorado, but in general, pricing is holding steady.
Thank you all very much for reading. I hope you continue to find value in this stats report. And lastly, I am being asked a lot about my new job at First American Title. Our office is open and running smoothly. Orders are coming in, closing are happening and we are all enjoying ourselves very much. First American is an excellent company and they have simply impressed Jennifer, Lenise and me every step of the way. Please let me know if you would like to meet so I can share even more.
Thank you very much for your support.
First American Title Insurance Company
I am thrilled to announce I have joined First American Title and will be opening an office in Longmont. This change is made even better with Jennifer Engelking and Lenise Jacobs on the team, as Closer and Assistant. We are all very excited for this opportunity to provide you with superior customer service. I’ve done my best to contact agents and lenders we’ve worked with for so many years, but wanted to use this stats piece as the official announcement of our move. For those of you who I’ve not spoken with yet, my apologies, we will surely catch up soon. My new contact information is below, so please feel free to call or email me at any time.
First American Title is a national title company with a stellar reputation. They have been underwriting in the state for many years and have had direct closing offices open in Colorado for the last 8 years. First American has been in business since 1889 and is based in Santa Ana, CA. They are a Fortune 100 company with outstanding people, support and systems. The management team is amazing and decision making is done on a local level, so we will be able to handle your questions on title work easily and quickly.
The new First American office in Longmont will be open on Monday, July 17th. You can find us at 512 4th Avenue, Suite 102, a half block east of Ziggy’s. Just look for the eagle on the door. If you need to place an order before then, you can email it to Jennifer Corsentino email@example.com. If you need me to come pick up earnest money, just shoot me an email at firstname.lastname@example.org or a text at 720-534-8355. I will get more details out next week once the office is finalized.
There are many great things I want to tell you about First American Title and our decision to join them, but that will have to wait until a later date. This email is about stats! Yes, these are the official stats of the Longmont Association of REALTORS®. These are correct and approved for use, so sit back and enjoy.
The end of June marks the end of the first half of the year, so I created charts to compare first half sales this year to those in the recent past. I did the math from the data in the chart on the left and can you believe the average price of a single family home in Longmont has risen 60%(!) since 2012? That is simply amazing. The chart on the right clearly shows the fewer sales total for the first half and we all know this is due to both lack of inventory and rising prices. You may notice the total sold in the chart on the right does not match the total in # Sold YTD. The total in the graph of 529 was pulled specifically for this report and is correct. The 510 number in the grid is comes from adding each monthly total together, but IRES does a great job of cleaning up the sales at the end of each month so the monthly number can go up or down depending on what they find. Also, some agents don’t get their listings updated by the time we publish. I usually update these in July and again in December to account for the slight monthly changes.
The monthly resale closed in the Longmont attached category is very low, but the yearly sold total is still ahead of last year. I’m pretty sure this is due to the increase in average price. If you think about it, this makes sense. Today the average price of an attached home in Longmont is about $50,000 higher than the average price of a single family home in 2012. There are fewer lower priced options for the attached buyer and those who’d love to sell are possibly being priced out of the single family homes… if they can find one.
The Boulder County Plains and the Carbon Valley numbers are still suffering from being underreported. There are many sales in both of these areas that occur in the other MLS only, but we are informed this lack of data will be fixed by the end of the year so we will go back and recalculate when we get the data back. But even without the complete data, which I estimate to be at least 20% of each market, it looks as if both areas would look strong. Overall, we are going to have to use these numbers more as a guide for the next few months.
Thank you very much for your support.
My apologies for being a little behind schedule with these, it’s been a busy week. Here are the May stats for your enjoyment.
When I looked at the May graph from 2016 and saw the number of sales in May of 2017, I thought this would be a great time to show you what I’ve been saying about average price and how it depicts where the activity exists.
If you take a look at this month’s graph you can clearly see the high number of sales in the $250-$300k range and the corresponding lack of sales in that range for 2017. To show the change in activity and price points, compare the closings under $350k for both years: there were 57 in 2016 and just 31 in 2017 – a 45% decline. Then do the same comparison for closings between $350k and $600k: 51 in 2016 and 77 this year – a 51% increase. The sales activity has moved up and the average has moved up with it.
Speaking of averages moving up, I have to point this out because it’s now starting to blow my robust prediction for the year out of the water. The monthly average price of a single family home in Longmont hit its 5th straight record high. The results from May brought the overall average price for the Year to Date to: $427,197 – a 10.6% increase over all of last year. And we haven’t even hit the hot time of the yearly market.
May 2017 Longmont Area Stats
Click here for .pdf file
Looking at Longmont Attached homes, you ca see the effect of the recent new construction being completed in SW Longmont. The average days on market has dropped dramatically and the number of closings YTD his significantly higher Even the median and average prices are normalizing. And when I say normalizing, I mean that the average isn’t bloated with very high sales prices of those new homes. I’m clarifying because you may have thought normalizing is like back in May of 2008 when the average attached price in Longmont was $171,380, it’s not. Those days are over.
I can’t wait until the MLS merger is all figured out. I’m sure all you Realtors out there feel the same way. But the stats for the Boulder County Plains and the Carbon Valley are just misrepresented. It’s comparing apples to oranges. And I don’t like it. At the end of June we will be half way through the year so I will do a special piece where I will pull IRES only data for this year and last for all areas so we can see what that looks like.
Thank so much for reading. I hope you all have a wonderful weekend.
There are a number of things happening in the real estate business right now that I’d like to bring up here. I’m not positive how they will all come together to makes things better, worse or more of the same. I’m fairly good a reading the proverbial tea leaves, but I think these things will have to marinate a bit before we know their real impact.
First, a quote. This is from Steve Murray, Publisher of Real Trends, a local, industry-leading publication and a 40-year industry veteran. This is from the lead story in their May 2017 issue. The article is titled “Will We Run Out of Housing?” And the quote is: ”The problem is not just affordable housing; it’s that unless home building of all kinds increases back to near its historical norm of above 1.4 million homes a year, we may simply run out of places to live and homes to sell.” He gives several great numbers to back up this claim and it is very compelling.
The biggest recent news item is the passing of a reformed construction defects law here in Colorado. It was a solution liked by both builders and the attorney’s for HOA’s, so it surely can’t be perfect. It would have been nice to see our governor and others who were voted into office to take the lead on this, but nonetheless, we have something that may spur condo construction. It’ll take at least two years (and probably longer) before any of these condos are completed and ready for sale, so don’t look for any immediate relief. Just know it’s on the way to hopefully coincide with the increased housing needs of a growing population.
Between now and when those condos get built, there will be a lot more of the same: low inventory and increasing prices. This month’s chart was trying to depict the current inventory situation versus the past. Everyone knows inventory is low and the chart shows it’s nearly the same as the past 3 years, as evidenced by those four lines being almost on top of each other. Well folks, that’s why we go through this every month. There are 263 unsold listings in the MLS, but 57 of them are under construction. They are new construction homes and there is no way there were that many in there last year. I don’t have that number because we can’t go back in time to see the actives at that time, but I’d bet there were only a handful. If we eliminated all the new construction, we’d be at an all-time low for April.
April 2017 Longmont Area Stats
Click here for .pdf file
New construction is happening in the attached home inventory as well. Of the 90 unsold listings of attached homes in Longmont, one-third or 37 of them are under construction. We need this new construction in both single family and attached to serve both people moving into the area and for people looking to move across town. There are 1,800 apartments being built in Longmont right now. How these new rentals will affect the prices in its closest cousin – the attached home – isn’t certain, but my guess is that for the time being, attached homes will stay in high demand because they represent the most affordable housing segment in Boulder County.
Now, check out the average sales price of $956,088 for the Boulder County Plains area. I remember back when the City of Boulder averaged just under a million dollars. Nobody thought it would keep going up…little did we know. This one’s different. Last month there were 11 homes that sold in this area for over $1M and one sold for over $5M. That isn’t a typical month for this area. And, I’m starting to hear that the $1M+ price range is starting to slow down a bit. Let me know if I’m wrong on this.
The numbers for the Carbon Valley are the ones most affected by our recent loss of data share. Interesting tidbit, this area has 38%, or 63 of its 169 actives, under construction and those are just the ones listed in the MLS. These builders are pretty smart and they all learned a serious lesson back in ‘08/’09 when they got caught holding a lot of land and inventory homes that they couldn’t sell. Things aren’t slowing any time soon. Another example are the 1,800 homes platted in Berthoud (particularly around the new golf course) with about 2,300 more in the works. Activity will continue out there and now you are going to see a lot more construction along I-25 between here and Denver…
Last thing to mention: Longmont set another all-time high average sales price in April at $422,475. As far as streaks go, this one is pretty solid because it’s our fourth straight month with a higher high and a new record.
Hit ’em straight
It’s official. We are now comparing apples to oranges. Everyone is always clamoring for apples to apples, but today, everything has changed. In all past stats reports we have used identical data sources, pulled in exactly the same manner at the same time every month to bring you this statistical data. And now, because of the death of data sharing between IRES and REColorado, this is not possible. With the disappearance of about 8-12% of our monthly data, I had to make some choices to work around this problem.
The first possibility is to pull in REColorado data and de-dupe it to add that data to IRES to get what should like our data from before the split. The problem here-REColorado doesn’t define an area in the same way IRES does, so it would take way too much time and still not be accurate.
The next possibility is to go back and just pull IRES data from a year ago and compare it to just IRES data this month. This is a better option than above, but I don’t like changing data I have previously published. Something about that feels wrong and I think it would create a lot of confusion about which one was changed and which one isn’t. It’d be like working with two different sets of data.
The third option, and the one I chose, was to keep the data from the past that comes from both IRES and RECO.com, and just include the IRES data I have at my disposal. This actually creates some unique perspectives, gives me a couple more things to talk about and hopefully it’ll be a temporary problem that can be updated (to change previously published data) or amended. I think it’s also the path of least resistance.
The first thing I did after I picked the third option above, was to scratch in what the sheet would have looked like had we chosen the 2nd option above. Believe it or not, there wouldn’t be that many big changes. In the Longmont Single Family, the top two lines would have a 10-ish% difference instead of a 20-ish% difference. Longmont attached would be the same except the median and averages would have gone through the roof. BoCo Plains would be nearly identical in all data points. And lastly, the FFD section would be similar to Longmont SFR with the percentages on # Sold for Month and YTD cut in half.
March 2017 Longmont Area Stats
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From my experience in looking at this data every month, the area in which a loss of data share should impact the most is expected to be the Firestone, Frederick and Dacono region. This area typically has closer to a 30% penetration of metro area agents, who, in the past, have listed these homes in REColorado only. I guess we will see real soon if they make the move to list in IRES. My bet is that they do. I just don’t think that area has enough strength to be a stand-alone area for metro agents.
Other than that, how are things going so far in the first quarter? So far, so good I’d say. This despite the continued lack of listings. March 15th had traditionally been the start of the spring listing season, but that date has been pushed back about a month over the past three years. The reason being, you don’t need 60 days of marketing time and 30 days more to close a deal by June 15th… when the kids get out of school. You only need a couple weeks marketing time and the 30 or so days to close, making April 15-30 the perfect time to list to close by June 15. And, so soon as I got done explaining this theory to a couple hundred Realtors, the listings started pouring in on about March 23rd. I can’t say that being wrong is a problem in this case, in fact, it’s way better than being right because of the listings that come with it. Best guess it was probably due to the summer-like weather we’ve had this past winter.
And, just for the record, the $418,465 average sales price this month is the all-time high monthly average. Yes, as in highest EVER in Longmont. Not a great big deal because it’s March and there are still fewer than 100 homes sold in a month, but chew on this number: $412,467. That’s the average sales price in Longmont for the entire 1st quarter… Another all-time high.
Go list some houses, if you can, you won’t regret it.
By the way. I stole the headline for this post from Shay Castle at the Times Call. She has been doing a fantastic job of covering the Longmont housing market for nearly two years now. And because of her work, the Daily Camera and Denver Post have been covering the Longmont market as well. Thanks Shay. Here is her complete article: Average monthly home prices reach all-time high in Longmont.
Amy Aschenbrenner of the Longmont Association of Realtors and Kyle Snyder are proud to deliver to you, our 2016 Longmont Housing Affordability Study. Please take the time to read the introductory letter in addition to reviewing all of the data. If you have any questions please feel free to contact Amy or myself. Click on the link below to see the report:
Additional commentary by Shay Castle of the Daily Camera and Times Call can be found here: No Entry Level Housing Options
Among Realtors and other industry participants, the big talk these days is about data sharing, or the lack thereof. In the short-term, this will be inconvenient at best. In the long-term, well, I’m on the side that hopes that some form of data share returns very soon. The best solution will include two years sales history, not just six months as it was most recently. I am lobbying for this solution for all my appraiser friends. Not all appraisals can be done with just six months of data, so even the most recent iteration of data share necessitated dual MLS membership.
Thinking ahead to March 2nd, I was Johnnie-on-the-Spot this month to grab REColorado sales data before it was gone. I don’t typically pull the stats until after the 3rd of the month due to the 3-day update rule at IRES. Even though I captured the data, I had to massage it a bit because I didn’t think far enough ahead. The results: the median sales price is actually a weighted average of two medians. When looking at the data that went in and came out, I like the results even if they aren’t perfect. This is just one of many ways a lack of data share can affect us even if a median sales price is of way less concern than a Realtor properly exposing a listing to the market. We have all gotten used to the data share and can hardly anticipate all the ways it will affect us. So, when given the chance, let your voice be heard and demand this issue be resolved.
February 2017 Longmont Area Stats
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The chart we created this month is the same as last February and it corresponds to the results of the 2017 Housing Affordability Study that’s about to be published by Amy Aschenbrenner and myself. For the second year in a row, Longmont is one of the top performing cities in the study. You will notice the average increase (13.5%) for Longmont is 1% higher than what I published last month in my ’15 vs ’16 report for Longmont (12.5%). This is another effect of the data share. About a year ago, REColorado realized they were providing IRES with two years of data instead of the 6 months that had been agreed upon, so I don’t have full year REColorado data for either report.
I could go on and on about how bad the lack of data share is, but I won’t. Instead, I’ll let you check out the second consecutive month where the average single-family home price in Longmont is over $400k; the 3rd consecutive month where the median sales price of an attached home in Longmont is over $270k; the 3rd time in a row the average price in the BoCo Plains is over $700k and the 3rd time in a row where the average price of a single-family home out in the Carbon Valley is over $340k. Think about this for just a second, the months I’m referencing here are December, January and February. Those are typically our slowest and least competitive months where prices and averages usually take a hit. If this keeps up I will have to revise my estimate of 8% upward price growth for the year.
I hope your year is off to a great start.
I just love doing these stats. I like putting them together, dreaming up a chart that I hope you like and is relevant, and then writing this story every month. This is the first month of my 11th (?!?) year of doing this. That means this is the 121st story and email I’ve done since I began all this back in January of 2007. Thank you all so much for reading and giving me your feedback.
So, before we go too much further, let’s review the rules regarding the use of this material. There are none. It’s un-copyrighted material I publish with the permission of IRES, REColorado and LAR. You can use it and the words I type here, in whole or in part, to help inform your clients and show them you are a true professional with a firm grasp on the market. There is no copyright or source crediting police, but I’m told that the real estate commission may frown upon someone who would pass this off as their own and not quote a source. Personally, I don’t care if you do, because this is about you, not me. Legally, you might want to consider it. I’ve been told they can and will audit your marketing material. Any questions on use, just shoot me an email at email@example.com.
January 2017 Longmont Area Stats
Click here for .pdf file
On to the stats. The chart this month shows we are up about 100% over the lowest month of November 2008. Who thought we’d ever double our prices from that time of panic in the streets? Not me. Nonetheless, here we sit at our second average price of over $400,000 in the past four months and looking to make that a regular occurrence throughout the year. Granted the sales volume in January is quite low, but that is only in the Longmont single family section. The other areas had normal to strong January numbers compared to last year.
In fact, the average and median sales prices across the board were strong. The strongest examples being the median price for Longmont single family (+26.6%) and Boulder County Plains (+30.7%), which pale in comparison to the average increase of Longmont attached (+36.6%) dwellings.
We all know that inventory, or the lack thereof, is the culprit here. The feedback I received from my last stats piece about the potential inventory boost from new construction and what it will do to prices this year is without detractors (up to this point). This means I’ve either pulled the wool over your eyes or we have similar optimistic outlooks. It’s going to be hard to derail this train. What will be the most difficult part to adjust will be to dial back our current, outright ecstatic outlook to merely optimistic. You must shift your approach and hope your buyers and sellers follow your advice.
Last thing. It looks like we will be dealing with a loss of data share beginning with next month’s stats. I’m not sure how I’m going to deal with it. Fingers crossed for miracles.
Here is to another great year!
Oops, there it goes again. On top of a blistering 11.1% rise in prices back in 2015, Longmont experienced an even greater average sales price increase in 2016. The news of another excellent sales month in December is being overshadowed by the Year-over-Year (YoY) 2015 vs 2016 average sales price increase of single family homes in Longmont. Many experts predicted a similar and possibly smaller increase this past year, but numbers recently released show a 12.5% increase in 2016.
Home sellers have been quite ecstatic since they are able to sell their home and actually make money compared to the foreclosure, bankruptcy and short sale days of 2008-2011 that are still fresh in many memories. In the past two years alone, the average single family home price has risen 23.6% in Longmont. Home buyers are not quite as happy, but demand is still quite high due to the lack of inventory and the even higher prices found in all neighboring towns except for those to the east of Longmont in the Carbon Valley of Firestone, Frederick and Dacono.
The second annual report of YoY price increases is attached to this report shows, in addition to the normal monthly statistics, there are several stories of price increases. One notable item that needs additional explanation is the 19.6% price increase in the average sales price of attached homes in Longmont. This increase is in addition to 14.1% in 2015. All 2016 results here are significantly impacted by several new attached property homes in Southwest Longmont where the base price is well over $350k and most have been on the market for an extended period of time. This is in contrast to the single family home numbers that are not significantly impacted by any new construction in the area in 2016. The single family numbers will change in 2017 with several new housing projects opening soon.
December 2016 Longmont Area Stats
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In a surprising twist to the end of year results is the decrease in the number of homes sold. When the basic economic principal of supply and demand is applied to the results, you see evidence that demand is still very high. Fewer houses sold, in fewer days on market, for a higher average price. The coming new home inventory in 2017 will, hopefully, slow this near parabolic, upward price curve. A well-known axiom of home price increases and historical averages indicate a healthy real estate market shows an approximate 6% price increases per year. Longmont has doubled that for two straight years, which could be considered unhealthy outside of a recovery period. Longmont’s recovery period ended about 2 years ago when prices exceeded their pre-meltdown levels.
2015 vs 2016 Longmont Area Stats
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After years of 11.1% and 12.5% price increases, what are the chances we will see something as low as a 5% increase in 2017? It seems like a lot more than interest rates rising to over 4% will have to happen for prices to slice their upward march by nearly 60%. But let’s just say, something more normal happens this year, and a 5% increase is what we report here next January. Well, if that’s what happens, the average price of a single family home in Longmont in 2017 will be $401,904. How much will your client wish they bought a house now, or this year? The big banks are going to have a hard time screwing up this economy and no matter how you voted, the guy in charge should be good for business, so hang on because if we get anywhere under an 8% increase this year, I’ll eat my sock.
Here is to your best year yet!
Happy winter…finally. I thought we’d never get snow this year. Fingers crossed for a white Christmas. In the meantime, we have some stats to look at before you begin your winter hibernation.
A couple of years ago I switched up the graphs in this report to show different ways of looking inside the numbers. The old graph was just updated each month and looked like the one below. While I think it shows some good information, it can get a little stale seeing it month after month. For old times-sake I have to sneak it in every once in a while. I think it’s more interesting to see it with the peaks and dips from ’05-’11, but that’s just too messy. One thing here is obvious by looking at the purple lines that represent 2015, is that last year was a pretty darn big year for residential resale in Longmont. We won’t reach that total this year unless we have about 200 closing this December and there is a zero chance of that happening. We will end up with about 8% (or about 100) fewer sales and an overall price increase of about what we saw last year of around 11%. I guess those things are good, but what will we see next year?
It isn’t the New Year yet, but I’m ready to make a few predictions for 2017. I predict we will see an equal number of total sales in 2017 as in 2016. The end of this year will show our yearly overall sales price to be about $385,000 and I predict our sales price increase will be smaller – hopefully no more than 6%. If we do a 6% average price increase, the average home price for next year will be over $400,000! The tougher one to swallow will be my prediction of yearly average days on market will increase to the 60-70 day range…and that will make a lot of people nervous. It’ll be foreign territory for sellers and their agents, kind of like 4.5% interest rates will be too. The main driver behind my predictions are twofold, the rising interest rates, but the greatest influence will be the construction of new homes. In the end, all of these are good things, even the higher interest rates, because they will resemble something closer to the historical norm. Hyper price increases of 11% a year, 35 days on market and 3.5% interest rates make things looks rosy, but they don’t represent a healthy, balanced market.
November 2016 Longmont Area Stats
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As for November stats, they were a bit better than predicted. Every area had a higher sales total in November of 2016 than they did in November of 2015. That result probably had a lot to do with the mild weather we’ve experienced the last few months coupled with a newer phenomenon over the last few years that has been fueled by low inventory – a longer buying season. The summer spikes aren’t any higher for the same reason, meaning, if a buyer can’t find the house they are looking for in the summer months (due to low inventory), they have to buy in the fall and winter months. The next three months are the most unpredictable of the year, but this fact remains in-tact: those people who have a home listed are ready to sell.
I like to point out oddities in the stats report and we have one we don’t see very often. Look at the average and median sales prices in Area 5…one is up and one is down. This happened in February of this year with attached homes in Longmont and, ironically, in Area 5 last November.
If I don’t get a chance to see you in the next few weeks, I hope you and your loved ones have a Merry Christmas and Happy New Year.
Getting right to the point today. Happy Friday.
Longmont attached sales. Huge increase in monthly sales totals. Huge increase in average days on market. Huge increases in both median and average sales prices and a good leap in the number of active listings. Something isn’t quite right here… Check the data and you’ll quickly see the culprit of a few of those big increases. Of the 40 attached sales, 8 of them were from the new Hover Place condos. They had an average price of $391,237 and an average days on market of 233 days. This easily explains the skewing of price and DOM results. Hidden in this are the moderately priced new condos on Summer Hawk where there were 7 sales between $250k and $280k. This explains a lot. When is the last time we had 15 new condos sold in a month?
Longmont single family homes. Five of them actually sold for below $250k. Good news, right? Half (45) of them sold for between $300k and $400k. This is more good news because it shows there are still plenty of options in the somewhat affordable range. There were 2 that sold for over $1M – both were in Somerset Meadows. And the resulting average sales price was $386k, which somehow makes me feel better because it wasn’t over $400k again. And even though last month’s average was over $400k, I calculated the overall average for the year and it’s right around $385.
October 2016 Longmont Area Stats
Click here for .pdf file
Boulder County Plains. I long for the days when a stats piece looks like this…normal. It has nice increases in sales totals for the month and year, steady days on market and slight increases in price. Look at the median price increases in the other 3 areas of the report…they are all over 18% – that’s just too steep. It’s good for homeowners and such, not so much for buyers. The prices are just outpacing incomes, or at least that’s the general thinking on this. I had a thought, what if our prices were just lagging behind and they are just catching up to where they should be? I’m not equipped to answer that question, but it’s my official hypothesis.
Carbon Valley. While looking at the active listings and solds for the month I did a quick sort to see how many were being listed by REColorado (typically Denver Metro based) agents. For the active listings it’s 35% and for the closed sales it was 37%. A full one-third of all listings and sales are by Denver agents. I thought one of the biggest factors impacting this would be the the low-price agents, it’s not. While there are a few, it’s mostly because there are Denver agents representing builders. In Longmont we are holding steady at 12% of Denver agents. Back in the days of high foreclosures it was 12% as well. I had thought that would decrease when the market normalized, but it hasn’t changed.
Last item – the graph. I updated this from June of 2015. It has now been almost two full years since the average price in Longmont hasn’t dipped to meet up with the average price in the Carbon Valley. This would be hard to say exactly why, but I think I may have touched upon this earlier when I said that the rise in prices is really just a result of them having lagged behind for so long. The graph is pretty clear that about twice a year Longmont would dip and the Carbon Valley would jump so the lines would touch. Not having this for two years is an indicator of strength. Sure the inventory is still low, but it’s low everywhere. Price is only one component of perceived value and people must be seeing the value of paying more to live in Longmont. We can argue this point a lot of ways, but the prime example is Boulder, where the average price in October was $1,058,117!
I hope y’all have a great weekend. Go Broncos! Crush the Raiders.