The August real estate numbers are in. Many real estate markets across the country have been on fire this summer and Colorado Springs’ market is definitely one of them. Colorado Springs was recently named the “Hottest Housing Market” in the country by REALTOR.com. Our market has been strong for the last few years and this can make us sound like a broken record in these market updates. But everything in our real estate market seemed to go into overdrive in the last several weeks since the economy started opening back up. We have a full market report of what we are observing when we are helping buyers and sellers right now.
Our real estate team is seeing many homes listed under $400,000 sell for much more than their list price. Real estate agents have grown accustomed to seeing contracts for $20,000 or more above list price, often without an inspection period, etc. Sellers have been pushing prices as high as they can. Who can blame them in these market conditions? But this creates a very challenging situation for anyone trying to buy under $400,000.
Related Reading: Steps to Buy a Home
Current Market Influences
1. Lots of people are moving here: We have many people coming to Colorado. Colorado Springs is one of the most desirable cities and many folks are trying to escape taxes, heat, and bigger cities or they are moving for job opportunities.
2. Moving season: This year is obviously an exception to the rule when it comes to our busy real estate season.
- Many buyers and sellers have decided to make a big change with the current circumstances.
- The military resumed allowing their personnel to carry out moving plans and we are heading into the military moving season. This is later than in previous years because everything was on hold in the spring, but the annual real estate activity due to the military is influencing the current market.
- School is beginning later or moving online. This gives home buyers a bit more time to get settled. In previous years, the moving season ended abruptly in mid-August with a few outliers here and there. This year we are continuing through September (at least).
3. Interest rates: When interest rates reached 3% we thought we’d seen it all. But we have now seen them as low as 2.25% with certain programs. Low interest rates do help buyers, but they also push prices up because buyers can and will offer more. For example, a buyer with a loan for 3.5% has an estimated $1,800 mortgage payment for a $400,000 purchase. But at 2.5% that cost is reduced to $1,580. This is a huge a difference!
4. Election year: In typical election years homes sales tend to drop. But now we are hearing clients say things like “I want to buy now because I don’t know where we’ll be after the elections.”
5. Economy: Experts are having a difficult time predicting where our economy will be this time next year. Many sellers are motivated to take advantage of the current high prices because they are just not sure how our market will be next year. Will we be in a strong recession? Depression? This pandemic is unprecedented so we have very little history to refer to for an indication of a path forward.
Related Reading: Colorado Springs Relocation Guide
If you’re planning to buy in the near future, we have a few tips to put yourself in the best possible position:
- In our current market, it will be impossible to get a home under $250,000 if you can’t pay in cash. We realize this is very disappointing for many buyers who have a budget in that price range. This is a very tough market for buyers. Our tips for you:
- Save as much money as possible for a down payment.
- Try to increase your earnings to qualify for more and be able to save up more money. We realize this is easier said than done in the current economy.
- Work hard to improve your credit score so you can take advantage of lower mortgage rates.
- Our Steps to Buy a Home page is a great place to educate yourself on the details of every part of buying a home.
- If you haven’t already decided exactly where you’d like to live, research neighborhoods, schools, crime rates, and commute times.
- Talk to a lender to learn details about how much you qualify for. Take a look at your budget and decide how much you want to spend. The lender can also give you detailed information about how much you’ll need to have for a down payment. Get pre-approved for a mortgage before you start seriously looking at houses. The market is fast and a pre-approval is an absolute necessity.
- Sign up for listing alerts so we can let you know as soon as a home you might like comes on the market. This is an especially important step with inventory so low.
- Contact us for a free home buyer consultation.
- Check out our Steps to Sell a Home page for detailed information about every part of the home selling process.
- Make simple updates or upgrades to your home to make it move in or even turnkey ready. You’ll attract more buyers who will compete for your home. This is the time when you will get more than 100% for simple updates (contact us for guidance on what exactly to update).
- Make a list of any items you’d like to purchase before listing (new welcome mat, new bathmats and towels, etc.)
- Contact us for a free listing consultation.
If you’re thinking about buying or selling, give us a call 719-219-9739 or email email@example.com. We’re always here to help and answer questions.