Real Estate Shift Continues in Colorado Springs
Lets check out some fast facts about the August Colorado Springs Real Estate Numbers:
- Inventory is up by more than 2000 listings since the historic low in February 2022.
- The average sales price is about $32,000 lower than the highest average price this year in April ($562,000).
- The average sales price decreased by $27,000 from July to August, reason for that was the large number of multimillion dollar sales in July. The median sales price only changed by about $2,000, which indicates a more stable price structure than the average price would indicate.
The latest Consumer Price Index showed a reduced inflation rate of 8.3%. This means are moving in the right direction, (though month over month, there really wasnt an improvement) but still far from the Federal Reserve Board’s goal of 2%. The Fed announced another 75 point interest rate increase this week. While the rate increases are not directly connected with the mortgage rates, the markets have already reacted and interest rates have increased. Another 75 point increase is expected before the end of the year and with that the dream of a “soft landing” have been shattered. The greater goal is now a “growth recession” than a soft landing. Many lenders had hoped that rates remain high through the rest of 2022 but with economy slipping into a recession and slowing significantly that interest rates will be lowered again early 2023. Now though, expectation are that all through 2023 rates will remain high or higher and by 2024 things start to come back down again. Fingers crossed.
Buyers Take a Beat
Buyers like safety and security with a home purchase. The dynamic conditions of this market can feel overwhelming and cause some buyers to take a step back to reassess the situation with questions like:
- Will interest rates rise again?
- How much will interest rates increase?
- What will happen to the home prices?
- How low will home prices go?
- Will that provide new opportunities in spite of the high interest rates?
Ultimately, the best time for anyone to buy a house is when they are financially ready. Give us a call (719-219-9739) or email us (email@example.com) if you’re not sure if that’s the right time for you. We’ll walk you through everything that is going on, what to expect, and give you an analysis of the pros and cons of buying now so you can make an informed decision.
Sellers Watch Prices Slide
Weekly listings are stable which is an indication that we are heading into a more quiet real estate season. Colorado Springs typically has a slower real estate season once school starts and we approach the holidays. Many sellers are wondering if home prices will decrease even more next year and if it’s best to sell now. Others are holding off to see if there is a slight increase during the busy spring and summer moving season.
So much of this decision is based on your specific circumstances. We’re happy to provide you with a home valuation, home value updates, and help you come up with a strategy to set you up for success if you’re hoping to sell in the near future or 3 years from now. Give us a call (719-219-9739) or email us (firstname.lastname@example.org).
Rents Expected to Continue Rising
Rental rates have skyrocketed in Colorado Springs and are expected to continue increasing. These rental increases place renters (and a large section of future buyers) in a pickle. They are forced to choose between:
- Tolerating rent increases that are currently pushing the monthly housing cost in Colorado Springs past 50% of monthly income.
- Buy a home at higher interest rates to lock in monthly housing cost until interest rates decrease again.
Related Reading: Tips for Finding a Rental in Colorado Springs
Back to the Old Rules
There are some important things to keep in mind as we move toward and through a recession. The past two years have been a real estate anomaly. It’s not normal to sell your house after owning it for a year and walk away with a substantial amount of cash.
The shifting market conditions mean it’s time to remember the classic rules of real estate:
- Expect to hold a home for a least 4 years to have enough value appreciation to sell.
- Sellers will need to put in some work preparing their home for market.
- Homes don’t usually sell in a weekend (note our climbing average days on market in Colorado Springs).
- Buyers can take their time and will have an opportunity to go back for a second showing, with the exception of a few price points.
Current market snapshots by zip codes.*
Most real estate market data is generally about 4 weeks old. The following real estate snapshots of popular areas in Colorado Springs have been particularly helpful in understanding the current situation because they capture the development of the market in 7 day segments. The market activity index in each chart is a measure on a scale 0-100 with 0 being the strongest buyers market, 100 the strongest sellers market.
The Monument median list price showed a sudden increase, while the median list price of new listings (the most recent marker) clearly shows a downward trend and a startling difference in pricing.
This market shows a stronger market activity index than Monument, but it shows all the signs of a declining market with somewhat flat inventory.
The 80905 zip code has one of the strongest markets with a market activity index of 58, but it is still down by 10 points from the high 60’s last month. This is probably because of the fairly low median sales price, which in this economic climate attracts a larger number of buyers.
Even though there is a huge difference between the median list price and the median price of new listings, the market has retained its activity level. Median rents are level, but average and median days on market are higher than in other zip codes.
Market action index is on a steady slide, with all indicators showing that it will continue. One contradiction: the median price of new listings is slightly higher than Medial List price.
An index above 50 means this is currently one of the strongest markets. Prices, including rental rates, are recently stable to still down trending.
Median list and median price of new listings are nearly identical with the latter showing a strong uptick for the moment. Median rents indicate an upward trend. If you are looking for a rental, this zip code might be a good place to start. A noteworthy stat to pay attention to is the amount of homes decreasing their price after listing: 64%!
Median list price flat and steady, with median list price of new listings trending upwards in this zip code. Median rent also trending up.
Median list price is trending flat and so is the median new list price. Rents seem to be on a downward trend.
80923 has one of the weakest market activity indices at 37 which makes it an official buyers market according to this scale. Interestingly, median new listing prices are trending sharply upward.
*Data provided by Altos Research.