Inventory of Single Family homes listed for sale in the Longmont area have declined for the fourth straight month, again raising the question of a real estate bubble bursting. Experts also note the steady decline of the average sale price of homes in the same area, now down 7.6% over the same period. This decrease in value has nearly wiped out all gains since the beginning of the year. All of this information is clearly depicted in the chart on the left.
In reality, the chart on the left is only showing the last four months of the chart on the right. Same data in both charts. Inventory is actually higher than it was at this time last year. It also happens to be almost exactly where it was two years ago and three years ago at this time of the year. Average prices are up 4.6% over this month last year. Sales are up an enormous 32.3% over this month last year. The monthly sales total is being driven by unmet demand from the summer months where we experienced lower than normal inventory levels. There is still a backlog of qualified buyers for well-priced properties as evidenced by the still extremely low 61 days on market.
It’s amazing to me that some joker who writes articles a national news source or an online real estate portal (web site names withheld for fear of retribution against this author) can actually look at the numbers depicted in the graph on the left and come up with the same sensational headline as I have. He could also write the completely misleading first paragraph I’ve written above. The worst part is there are people out there who believe this stuff. Their market reality is shaped by a person whose only directive in life is to drive traffic. Higher traffic leads to higher ad revenue.
October 2014 Longmont Area Stats
- UP, UP, UP,UP!
- October SFR Sold Volume UP 32.3%!
- October ATD Sold Volume UP 40.9%!
- BoCo Plains Oct Sold Volume UP 7.1%!
- Carbon Valley Oct Sold Volume UP 58.5%!
I have names for people who manipulate data like this and many of them are not printable here. Nonetheless, this practice persists. I read it every day and, knowing better, I wonder who actually believes it. In reality, people who don’t keep themselves continually informed are susceptible to believe whatever is printed on the day they happen to read the news. I talk to buyers and sellers all the time and it is amazing what a wide variety of strong opinions and data they recite as the absolute truth. I can understand the variety of opinions, but many people speak with an authority that isn’t based on anything more than an article they read in the paper or online. As a market leader and influencer in the community, part of your job is to usurp or seize this authority by educating and gaining their trust and an expert.If I would have seen a headline like the one above, it would catch my attention, I’d read it and then I’d try to figure out who this person is and why is he trying to impose his brand of crazy on my town. The answer is: he’s trying to get site traffic, and generally engage you in the conversation. To what end? With sensationalism like this it’s to create site traffic, to show the traffic reports to advertisers in order to get them to buy more ads. It worked; it’s too late. I went to his site, I wrote a scathing comment and his job is done…traffic and engagement accomplished. He is now on to the next sensational headline, backed by skewed data to create more traffic, to sell more ads.
Sorry. I kind of went off on a tangent, but that was generally the point of how data can be skewed for a purpose that is so completely different than revealing the truth. In this case, things are generally very good in the local real estate market and will probably continue until interest rates rise significantly. The Predictor has no ability in the interest rate arena, but it does show 108 sales for November. Local knowledge says that could be a little high. I’d think 85 is a more reasonable number.