Sales Volume, Not Prices, Trending Downward
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.
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