Welcome to September. Raise your hand if you’re excited that we are headed toward the end of 2020. It’s been a spectacular year so far in Colorado Spring real estate, but we are ready to say farewell to the rest of the 2020 experience.
(Click here to downloaded the Home Buyer Guide)
As a reminder, the August real estate statistics reflect the activity that occurred in July. June and July are historically the months with the highest sales numbers in Colorado Springs because this is when most relocation activity occurs. Usually, we start to see things slow down a bit in August. As with everything else in 2020, our August 2020 real estate numbers did not follow typical trends.
The August Real Estate Numbers
When we compare August 2020 to August 2019, sales are up and the amount of available inventory is way down (by 50%!). Home prices continue to rise: the average sales price in July 2020 was $427K and that increased to $436K in August.
Here’s an important factor to pay attention to: inventory is already very low with only 1079 homes listed in the PPAR (our region’s Multiple Listing Service or MLS). A closer look at this number reveals that those 1079 homes include homes for sale in Teller County, Douglas County, etc. What does this mean? The actual amount of available homes in Colorado Springs is even lower.
There 767 homes for sale in El Paso County in August 2020. This is the amount of homes in Colorado Springs for ALL price ranges and for all buyers. When you consider this number, it is not surprising that a single home will have 25 offers and sell for $20k over list price.
We only saw about half of all homes implementing a price reduction when compared to last month, and the homes that did had much smaller reduction when compared to July. All of this indicated that pretty much anything listed in our Colorado Springs market right now will sell. If a home doesn’t sell, it’s overpriced or something else is seriously wrong.
Related Reading: Steps to Sell a Home
What about the rest of the year and 2021?
No one can predict what is going to happen with real estate in Colorado Springs or our national economy in the near future. But here are some key indicators to pay attention to that might allow you to determine for yourself where we are going with our home values.
- The Federal Reserve announced that they do not intend to increase interest rates any time soon in order to encourage people to spend money and boost the economy. This might also come with a side of inflation above the desired 2% and that could increase home prices.
- The low interest rates will continue to make borrowing money cheap. This will provide incentive for more home purchases and refinances.
- While “increasing home prices” sounds great for all the home owners, keep in mind that this will make affordability tank as wages usually do not keep up with inflation.
- We’ve noticed a trend in Colorado Springs real estate for the last few years: so many more people started to relocate here from out of state and the numbers confirm it. According to Atlas Van Lines, Colorado has become an “inbound state” for the first time in 10 years. We have always seen a great amount of migration because of our military communities, but now we are officially an inbound state.
Source: Atlas Van Lines
Related Reading: Is the Cost of Living in Colorado Springs High?
Will there be a wave of foreclosures?
We don’t think Colorado Springs will experience this. Even if there are many homeowners in distress who can’t pay their mortgages, the value increases of the past several years have helped build home equity. Most distressed homeowners can avoid foreclosure by putting their home on the market, selling it, and walking away with proceeds after all fees are paid. Please contact us if you have any questions (719-219-9739). We are happy to help you determine the equity in your home.
Please reach out to us if you’re hoping to jump into the real estate market this fall by either buying or selling a home. We’re here for you every step of the way.
