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Unemployment vs Average Price of a Home in Longmont

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Holy smokes! The sales keep coming and the prices keep rising. After a couple of slightly below average summer months, August has us catching up to last years sales totals. It would be great to finish the year with a couple strong months with above average sales totals. I predicted the summer volume would leak into the fall months to prop up the end of year numbers. The only reason I thought this was the information I was getting from Realtor clients of mine who still couldn’t find homes for their buyers. That, combined with slightly rising inventory made for a good environment to perpetuate the summer volume push for an extra couple of months. I think there is at least one more month left.

The Predictor said we should have had 108 closings in August and we had 119…that’s a 10% bump. The Predictor isn’t perfect, but it’s rarely off by 10%, so there is still some steam left heading into the end of the year. The prediction for September is 105 and I think we should hit that number as well. So keep your foot on the gas until the end of the year.

Curiosity got the best of me this month. I know this is the kind of thing that keeps y’all up at night as well. One day I was pondering the relationship between the local unemployment rate and the average price of homes. So it was off to Google, my stats vault and the graph creator tool in Excl. It was fairly easy to find the unemployment rate for Boulder County; the data are readily available in the archives of the Bureau of Labor Statistics (www.bls.gov).


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August 2014 Longmont Area Stats
Residential Highlights

  • Average Days on Market – 48!
  • Longmont Condos Average Price OVER $205k
  • BoCo Plains Average Price UP $100k
  • Carbon Valley Sold YTD UP 13.5%

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Once I had all the unemployment data in hand, all I had to do was graph it against the average sales price. My approach was similar to the graph from a couple months back where I picked a point in time and called that my baseline. In this case it’s January of 2007, the same as my May 2014 graph. From there, what you see is each lines’ divergence from that point in time. For the most part, they tend to go in opposite directions. Common sense would tell you that this is a reasonable assumption, but I can’t let things go until I can prove them. Here you go. Proven.

The next reasonable assumption would be that one of these lines influences the other. Much harder to prove and I am just not equipped to go that deep. My powers of deduction tell me that the answer would be no. I’d say there is a correlation, but not a direct cause and effect. My only real argument here would be that when you look at the peak of the unemployment line, you’d expect to see a more significant dip in the average price line. There is probably a good economics dissertation relating to reasons why this didn’t happen, but I’d bet that it would boil down to the fact that most people will do just about anything to retain the key element to their survival – shelter – in tact. Unemployment benefits, mortgage forgiveness and modification, lenders delaying foreclosures and even community assistance programs are other safety nets in place to keep people safely in their own home.

Last interesting note: average prices have exceeded their beginning point, but unemployment has not returned to pre-recession levels.

Go Broncos!

Kyle Snyder
303.328.7157
ksnyder@ltgc.com
When you think of choosing a Title Insurance partner think of Land Title, we have been locally owned and operated since 1967, with 100% of work produced in our 40+ Colorado offices.

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Local Real Estate Sales Unstoppable

It’s obvious now that not even a 1,000 year flood can derail this market. The floods came a month and a half ago and many industry insiders were holding their collective breath to see what it would do to our roaring real estate sales. The results are in and the answer is: Nothing. You can breathe now… That doesn’t mean it won’t have a larger impact in the near future. Many of the people affected are still digging out or trying to figure out what their options are. Until then, it will be full steam ahead and right on through the winter months.

Interest rates popped up a fuzz a couple of months ago and that was supposed to slow things down. They may have gone up just enough to chase a few refi’s out of the market, but have settled back nicely as to not adversely influence the amount of money we can borrow to buy a home. Honestly, I hear so much speculation on interest rates and what it will do to the market that I have become kind of immune to all the chatter. I can tell you what it’s doing to the market by looking at these numbers and it appears to be – business as usual.


October 2013 Longmont Area Stats

Residential Highlights

  • 20.0% Increase in closed sales year over year.
  • 19.5% Increase in Median Sales Price ($260,000)
  • 13.6% Decrease in active listings (306)
  • 12.5% Increase in Average Sales Price ($281,938)

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Take in mind that these reported numbers are from October…which look more like a few June’s and July’s from a few years ago! We sure have come a long way. I took a peek back at the 2011 report for October and we had only sold 779 homes at this point in the year and there were 400 active listings. This year we have sold about 30% more than that with 25% less inventory.

Help yourself out when going in to a listing and bring along a professional looking NetSheet to wow you prospective customers. Land Title’s new Net Sheet can be found on our web site HERE or can be found on Apple’s App Store by searching LTGConnect. Please let me know if you need any help with it, I’m happy to come spend some time with you. And, as always, you can find this or any past Monthly Stats reports on my website at www.LongmontTitle.com.

Sincerely,

Kyle Snyder
303.328.7157
ksnyder@ltgc.com
When you think of choosing a Title Insurance partner think of Land Title, we have been locally owned and operated since 1967, with 100% of work produced in our 40+ Colorado offices.

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Interesting Real Estate Stats and Facts-May 2013

I find these facts interesting:

  • 60 Days on Market for the 109 Single Family solds in Longmont for the month of May
  • 348 homes in either Active or Active/Backup status in Longmont and their Avg DOM is 65
  • Of those 348 A or A/B listings, 243 have been on the market for 60 days or less
  • Of the 170 homes in Active only status, their Average DOM is 60 days

There goes my theory of there being a good number of homes on the market that have been sitting there, overpriced, for a long time. There is a term in economics that defines the turnover of money from when it comes in to a person or company to the time in which it is spent again. That term is Velocity; and the higher the number, the more quickly it turns over. I think we are seeing high velocity in the turnover of the entire available housing market.

Before I researched this information, I had assumed that the high velocity segment was only apparent in new listings. What led me to believe this was the high number of reports from clients on how fast their listings were selling. I think the facts above suggest it’s much more prevalent in the market as a whole. This is something that I will try to remember to look at near the end of the summer.

Taking a look at the sales totals from Attached Dwellings in Longmont, the Boulder County Plains and the Tri-Town area, each of these has a lower sales total than last year. This also is interesting and breaks a pretty steady trend we have seen fairly consistently through out the year. My best guess here is that we are seeing the real results of lower inventory. I know this has been discussed and even predicted, but I think this is the first real evidence. Sales are still extremely strong, but even though our total of 109 didn’t come close to the Predictor’s number of 128, it’s still the highest monthly total for May since 2007 (excluding that silly tax credit year of 2010). In fact, we are ahead of 2007’s YTD sales…not quite the amount from 2006, but still the best year in the past 7.


May 2013 Longmont Stats

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The Predictor for June says 115 Single Family units are going to close. If there are still about 400 Realtors in town, 25% of them will be making a check. Will you? If not, go get a listing or two…or more.

Cheers,

Kyle Snyder
303-328-7157
ksnyder@ltgc.com

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