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.