Show me the Slowdown…
Surprisingly, the most common question or comment I am getting these days is in regard to the slowdown of the market. Of course I’m not a Realtor, so my perspective is a bit different than those of you working with buyers and sellers in the market. My daily, weekly and monthly view is mostly from orders and closings in our office and throughout our company. I take an occasional look at new listings. I can tell you that orders and closings are at or just above our all-time highs. Listings look healthy and robust, even if they are a bit pricey.
Of course, with no real evidence of a slowdown in my day-to-day interaction with the market, I went straight to the stats. The first thing I did was grab the last 5 years of single family sales for January through July in Longmont and graphed them out (see this month’s graph). Since January, sales totals in 2016 have been running slightly behind those of 2015. The overall sales total in 2016 is only 6.2% or 48 units behind 2015. That small number surly can’t be felt in the market, so my next step was to average out the past five years and add that trend line to the graph…still nothing because this year is running almost exactly at the average for the past five.
July 2016 Longmont Area Stats
Click here for .pdf file
To find evidence of a slowdown I looked even deeper. All the numbers in the Longmont Single Family homes looked pretty good, so the next step was to look at Longmont attached homes. Here, I found a little something. There is a spike in active listings. This is easily explained. Of the 107 active attached homes, 63 are brand new construction, with an average DOM of 104 days, and an average price of $364,940. That average price is higher than the average price of a single family home in Longmont. In the economics of real estate, I’d suggest this kind of activity shows a vibrant market where demand for this product and all the included amenities is pushing the market upward.
My search continued into the Boulder County Plains area. Here, no evidence of a slowdown with the possible exception of higher days on market. So that leaves us with the Carbon Valley to find a slowdown. Here…possibly. But as we know, one month does not make a trend. If you look in this box in the report, all four metrics of monthly sold, YTD sold, DOM and Active listings are going in the wrong direction. Going back to the reports for the past three months, shows similar numbers. If you remember from report at about this time last year, Firestone, Frederic and Dacono were skyrocketing. Now, not so much. I would agree that we may have found some evidence of a slower market. But really, is this being felt by agents in Longmont to the extent that they would come to me and ask if things were slowing down? Possibly.
If you think back to many of the discussion we’ve had here at what’s driving the market – demand, low inventory and rising prices – the flow of this starts in Boulder, works itself to Longmont and then out into the Carbon Valley and then north. Remember the “drive ‘till you qualify” saying being splashed around earlier this year? There is better than normal inventory at the moment and I hear that multiple offer situations are decreasing too. This is some evidence of less demand. If you pair that with all the new homes, townhomes and condos being built, which take at least one Realtor out of the deal, I can see where a slowing of the market is being felt.
On the plus side of some of these minor signs, prices are still increasing, inventory is becoming available, interest rates are still low, and transactions are still closing. I hear from a lot of lenders that appraisals are about 45 days out, which shows there is still a lot in the pipeline. Staying focused on your daily lead generation and taking great care of the clients you have is still the very best way to ensure you have business to carry you through the fall and winter months. And the best part: it’s almost football season!