Ladies and gentlemen, welcome to 2019. A review of the December 2019 local sales and the eagerly awaited full-year over full-year statistical review are both a focus of this months’ report. I know you are as excited as I am, and I hope you appreciate the Bronco Orange in the graph this month. Rumor has it the orange will bring us a great new coach and a return to our winning ways. Fingers crossed.
Before you get too excited about the numbers in the graph you need to understand exactly what they are, then you can spread the good word of how great it is to live in Longmont. The percent increases within the large arrows represent the total growth of average prices over five years. It isn’t a yearly growth. Here are some actual numbers to help you fully understand. Below, the far-right column shows the price change from 2014 to 2018. The bars in this month’s graph show the steady, yearly climb in average price over the past 5 years.
|Longmont Single Family||$ 306,144||$ 461,976||50.9%|
|Longmont Attached||$ 213,577||$ 353,942||65.7%|
|BoCo Plains||$ 618,848||$ 838,333||35.5%|
|Carbon Valley||$ 283,327||$ 398,469||40.6%|
The Longmont market is starting to see a steady change it the year over year (YOY) activity. Since we are such a seasonal market, we generally like to see similar activity or volume each year. The flaw in this rationale is that, due to new construction, there are an ever-increasing number of homes each year. Because of that we should see sales volume totals increase each year. Well, the market and the houses don’t talk. The market whispers to homeowners and right now it’s beginning to whisper a Shift. Locally, our YOY monthly and yearly sales are down, Days on Market (DOM) are up, inventory is up, and prices are still climbing.
The higher prices you see are a byproduct of the past few months of the summer demand, but I think the sales totals, DOM increases, and increased inventory are signaling that the Shift is real. These are trend lines starting to move in a different direction. When I say different direction, I am not indicating violent turn of events like the mortgage meltdown. The picture I’d like to paint is that of an airplane flight path, but instead of flying from L.A. to N.Y., it’s flying from L.A. to Shallotte, N.C. where my home builder buddy Doug Keech lives. Get the map out, it’s a much flatter line, but still slowly rising and this will be indicative of what you should see through out 2019.
Now for the fun stuff. It’s time to look at the 2017 vs 2018 Extra, Year-over-Year, Statistical extravaganza that I have been asked no fewer than 25 time for in the past week. You people love this stuff and I’m happy to prepare, produce, present and, once again predict.
A year ago, I was patting myself on the back for being the only optimistic person to say we’d be above an 8% average price increase. I was also telling you it couldn’t happen again and that this year we’d finally take a break from sharply rising prices…well I was wrong! The average price of a home in Longmont increased by 9.5% in 2018. Sure, it’s below double digits, but it rounds up to 10. And for goodness sake, the average price of an attached home was up 11.8%! If you remove the 10 half-duplexes that sold in Prospect last year for over $600k the average price still goes up by 8.1% on attached homes.
For the first time I wish Longmont had the price increases that the Carbon Valley has. Their price increases were reasonable. I’d have been quite satisfied with those results. When we started seeing double digit gains about five years ago it was very exciting because we were still thinking about how bad prices were between 2008 and 2010. The good news…we still aren’t Boulder. Even though they have the world’s greatest excessive regulation, building codes, linkage fees, affordable housing programs, and Googlers galore, they are still one of the most expensive places to live with an average price of a single-family resale home in 2018 of $1,215,731. This is up from a mere $1,094,000 in 2017 for a solid 11.1% increase.
What’s going to happen in 2019? Please refer to the flight path to Shallott, N.C in paragraph 4. I’ve said it before, but this time it’s really going to happen. 8% price increase in 2019. Promise. But if I’m wrong this time it’ll be more like 5% instead of 10%. Promise. This prediction has a caveat or two. If a recession hits, it will be lower, but I don’t think that’ll happen yet. If Longmont can’t figure out how to get homes built with their new inclusionary zoning initiative, then we will settle in at about 12%…again.
I hope you all had a happy, safe and restful holiday season. Now it’s back to work. In yearly sales, you may have had a pretty good 2018, but you have a doughnut hanging next to your name for 2019. I’m a small business consultant, let me know how I can help you grow your business this year. My contact information is below. I’d love to hear from you.