Another month and another record setting average sales price. I’m guessing that at least once this year we’ll see the average Longmont single family home break the $450k price mark. It has to happen if we can post an average of nearly $448k in January. Additionally, I predict we’ll see the average attached home exceed $350k. While I’m on a roll, I’ll go ahead and throw this one out there too: the Carbon Valley will see its first $400k monthly average. I’d like to say these are bold predictions, but they aren’t. The two I made for Longmont are only a smidge away in the slowest month of the year and the median price in the Carbon Valley is at exactly $400k this month, so they will all come true, it’s just a matter of time. What would be very surprising is if none of them come true.
Speaking of predictions… I still keep up with my custom built sales predictor. For years, this marvel of mathematical engineering has been called The Predictor. Recently we named it Henrietta. And Henrietta was off by 5 sales for the entire year of 2017. One day someone will figure out how to make money with such accurate information. Let me know if you have an idea and you’ll be able to rename it.
One thing we don’t need Henrietta to predict is the lack of inventory at this time of year. If you look at the chart in the middle of the stats page, it clearly shows a dip in inventory at this time of year… every single year. We understand this is a result of the weather and holidays. If we take a peek into the current inventory numbers we’ll see there are only 60 active listings that aren’t under contract and 23 are still under construction. It’s pretty tough to find a home for a buyer to move into immediately with only 37 active listings on the market. Spring is coming and this situation will improve, but to what extent?
There are two things that give me a bit of hope when it comes to inventory this upcoming year. The first is depicted in the graph. The surge in inventory last year was higher than the previous year. This was despite higher prices, so it screams excess demand. Our current inventory situation is simply a winter thing that needn’t be over-explained. Let’s get a show of hands of who wants to move during the winter. Seeing none, we can agree that it’s simply more convenient and comfortable to move in the summer.
The other thing that gives me hope is the continued new construction of single family homes and apartment complexes. My research show there were about 250 new homes added to town last year. And of the 1,800 apartments on the books to be built, about half of them have been completed with many of the rest to be completed this year. The capacity and opportunity for turnover new construction brings to the market will result in a year similar to the past three. That’s if interest rates don’t run away from us. Fingers crossed.
Rant of the Month
When Realtors talk about their employment status they usually say they are an Independent Contractor. Technically this is true, but really, that job status is an IRS definition of how they are not an employee of their brokerage. This status gives them freedom from “reporting to work” and defines how they are taxed, but I’d argue that it’s time for a change in this thinking.
You won’t get the IRS to change your classification, but a change in mindset might be beneficial to your business and income. Try on this hat and see if it fits: Solo-prenuer. Yes, it’s a real word used to describe people who run their business single handedly and take full responsibility for the outcomes. Sound familiar? A Realtor isn’t an entrepreneur because they don’t have a marketing team and accounting team and a distribution or manufacturing system… you typically work alone. In the case of a team, it’s still typically being directed by a single person.
Solo-prenuer embodies the lone-wolf nature of a Realtor, the creative brilliance of your research, the personalized marketing and the individuality of your brand are the trademarks of your business. You put on your “me against the world” clothes every day, personalizing everything from head shots to listing presentations. You’ve already accepted the fact that nobody’s going to do it for you, your income is uneven, and both good and bad decisions rest squarely on your shoulders. So, own it! Be your own boss, reprimand yourself when you need it, reward yourself excessively if you deserve it. Your schedule is flexible and you don’t have to worry about HR reprimanding you for wearing tattered jeans. You can hire and fire clients at will and your decision-making doesn’t include several levels of management. You can pivot on a dime and you have a higher earning potential than an hourly worker. Embrace the insanity of your “job” and BE the boss you always wanted to work for.
Happy New Year to you all. I hope 2018 is your best year yet. Thank you for reading my monthly stats reports. I hope to continue to be informative throughout 2018. This is the final regular stats report covering 2017, but you will see some additional reporting in the coming weeks. First, I will be updating all 2017 reports by adding REColorado data to that of IRES, which is all we’ve seen for most of the year. Also, the annual Housing Affordability Report will be coming out near the end of this month. Both of those will take a little extra time due to the lack of data share.
If you recall, a year ago I promised to eat my sock if our average price increase was under 8% (here is a link to the proof: http://bit.ly/2wcGjcd). I got called out by a number of people who thought I was crazy. The rising prices, low inventory, rising interest rates and lack of job growth were all reasons why I was supposed to get used to the taste of dirty socks. Cutting to the chase, I cleared it by 2.2%! Yes folks, another 10.2% climb in average sales price puts us at a 37.8% price increase since 2014 and that’s just for single family detached homes. The average sales price of a home in Longmont in 2017 was $421,836, up from $382,766. That is nearly a $40k increase. Yes, I know, it’s got good and bad written all over it, but consider this, the average price in Boulder only went up about $1,000 to $1.094M. I’d argue that Boulder is suffering more from rising prices, low inventory, etc., than we are.
If you are amazed at the average price growth of single family homes, then you will be floored by that of attached homes in Longmont. That average price only grew by 8.6% over the past year, but to put it in perspective, those prices have risen by a whopping 48.2% over the past four years. As in the paragraph above, I want to point to what happened in Boulder, the average price of an attached home over there FELL this year by about $28,000 to approximately $465k.
I’m interested to see the results of the upcoming Housing Affordability Study. My experience tells me that Longmont will again, be proven to be the most affordable town with the most available affordable homes in Boulder County. The interesting part will be the results of the other towns in the county, which I predict will see a bit of a leveling off of prices like in Boulder. Why? Value. When you can buy a 1,000 sf shoebox in Old Town Longmont for $400k and you think it’s crazy; those things are going for $600k and $800k in Lafayette and Boulder. There is a point when people look at the price difference and think Longmont still has value, comparatively speaking. But I fear we are finally reaching our own price ceiling. The next great value movement will be in the Carbon Valley. All that new construction will really start attracting homebuyers who see the difference in price and think that an additional 10 minutes of commute time is nothing when they can save 2, 3 or $400,000.
2017 was an exciting year for many reasons. I have several personal milestones and achievements to reflect upon. Not only did I make a move to First American Title with Jennifer Engelking and Lenise Jacobs, I turned 50, played Pebble Beach for the first time and didn’t have to eat a sock. I hope you all reached your goals in both life and business. My wish is for your continued success. Whether you use First American Title or another company for your title and closings, we are all in this business together. If there is anything I can do to help you with your business, please feel free to give me a shout, maybe one day I can earn your business too. Thank you, from all of us at First American Title for the support and friendship you’ve shown to us. Our success is a reflection of your success.
Peace to All,
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.
Since there isn’t much to cheer about in regard to our beloved Broncos, let’s just focus on the real estate and all we have to be thankful for. One thing I’m thankful for and look forward to receiving is the yearly NAR Profile of Home Buyers and Sellers. It was just released and you will do yourself a huge favor to read (or at least flip through) it. NAR collects tons of data and they are getting much better at making it meaningful. I noticed several new and changing trends in my first quick look, but I’ll have to add this 144 page document to my holiday reading list.
In our local real estate market, I’m thankful for a strong market where prices are still trending up, days on market are settling in at around 60 days, and active listings are somewhat stable, albeit low. The attached October report clearly shows our markets are doing well. Last month I was looking at the data and seeing some discrepancies I promised to research. One was new home sales. Well, pulling data from the county records didn’t help. We have more new home sales reported in IRES than I could find in the county records. The more I looked, the more I realized that many of those homes sold are still categorized as vacant lots because their tax status hasn’t been updated. Nonetheless, we have nearly 90 new home sales reported through IRES. I’m sure that is lower than the actual total, so I’m thankful we have some representation in our numbers.
Each area in the stats report shows an increase in both median and average sales price. Home owners and sellers like seeing this trend. Buyers… not so much. The good news is that in Longmont single family home sales in October, there were actually 8 homes that closed for under $300k and the highest was only $807k, so the average isn’t being skewed by several $1M+ homes like we’ve seen in the past. The Longmont attached homes are just about the opposite. Three of them sold for over $500k with the most expensive at $659 and the least expensive being $195k.
I am always thankful for the graphs I’ve created for you in the past. I can update them or put a new twist on an old graph. I updated this months from a couple years ago. It shows the monthly average sales prices for Longmont versus the Carbon Valley. The graph starts in January of 2015, the only month on record where the average in the Carbon Valley was higher than Longmont. You can see the average prices climb for each area, but I also added a linear trend line that clearly shows the Longmont prices outpacing those in Firestone, Frederick and Dacono. Most reasonable people would attribute this to Longmont being in higher demand due to its proximity to Boulder. If you think otherwise, let me know.
It’s less than two months until the New Year. We all know that listings and sales start to drop off for the winter at this time. We also know that now is a great time to start reflecting on the results from the past year and plan for next. When you start your planning and want to kick your business into a higher gear, feel free to bring me into your research and planning. I’m a small business consultant with many avenues, ideas and tools for you to consider. First American Title is a company that partners with several marketing companies to bring you new ideas, reasonable prices and streamlined processes to your marketing efforts. Feel free to contact me any time to see if I can bring some fresh ideas into your business.
Happy Monday and Happy Fall y’all! The stats are ready and I have a couple of other things for you that may be of interest. Grab another cup of coffee and get ready for a beautiful week ahead.
There is so much red (negative numbers) on this month’s report, it looks like it’s bleeding. Red colored numbers are good when they are next to the Days on Market results, but not so much on the rest of the report. The numbers are so drastic I am going to have to look into a couple more items for next month because something just doesn’t seem right. The things I’ll bring to you will be a look into the amount of new home sales and I’ll even take a peek at the sales only being reported in REColorado.
In the meantime, the biggest topic of discussion is how things are slowing down and what an odd year it’s been for home sales. The market is moving in fits and spurts, and completely unpredictable. Remarkably, this is the first month since January that the average sales price of a single family home in Longmont has dipped below $400k. And even more amazing is that it is exactly one year ago when the September 2016 average price first broke $400k to set an all-time high water mark. Overall, average and median prices are still strong and higher than last year in all areas of this report… they just aren’t rising as fast as we’ve seen in the past four years.
We are still three months until the end of the year, but I want to point out one thing about this months’ graph. The graph is only showing the number of closed sales each month over the past 10 years. The first thing that’s easy to notice is the height of each of the peaks. The height this year, compared to last, is not much different. The last two years, compared to the previous four, are obviously lower and we attribute this to both rising prices and lower inventory. But if you look at the width of this years’ data, it’s very narrow. If you could see the data behind the graph, you’d see that it’s actually the lowest Year-to-Date total since 2011.
Where is this market headed? Obviously I don’t have all the answers and there is no magic pill to understand it. However, there is one yearly event I never miss to help in my understanding of what our future holds. If you’ve not been to the Boulder Valley Real Estate Conference put on by BizWest, you are surely missing out on the very best event of the year. This can’t-miss event always has a very light showing of Longmont area Realtors and I just don’t know why. Yes, it’s in Boulder, but it covers every part of our market and every town in Boulder County. It isn’t a bunch of CE classes, it’s in-depth analysis of what drives our residential and commercial markets. Every professional should be there. Believe me on this one and get your tickets here: http://bit.ly/2wBx1aX.
The last item I have for you has to do with the possibility of Amazon coming to Colorado. I’ve thought about what would happen if they moved to the proposed Louisville location. That move would turn this region on its head. Here is a good news story that will make you think about the depth and breadth of the possibility: http://bit.ly/2yucjOT. The Denver Post had a great article on this topic that you can read here: http://dpo.st/2hReCEr. We are now possible victims of our own success.
Enjoy the snow,
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.
First American Title Insurance Company
I am thrilled to announce I have joined First American Title and will be opening an office in Longmont. This change is made even better with Jennifer Engelking and Lenise Jacobs on the team, as Closer and Assistant. We are all very excited for this opportunity to provide you with superior customer service. I’ve done my best to contact agents and lenders we’ve worked with for so many years, but wanted to use this stats piece as the official announcement of our move. For those of you who I’ve not spoken with yet, my apologies, we will surely catch up soon. My new contact information is below, so please feel free to call or email me at any time.
First American Title is a national title company with a stellar reputation. They have been underwriting in the state for many years and have had direct closing offices open in Colorado for the last 8 years. First American has been in business since 1889 and is based in Santa Ana, CA. They are a Fortune 100 company with outstanding people, support and systems. The management team is amazing and decision making is done on a local level, so we will be able to handle your questions on title work easily and quickly.
The new First American office in Longmont will be open on Monday, July 17th. You can find us at 512 4th Avenue, Suite 102, a half block east of Ziggy’s. Just look for the eagle on the door. If you need to place an order before then, you can email it to Jennifer Corsentino firstname.lastname@example.org. If you need me to come pick up earnest money, just shoot me an email at email@example.com or a text at 720-534-8355. I will get more details out next week once the office is finalized.
There are many great things I want to tell you about First American Title and our decision to join them, but that will have to wait until a later date. This email is about stats! Yes, these are the official stats of the Longmont Association of REALTORS®. These are correct and approved for use, so sit back and enjoy.
The end of June marks the end of the first half of the year, so I created charts to compare first half sales this year to those in the recent past. I did the math from the data in the chart on the left and can you believe the average price of a single family home in Longmont has risen 60%(!) since 2012? That is simply amazing. The chart on the right clearly shows the fewer sales total for the first half and we all know this is due to both lack of inventory and rising prices. You may notice the total sold in the chart on the right does not match the total in # Sold YTD. The total in the graph of 529 was pulled specifically for this report and is correct. The 510 number in the grid is comes from adding each monthly total together, but IRES does a great job of cleaning up the sales at the end of each month so the monthly number can go up or down depending on what they find. Also, some agents don’t get their listings updated by the time we publish. I usually update these in July and again in December to account for the slight monthly changes.
The monthly resale closed in the Longmont attached category is very low, but the yearly sold total is still ahead of last year. I’m pretty sure this is due to the increase in average price. If you think about it, this makes sense. Today the average price of an attached home in Longmont is about $50,000 higher than the average price of a single family home in 2012. There are fewer lower priced options for the attached buyer and those who’d love to sell are possibly being priced out of the single family homes… if they can find one.
The Boulder County Plains and the Carbon Valley numbers are still suffering from being underreported. There are many sales in both of these areas that occur in the other MLS only, but we are informed this lack of data will be fixed by the end of the year so we will go back and recalculate when we get the data back. But even without the complete data, which I estimate to be at least 20% of each market, it looks as if both areas would look strong. Overall, we are going to have to use these numbers more as a guide for the next few months.
Thank you very much for your support.
My apologies for being a little behind schedule with these, it’s been a busy week. Here are the May stats for your enjoyment.
When I looked at the May graph from 2016 and saw the number of sales in May of 2017, I thought this would be a great time to show you what I’ve been saying about average price and how it depicts where the activity exists.
If you take a look at this month’s graph you can clearly see the high number of sales in the $250-$300k range and the corresponding lack of sales in that range for 2017. To show the change in activity and price points, compare the closings under $350k for both years: there were 57 in 2016 and just 31 in 2017 – a 45% decline. Then do the same comparison for closings between $350k and $600k: 51 in 2016 and 77 this year – a 51% increase. The sales activity has moved up and the average has moved up with it.
Speaking of averages moving up, I have to point this out because it’s now starting to blow my robust prediction for the year out of the water. The monthly average price of a single family home in Longmont hit its 5th straight record high. The results from May brought the overall average price for the Year to Date to: $427,197 – a 10.6% increase over all of last year. And we haven’t even hit the hot time of the yearly market.
May 2017 Longmont Area Stats
Click here for .pdf file
Looking at Longmont Attached homes, you ca see the effect of the recent new construction being completed in SW Longmont. The average days on market has dropped dramatically and the number of closings YTD his significantly higher Even the median and average prices are normalizing. And when I say normalizing, I mean that the average isn’t bloated with very high sales prices of those new homes. I’m clarifying because you may have thought normalizing is like back in May of 2008 when the average attached price in Longmont was $171,380, it’s not. Those days are over.
I can’t wait until the MLS merger is all figured out. I’m sure all you Realtors out there feel the same way. But the stats for the Boulder County Plains and the Carbon Valley are just misrepresented. It’s comparing apples to oranges. And I don’t like it. At the end of June we will be half way through the year so I will do a special piece where I will pull IRES only data for this year and last for all areas so we can see what that looks like.
Thank so much for reading. I hope you all have a wonderful weekend.
There are a number of things happening in the real estate business right now that I’d like to bring up here. I’m not positive how they will all come together to makes things better, worse or more of the same. I’m fairly good a reading the proverbial tea leaves, but I think these things will have to marinate a bit before we know their real impact.
First, a quote. This is from Steve Murray, Publisher of Real Trends, a local, industry-leading publication and a 40-year industry veteran. This is from the lead story in their May 2017 issue. The article is titled “Will We Run Out of Housing?” And the quote is: ”The problem is not just affordable housing; it’s that unless home building of all kinds increases back to near its historical norm of above 1.4 million homes a year, we may simply run out of places to live and homes to sell.” He gives several great numbers to back up this claim and it is very compelling.
The biggest recent news item is the passing of a reformed construction defects law here in Colorado. It was a solution liked by both builders and the attorney’s for HOA’s, so it surely can’t be perfect. It would have been nice to see our governor and others who were voted into office to take the lead on this, but nonetheless, we have something that may spur condo construction. It’ll take at least two years (and probably longer) before any of these condos are completed and ready for sale, so don’t look for any immediate relief. Just know it’s on the way to hopefully coincide with the increased housing needs of a growing population.
Between now and when those condos get built, there will be a lot more of the same: low inventory and increasing prices. This month’s chart was trying to depict the current inventory situation versus the past. Everyone knows inventory is low and the chart shows it’s nearly the same as the past 3 years, as evidenced by those four lines being almost on top of each other. Well folks, that’s why we go through this every month. There are 263 unsold listings in the MLS, but 57 of them are under construction. They are new construction homes and there is no way there were that many in there last year. I don’t have that number because we can’t go back in time to see the actives at that time, but I’d bet there were only a handful. If we eliminated all the new construction, we’d be at an all-time low for April.
April 2017 Longmont Area Stats
Click here for .pdf file
New construction is happening in the attached home inventory as well. Of the 90 unsold listings of attached homes in Longmont, one-third or 37 of them are under construction. We need this new construction in both single family and attached to serve both people moving into the area and for people looking to move across town. There are 1,800 apartments being built in Longmont right now. How these new rentals will affect the prices in its closest cousin – the attached home – isn’t certain, but my guess is that for the time being, attached homes will stay in high demand because they represent the most affordable housing segment in Boulder County.
Now, check out the average sales price of $956,088 for the Boulder County Plains area. I remember back when the City of Boulder averaged just under a million dollars. Nobody thought it would keep going up…little did we know. This one’s different. Last month there were 11 homes that sold in this area for over $1M and one sold for over $5M. That isn’t a typical month for this area. And, I’m starting to hear that the $1M+ price range is starting to slow down a bit. Let me know if I’m wrong on this.
The numbers for the Carbon Valley are the ones most affected by our recent loss of data share. Interesting tidbit, this area has 38%, or 63 of its 169 actives, under construction and those are just the ones listed in the MLS. These builders are pretty smart and they all learned a serious lesson back in ‘08/’09 when they got caught holding a lot of land and inventory homes that they couldn’t sell. Things aren’t slowing any time soon. Another example are the 1,800 homes platted in Berthoud (particularly around the new golf course) with about 2,300 more in the works. Activity will continue out there and now you are going to see a lot more construction along I-25 between here and Denver…
Last thing to mention: Longmont set another all-time high average sales price in April at $422,475. As far as streaks go, this one is pretty solid because it’s our fourth straight month with a higher high and a new record.
Hit ’em straight
It’s official. We are now comparing apples to oranges. Everyone is always clamoring for apples to apples, but today, everything has changed. In all past stats reports we have used identical data sources, pulled in exactly the same manner at the same time every month to bring you this statistical data. And now, because of the death of data sharing between IRES and REColorado, this is not possible. With the disappearance of about 8-12% of our monthly data, I had to make some choices to work around this problem.
The first possibility is to pull in REColorado data and de-dupe it to add that data to IRES to get what should like our data from before the split. The problem here-REColorado doesn’t define an area in the same way IRES does, so it would take way too much time and still not be accurate.
The next possibility is to go back and just pull IRES data from a year ago and compare it to just IRES data this month. This is a better option than above, but I don’t like changing data I have previously published. Something about that feels wrong and I think it would create a lot of confusion about which one was changed and which one isn’t. It’d be like working with two different sets of data.
The third option, and the one I chose, was to keep the data from the past that comes from both IRES and RECO.com, and just include the IRES data I have at my disposal. This actually creates some unique perspectives, gives me a couple more things to talk about and hopefully it’ll be a temporary problem that can be updated (to change previously published data) or amended. I think it’s also the path of least resistance.
The first thing I did after I picked the third option above, was to scratch in what the sheet would have looked like had we chosen the 2nd option above. Believe it or not, there wouldn’t be that many big changes. In the Longmont Single Family, the top two lines would have a 10-ish% difference instead of a 20-ish% difference. Longmont attached would be the same except the median and averages would have gone through the roof. BoCo Plains would be nearly identical in all data points. And lastly, the FFD section would be similar to Longmont SFR with the percentages on # Sold for Month and YTD cut in half.
March 2017 Longmont Area Stats
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From my experience in looking at this data every month, the area in which a loss of data share should impact the most is expected to be the Firestone, Frederick and Dacono region. This area typically has closer to a 30% penetration of metro area agents, who, in the past, have listed these homes in REColorado only. I guess we will see real soon if they make the move to list in IRES. My bet is that they do. I just don’t think that area has enough strength to be a stand-alone area for metro agents.
Other than that, how are things going so far in the first quarter? So far, so good I’d say. This despite the continued lack of listings. March 15th had traditionally been the start of the spring listing season, but that date has been pushed back about a month over the past three years. The reason being, you don’t need 60 days of marketing time and 30 days more to close a deal by June 15th… when the kids get out of school. You only need a couple weeks marketing time and the 30 or so days to close, making April 15-30 the perfect time to list to close by June 15. And, so soon as I got done explaining this theory to a couple hundred Realtors, the listings started pouring in on about March 23rd. I can’t say that being wrong is a problem in this case, in fact, it’s way better than being right because of the listings that come with it. Best guess it was probably due to the summer-like weather we’ve had this past winter.
And, just for the record, the $418,465 average sales price this month is the all-time high monthly average. Yes, as in highest EVER in Longmont. Not a great big deal because it’s March and there are still fewer than 100 homes sold in a month, but chew on this number: $412,467. That’s the average sales price in Longmont for the entire 1st quarter… Another all-time high.
Go list some houses, if you can, you won’t regret it.
By the way. I stole the headline for this post from Shay Castle at the Times Call. She has been doing a fantastic job of covering the Longmont housing market for nearly two years now. And because of her work, the Daily Camera and Denver Post have been covering the Longmont market as well. Thanks Shay. Here is her complete article: Average monthly home prices reach all-time high in Longmont.
Amy Aschenbrenner of the Longmont Association of Realtors and Kyle Snyder are proud to deliver to you, our 2016 Longmont Housing Affordability Study. Please take the time to read the introductory letter in addition to reviewing all of the data. If you have any questions please feel free to contact Amy or myself. Click on the link below to see the report:
Additional commentary by Shay Castle of the Daily Camera and Times Call can be found here: No Entry Level Housing Options
Among Realtors and other industry participants, the big talk these days is about data sharing, or the lack thereof. In the short-term, this will be inconvenient at best. In the long-term, well, I’m on the side that hopes that some form of data share returns very soon. The best solution will include two years sales history, not just six months as it was most recently. I am lobbying for this solution for all my appraiser friends. Not all appraisals can be done with just six months of data, so even the most recent iteration of data share necessitated dual MLS membership.
Thinking ahead to March 2nd, I was Johnnie-on-the-Spot this month to grab REColorado sales data before it was gone. I don’t typically pull the stats until after the 3rd of the month due to the 3-day update rule at IRES. Even though I captured the data, I had to massage it a bit because I didn’t think far enough ahead. The results: the median sales price is actually a weighted average of two medians. When looking at the data that went in and came out, I like the results even if they aren’t perfect. This is just one of many ways a lack of data share can affect us even if a median sales price is of way less concern than a Realtor properly exposing a listing to the market. We have all gotten used to the data share and can hardly anticipate all the ways it will affect us. So, when given the chance, let your voice be heard and demand this issue be resolved.
February 2017 Longmont Area Stats
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The chart we created this month is the same as last February and it corresponds to the results of the 2017 Housing Affordability Study that’s about to be published by Amy Aschenbrenner and myself. For the second year in a row, Longmont is one of the top performing cities in the study. You will notice the average increase (13.5%) for Longmont is 1% higher than what I published last month in my ’15 vs ’16 report for Longmont (12.5%). This is another effect of the data share. About a year ago, REColorado realized they were providing IRES with two years of data instead of the 6 months that had been agreed upon, so I don’t have full year REColorado data for either report.
I could go on and on about how bad the lack of data share is, but I won’t. Instead, I’ll let you check out the second consecutive month where the average single-family home price in Longmont is over $400k; the 3rd consecutive month where the median sales price of an attached home in Longmont is over $270k; the 3rd time in a row the average price in the BoCo Plains is over $700k and the 3rd time in a row where the average price of a single-family home out in the Carbon Valley is over $340k. Think about this for just a second, the months I’m referencing here are December, January and February. Those are typically our slowest and least competitive months where prices and averages usually take a hit. If this keeps up I will have to revise my estimate of 8% upward price growth for the year.
I hope your year is off to a great start.
I just love doing these stats. I like putting them together, dreaming up a chart that I hope you like and is relevant, and then writing this story every month. This is the first month of my 11th (?!?) year of doing this. That means this is the 121st story and email I’ve done since I began all this back in January of 2007. Thank you all so much for reading and giving me your feedback.
So, before we go too much further, let’s review the rules regarding the use of this material. There are none. It’s un-copyrighted material I publish with the permission of IRES, REColorado and LAR. You can use it and the words I type here, in whole or in part, to help inform your clients and show them you are a true professional with a firm grasp on the market. There is no copyright or source crediting police, but I’m told that the real estate commission may frown upon someone who would pass this off as their own and not quote a source. Personally, I don’t care if you do, because this is about you, not me. Legally, you might want to consider it. I’ve been told they can and will audit your marketing material. Any questions on use, just shoot me an email at firstname.lastname@example.org.
January 2017 Longmont Area Stats
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On to the stats. The chart this month shows we are up about 100% over the lowest month of November 2008. Who thought we’d ever double our prices from that time of panic in the streets? Not me. Nonetheless, here we sit at our second average price of over $400,000 in the past four months and looking to make that a regular occurrence throughout the year. Granted the sales volume in January is quite low, but that is only in the Longmont single family section. The other areas had normal to strong January numbers compared to last year.
In fact, the average and median sales prices across the board were strong. The strongest examples being the median price for Longmont single family (+26.6%) and Boulder County Plains (+30.7%), which pale in comparison to the average increase of Longmont attached (+36.6%) dwellings.
We all know that inventory, or the lack thereof, is the culprit here. The feedback I received from my last stats piece about the potential inventory boost from new construction and what it will do to prices this year is without detractors (up to this point). This means I’ve either pulled the wool over your eyes or we have similar optimistic outlooks. It’s going to be hard to derail this train. What will be the most difficult part to adjust will be to dial back our current, outright ecstatic outlook to merely optimistic. You must shift your approach and hope your buyers and sellers follow your advice.
Last thing. It looks like we will be dealing with a loss of data share beginning with next month’s stats. I’m not sure how I’m going to deal with it. Fingers crossed for miracles.
Here is to another great year!
Oops, there it goes again. On top of a blistering 11.1% rise in prices back in 2015, Longmont experienced an even greater average sales price increase in 2016. The news of another excellent sales month in December is being overshadowed by the Year-over-Year (YoY) 2015 vs 2016 average sales price increase of single family homes in Longmont. Many experts predicted a similar and possibly smaller increase this past year, but numbers recently released show a 12.5% increase in 2016.
Home sellers have been quite ecstatic since they are able to sell their home and actually make money compared to the foreclosure, bankruptcy and short sale days of 2008-2011 that are still fresh in many memories. In the past two years alone, the average single family home price has risen 23.6% in Longmont. Home buyers are not quite as happy, but demand is still quite high due to the lack of inventory and the even higher prices found in all neighboring towns except for those to the east of Longmont in the Carbon Valley of Firestone, Frederick and Dacono.
The second annual report of YoY price increases is attached to this report shows, in addition to the normal monthly statistics, there are several stories of price increases. One notable item that needs additional explanation is the 19.6% price increase in the average sales price of attached homes in Longmont. This increase is in addition to 14.1% in 2015. All 2016 results here are significantly impacted by several new attached property homes in Southwest Longmont where the base price is well over $350k and most have been on the market for an extended period of time. This is in contrast to the single family home numbers that are not significantly impacted by any new construction in the area in 2016. The single family numbers will change in 2017 with several new housing projects opening soon.
December 2016 Longmont Area Stats
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In a surprising twist to the end of year results is the decrease in the number of homes sold. When the basic economic principal of supply and demand is applied to the results, you see evidence that demand is still very high. Fewer houses sold, in fewer days on market, for a higher average price. The coming new home inventory in 2017 will, hopefully, slow this near parabolic, upward price curve. A well-known axiom of home price increases and historical averages indicate a healthy real estate market shows an approximate 6% price increases per year. Longmont has doubled that for two straight years, which could be considered unhealthy outside of a recovery period. Longmont’s recovery period ended about 2 years ago when prices exceeded their pre-meltdown levels.
2015 vs 2016 Longmont Area Stats
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After years of 11.1% and 12.5% price increases, what are the chances we will see something as low as a 5% increase in 2017? It seems like a lot more than interest rates rising to over 4% will have to happen for prices to slice their upward march by nearly 60%. But let’s just say, something more normal happens this year, and a 5% increase is what we report here next January. Well, if that’s what happens, the average price of a single family home in Longmont in 2017 will be $401,904. How much will your client wish they bought a house now, or this year? The big banks are going to have a hard time screwing up this economy and no matter how you voted, the guy in charge should be good for business, so hang on because if we get anywhere under an 8% increase this year, I’ll eat my sock.
Here is to your best year yet!
Happy winter…finally. I thought we’d never get snow this year. Fingers crossed for a white Christmas. In the meantime, we have some stats to look at before you begin your winter hibernation.
A couple of years ago I switched up the graphs in this report to show different ways of looking inside the numbers. The old graph was just updated each month and looked like the one below. While I think it shows some good information, it can get a little stale seeing it month after month. For old times-sake I have to sneak it in every once in a while. I think it’s more interesting to see it with the peaks and dips from ’05-’11, but that’s just too messy. One thing here is obvious by looking at the purple lines that represent 2015, is that last year was a pretty darn big year for residential resale in Longmont. We won’t reach that total this year unless we have about 200 closing this December and there is a zero chance of that happening. We will end up with about 8% (or about 100) fewer sales and an overall price increase of about what we saw last year of around 11%. I guess those things are good, but what will we see next year?
It isn’t the New Year yet, but I’m ready to make a few predictions for 2017. I predict we will see an equal number of total sales in 2017 as in 2016. The end of this year will show our yearly overall sales price to be about $385,000 and I predict our sales price increase will be smaller – hopefully no more than 6%. If we do a 6% average price increase, the average home price for next year will be over $400,000! The tougher one to swallow will be my prediction of yearly average days on market will increase to the 60-70 day range…and that will make a lot of people nervous. It’ll be foreign territory for sellers and their agents, kind of like 4.5% interest rates will be too. The main driver behind my predictions are twofold, the rising interest rates, but the greatest influence will be the construction of new homes. In the end, all of these are good things, even the higher interest rates, because they will resemble something closer to the historical norm. Hyper price increases of 11% a year, 35 days on market and 3.5% interest rates make things looks rosy, but they don’t represent a healthy, balanced market.
November 2016 Longmont Area Stats
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As for November stats, they were a bit better than predicted. Every area had a higher sales total in November of 2016 than they did in November of 2015. That result probably had a lot to do with the mild weather we’ve experienced the last few months coupled with a newer phenomenon over the last few years that has been fueled by low inventory – a longer buying season. The summer spikes aren’t any higher for the same reason, meaning, if a buyer can’t find the house they are looking for in the summer months (due to low inventory), they have to buy in the fall and winter months. The next three months are the most unpredictable of the year, but this fact remains in-tact: those people who have a home listed are ready to sell.
I like to point out oddities in the stats report and we have one we don’t see very often. Look at the average and median sales prices in Area 5…one is up and one is down. This happened in February of this year with attached homes in Longmont and, ironically, in Area 5 last November.
If I don’t get a chance to see you in the next few weeks, I hope you and your loved ones have a Merry Christmas and Happy New Year.
Getting right to the point today. Happy Friday.
Longmont attached sales. Huge increase in monthly sales totals. Huge increase in average days on market. Huge increases in both median and average sales prices and a good leap in the number of active listings. Something isn’t quite right here… Check the data and you’ll quickly see the culprit of a few of those big increases. Of the 40 attached sales, 8 of them were from the new Hover Place condos. They had an average price of $391,237 and an average days on market of 233 days. This easily explains the skewing of price and DOM results. Hidden in this are the moderately priced new condos on Summer Hawk where there were 7 sales between $250k and $280k. This explains a lot. When is the last time we had 15 new condos sold in a month?
Longmont single family homes. Five of them actually sold for below $250k. Good news, right? Half (45) of them sold for between $300k and $400k. This is more good news because it shows there are still plenty of options in the somewhat affordable range. There were 2 that sold for over $1M – both were in Somerset Meadows. And the resulting average sales price was $386k, which somehow makes me feel better because it wasn’t over $400k again. And even though last month’s average was over $400k, I calculated the overall average for the year and it’s right around $385.
October 2016 Longmont Area Stats
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Boulder County Plains. I long for the days when a stats piece looks like this…normal. It has nice increases in sales totals for the month and year, steady days on market and slight increases in price. Look at the median price increases in the other 3 areas of the report…they are all over 18% – that’s just too steep. It’s good for homeowners and such, not so much for buyers. The prices are just outpacing incomes, or at least that’s the general thinking on this. I had a thought, what if our prices were just lagging behind and they are just catching up to where they should be? I’m not equipped to answer that question, but it’s my official hypothesis.
Carbon Valley. While looking at the active listings and solds for the month I did a quick sort to see how many were being listed by REColorado (typically Denver Metro based) agents. For the active listings it’s 35% and for the closed sales it was 37%. A full one-third of all listings and sales are by Denver agents. I thought one of the biggest factors impacting this would be the the low-price agents, it’s not. While there are a few, it’s mostly because there are Denver agents representing builders. In Longmont we are holding steady at 12% of Denver agents. Back in the days of high foreclosures it was 12% as well. I had thought that would decrease when the market normalized, but it hasn’t changed.
Last item – the graph. I updated this from June of 2015. It has now been almost two full years since the average price in Longmont hasn’t dipped to meet up with the average price in the Carbon Valley. This would be hard to say exactly why, but I think I may have touched upon this earlier when I said that the rise in prices is really just a result of them having lagged behind for so long. The graph is pretty clear that about twice a year Longmont would dip and the Carbon Valley would jump so the lines would touch. Not having this for two years is an indicator of strength. Sure the inventory is still low, but it’s low everywhere. Price is only one component of perceived value and people must be seeing the value of paying more to live in Longmont. We can argue this point a lot of ways, but the prime example is Boulder, where the average price in October was $1,058,117!
I hope y’all have a great weekend. Go Broncos! Crush the Raiders.
Thank you all so much for the feedback on last month’s stats report. Included in today’s report are updated sales totals for each price bracket (bars), plus the average days on market (DOM) for the homes sold in that bracket (line). The graph reveals what we all know – that days on market increases as the price bracket increases. But now you can more accurately inform your sellers about their expected marketing times. With an overall DOM of 60 in Longmont right now for single family homes, you can clearly see the most active price points have the lowest average time on the market.
Please note that the reported DOM for September is 60. That number is the highest it’s been since February (69). A majority of the sales represented in the graph happened in the hottest part of our yearly market. The reason I point this out specifically is so you can communicate to your sellers to expect longer marketing times in the upcoming months and not the ones in the graph. We can reasonably assume the average days on market will increase in all brackets due to the slowing of activity between now and the end of the year.
September 2016 Longmont Area Stats
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Now for the good news/bad news portion of this commentary. Longmont single family homes eclipsed the $400,000 mark for a month for the first time ever! Good news for sellers, bad news for people wanting to buy lower priced homes. My how the times have changed. In the first 9 months of 2016, only 12 homes have sold for under $200k. In the same time period in 2009 there were 269 homes sold in Longmont for under $200k. The average price is going up everywhere, but look at the huge leap in the Boulder County Plains section. There were four homes that sold for over a million and one that was over $6 million, pulling that average way up.
On a side note. Many of you reading this are small business owners. And many of your clients are small business owners as well. There are many creative and fun people in that big group and 1stBank wants to hear from them. They have a video contest called 90 Seconds to Success that will award one person from Colorado $20,000 for the best business video. Go to www.efirstbank.comfor instructions on how to enter.
The last thing I’d like to say is that now is a very good time to change your email password. If you don’t have a two-step verification, you may have already been hacked and don’t even know it. Hackers are now sitting back and monitoring the inboxes of Realtors and waiting for emails to come in with sensitive information. They are getting things like names, phone numbers and closing dates from you and your clients. They are then masking their email address to look like yours or your clients so they can try to intercede in a transaction to redirect proceeds into their accounts. Every title company is on high alert for this scam. I know it’s a pain to change your password on all your devices, but in the end, it’ll be worth it.
Back in May of this year I created the same graph as the one I have included in this month’s stats report. The difference is that the original had just one month’s worth of data. This one contains the year to date single family homes sold, so the data set is much larger to give us a clearer picture of where the action is. I added a couple of extra columns, but for the most part, the results are the same. In May, 63.5% of all sales were between $250,001 and $400,000. During the entire first two thirds of the year, 59.5% of all sales were in the same price range.
It would be interesting to track the days on market for each of these price ranges because that would give sellers a more realistic marketing time frame depending on their price point. We all know that the days on market for a home priced at $280,000 is much different than that at $530,000, so maybe we will visit that next month.
August 2016 Longmont Area Stats
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For the time being, let’s go back to what we have in front of us. The most active portion of the pricing spectrum isn’t news. We’ve all pretty much known what sells, but it’s nice to see the numbers to back it up. What interests me are the outliers in the graph. For the lower end, there simply aren’t any. The one home that sold for under $150k was that boarded-up, uninhabitable place over on Coffman and 3 of the 8 between $150-$200k closed back in January. On the other end of the spectrum, there were two homes that sold for over $1M, both in Sommerset.
Average and median prices continue to climb on a year over year basis. The Longmont attached home inventory and days on market increases are still trending higher only because of the new attached inventory in the southwest part of town. Interestingly, both DOM and inventory are climbing in the BoCo Plains and Carbon Valley markets. We will have to keep an eye on those over the next couple of months. Only the Longmont single family market is holding steady in those departments. I have a feeling this will continue for another few months before the leftover demand from summer is fulfilled.
I don’t know if anyone eles is ready for football, but Thursday can’t get here soon enough for me
Surprisingly, the most common question or comment I am getting these days is in regard to the slowdown of the market. Of course I’m not a Realtor, so my perspective is a bit different than those of you working with buyers and sellers in the market. My daily, weekly and monthly view is mostly from orders and closings in our office and throughout our company. I take an occasional look at new listings. I can tell you that orders and closings are at or just above our all-time highs. Listings look healthy and robust, even if they are a bit pricey.
Of course, with no real evidence of a slowdown in my day-to-day interaction with the market, I went straight to the stats. The first thing I did was grab the last 5 years of single family sales for January through July in Longmont and graphed them out (see this month’s graph). Since January, sales totals in 2016 have been running slightly behind those of 2015. The overall sales total in 2016 is only 6.2% or 48 units behind 2015. That small number surly can’t be felt in the market, so my next step was to average out the past five years and add that trend line to the graph…still nothing because this year is running almost exactly at the average for the past five.
July 2016 Longmont Area Stats
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To find evidence of a slowdown I looked even deeper. All the numbers in the Longmont Single Family homes looked pretty good, so the next step was to look at Longmont attached homes. Here, I found a little something. There is a spike in active listings. This is easily explained. Of the 107 active attached homes, 63 are brand new construction, with an average DOM of 104 days, and an average price of $364,940. That average price is higher than the average price of a single family home in Longmont. In the economics of real estate, I’d suggest this kind of activity shows a vibrant market where demand for this product and all the included amenities is pushing the market upward.
My search continued into the Boulder County Plains area. Here, no evidence of a slowdown with the possible exception of higher days on market. So that leaves us with the Carbon Valley to find a slowdown. Here…possibly. But as we know, one month does not make a trend. If you look in this box in the report, all four metrics of monthly sold, YTD sold, DOM and Active listings are going in the wrong direction. Going back to the reports for the past three months, shows similar numbers. If you remember from report at about this time last year, Firestone, Frederic and Dacono were skyrocketing. Now, not so much. I would agree that we may have found some evidence of a slower market. But really, is this being felt by agents in Longmont to the extent that they would come to me and ask if things were slowing down? Possibly.
If you think back to many of the discussion we’ve had here at what’s driving the market – demand, low inventory and rising prices – the flow of this starts in Boulder, works itself to Longmont and then out into the Carbon Valley and then north. Remember the “drive ‘till you qualify” saying being splashed around earlier this year? There is better than normal inventory at the moment and I hear that multiple offer situations are decreasing too. This is some evidence of less demand. If you pair that with all the new homes, townhomes and condos being built, which take at least one Realtor out of the deal, I can see where a slowing of the market is being felt.
On the plus side of some of these minor signs, prices are still increasing, inventory is becoming available, interest rates are still low, and transactions are still closing. I hear from a lot of lenders that appraisals are about 45 days out, which shows there is still a lot in the pipeline. Staying focused on your daily lead generation and taking great care of the clients you have is still the very best way to ensure you have business to carry you through the fall and winter months. And the best part: it’s almost football season!
I have a lot of little items for you this month, so this won’t be one of those smooth, flowing stories I usually write. I hope you enjoy and find value in this all the same.
First of all, take a look at the median and average price increases in all areas. They are UP in all cases between 8.1% and 21.9%. This is amazing to see this half way through the year in addition to the decline in sales volume in 3 out of 4 areas. Area 5 is leading the pack with increased sales for the month and year, higher DOM, fewer listings AND higher prices.
Now take a look at the average price for June in Longmont…$397,144! It’s on the verge of $400k! Who’da thunk it? If you think that mark is impressive, well, it’s almost exactly one third of Boulder’s average sales price last month of $1,192,530. Believe it or not folks, even with our higher prices, there is still value to be found in Longmont. I’m pretty sure this is the first time Boulder’s monthly average has been over $1 million. And if my calculations are correct, they are over $1 million on average for the entire first half of the year.
Both of the graphs I created for you this month show just first half numbers for the past five years. You can see the sales volume is down just a bit (7.4%). This has been the trend all year thanks to our slow winter months. There’s a small chance we can catch up, but I wouldn’t bet on it (because of inventory, of course). The interesting graph is on the right, which shows the overall average sales prices for the first half of the past 5 years. I inserted the trend line to show just how steady and consistent this increase has been. The percent increases are, in order, starting from ’12 to ’13 are: 8.7%, 8.1%, 9.3% and 11%. When you read articles about a healthy housing market, “they” say increases of 6%-8% are healthy and anything more than can lead to problems. Again, this is not an indicator of a bubble. Elliot Eisenberg said it and I’ll say it again – This market is built on wealth, not credit. There is no bubble.
June 2016 Longmont Area Stats
Click here for .pdf file
Thank you for the feedback and updates to my list of new home construction projects in the area. I’ll include the link to that page frequently over the next several months in case you lose it. When I get some time I will build a map so you can see where these projects are located. Here’s the link: Longmont Construction Map.
Well, that wasn’t as disjointed as it looked in my head before I started typing. Please let me know if you have any questions.
The year is half over and if you haven’t seen the results you expected from your efforts, think about this quote from James Allen: “In all human affairs there are efforts, and there are results, and the strength of effort is the measure of the results.”
The story hasn’t changed here folks, but I think I have found some inventory for you and more relief may be on the way. But, before we get into where the inventory can be found, let’s take a quick look at some numbers in the chart.
Monthly and yearly sales totals are DOWN in all areas of this report. As we discussed several times, it isn’t all due to the rising prices, but the lack of inventory is having a huge impact on this market right now. The buyers are still there and there are more coming every day. Average and median prices for single family homes in Longmont and the Carbon Valley are still on their steep increase of 10-11% YoY. The Boulder County Plains, which carry a significantly higher price point, are still increasing, but at a slightly slower pace. This is to be expected.
Just like last month, the very high DOM, average, and median prices of attached homes in Longmont are due to the new construction townhomes in the southwest part of town that are selling above $350k. For comparisons sake, of the 32 attached sales in May, there were 23 resales which had an average price of $276,718, median price of $257,000 and 23 Days on Market.
May 2016 Longmont Area Stats
Click here for .pdf file
The graph this month is simple, but revealing. It shows a number of different price bands and where the sales are occurring. It looks like the sweet spot for selling max’s out at about $400k. I was going to bring in the DOM for each price breakdown, but thought of that after I’d done all the work. Maybe next month.
I claim to have found the inventory in the area. When I pulled stats for this month I checked the Active only listings and there were 90 on June 6. Of those 90, 23 (or 25.6%) of them are new construction. Some of them are ready now and some are yet to be finished. Not all builders put their homes in the MLS, so I did some digging and have come up with a list of new construction projects to take your sellers. Sellers are having a bit of a hard time finding a replacement home so here you go; get them into one of these and list their home for sale about 45 days before it closes. It’s a little less risky on their part because they know they are getting a new home, under warranty and they can get all those nice new things they want in their home. Plus, they don’t get “stuck” just taking what’s available on the market at the time.
The list I made is of all the new home communities and builders in the area I could come up with. I will only keep track of ones in Longmont, Berthoud, Mead, Niwot, and the Carbon Valley. The bottom section of my list is taken right from the City of Longmont’s Active Developments Log and represents mostly lots that are in the process of getting approvals to build on. The bottom line here is that there are about 450 single family or attached homes that will be coming up for sale here in Longmont in the next couple of years. Additionally, there are over 800 lots being planned right now. Maybe it’s time to have your sellers look at new construction.
I hope you have fun spreading this new knowledge of the Longmont market around this upcoming year.
This post is a companion post to my May 2016 Longmont Sales Statistics Report. It will be updated as I get more information, so if you are following a link to this lost, come back soon because I’m sure there is a lot I have not included.
These are builders and developments that are currently under construction or ready to break ground. Please send me any additions or corrections to this list at email@example.com.
Based in Gunbarrel, this custom home builder is now building in all the following areas.
Woodridge in North Longmont. They have available 18, 1-acre lots
Sommerset Meadows in Southwest Longmont. One lot remains
Portico in Southwest Longmont. Two lots remain.
Tracie Thede at 303-522-3911
Richfield Homes – Longmont based home builder with two properties under construction in Berthoud and Brighton.
PrairieStar (Berthoud – Hwy 287 – County Road 17)
265 Homesites (44 sold) + mulit-family homes and town center.
Geralyn Gibson – Community Sales Manager – 720-587-7783
Shelbie Gehle – Assistant Community Sales Manager – 303-552-8942
Riverside (Brighton – 7 miles east on Hwy 7 from I-25 – North Side)
92, 1-acre Homesites 58 solds
Stephanie Lerwick – Community Sales Manager – 303-817-8055
Ashly Tugmon – Assistant Community Sales Manager – 303-817-5070
This is the developer of Barefoot Lakes in Firestone, just east of I-25 and North of 119.
293 total homes in the first phase. Two builders so far: Brookfield Residential and CalAtlantic. Both plan to have homes available this fall.
Kristen Peterson at 303-790-6663
Brian Cassidy at 303-486-5004
Longmont based custom homebuilder with 10 plans to start from. Has one spec home in Starwood that will be ready in a few months with time to pick finishes. Also, two large lots in Erie with great views and zoned AG (no HOA)
Contact: Susan Massey at 720-371-1511.
Sigg Brothers Homes
Longmont custom home builder will build to your specifications.
Doug Sigg at 303-579-3674
Longmont home builder, building moderately priced homes from $320k-$370k
Coal Ridge Estates in Frederick. Only 11 lots remain
The Dunn Team at 303-772-9620
Horizon View Homes
Johnson Farm in Frederick
Provenance off Hwy 66 between Pace and County Road 1. 226 Single family homes.
Coast to Coast Development
Parkside – in Quail Ridge. 93 condos and 36 single family homes
Sharpe Farms in Dacono off Hwy 52, just east of I-25
The Shores in Frederick
Siena Park in South Longmont
Contact: Kevin Wolf 855-396-2700
Yeager Farms – 45 Lots. $400k-540k
Contact: Chad Jarrell at 866-831-4955
Dream Finders Homes
Silver Meadows – Luxury Townhomes near Silver Creek HS
Park Meadows – Townhomes in Longmont. Project not started yet
Tami Smith or Gabriele Walton at 303-827-3086
Masterwork Home Company
Custom home builder building in Summerlin and Somerset. Homes from $950k-$1.2M. Located just west of Airport Rd and Glenneyre Dr. They have 11 lots remaining in Summerlin and 2 spec homes in Somerset.
Brian Terry at 303-845-0949 or
Ronda Connolly at 303-746-5040
West Grange – 83 home sites from $450k-$600k
Contact: Go see David Trow or Rosalie Borja at:
1020 Redbud Circle, Longmont, CO 80503
LOTS IN PLANNING STAGES
And the rest of this is taken from the Active Developments Log of the Longmont Planning and Zoning Commission – May 2016. Most are all still in the early planning stage so there is no contact information or further details at this time. If you’d like to see the full list on the City’s Active Development Log with a map – CLICK HERE.
Boulder Creek Homes
Denio West – 81 lots to include single family, triplex and fourplex buildings.
Location: SW corner of Hover St and 9th Ave
Shadow Grass Park, Eastgate 6th Filing – 44 single family detached homes
Location: South of 17th, NE of Moonlight Dr.
Shadow Grass Park, Eastgate 3rd Filing – 50 Single family home lot PUD subdivision
Shadow Grass Park, Eastgate 4th Filing – 26 single family lots
Shadow Grass Park, Eastgate 5th Filing – 27 single family homes
Dream Finders Homes
Clover Basin Ranch – 62 Single Family Homes
Location: generally east of Mt. Audobon and south of Renaissance Filing 4
Meadow View Estates – 20 single family lots
Prairie Village 7th Filing – 36 Townhomes
Somerset Meadows Filing 5 – 199 Single Family Homes. I believe this is the property that KB Homes bought recently.
Boulder Creek Builders
Tramanto 2nd Filing – 20 lot residential subdivision
Harvest Junction Village – 277 Single family homes. I believe this is the Oakwood Homes development along Ken Pratt, just east of my office
I was going back through the last two years of stats reports to find something I had written. I never found what I was looking for, but I did find something else. I found that the most common theme in my reports is inventory. I’m guessing y’all are tired of hearing about it. The problem here is that I found that out after I created this month’s chart on guess what…inventory. I’ll work on that in the upcoming months…promise.
In the meantime, let’s take a look at inventory today. The graph in this months report shows we are at an all-time low. What is doesn’t show is that there are only 49 single family resale homes available in town. There are also 22 new-builds, some of which are actually complete. No matter how you slice or dice the numbers, a prediction I made (but couldn’t find) is finally coming true. Low inventory is slowing down sales. The flash inventory environment we’ve been experiencing for the past two years is catching up to us. The rapid increase in price has a lot to do with this as well.
Rather than spend any more time on the lack of inventory, let’s see what it’s doing to sales across the region: Longmont single family sales are down 8.7% year over year; Longmont attached-down 32.3% YoY; Carbon Valley-down 5.2%; and the Boulder County Plains is up 6 units or 3.3%. The fact that the sales totals are down hasn’t impacted price or days on the market, which is surprising. Median and average sales prices are up in every single region year-over-year and days on market is holding steady for the most part.
April 2016 Longmont Area Stats
Click here for .pdf file
Having looked at these stats for so many years now, I never imagined market conditions, as described above, coming into play. Obviously, it’s still a sellers market, but I think we’ve reached a pricing plateau for the moment. If sellers aren’t careful with their pricing this summer, you will see days on market grow and prices soften. Prices softening in this context means there won’t be as much price appreciation year-over-year. If I could control the market, this is exactly what I’d like to see it do because the 11%-23% increase in average price is just too much for a market to sustain. Sellers don’t want to hear this, but they will need to pay attention to it because anything that’s sitting on the market for 45 days or more will be assumed to be over-priced and buyers will simply offer less. It’s the same old balancing act that professional Realtors deal with in every changing market and it’s a big reason sellers hire you in the first place.
I hope you have fun spreading this new knowledge of the Longmont market around this upcoming year.
It’s pretty obvious from the graph in the middle of the chart that the first quarter of 2016 saw fewer closed sales than last year. The easy way to explain this is lack of inventory. How about a little perspective on that inventory before we go any further? Look at the number of active listings in 2015 vs 2016, they are exactly the same at 262. Coincidentally, 2013 and 2014 were exactly the same at 264. So, our inventory isn’t any different at this time of year than it has been for the past 4 years. Why the big difference in closed sales? I can’t go back in time to research the active listings from 2014, when there were only 200 sales at this point in the year, but I can guarantee you that today is much different than 2014.
Of the 262 active and under contract homes in Longmont right now, there are just 79 that are just in active status. Of those 79 actives, a full 40% or 32 of them are new construction and most are not available for move-in for months. That means that there are really only 47 homes for sale in town…46 if you don’t count the one that’s condemned. Inventory is definitely the answer. Good news is on the horizon. The grass is turning green and this is the beginning of the end of winter hibernation. Since April 1, there have been 30 homes put up for sale and only 8 of them are under contract already. Hopefully this trend continues.
In the Longmont attached department, take a look at the significant jump in days on market. It goes from 46 to 121 and I’m wondering why. Thankfully, that’s an easy one to explain. It really isn’t that bad. The numbers are skewed by 5 properties in Silver Meadows and Hover Place that have been listed (and under construction) for anywhere from 231 to 345 days. If you take those out the average for the rest is 26 days on market. So the resales are selling fast. The sales price of those five condos is also contributing to the average price, which comes in higher than the average price of a single family home in the Carbon Valley. Again, if you take those five out of the mix our average detached home price drops to $279k. In both of these cases the data set is so small (14) that a few can really influence the outcome.
March 2016 Longmont Area Stats
Click here for .pdf file
Some people are confusing our steep price increases with another bubble. This just isn’t the case right now. It could be in the future, but we are still a long way from that. There are an estimated 5,000 people a month moving to Colorado. Where do you think they are going to live? Lenders cannot lend like they used to with no-down, no doc, interest only and option ARM’s. Those are the unaffordable and unsustainable loans that made for a great movie called The Big Short. If you haven’t seen it, you should. The world doesn’t have that problem anymore. In a few years banks will figure out another way to screw things up, but for now there is no bubble in the works. In the meantime, believe in the demand, it’s real…that’s why builders are building. And when you are asked if all this new construction is going to hurt our prices, think of this, at what price will a builder sell his/her home? Market price and nothing less.
I hope you have fun spreading this new knowledge of the Longmont market around this upcoming year.
Allrighty folks, it’s stats time again! I have some 80’s hair bands playing on my iPod so I’m ready to rock. Hold on tight because I have some other good data at the end of this report that should interest you.
First things first. At first glance, most people might think things are not going well with single family and attached dwelling sales so far this year Longmont. Monthly solds are down again in February and Year to Date (YTD) sales are down 15.5% and 25% respectively. Those are not the typical results we’ve become accustomed to seeing over the past couple of years. But, if you look a few lines lower you will see decreased days on market and increases in both median and average sales prices.
Inventory. Yes, I know you are all tired of hearing about it, but this is where the real problem exists. Of the 225 Active and Under Contract homes listed in this report, there are only 73 that are listed as Active. Of those active, there are 33 homes that are new construction and not even built yet. This gives us exactly 40 single family homes for sale in Longmont and one of them is condemned. This extremely low inventory is what is holding us back from bigger sales totals so far this year. Thankfully, I’ve seen a number of homes get listed in the last two weeks. Those homes are just extinguishing the leftover demand from last fall and over the winter. It isn’t enough to sustain us going into the summer. One note on the recent listings…at least half of the ones I’ve seen come on the market in the past two weeks were listed by out of town brokers…. hmmm.
February 2016 Longmont Area Stats
Click here for .pdf file
I hope you like my cool new bubble graph. It’s a total pain to make, but I like the way it shows the data. Those bubbles correspond to a town and it’s average price increase (or decrease) from 2014 to 2015. Longmont had the 2nd highest average price increase for single family homes in the 12 towns listed. That’s kind of amazing. What’s even more amazing is that two towns – Dacono and Frederick – actually had negative numbers. Please, I beg of you, don’t go out and tell everyone I said the price of homes is falling in these two towns. All it takes is a high number of doublewides sold in the Glens of Dacono for record high prices (in the Glens) to bring Dacono’s average down. Those people are taking advantage of rising prices, but those prices just happen to be at the low end of the spectrum. An average points more to where the activity is in a market, NOT an overall measurement of value for an area. What you could say is that there are probably more value priced homes available in these area and you could direct your buyers there instead of the high prices in Lafayette and Louisville.
Now, since you will all ask for it… here is the data behind the cool bubble graph. These are just single family detached homes in each town.
One last interesting thing I found in my research for this project (The project is to update the Home Affordability Study I did for LAR and the City of Longmont last year.): of all 12 towns listed in this report, as of 3/3/16, there was just ONE attached unit active for under $150k. Guess were it was… Boulder. It was a permanently affordable shoebox listed at $113k. We need a construction defects ordinance in this town, and all surrounding towns, to get condo construction back on track in order to create lower priced options for these buyers that each of you have sitting on the sidelines right now.
January home sales stats are in and, as usual, they aren’t very interesting. They also aren’t very telling of the year to come. January is always one of the slowest months of the year so I dug a little deeper to come up with some other items that may be of interest. I can assure you it won’t top the awesome Super Bowl performance by the Broncos, but I’ll give it my best.
First of all, I know it’s kind of lame graph. I was hoping it would show something little more revealing over the past two years. The graph plots single family home sales versus attached home sales in Longmont against one another. The numbers behind this graph revealed something I did not know: on average, about 25% of the total sales occurring each month are attached homes. This is over the entire time of the graph. If you separate 2014 from 2015, the percentage drops only about 1% in 2015. I know, not too interesting. Take a look below the stats links for some items that I promise will raise an eyebrow.
January 2016 Longmont Area Stats
Click here for .pdf file
Here are some items I found when pulling the data for the special full year report I published last month. There is an extraordinary amount of data to sift through so here are some facts about the single family homes sold in Longmont in 2015.
- Average Finished SF w/out Basement = 1,789sf
- Average Finished SF w Basement = 2,361sf
- Average Final List Price = $325,151
- Average Sold Price = $340,215
- Average Garage Spaces = 1.95
- Average Year Built = 1981
- The biggest takeaway is that, on average, homes sold at 4.6% above their final list price.
- It seems logical that 2000 and 2001 had a lot of sales because there was a lot of new construction during that time period. I wish I could track how many times those properties had been bought and sold since they were built.
- On the other side of the new construction coin is the small number of homes sold that were built between 2008 and 2011. With the exception of the one home built in 1988, these years, by far, have the smallest number of homes sold that were built during any year going all the way back to 1944.
The one thing I never really liked about my own stats report is the lack of a global overview in each area. In a typical report, the monthly numbers are compared to that same month from the previous year. So, when you see an average sales price, it’s for that month only, and it’s compared to that month only from the year before. The whole thing lacks an answer that ubiquitous question “How’s the market”? I can never answer this question. As we have discussed several times in the past, averages don’t tell the whole story either, but it still kind of drives me crazy. A yearly comparison is what the people want, so here they are!
Of course I didn’t abandon my traditional reporting for those of you who use this information to track what is going on in the area. All I did was add an additional page that took a bit of extra work. But before we get to that I have some other explaining to do regarding the yearly totals in each area. I can honestly say they are a little low and not correct. The problem here is that I can’t prove the numbers are wrong. It all has to do with a little data sharing issue between the two dominant MLS systems in the area. After they had their little fracas earlier in the year not all data was reinstated. I record the number of sales each month and add them up from one month to the next. IRES is really good about going back to scrub the monthly sales to remove duplicates and such. Because of this, about every quarter I go back and do a re-count of the sales to make up for any errors that might not have been fixed at the time this is published. The problem is…I don’t save the underlying data. So after the mess between the MLS’s, some old data wasn’t restored because it was either too old or lost.
I have to go with what I absolutely know for sure when doing these reports. I know is that there are 1,301 SFR sales reported for Longmont. The number should be between 1,319 and 1,323. The difference is about 1.5% off in all areas. I don’t feel this is statistically significant at this point so I’m going move forward with what I can prove. The odd thing about the number 1,301 is that it’s the exact number that The Predictor calculated from back in January 2015. I didn’t publish this prediction because my model isn’t built for long term projections. But in the spirit of good fun…The (now) Awesome Predictor says there will be 79 SFR home sales in January. When that total comes in I will make a prediction for 2016, which we will publicly revisit in a year.
December 2015 Longmont Area Stats
Click here for .pdf file
Since y’all will be quoting this information to your clients for the next six months,let’s jump right into the Full Year Comparison. Every single area shows the same general trend: more sales in 2015 than in ’14; fewer days on market; higher median sales price and higher average sales price. Whoever is surprised raise your hand. There are a couple of specific items that are remarkable at this time. The first being the 11%+ median and average price gains in Longmont SFR homes. In most ways we see this as a good thing, but in the big picture it’s unhealthy to continue this for years on end. It’s too steep a curve that will price too many people out of the market. It needs something more normal like 6-8% for 2016 to let income levels to catch up. I fear it may not let up this year due to the continued lack of inventory. If interest rates rise just a bit we could see slightly lower increases, but it may come at the cost of fewer sales.
2014 vs 2015 Longmont Area Stats
Click here for .pdf file
The rising cost of single family homes is the cause of the 19.2% increase in the price of attached homes in Longmont. Condos are now sitting at $230,000 for the year and it was as recent as February 2012 when the average price of a single family HOME (not condo) in Longmont was lower than $230k. My how the world has changed in four short years.
Still, the #1 surprise of 2015 the sales total of single family homes in the Carbon Valley. A 44.1% upward change is simply unbelievable to me. I dare you to jump into IRES and take a look at the agents who are listing and selling these homes. If you are looking for homes to list and sell – head east. Their prices are keeping up with Longmont; their sales totals are growing; and there is new construction throughout the area. Many of the buyers are coming out of the metro area or heading east from the high prices prevalent in Boulder County. FYI – I took a peek and Erie is doing the same thing.
This leads me to my last point. I have talked before about migration east to take advantage of lower price points. “They” have even named this phenomenon – Drive ’till you Qualify. In my last report I said I’d have some informational slides from the BizWest Boulder Valley Real Estate Conference in December. Those never came through, but I do have one slide created by John Covert of MetroStudy that graphically shows the easterly migration of home buyers, driven by the high prices and lack of construction in BoCo, to take advantage of lower prices and more availability. I can’t repeat his whole story, but if you ever get the chance to see him you will see where the future potential is in our market. Click here to see Dave’s migration slide.
If you haven’t done your business plan for 2016 yet, answer these three questions and you will be better off than if you stop reading. What will I start doing? What will I stop doing? What will I continue doing? Answer honestly. Only you know answers and there is no test. All I know is that if you do this answer these questions, and write down your answers, you will be ahead of about 80% of your competition. That would be a nice place to be when we talk next January.
Here is to your best year yet!
I know. I’m not supposed to post important information late on a Friday because y’all are already done for the week, but I just had to get this out today, so I’m going to make it kind of quick this month.
When pulling the stats I decided to take a peek under the hood and came up with some seriously interesting items. First of all, in the 239 active listings in Longmont reported here, there are actually only 93 that are not under contract. I didn’t count them, but there are about 20-25 of those that are either just completed new construction, or they have not yet been built. Of those not under contract, the lowest priced single family home in town is: $213,200. That’s kind of been the story for this entire year, so what is so interesting about that? Well, nothing, so I kept looking. Now take a look at the attached dwellings in Longmont. 24 sold last month and 66 listings. Of the 66, only 33 are not under contract. I know… still not interesting, but let’s take a look at those 33. 27 of those are new construction. Yes, that means there are only 5, yes 5, resale attached homes available in all of Longmont. Frankly, that is amazing to me.
Another observation is from the graph. Take a look at how the sales total has increased each year for the months of August, September and October. I have mentioned several times how the demand from the summer months has not been met due to the lack of inventory and how it’s getting pushed further back into the fall. Well, here is proof. If I were to show you the historical charts going back to 2004, you would see that volume normally drops off quite a bit during these months. Only in 2008 was August the highest sales month of the year, and you know what happened just a couple of months after that…the great meltdown. Oh, I am not suggesting that we are in store for anything like a repeat of that again at all. I’m just pointing out that the strong buying season has been extended by at least three months over historical norms.
- 5 Active Resale ATD in Longmont!
- Carbon Valley Median Sales Price > Longmont
- BoCo Plains DOM 64
- Longmont SFR YTD Sold +10.3%
The Predictor says 82 sales for December and based on the orders here at Land Title, I’m sure we are going to come very close to that number. When we do, the graph for December will resemble that of August. Strange days indeed.
Last item. Take a look at the median price in Longmont ($300,000). Nice, right? Now take a look at the median price for the Carbon Valley – $329,000. I’m not sure if this has ever happened before. I could look, but it’s 3:00 on Friday and I want to get this into your hands before you go out and list a bunch of homes this weekend.
Next month, look here for a link to some very interesting slides and information I collected a couple of weeks ago at the Boulder Valley Real Estate Conference. If you haven’t ever been, it’s the best one in the area. They guy from MetroStudy had the best presentation I’ve seen on the flow of business and future opportunities in this area. My best advice to you is to start marketing east of Longmont. It’s going to explode.
And if I don’t see you beforehand, Merry Christmas. Yes, I know it’s a bit early for that, but at least I waited a week after Thanksgiving.
Oh my! Days on market (DOM) are rising. Average prices are dropping. Offers aren’t coming in by the dozens the first weekend on the market. All of this can mean only one thing: the sky is falling.
You may not believe this, but these things are normal for this time of year. You may also experience some of the following symptoms: fewer showings, seller anxiety over longer marketing times, downward price adjustments, and quite possibly, less than full price offers. It is fall, but I assure you, the sky is not falling.
It’s funny, but agents go through this fall panic every year. The leaves change and the business mix changes. This year is no exception, but for some reason it feels different, doesn’t it? I think the reason it’s because the activity in the late summer months never really slowed down. We never eased gently into fall/winter. We had 122 closings last month, which is actually very high for October. So, what you feel is the lower number of October showings and contracts, which will be reflected in November’s closings. We will have to see how this one works out because The Predictor has us down for 105 sales, which would be a record November. Who knows anymore…even the trends are trending away from trends.
Our good friend inventory, or lack thereof, will keep us warm and insulated from a cold winter. A quick check before I typed this showed the 266 Active and Under Contract in this report is only 113 Active listings. Of those 113 active listings, there are 23 under construction, leaving just 90 homes for sale in Longmont. Heck there are 83 condos for sale. Even with the talk of the Fed raising interest rates, it won’t change inventory and there will still be a shortage of homes in town. The inventory issue will not be going away soon. My best guess is there is at least another year of steady prices and tight inventory.
October 2015 Longmont Area Stats
- Boulder Avg Price in Oct: $952,916!
- Longmont Active SFR Listings: 90
- Carbon Valley Avg DOM: 50
- BoCo Plains Avg Price: +23.4%
- Longmont ATD Oct Closed: -41.9%
This month’s graph is comparing the January through October Year to Date sales totals. The line is just a 2 period standard deviation trend line that I just figured out how to add. I think we have a decent shot at breaking the 2004 all-time high sales total. We are 11% ahead of last years’ sales total on single family resales and that is the lowest increase in this report. Boulder Count Plains is up a healthy 13.5% and both Longmont Attached and the Carbon Valley are both up nearly 40% in sales volume alone. Those are flat-out crazy numbers.
Forrest Gump said, “Crazy is as crazy does”. The average prices around here have been described by some Realtors as insane. Count your blessings and realize there is no insanity here in Longmont. It’s located about 10 miles south by southwest of here (Boulder for those of you who are directionally challenged). That’s where the Average Price of a home in October of 2015 is: $952,916! And here is the really funny part… their days on market = 66. The average price in Boulder is almost 3 times higher than ours (2.86 times to be exact). Prices are lower in Longmont than in any of the following nearby towns of: Berthoud, Mead, Lafayette, Louisville, Superior and Erie. So, since we are surrounded by crazy high prices and low inventory, our insulation grows thicker. I am now extending my prediction of a healthy, steadily rising, tight inventory, low DOM, and strong sales volume market to two years.
Would somebody please mark down these predictions? I need to know if I’m anywhere close on this stuff. I try to track them, but this is a pretty easy target. November of 2017 things will start to cool off, both literally and figuratively. Thanks for reading. I hope y’all have a great Turkey Day.
Happy Fall y’all! Sorry, I just love saying that and I can’t resist with the absolutely perfect Colorado Fall days we’re having. And the sunsets…to die for. I hope y’all have had a busy and productive year. We are now three quarters through it and, as you can see from the repeatable pattern of the blue line in the graph, it’s that time again… the time when sales start to slow into the winter months. Maybe we can all get a break from the crazy workload so many Realtors have spoken about.
Speaking of a crazy workload. I’ve heard from a lot of you that a higher percentage of contracts are canceling these days. They eventually go back under contract with another buyer soon thereafter, but overall it’s taking two or three contracts to get a home sold. Not all of them fall under this scenario, but more so than during the summer. I’m guessing that with higher prices come increased expectations from buyers. This makes sense. If they are going to pay higher prices to buy a home and they’ve been waiting a while to find one, they’re going to make sure it’s the right one. If this is happening to you in your business, just know it’s happening to a lot of others as well.
Are you tired of hearing about TRID yet? Me too. The good news is that it’s arrival didn’t resemble the Zombie Apocalypse as some had predicted. It looked a little more like Y2K (remember that non-event). Nonetheless it’s here and we are already seeing a bit of confusion on a number of items. Just know that our rate calculator is updated to reflect the changes in disclosing fees and our closers are trained and ready. My advice is to slow down, take a breath and don’t rush things. The timing of closing is all lender dependent. Your closing has to do with their new disclosure and underwriting deadlines, som communicate, communicate, communicate and never, never, never again, write a contract without a fully qualified buyer.
I hope you like this month’s graph. It’s updated from when first published in May of 2014. I really like how it shows the relationship among inventory, sales volume and average price. As mentioned above, the blue line very clearly shows sales volume peaking around July each year. Each peak is then followed by a drop of 50% or more in December/January. Despite the strength of this years’ market, don’t hold your breath for anything different this winter. This is eight years of data that’s as predictable as an atomic clock.
September 2015 Longmont Area Stats
- Longmont September Sold +32.6%
- Carbon Valley YTD Closed +41.08%
- BoCo Plains YTD Closed +12.9%
- Longmont Attached YTD Closed +31.5%
If you thought we had an inventory crunch before, we still do. We have 35% the number of listings as back in 2007. Everyone has come to understand this problem, but when you plot this against the sales volume, it’s simply shocking that this lower inventory can produce 25% more sales. Even if a home is listed and goes under contract immediately, it’s still counted here since the inventory number includes everything active and under contract. I’ve actually heard panic from a couple of Realtors who had a home NOT go under contract its first week on the market. Just remember to breathe and lower your seller’s expectations because we are not in a multiple offer, first day on the market situation anymore… thank goodness. Days on Market is 55 days right now and that is still way shorter than historical norms.
Last item. I know there is no such thing as extra time. It’s kind of like extra money – doesn’t exist. But, if there are going to be about half the sales over the winter months, you could generally expect to have half the (real estate) work to do. Use this time to review this year and plan for next. Something easy to do is to think back to what made you successful when you first got into the business…it was something like door knocking or phone calls or coffee with clients. Consider making this a part of your plan for 2016 now. It’s an activity you’ve done before so it’s comfortable. Go do it and you will be surprised how it can jump start (or resuscitate) your business.