The word on the street is that the market is slowing. Relative to July, slowing would seem quite normal because there is almost no way August could match the numbers contained in the July 2013 stats report. If you look at the monthly trends in the chart, the market starts to cool off in August for the fall and on into the winter. But, relative to past years, this market is HOT!
If you read this commentary regularly, you know that I include a number that comes from The Predictor – a mathematical formula I devised based on closed sales. It isn’t usually right on the number, but it is usually close. Since its creation it has been off, over the last two full years, by a grand total of 8 sales, so it’s fairly accurate. The Predictor gave us a number of 114 for July 2013 with the actual total sales coming in at 142. It has been off by a significant number only this past winter when things really started to heat up. Maybe that is evidence that shows you just how hot this market is compared to historical activity. Maybe not, read on.
Further proof that the perception of slowing vs my view as hot, is the ridiculously low Days on Market. In normal or average times, Days on Market is somewhere in the 90 day range. July’s 59 Days is just silly-low. I expect this number to start to climb as there become fewer sales and more inventory. A large part of the higher inventory is that there are fewer underwater homeowners out there now who can actually afford to sell their homes. Real Trends recently reported that now there are only 17.9% of homeowners nationwide who are under water. A year ago, this number sat at 30%. Hot or not?
The last piece of this puzzle is the fact that I had to pull out my stats sheet from 2006 to find the last time we had this many sales in a month. In August 2005 we had 151and July represents the highest sales total since then. If you recall what was going on in the market in 2005, you should be surprised that we didn’t get this high in 2006, 2007 or even during the first time home buyer’s tax credit days. Those were some pretty darn good sales periods that we have just pummeled. So, slowing, I think not…normal, seasonal activity is more like it.
July 2013 Longmont Stats
For reference, The Predictor shows 124 for August. I think we’ll hit that number too.