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After writing this article I ran it through Chat GPT. Tell me what you think. I think it removed my personality and used a bunch of words I wouldn’t normally use. I don’t think it changed much besides the tone.
When I sit down to compile data for this report, I generally feel a sense of anticipation for positive outcomes. As an optimist, I naturally expect favorable results, though I do take note of any less-than-ideal figures that may temporarily throw me off track. This month, my optimism was momentarily dampened when I encountered the significant average price decline in the Boulder attached market. However, I anticipated uncovering anomalies in the data later in my research, so I made a mental note and moved forward. As it turned out, several other intriguing abnormalities made this month's analysis particularly engaging.
The Boulder attached sales figures presented a striking year-over-year spectacle. The average price plummeted by a staggering 32.3%. This wasn't simply a matter of volume or price decline; rather, it stemmed from a combination of what was available for sale and what closed. February 2024 witnessed just 2 attached homes closing for over $1M, a far cry from the usual volume. In contrast, February 2023 saw 4 closings for over $2M, including one exceeding $5M. Such drastic price swings significantly skewed the average price, highlighting the inherent weakness in relying solely on this metric and reinforcing the importance of publishing both average and median prices.
In February, Lafayette provided a lesson in median and average price volatility, with both metrics fluctuating markedly despite only a 1.5x increase in volume. The 7 units closed in 2023 hardly constituted a reliable dataset, whereas this year witnessed 18 units closing, with prices ranging from under $435k to over $1M. Similarly, Louisville experienced nearly identical fluctuations in median price, while Superior's limited 2023 data set was mirrored by its 2024 results, which closely resembled those of 2022 in terms of median, average, and sales volume.
Longmont Area Real Estate Stats February 2024
Boulder Area Real Estate Stats February 2024
Northern Colorado Real Estate February 2024
With the unusual fluctuations addressed in this report, what remains to discuss? How about total sales year-to-date (YTD)? For the first time in three years, we've seen a departure from the negative numbers that typically characterize February, a trend that persisted throughout the year, leading to lower yearly sales volume. While Boulder's attached and single-family sales in Erie and the Carbon Valley have declined, the rest of the report indicates an increase. Let's hope this trend continues.
National reports suggest increased listings nationwide, despite lingering beliefs in the rate-lock theory. According to this theory, homeowners are disinclined to move due to the low-interest rates on their current mortgages. However, with rates declining from over 8% last November to around 7% currently, and the supposed seller threshold below 6%, the surge in activity raises questions. I believe it's not just the rate itself but also the trend, speculation, or belief in imminent rate drops that drives market dynamics.
Analysis of this month's graph reveals significant shifts compared to the previous year. Starting in June 2022, a near-direct correlation emerges between the rise in interest rates (depicted by the green bar) and the decline in new listings (illustrated by the red line). Conversely, as interest rates decrease, new listings tend to rise in the following month. If this pattern persists, it could disprove the rate-lock theory, as declining rates would coincide with increased listings and subsequently, heightened sales activity due to ongoing inventory shortages.
Interestingly, this month's graph also shows a similar pattern in monthly closings correlating with changes in interest rates. While not the sole indicator of each other, it stands to reason that fewer listings would result in fewer closings. If the blue line representing closings remains below the red line indicating listings, equilibrium should prevail. One striking observation is the consistent peak in listings each year occurring in June. Therefore, clients waiting until June to list their properties may find themselves amidst heightened market competition. Additionally, the peak sales period typically falls in May/June, suggesting that clients may benefit from listing in April or May to capitalize on early buyer demand.
I look forward to updating this chart next year, as I anticipate the results will offer a completely different perspective. Exciting times lie ahead.
Cheers,
Kyle Snyder
