October 2011 Longmont Area Statistics
We have all asked ourselves and others about when this market would return to normal. The problem with the question is that there is no standard definition of normal. To most Realtors and consumers, normal is a reference to a better time in the past when sales flourished, prices were climbing, and frankly, when business was a little easier to come by. Isn’t this definition a little skewed? That definition of normal is really only in reference to a time period between about 1999 and 2005. I would argue that six years does not define normal.
Many have argued that we now have to get used to a new normal. That is to say that we need to get used to something different than our previous definition. This may be the case when comparing that old normal time frame to an undefined time frame since. For a period of 5 years since 2005, that new normal was defined by falling prices, declining values and difficulty finding qualified buyers and willing sellers. In late 2010 we started to hear about a new normal of slower sales, steadying of prices with slower appreciation, buyers who need money to put down and sellers that may not be able to sell.
After building The Predictor, using years and years of data, I think I was able to better define normal through numbers alone. This is a normal that isn’t based on unrealistic expectations from past experiences. It was a normal built from pure analysis. The Predictor would have been useless during the first half of 2010 when we had the new home buyer tax credit, because that was not a typical market. And currently, the accuracy of The Predictor is probably being aided slightly by low interest rates. Despite the factors propelling the results, the current market activity is just slightly above normal…and has been for most of this year. I believe I made an outright optimistic proclamation of the market back in July. That still holds true for today.
Look at the results in the October 2011 Longmont area statistics and tell me where you an issue that gives you concern. The Predictor said 68 for October and we hit 72 single family residential sales for the month. Look at the other areas too, they are doing equally above normal (average). Take this to your clients and show them that they should have confidence in this market. The market and the economy will both take time to return to their previous levels, but in the meantime, we can say that this market is normal and we should all embrace it.