Archive for February, 2019
Last month I wrote that we’d be seeing steady changes in the Year-over-Year (YoY) comparison numbers. It’s awesome to get your first prediction of the year correct in the first month of the year. It’s hard to be pinpoint accurate when it comes to real estate predictions, but y’all have seen I’m generally in the ballpark. We haven’t seen many red (negative) numbers in our stats reports for several years and when they make regular appearances this year, it may be quite concerning to some. Please don’t let the red numbers get stuck in your head, there is still plenty of good news out there.
Due to the nature of this report, any negative YoY sold total in January will also give an automatic doubling of red numbers since the same number is reflected in the Year-to-Date (YTD) result. Three of the four areas covered in the report have negative YoY total sold comparisons. The three areas with negative numbers are each down by three closings apiece and with the Carbon Valley in positive territory there is a net of four fewer sales in the whole region. Are those results a precursor of what’s to come for the remainder of the year? My opinion (prediction?) is no. It’s just a January and not a concern.
Three areas have negative numbers next to the YoY data for Days on Market (DOM). As far as DOM data is concerned, a negative number is a positive outcome. So that should help to alleviate some of the negativity associated with all the red numbers on the report. The biggest concern for many who read this are the declines in average and median sales prices. As you clearly see, in the three areas where inventory is up, sales prices are mostly lower. The converse is true for the Boulder County Plains section where inventory is down, and prices are up. This is a clear example of supply and demand unfolding right in front of your eyes. Like I said before, it’s just a January and not a concern.
Why do I say, “It’s just a January and not a concern”? Well, the point of reference for most observers is rapidly increasing prices over the past four Januarys, where prices rose precipitously no matter how many homes sold.
I’ll write it again friends, those were never realistic or sustainable results. And if you thought otherwise, you were mistaken. Back then, demand was so high during the summer that it was still being filled in January when additional inventory came on the market. We don’t have those circumstances at this point. It’s more like a normal January with varying prices, inventories and sales totals… like in the olden days… before 2015.
I know, I know, I know…what’s this green, yellow and red mess in the middle and where is my cool graph? Well folks, this is a heat map or, according to Dan Yegge at ERA Tradewind, a stoplight report. Either way, green mean “Go” and red means “Stop”. The numbers represent all single family and attached homes sold in Longmont in 2018 and when they closed. They are divided into price ranges from low to high and yes, the “to $350k” is everything from $250,001 to $350,000. I didn’t duplicate anything. It’s just hard to put the data in a small area to show to you.
This information can be used to advise both buyers and sellers. It can assist Realtors in communicating with sellers an expectation about their chances of selling in a given month. It can show a seller which months have the highest probability of selling. Interestingly, why, with such a lack of affordable homes, are September through March so slow in the under $250k range? Also, ask yourself why December is such a hot month for the over $850k bunch. I have theories, but I’d love to hear yours. We all know the April through August time frame is always pretty hot (green in this case), but it’s odd that there are red blocks in there as well. My guess is that inventory was exhausted at that point and there were fewer houses left to close the following month.
December and January are almost unanimously red, which means fewer closings compared to the rest of the year, we know this, but do you know how to take advantage of this information with your buyers? It surely doesn’t mean the same thing for sellers as buyers. For a buyer, it might give them more negotiating leverage on inspection items or price. For a seller it might give them more negotiating power because who really wants to move in December or January? Mostly just people who need to. I think a good Realtor uses this information to tell the story of their buyer or seller. It can help you get them get off the fence and write that contract or list that house. Let me know your story from a buyer or seller. I’d love to know how you used this information.
I’m always trying to bring you value. I’m your very inexpensive, small business consultant. I try to help you increase your business. In return, if you see value in what I do and the information I provide, we should talk to see if we’d be a good fit to work together. In the year and a half since we opened the Longmont office of First American Title, we have grown from 1 to 3 closers, moved into a beautiful office and gained market share throughout Boulder County. Our goal isn’t to be the biggest, it’s to be the best, that’s why we joined First American. After 130 years in business, they have this thing called title and closing down pat. When we add good people, it’s a recipe for success. If you are having issues with your title company, experiencing late delivery of commitments or just think things could be better, let’s talk. Or, you can just email me your next contract and I’ll introduce you to a whole team who believes in the highest level of customer service.