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.