Sales Volume & Inventory Down, Prices Continue Upward
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.