The first month of the year is in the books and real estate professionals are getting a feel for what might be ahead for the 2022 real estate market. We know you are here for the numbers, so here is what we have for January 2022 as published by the Pikes Peak Association of Realtors (PPAR):
Important note: the average home price for homes in just Colorado Springs proper (and excluding surrounding areas) was $509,000 in January. This is about the same as December’s average home price.
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Should I sell my home now or wait?
Our team is already seeing strong buyer activity with lots of competitive offers in all price ranges. Competition is significant in prices ranges below $600,000. For example, a team member listed a home for $475,000 the last week of January. It received multiple offers and went under contract well above list price.
There are a number of factors that are contributing to this surge in activity: pent up buyer demand from 2021, interest rates pulling up, a weaker stock market, and investors pivoting to real estate which is further crowding the market while increasing demand. Our expectation is that February closings will see a strong price increase which is much earlier in the year than was typical before the pandemic. Should I sell my home now? Yes!
Related Reading: How much is my home worth?
Should I buy now or wait?
There are many factors to consider when trying to decide if now is a good time for you to buy a home:
- Are your finances in order?
- Do you have your team assembled?
- Are you informed about the process?
- When is your rental ending?
- What other things need to be considered before you are able to move forward?
If you have everything lined up, by all means jump into the buying market with both feet.
Food for thought for first time home buyers: With home prices increasing the way they have been, consider other ways to become a homeowner. For example, have you considered that your first home doesn’t necessarily have to be one that you live in yourself? You can start with an investment property that will kick off your wealth building process and allow you buy your dream home at a later time. Or take a closer look at house hacking. House hacking is when you rent out a room in your house to support your monthly mortgage payments. It’s money that you can set aside to save up a bigger down payment for your next home or help you pay down the mortgage on the home you are currently in. It’s not always comfortable to have a stranger in your home, but it could be a short-term solution to build wealth. Think outside the box to get you where you want to go.
The chart below can also give you an idea of which neighborhoods within Colorado Springs might be most realistic for you based on your estimated budget.
zip code report data provided by REDI data
Steps to Buy a Home
Colorado Springs Neighborhood Guide
Rising interest rates are in the news and making waves. It seems that buyers are trying to get into the market before the increased home prices collide with anticipated higher interest rates, This affordability issue could price many first time buyers out of the market all together. But when we step back and look at the interest rates over the past 24 months, it gives us a different perspective:
So far, the rates during this period have not even touched the level of April 2020. That said, the common consensus is they most likely will in the near future.
Current mortgage forecasts also predict interest rates to stay at or below 4% for the next 90 days barring any big events.
The annual movers study released by United Van Lines shows that Colorado Springs is a balanced state. In fact, inbound and outbound moves in 2021 were balanced perfectly at 50/50. You hear in the news that everyone is moving to Colorado, but there are plenty of people moving away as well. This may be a good thing as there is only a limited amount of growth that our state can handle.
The Supply Chain Issues
Most of us are tired of supply chain issues and wondering why this is still not resolved. Supply chain issues have had an undeniable effect on new construction. Most builders have extended their build times and increased prices. If you are in the new construction market to purchase, make sure you do not lock your interest rate early but leave a generous amount of time as buffer. It might be tough to do with interest rates increasing, but an exact date time is just really hard to predict.
Related Reading: Where to Find New Construction in Colorado Springs
Our team is always here to help and answer questions. If you want to learn more about how we help buyers buy and sellers sell, call 719-219-9739 or email email@example.com.