The Longmont Leader received a column submission from Kyle Snyder about the state of local real estate:
Combining the data from all three of our Northern Colorado reports, there are 18 separate results. In 2024, of these 18 reported sectors, 14 show increased Year-to-Date (YTD) sales totals compared to the same period in 2023. Of the four areas that fell short of last year’s mark, three of them (Loveland attached, Greeley attached and single-family in Johnstown/Milliken) report a higher average sales price over last year. The only outlier with fewer sales and a lower average sales price is Berthoud. Upon closer inspection, it isn’t evident as to why Berthoud fell short in both statistical areas, but smaller markets tend to fluctuate more than larger markets, which produce a larger amount of monthly data.
Year-to-Date sales totals aside, there were eight areas in which monthly sales volume increased more than 10% compared to last April. Some monthly closed volumes were staggering like: Ft Collins attached (+27.8%), Greeley single-family (+25.2%), Boulder single family (+37.8%), and Lafayette single-family (+169.2%), where the monthly sales increase would be over 100% even excluding all the new home sales at the Silo.
Getting Used to Higher Interest Rates?
What’s driving this sales volume increase? Clearly both buyers and sellers are getting used to higher interest rates. We can’t have a sales volume increase without an increase in the number of willing sellers. The YTD listings in Boulder County areas are UP 21.9% over last year. And the Northern Colorado listings are UP 6.3% over last year. Is this the trend reversal we have been waiting over four years for? The low inventory has done nothing but drive-up prices, despite higher interest rates. New listings are more numerous this year, and prices are either holding or moving higher, but inventory isn’t growing, proving the local demand for housing is quite high.
Some of this doesn’t make a lot of sense. The only explanation I can come up with is that consumers aren’t scared of higher interest rates anymore. Case in point, the average 30-year fixed rate mortgage on May 1, 2023, was 6.7%. The average rate on May 1, 2024, 7.4%! How in the world do we get more listings and more sales, at higher prices with even higher interest rates? Since most sellers turn around and become buyers once they vacate their home, they’re the ones leading this charge. But wait, weren’t they supposed to be rate locked into their 3% mortgage on the house they are selling?
The Proof is in the Numbers
Take a peek at the stats pieces linked below. They will illustrate everything I’ve been detailing. I made a graph that depicts the Listings (identified by an L after the area name) and Sales (S). The Bo/La/Lo area is Boulder, Lafayette and Louisville. You can see that in ALL cases except Greeley and Loveland Sales, we have MORE year-to-date listings AND sales than we did last year. We have a bit to go before we enter recovery mode, but I sure do love it when a trend reverses in a positive direction.
Longmont Area Real Estate Stats April 2024
Boulder Area Real Estate Stats April 2024
Northern Colorado Real Estate April 2024
Days on Market = Strong Indicator of Market Health
Having written this monthly article for 17 years, I receive a good number of comments. I enjoy them…mostly. Many of them focus on price increases and decreases as indicators of market health. My observation is that Days-On-Market (DOM) is an equally good indicator of market health. This month combined in all reports, we have eight areas where DOM has increased over April of last year. Six of those increases were minimal and/or fall within the normal range for the area. Two of them were much higher than expected. Berthoud’s 34.1% rise to 114 days was due to 8 sales with a DOM range of 189-550 days (6 were new construction). New construction had a similar impact on DOM for the Longmont attached market with 4 sales between 515-568 days.
For the most part, DOM ranges in the region are between 38 and 60 days. There are a couple small markets in the 70’s and the DOM for the Loveland attached market is coming down despite the high percentage of sales that are new construction. It was only a few short months ago in January, when DOM looked like it was going to get out of control and most areas were in the 80–100-day range. We are half of that these days with higher prices and higher interest rates. This is a very good sign leading into the end of spring and beginning of summer.
Cheers,
Kyle Snyder
