For the first time ever, the average price of a home in Longmont exceeded half a million dollars last month. We all knew it would happen sooner or later, but this is much sooner than expected. Last month saw the previous highest monthly average price ever at $481,378. Mark August of 2018 in your memory because in that month, the average price of a home sold in Longmont was $500,134. This is a significant milestone for sure, but the overall average price for the year is still much closer to $450,000.
The number of closings of single family homes in Longmont don’t seem to be affected by the higher prices. The 134 sold in August is the highest monthly total (any month) since August of 2015 when there were 153 sales. If you look at the average and median prices in all areas of this report you will see what amounts to significant demand. Yes, there are fewer homes on the market, but, you’d think at some point the homes become too expensive and people choose to buy elsewhere. In fact, many of us have predicted that for some time now, and it’s happening to some extent, but obviously the market in Longmont is stronger than expected.
Prices going up, up, up is not the wave of the near future. Sales start to slow after the kids go back to school for obvious reasons. Simply put, families are too busy to mess with moving with all the kid activities and sports. And really, who wants to list and show their house during the holidays and move during a snowstorm? That’s right, nobody, except the people who need to for one reason or another, like a job change or relocation. Also, prices are generally leveling off as I had predicted about 18 months ago. It’s more of a plateau than a reversal. There are about 9 million articles out there explaining how there is no real estate bubble. They are being written by peoples’ natural fear of “what goes up, must come down”. Interestingly, I haven’t seen any articles predicting a real estate crash.
Some of you may wonder about the graph in this month’s stats report. The legend shows three years of data and the graph shows three columns, but there are only two numbers. The graph was getting too crowded, so I only displayed the actual numbers from 2016 and 2018 while leaving the column for 2017 as a reference point. This information is at the bottom of this post. What you will see in the data sheet is that the volume of homes sold below the $350k-$400k price range in 2016 is now about equal to the number of homes sold above that range in 2018. And the fewer homes sold above the $350k-$400k price range in 2016 is now about equal to the number to the number sold below that price point in 2018. That’s a long-winded couple of sentences to say that the numbers have flip flopped. What does that mean to anyone? There were 65% fewer single family homes sold below $350,000 in 2018 vs 2016…that’s what.
This is a seemingly perilous place for us to be when it comes to home affordability. Good thing we aren’t in Boulder where the average price of a home is still hovering around $1.3 million! Boulder has all the requisite affordable housing projects in place and even a commercial linkage fee (really it’s a tax on commercial new construction of $32/sf to fund their affordable housing program that has managed to crush the commercial construction business in Boulder, but that’s another discussion altogether) and their prices have skyrocketed…I wonder what will happen when Longmont brings back their inclusionary zoning (deed restricted, affordable homes)? Actually, I’m being sarcastic. I know exactly what it’ll do to prices in Longmont and the answer is the opposite of lower.
Here are a few parting gifts:
First American Title will be releasing a new secure portal for communicating with buyers and sellers. This will be a game changer and much safer for everyone. All title companies should have a secure portal…but they don’t.
Longmont Active Development Log – This is where you can find out what all those construction projects are going to be.
Business Coach Alex Gil will be giving a 90-minute workshop at Steps Real Estate in downtown Longmont on Wednesday, September 12 at 3 pm. Mindset for Success is the topic and well worth the $20. I know Alex personally and you will not be disappointed. Click Here to Register.
Below is the data table for this month’s graph. I removed the $350k-$400k from the calculations since it has stayed very consistent. The main point I was making is that the numbers highlighted in red have flip-flopped. The numbers in blue have somewhat flip flopped as well. You can also see the 2017 numbers that I was unable to squeeze into the graph. You can clearly see a trend downward in the section at the top when reading left to right. In the lower section you can see the opposite, an upward trend in activity in the higher price ranges from 2016 to 2018.