by Tracy Graham
Happy 2021 Carbon Valley! Nationwide our 2020 residential real estate market turned out to be a phenomenal year, and Carbon Valley was no exception. After being completely shut down in the Spring during the beginning of the traditional, busy real estate buying and selling season, the market surprisingly catapulted into a plethora of home sales through the remainder of the year. The strong buyer demand and lack of supply resulted in accelerated appreciation and multiple offers. Lawrence Yun, NAR’s Chief Economist, recently explained: “Such a frenzy of activity, reminiscent of 2006, raises questions about a bubble and the potential for a painful crash. The answer: There’s no comparison. Back in 2006, dubious adjustable-rate mortgages taxed many buyers’ budgets. Some loans didn’t even require income documentation. Today, buyers are taking out 30-year fixed-rate mortgages. 14 years ago, there were 3.8 million homes listed for sale, and home builders were putting up about 2 million new units. Now, inventory is only about 1.5 million homes, and home builders are underproducing relative to historical averages.”
The housing market may very well be one of the leading sectors to help pull out the economy. Of course, all of this is dependent on what happens from here with the coronavirus. There are not any historical trends of a global pandemic, so we are in uncharted territory. Those of us active in the real estate market could only observe and report, so, essentially, we became “Mall Cops.”
The real estate market recovery always comes down to four components: Demand, Supply, Price, and Time on Market. In our current market, housing demand is directly affected by several factors. Interest rates are at historic lows. Freddy Mac has come out with their projections through the 4th quarter of 2021, stating that 30-year fixed interest rates will stay around 3%, making a favorable lending market to purchase and refinance. The fundamental makeup needs of a home have also changed; people want more personal space for work, school, exercise, a larger yard for entertainment to avoid being on top of one another. Lastly, working from home may be here to stay for some or a hybrid of sorts, only going into “the office” a couple of times a week or month. Many businesses now know it as a viable option, which broadens the area where employees can live by lessening the commute. As a result, there is an emerging trend desiring larger homes in less densely populated areas. “The pandemic is making people reconsider city living, trading traffic for chickens,” according to The Washington Post.
In November, Carbon Valley’s median sales price rose 11% compared to this time last year. The month brought a 13% increase in listings to 224. It was the first time since January Carbon Valley has had an increase in the number of listings in our market. For sellers to receive the best price, it is necessary to correctly determine the property’s list price to attract the largest number of potential buyers. With the Holidays, typically, potential buyers are distracted from their home search with kiddos out of school, family activities, vacations, and celebrations causing the average days on the market to increase between Christmas and the New Year. It will be interesting to see December’s results (released in January) due to our current situation.
With our strong buyer demand, homes spent an average of 42 days on the market, versus 82 days in November 2019. Additionally, our year-to-date closed listings are up 22% compared to November 2019. All our new construction inventory certainly helped elevate this number. Carbon Valley’s real estate market is outperforming many of the surrounding communities, including Longmont, based on their 12% increase of closed listing year-to-date from 2019. Because of all our current market conditions, now is the most affordable and favorable time for both buyers and sellers to build wealth.
Data obtained from Longmont Association of REALTORS® & based on information from IRES, LLC.
Tracy Graham is a REALTOR® with Keller Williams 1st Realty Associates in Firestone. She lives in Frederick with her husband and parrot. Her dedication and passion for helping individuals achieve their goals and build wealth through real estate spans over 15 years. She has earned the following real estate designations to best serve her clientele, ABR, CNE, CRS, GRI, SFR. When not helping clients, Tracy can be found gardening or enjoying any number of outdoor activities with her family. You may reach Tracy at 720-272-0183 or www.TracySoldMine.com.