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
Click here for .pdf file
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 email@example.com.
January 2017 Longmont Area Stats
Click here for .pdf file
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
Click here for .pdf file
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
Click here for .pdf file
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
Click here for .pdf file
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
Click here for .pdf file
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
Click here for .pdf file
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 firstname.lastname@example.org.
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.
Happy September y’all. It’s obvious many of you have been hard at work these past few months. Congratulations if you found time to take a vacation. Congrats also if you just sent some kids back to school. I enjoy this time of year for two simple reasons: golf and football. It’s just a little cooler and I simply love watching the Broncos. I also love writing this stats report.
The boring stuff is the numbers, but what they have to say can be interesting. If you haven’t been in the business for 11 or more years, you have never seen a report with a number of closed single family homes as high as it was this month. Back in July of 2004 we had 154 closings and not once since have we broken 150 in any month. Pretty impressive. We’ve also never had an average price this high. August is typically the first of the months that begins our annual volume slide into the slower winter months. As I predicted…not this August. September will finally reveal a bit of seasonal softening, but that’s to be expected and that summer demand is going to cool off like the weather.
A hot topic around town and even across the metro area is affordable housing. It’s interesting, there are really three parts to this discussion that all get lumped into a single title. Affordable housing means different things to different people who expect something different depending on their situation. The three main areas are: affordable houses to buy, affordable places to rent, and subsidized housing to take care of those who need help. When I talk of housing affordability I stick to what I know and that’s the Longmont real estate market. It’s my contention that housing affordability isn’t just a function of the average home sale price. This metric is generally used to compare different areas because it’s handy, convenient and accessible information. This discussion should include the number of homes available in each area, within an affordable range. Take the Carbon Valley for instance, The average home price in Firestone, Frederick and Dacono was about $23k less than Longmont. This typically means this area is more affordable. If you separate those towns and calculate the averages individually, Dacono (Avg Price-$225,034, 8 total sales, 4 under $250k, 2 modular, 1 manufactured) seems waaaay more affordable than Longmont. Now think of this. Last month there were 31 out of 153 (or 20.3%) homes that sold in Longmont for under $250k. In the whole Carbon Valley there were 12 of 87 (or 13.8%) sold for under $250k. These numbers are typical of almost any month. Using this information, does it seem like Longmont lacks affordable housing to purchase when 20% of the sold last month were under $250k? See the report for yourself. Click here to see the full, updated Housing Affordability Report.
August 2015 Longmont Area Stats
- Longmont Sold Volume +10.6% YTD
- Carbon Valley +42.8% YTD Solds
- BoCo Plains 59 DOM
- Attached Dwelling in Longmont Avg $245,194
Now the graph. I resurrected and updated this chart from a year ago. Back then the lines unemployment and average price lines were intersecting. A year later there is separation. Again, I don’t have the capacity to go into cause and effect on this issue even though there surely is some. But it is interesting to me that as housing prices have risen, unemployment has continued to drop or vice-versa. You can check out the unemployment data yourself at http://1.usa.gov/1UzXak0. The graph shows January 2007 as the baseline. Since then unemployment is 55% lower (currently 3.3%) than it’s high water mark of 7.4% in June of 2010. Housing, on the other hand is 28.3% higher on average. I think these two numbers are going in the right direction. How far can each line go? We will take another look at this time next year.
By this time next month we will all be in the grips of the new TRID, CFPB, TILA/RESPA, Regulation X, Regulation Z guidelines , laws, disclosures and more regulations. Many lenders I’ve spoken to are prepared. Realtors have all taken a class or two on the topic. All I can say is good luck, be patient and learn everything you can from the people around you. It is going to be interesting.
Since I have been publishing these statistics for nearly eight years now, I’m frequently asked questions about the real estate market. Although I pay attention to national and regional trends and news, I only research the local areas in this report. And, because I live and work in Longmont I tend to focus on the leading indicator of our local market…single family home sales. As this market goes, so does the local population of Realtors, home buyers and home sellers.
One of the items we haven’t visited in a while is “How are we doing”? To me, this question presupposes the questioner is talking about Longmont single family home sales. And the answer is simple. Great! Despite the overall lack of inventory, which has been going on for years now, at the end of July 2015 we have the highest year-to-date sales total in since I’ve been publishing this report starting in 2008. I’d have to dig up some other info to go back further, but I think we can all agree that this market is very good. Not only is the sales volume up, prices are at their highest ever…on average.
July 2015 Longmont Area Stats
- Longmont Median Price +23.8% YoY
- Carbon Valley +43.9% YTD Solds
- BoCo Plains $708,052 Avg Sales Price
- DOM in Longmont 43 SFR & 32 ATD
It pains me to see recent news reports of slowing markets and slowing home sales. Slowing? Compared to what? Last month? Look at the graph. A couple fewer sales maybe, but fewer days on market, fewer listings, and higher prices in EVERY area do not indicate slower anything. The seasonal nature of real estate in Colorado says slower is coming, but that is yet to play out. Kids go back to school; nobody wants to move in the winter; and the market softens just a bit come August and September, but that is natural. And if the order volume Land Title experienced in July (for August closing) the seasonal drop off will definitely not come until September… or after
Welcome to July everyone. My how time flies. And, Oh my, how real estate is flying as well. There are plenty of story lines this month, so hang tight and see if there is anything in here you can use in your business.
When you were a kid, do you remember that time when you really felt like you might actually be growing up? My moment was when I accidentally took out my dad when we were playing hoops in the driveway. I was 15 and I crushed him into the wall when he tried to drive the lane on me. More recently, my 15 year old son Pete out drove me on the golf course – by 45 yards! Well, I think the Carbon Valley (Firestone, Frederick and Dacono) just hip checked their big brother (Longmont) in the boards. Take a look at the Median Sales Price in Longmont vs the Carbon Valley and you will see what I mean. In honor of this big moment, I created a chart from the past 3½ years to show the Average Price trends of Longmont and the Carbon Valley. That “East of the highway” area isn’t just the kid brother that can be dismissed, or where someone defaults to when they think they can’t afford Boulder County. They’re now a solid competitive player player in this market.
The housing stock is increasing with new projects in Longmont and in SW Weld County. Next to come is commercial and retail construction to support the families that move in. These additional services will attract even more buyers to the area. The end result is a longer rally in our market than many had initially anticipated. Even with a bump in interest rates starting to kick in, there is obviously no immediate slowdown. Nearer the end of the year, I predict slower price appreciation, which would be a good thing, but transactions will continue at a good pace with slightly longer days on market.
Back to the graph for a moment. I find it interesting, that each spike in Carbon Valley average sales price corresponds with a dip in the average price in Longmont. I’m guessing here, only because it would be hard to prove, but this looks like a good example of what I have talked about in the past… When prices go up in one area, buyers gravitate toward lower prices in another. Sure, inventory plays a role in this too, but the direct correlation in amazing to me. The number of sales in the Carbon Valley this past month is particularly astounding since it’s double their normal monthly total…and darn near equal to that of Longmont.
- Longmont = Carbon Valley in Median Price
- BoCo Plains Median & Avg Price UP $75,000
- Longmont ATD UP 36.5% YTD
- Carbon Valley Closings UP 87.5% vs 2014!
The Boulder County Plains and Longmont Attached units are no slouches in this market as well. The Average Price of a condo in Longmont has climbed to where a single family home in the Carbon Valley was just 18 months ago. The Plains area is showing about a $75,000 gain in both Median and Average Sales Price since this time last year. The question I am beginning to hear is: “How high can these prices go”? A bad answer is: “Look at Boulder”. We are a looooong way from that due to a number of reasons. That’s good, but what about the downside? The lending changes that went into effect over the past 8 years have somewhat protected us from a significant down turn. These prices are here to stay because we have more foundational stability that didn’t exist back then, preventing the pervasive foreclosures and significant price drops in the future. Jobs, interest rates, the economy, over construction, government policy and lending practices will all have a hand in deciding our future.
As for the nice rise in inventory you see in the charts, there is a bit of a fudge factor built-in, making them look a bit too rosy. Forty four Active Listings in Longmont are new construction or haven’t even been built. If you take out all the Pending, Under Contract, Under Construction and to be built listings there are only 85 Active SFR Listings in Longmont. For the time being, we are in the same place we’ve been for the past year and a half. So, start your second half of the year off on the right foot and spend some time with the people in your database. That’s where the money is. It’s always been that way and it always will. There is no magic pill out there for success. This is a relationship business, so go solidify those you have, make some new ones and go get your piece of the pie.
I will end with a couple of numbers you’ve never seen. I recently did research for LAR and a company providing the City of Longmont with data to help in their decision making. I won’t drop all that info on you, but here are a couple things for you to think on. Since January 1, 2000 until December 31, 2014 the total sales volume of sold homes, condos, and other attached units in Longmont is: $5,629,669,030. That’s 5.6 BILLION dollars worth of real estate that changed hands in this town in the past 15 years. Amazing, isn’t it? And since you were going to ask anyway, that was in 22,957 transactions.
I hope y’all had a Happy 4th!
Surprise! I have a brand new chart this month! I also have two additional charts (see the bottom of this post) you may be able to use that goes along with it, but we will get to that later. First, there is a lot going on here and I want to get right into it.
This is the strongest first 1/3 of the year we have had since I started doing these reports in 2008. Year-to-date closings are 10.5% (or 46 closings) ahead of last year, 2 (closings) ahead of 2013 and a whopping 19 closings ahead of 2007. Back in January, I predicted we wouldn’t see big numbers for closings this year due to the low inventory. I don’t know about you, but the highest 1/3rd of the year in 8 years is the same as a big number. I guess I was a bit off. (Y’all need to call me out when I’m off like that.)
Longmont single family sales are almost always the focus of this report due to their significance to a majority of you loyal readers, but my focus is a bit elsewhere this month. Look at the 34.3% year-over-year change in Longmont condo sales. We briefly spoke of this in the past. Industry experts hypothesize this is due to the increase in price of single family homes. As the price of single family homes goes up and become less affordable, buyers tend to migrate their buying activity away from the more expensive single family product and into condos. Seems quite reasonable.
The Boulder Plains market is even hotter. Not only are their monthly and year-to-date closings way up over last year, their average and median prices are up significantly. What I’m asking myself right now is, “How can an area with a $650k+ average sales price have an average days on market as low as 48”? My gut is telling me it’s a migration from the high price of single family homes in Boulder (which averaged about $924k in the 1st quarter of 2015. It’s similar to the migration in Longmont from single family to condos.
May 2015 Longmont Area Stats
- Longmont SFR Closings UP 10.5% vs 2014
- Longmont Condo Closings UP 34.3% vs 2014!
- BoCo Plains Avg Sales Price = $656,257!
- Carbon Valley Closings UP 40.3% vs 2014!
The real rock star in this report is the Carbon Valley. They really have 40.3% more homes sold out there this year than last. Their 355 total through May is twice, yes you read that right, more than double the number they had for the same period in 2008 (175). That is astronomically high. Their sales benefit from a double whammy of price appreciation. They get overflow from buyers who are priced out of both the Longmont AND the Denver Metro market. Yes, remember that prices are spiking down there and inventory is even lower as a percentage of historical norms. Our relative inventory is at about 30% normal levels. In Metro, it’s about 10% of historical averages.
The good news out in the Carbon Valley is the recent approval of an ODP for a new development of about 3,500 new homesto be built northeast of Hwy 119 and I-25 called Barefoot Lakes. The developer (Brookfield) is very good at what they do (they built Sol Terra, Talyn’s Reach and Brighton Crossing) and the Town of Firestone is very receptive to doing business with companies who do more than asked when going through the development process. So, if everything goes as planned, they should start construction of about 300 homes late this year. More homes built should create capacity in the system for sellers to possibly move up and give them the ability to sell a moderately priced home in the area.
Now for the chart. You forgot about it didn’t you? I was graciously given this template by, Megan Aller. She isn’t just a stats geek, she’s an actual math major who dreams in numbers. This chart tells us the odds of selling a home, in a given price range, last month. I had to extend the chart for our $200-299(,999) bar graph because nothing has ever been that high. The odds are based on the inventory, under contracts and closings for last month. You can generally apply the percentages going forward when taking a listing, but this also assumes a house is priced right because it sold. You’d hate to be one of the 9.7% in to $200’s that didn’t sell because it’s way over-priced. There were two two additional graphs that Megan’s template spits out: Average Days on Market and Supply in Months, both broken down into price bands. Please see them below.
This chart shows that any house priced between $200,000 and $299,000 had an Average Days on market of 28 days.
Thanks for reading. I hope you all have a great month. Please feel free to contact me with any questions.
Yes, I know. It’s a pretty simple graph this month, but it does finally show a decent increase in seasonal inventory. Hopefully this will provide some much needed relief to our longstanding shortage. It’s just in time to feed the summer rush of home buyers. Did you notice that this “summer rush” started a bit early this year? The high sales volumes we experienced were also present in the Metro area with higher than normal closing starting back in March. Normally, the summer rush begins in earnest in June.
Some research I was doing for a different project showed that Longmont saw 219 new listing in April. That 219 total included both single family and attached homes. And, 219 sounds like a pretty good number…until you hear 154 of them are under contract, 10 are closed, and 7 withdrawn…leaving just 48 new listings from last month still active (as of noon on May 5th).
Speaking of lack of inventory. If you look at the inventory graph you will see that we have about 1/3rd of the number of listings we had in 2007. We pretty much know this is the cause of our inventory crunch and price increases. I was at a real estate conference in Denver last week and saw a chart of their inventory. The 7 county Metro area currently has about 1/10th of their normal inventory levels. I guess we are lucky.
- YTD Closings ahead of both ’13 & ’14
- 219 New Listing in Longmont in April
- Area 5 Median and Average Price gains huge!
- Carbon Valley Average Sold Price $314,509!
The year-to-date (YTD) closing totals in all areas are UP over last year. We haven’t seen that in a while and is a bit of a surprise given the lack of inventory. Even better news on this front is that we are up in all areas over 2013 as well. If you remember 2013 was a higher sales volume year than 2014. If this trend continues, we could see some record numbers this year. We have a long way to go so don’t bank on that one yet.
Holy smokes! Take a look at the median and average price gains in the charts. The median price in Area 5 jumped $70k and the average jumped $50k. The numbers that come from that area can produce quite a big swing on a monthly basis due to the multimillion dollar home sales that can occur (or not occur), but it doesn’t usually jump that much. The Carbon Valley has an AVERAGE at $314k? Wow! The lowest median or average price increase in this report is +9.7% and the highest is 19.0% for the median increase in Longmont attached properties. Last month the median and average in Longmont attached homes both jumped over 30%. Those are big numbers, but they are being fueled by the townhomes on Venice finally going through resale and a number of high end condos in Prospect selling for the first time in a long time.
Considering all that you see in this report and what I’ve written about, I’m going to make a small prediction that’s fueled by nothing more than a gut feeling. There is nothing in these statistics or current trends that can lead someone to come to this conclusion. It’s just the way I’m reading the tea leaves. I predict that we will start to see our percentage price gains level off over the next few months. It might be a healthy thing if they do. I don’t think it will do any harm either. Let’s wait and see. Until then, good luck and remember that there is no magic pill to great success, only hard work.
Just when you thought I’d stop writing and talking about the low inventory issue I have found more to write and talk about for your statistical enjoyment. There are a few other things to spice things up so don’t give up reading just yet. There are a handful of interesting items to take to the streets this month. And, as a reminder, I do all this research, put these charts together, write this summary and sent it to you in several different formats for one purpose only…to help you with your business. You are welcome to republish, plagiarize and otherwise re-post, reprint and redistribute this information. There are no actual copyright police waiting to bust you if you don’t cite your source of this information, but I’d suggest adding a notation somewhere just to stay on the safe side.
The two most noticeable items in March are the huge jump in monthly closing and the Year to Date (YTD) closings this year vs 2014. All areas are much higher over last year. Take a peek at the extraordinarily high Carbon Valley numbers. Included in that total for the month are about 25 new construction closings from Journey and St Aubyn. Even if those new construction sales weren’t included, that monthly total would still be 75% higher than last year.
I am still hearing the pleas for more inventory. The good news is there is good news on that front. First, we are no worse off than last year at this time – no better either, except out in Carbon Valley where their level has jumped a bunch. Also, Jamie Plaster at ERA Tradewind keeps me updated on Active only listings, they have been hovering at 75 or below for over a month now. That number has jumped to 90 in just the past few days. In fact, there were 33% more homes listed in Longmont in the first week of April than there were in the first week of March…and April had an Easter weekend to deal with. Of the 34 listings taken in the first week of March only 2 are still available. But of the 44 listings taken in April, 28 are still available.
March 2015 Longmont Area Stats
- YTD Solds UP in ALL areas!
- Longmont SFR Solds UP 34.2% vs 2014
- Carbon Valley SFR Solds UP 159.4% vs 2014!
- Active Listings still in demand
A couple other random items uncovered in my monthly trek through the numbers in my own little geekdom:
- 20 of 83 (24% market share) solds last month in the Carbon Valley were in Mountain Shadows. Granted most all were new construction, but I haven’t seen such a high percentage from one subdivision like that in a long time.
- In Longmont, the highest sales in any single subdivision was 13 (in Renaissance) for a 12% market share.
- Of the 106 sales in Longmont, 8 were over $1 million. The highest was $1.859M!
- By now I should learn to trust The Predictor. Last month I said it was a bit too high when it spit out a prediction of 110 solds in March. Well, at 106 I think it performed admirably. It says 120 for April, but those big numbers may soon be slightly restricted by both price increases and inventory decreases due to the renewed seasonal demand.
And now a treat for those of you who read all the way to the end…the line that connects the bars in this months chart is a two-period simple moving average. It basically tell us that our 1st quarter sales volume is well above where the “trend” says it should be based on previous years results. I thought it was a nice addition to the standard bars. Now go tell your friends and all the others who are still scratching their head and wondering what that line is. And if you feel that this stats report is valuable to you and your business, I’d love to hear from you.
As far as Februarys go, they are usually unremarkable months, unless it’s your birthday or you still buy Valentine’s Day cards. There just isn’t much to celebrate. February 2015 was a bit different; where records were broken…along with my son’s collarbone, but that’s hockey and different subject altogether. Let’s start with the record and then break down the month in stats.
The record we set is the average sales price in a month. At $338,727, it’s the highest monthly sales price ever recorded in Longmont. EVER…in ANY month. We’ve spoken before about the limiting factors of relying on averages…mainly that they can be influenced by outliers and non-representative. This is not the case in February. The outliers to the high side showed there were 3 sales in the $500k’s, 3 in the $600ks’s and 2 in the $700k’s, with the highest $756k.
Looking at a high average sales price without a bunch of super high priced sales, I would naturally guess there were only a few lower priced homes sold. I’d be wrong. There were 21 homes closed last month below $250k. That’s 27% of the market, showing this was a fairly even distribution of price points and that yes, values are trending upward.
February 2015 Longmont Area Stats
- Highest Avg Sales Price EVER in Longmont!
- Longmont SFR Solds UP 25.7% YTD
- BoCo Plains Median Sales price UP 34.7%
- Carbon Valley Avg Sold Price UP 11.9%
February 2015 also had the highest number of sold properties in February since 2006 when we sold 80. This sales total combines with our higher than normal January and bodes well for the remainder of the year. We see an increase in the number of active listings in every area of this report. As far as Longmont goes, it is misleading. It’s actually showing an increasing total of unclosed (is that a word?) homes – or ones currently under contract. The number of active and not under contract homes has actually dropped from 85 to 75. That fact alone leads me to believe that we will have another big month in March and we’ll exceed The Predictor’s estimate of 110 solds. If this happens, in March we will exceed the sales total of ANY month during the entire year of 2009…my we’ve come a long way.
I like the way all areas are trending in the right direction to start the year. The trend should remain strong due to continued low interest rates. Overall, we can expect another strong year and for all you Realtors out there, make sure you take a class to get some knowledge of the impending CFPB changes.
Any discussion of today’s real estate market should begin and end with inventory. Inventory is driving everything we are experiencing today. It is also the leading indicator of what will happen throughout 2015. Every day Realtors are experiencing the effect low inventory is having on both buyers and sellers.
Forget about price, appraisal issues, and the “wringer” that lenders put you through these days. Qualified and willing buyers simply can’t find a house to buy. They don’t get the choice of this one with a 3-car or that one with a lower price. They are making decisions based solely on availability. Sellers are having a rough go of it as well. Many would-be sellers are opting not to list their home because there is nothing to buy. Even with the prospect of being able to sell their home quickly and at a premium price they are reluctant to join the buyers group as described above who have to settle for something less than desired. Why move if you have to settle? If they sell and choose not to settle, they will get thrown into another unattractive situation…finding a short-term rental in an extraordinarily tight rental market. Things should start heading in the other direction soon. In the meantime, here’s a quick look inside the numbers.
This month’s graph is updated since the first time I printed it a year ago. It has one little hump on the far right end that represents our inventory levels for last year. The spot on the very far right end is almost exactly the same as it was last year at this time. Overall, last year was decent with sold volume down only 3.5% and prices up to record levels. So why all the fuss over inventory if things are turning out so well?
January 2015 Longmont Area Stats
- Longmont SFR Solds UP 18.5%
- Longmont ATD Solds UP 23.1%
- BoCo Pains Avg Sold Price UP 20.2%
- Carbon Valley Avg Sold Price UP 30.9%
The inventory I report here includes ALL of the following status levels: Active, Active/Backup, Pending, and Under Contract. I include all because the only other options are Sold and Withdrawn. When it closes, it goes in the sold column. If it doesn’t, it sits out there in limbo world and could possibly end up being withdrawn. The Pending, Active/Backup and Under Contract status’s represent a majority of the following months (February) Sold total. This number runs between 50-65% each month. Using this math, we should have about 79 solds in February. The Predictor says 73…let’s see which is correct. Just using the status of Active, it represents all those not under contract and fully available on the market.
Of the 207 Active reported here, only 84 are not under contract. Of those 84, 16 are under construction and not even built yet. So effectively, we have only 68 homes that can close in the next 30-45 days. If we are expecting 73-79 solds to occur, we are seriously short of inventory. Several homes will have to come on the market and go under contract within hours to fill that void. When the supply of available homes starts to rise in about a month, so will demand. This can go on and on, but can’t get better until significantly more homes are listed.
My prediction is that this will occur when more construction starts happening. Or, more precisely, when new construction is completed. My guess is that it will happen this year. There is a significant labor shortage preventing us from building any more homes any faster. This shortage is exasperated by many skilled workers going off to make big bucks in the oil fields over the past few years. Those jobs may be going away soon and those workers will be returning to their trades and filling the labor shortage gap, therefore increasing production. Prices won’t drop, but more homes may become available. With this availability, it will give us more resale listings…in the range of a couple of hundred over the next year. My take is that something is more than nothing and 200 is 16% increase.
In the meantime, I had a good discussion with Adam Ingersoll over at 1stBank. He said they’ve seen a very large increase in bridge financing over this past year. Nearly all of it was solving the problem of avoiding the circus in the market, not the traditional new house financing. So if you have people who want to sell, but not put their family in a very awkward position, take another look at bridge financing.
We wrapped up 2014 about a week ago, so let’s settle back and reflect on those numbers, our accomplishments, our shortfalls and try to predict and project what will happen in the upcoming year. I will try to give you some insight and not just a review. I suppose we could just say it was a relief that it was such a good year and call it good, but I think we’d be missing a couple of things that can help us moving forward.
I like the graph for this month. It is a vivid portrayal of how far we have come since the scary mortgage meltdown days at the end of 2008. It also shows us how we compare to the go-go years in the early 2000’s. “They”, whomever “They” are, said we would see a 5% decline in total sales in 2014 vs 2013. For the most part they were right (I give everyone a couple percent leeway). The Denver Metro area is down a little over 6% and Boulder is off by about 12%. Longmont was one of the best performing markets in that it is only down by 3.5%. Because I get a lot of questions on this subject, please don’t go around telling people our market is down by 3.5%. It’s NOT. It has 3.5% fewer sales compared to 2013. Price-wise, we are up.
I know you all have suffered through my publication of the monthly numbers from The Predictor. December was the first month all year where the predicted number was exactly right. Some months it was off by a little and some months by a lot (by 25 in Nov… ouch!), but for the year it was right on the money – off only by 3. The four year net total, it is only off by 5. I’d say that is a fairly accurate tool for anyone willing to pay attention.
December 2014 Longmont Area Stats
- Longmont SFR Solds down 3.5%
- Longmont ATD Solds down 0.7%
- BoCo Pains Solds down 0.8%%
- Carbon Valley Solds UP 17.7%
The monthly total or yearly accuracy isn’t the story. The story is that when I first developed The Predictor four years ago, I learned it wasn’t something that could predict a yearly total ahead of time. My first attempt was off my a couple of hundred. This year, the full-year prediction, done in January of 2014, was off by only 5! With this increase in accuracy I had to ask myself why all of the sudden it worked for a long term forecast. I hadn’t changed the formula. After pondering, updating the dates for the new year, archiving the old data and pondering some more I figured it out. It’s because this was an average year. The Predictor is built on averages and moves up and down based on average increases and decreases over time. The only way to get the result I did was to have an average year. Averages aren’t the best way to measure things, but in this case I went back to the data, averaged it in another format and it’s true, this year and last were totally average. Monthly swings higher and lower happened, but in the end we now know what average looks like.
Now, for next year. Inventory? Still holding us back from bigger numbers, but maybe average isn’t in the cards. Take a look here at this interesting segment from 9News that I have been saying for months and just happen to agree with:http://on9news.tv/1s2MHQs
I hope you all have your best year yet!