Sales Volume Dips 21.3% Year-over-Year

Finally. That’s the word I’m focused on. It’s finally happening. It’s a double-edged sword, but in the long-run, we’ll be better off not living in a savagely unhealthy market. What it’ll look like in the future is still up in the air, but my favorite real estate analyst who coined the term “savagely unhealthy” to describe this market, agrees… finally. A handful of loyal readers of this newsletter have recently told me that my favorite analyst is their favorite analyst. Logan Mohtashimi is the lead data analyst at housingwire.com and if you don’t have a favorite analyst, listen to his pod and read his stuff. I think he is right on. Wait to you hear what he has to say about the Fed.

What can I say that y’all don’t know about what’s happening in the market? It’s slower. At this point we have 21.3% fewer sales this year than last. Now that the 3^rd quarter has ended, we can lock that number in for our targeted year-end result. It surely won’t get any better, but I don’t think it’ll get worse. We’ve settled into a new pattern of fewer monthly sales. Our active inventory isn’t growing because potential sellers aren’t listing. Those who do list are still getting a decent return that’s 12% higher than at this point last year. Even though the game has changed, there are still players, just fewer of them… on both sides.

Over the past two years, Longmont single-family homes sales experienced 21 straight months of higher average prices and fewer days on market. That is an exceedingly rare occurrence that I doubt will ever happen again. The chart in this months’ report is very interesting, not for just the stuff in the middle, but the data at BOTH ends. The right end shows something we didn’t really expect to see in a rising interest rate environment– healthy price increases. We expected to see days on market increase, but weren’t prices supposed to crash? At the beginning of the year I predicted, but can’t find it to prove I was right (or wrong), an 8.9% average price increase this year. That was before the Fed started messing with us. Well, year to date (YTD), through three full quarters, we currently have a 14.6% average price increase over YTD in 2021…when sales volume dips 21.3%?? Explain that one.

Longmont Area Real Estate Stats September 2022 (.pdf)

Longmont Area Real Estate Stats September 2022 (.jpg)

Oh, I forgot to mention the left side of the chart. That’s what normal kinda looks like. Everyone remembers that lockdown started in March of 2020, and at that time everything was selling for over asking, the average price back then was a quaint $504,995 and days on market averaged 66 days. With our giant increase of 37.1% in days on market this month, we are only at 48. I don’t recall any complaints about the market back then. All I can say about where we are headed is: Freddie Mac predicts an additional 10% decline in sales volume next year.

There is a pretty scary number in the Longmont Attached data this month. The increase in Active Listings is up 145.2%. I’m not sure we’ve ever seen a number that high for any reason and it’s much higher than all other areas in Northern Colorado. It’s pretty simple. There are a ton of new construction, attached homes that are listed now. Most of them aren’t even available to buy and close in 30 days. Twenty-seven alone are at the Highlands at Fox Hill. If we normalize the data to remove new construction and correct for the systems inability to dedupe condos from REColo, our result of 72 active listings is similar to all other areas and in the expected range at +16.1%.

The Carbon Valley is cruising right along and in step with Longmont. They do have the highest days on market in this month’s report, but if we look at all of northern Colorado, they are nowhere near the top. Sitting right in the middle. One place where they do stand out is in their YTD sales volume that’s down 22.8% year-over-year. This is one of the lowest drops in the region. I’m guessing it’s a testament to their relative value, middle ground location between Ft Collins and Denver, as well as their maturing infrastructure.

Our guest spot this month is Niwot. It doesn’t have an actual designation in the MLS, so I drew a box around it that you can see HERE to define its boundaries for future comparison. I get requests for this data often, but there are so few sales in that town that it just looks skewed every month. What you see here are the number of solds for September 2022 on the top row of its box. All subsequent rows are year to date 2022 vs year to date 2021. As expected in a pricey little enclave like Niwot, sales are down more than the rest of the region. Unexpectedly though, days on market are even lower than last year while sporting a 25.4% average price increase. And get this, their YTD average price is $139k HIGHER than Boulder. Truly surprising.

It looks like it could be a beautiful fall. It’s also the start of the 4^th quarter. The old adage in real estate is that the work you put in today will give you results in 90 days. I hate to break this to you, but the new year is in less than 90 days… so get to work on next year by executing on a marketing plan now. If you are in need of a marketing plan/ideas/what to do to drum up business, there are tons of resources out there, but feel free to give us a call and we will put our heads together to create a plan that’s just right for you.

Cheers,