2021 has flown by and the holidays are suddenly upon us. Our Colorado Springs real estate market typically slows down a bit this time of year. We are happy to see that our usual real estate cycle is normalizing for 2021 after the unicorn year we had in 2020 when things stayed busy straight through the fall.
Colorado Springs October 2021 Real Estate Numbers
- Home prices increased by a shocking 18% from October 2020 to October 2021. We had a month over month gain of 2.4% with our average price increasing to $510,180. Keep in mind that 10 years ago Colorado Springs didn’t have 2.4% increases in value year over year, much less month over month.
- Buyers: Don’t be fooled by the increase of homes for sale.
There are still many serious buyers out there competing with you. Some of the techniques to get under contract have eased but it’s still competitive. Successful home buyers are swift and serious with their offers.
Steps to Buy a Home in Colorado Springs
- Sellers: Don’t be fooled by the increase of homes for sale. (See what we did there?)
It is still a strong sellers’ market. However, you might have to wait a little longer for the right offer than earlier in 2021. You will also see fewer and less outrageous offers. Our market is still lightening fast for real estate.
Steps to Sell a Home in Colorado Springs
Current Focal Points
We’ve had a few months now with the number of homes for sale hovering over 1,000. Keep in mind that this number (1,048 for October 2021) includes areas surrounding Colorado Springs within El Paso County. Inventory in our market still continues to be a challenge for buyers.
Take a closer look: as of 11/9/2021, if you narrow down the number of homes for sale to only existing single family homes within Colorado Springs, there are only 322 houses available. This number decreases significantly once you filter for price, location and home features. The last time our market had more than 2,000 homes for sale was in September 2019 (see below). The pandemic had significant impacts on our inventory and we are still struggling to rebound.
Affordability continues to be an issue for buyers as well. After 3 months of small declines in average home prices, our market had a huge jump in October. An increase is very unusual during this time of year in Colorado Springs because it is generally considered the low real estate season when prices gradually decrease until after the holidays.
What about 2022?
Predictions for the 2022 real estate market will increase as we approach the end of the calendar year. Our team and fellow real estate professionals are very curious about the monthly statistics. We analyze them for indications about where the real estate market might head so we can strategize accordingly with our clients for the upcoming year. Remember that real estate is a hyper local industry and it’s important to take national analytics and predictions with a grain of salt. This is also why it’s vital to have an experienced, local real estate professional on your team.
- Supply chain issues. People can’t get what they want or need because it’s not available in stores. The holiday season will be a bit of a treasure hunt to get everyone in the family taken care of.
- Inflation is up 5.4% (Sept 2021, year over year)
- The Feds are planning to taper monthly treasury bond purchases and this could increase interest rates. A good rule of thumb for buyers to remember: every 0.5% interest rate increase will decrease your purchase power by $5000.
- Consumer confidence is still up by 4pts in October 2021.
- The infrastructure bill passed. It will bring overdue improvements to roads, railways, etc. and should spin up the economy with the jobs it creates.
- The stock market seems to still be bullish and this particular market is very sensitive to changes.
- Supply chain issues are impacting home builders and delaying build times and prices.
- Colorado and Colorado Springs are still a popular place to move to.
- Colorado is working on getting the Spaceforce back to Colorado Springs.
- Our overall economy is strong.
- Zillow has shut down their program to buy homes. They have had a huge influence on our local market and their absence will bring relief to home buyers who will no longer have to compete with the corporate giant.
- Affordable housing is at its lowest it’s ever been.
- Only 17% of rental assistance that the state received has actually been distributed.
- Unemployment rate is 4.8% in Sept 2021
History Tells Us
- Real estate is a cyclical industry. The military influences in Colorado Springs cause us to have an official moving season from late spring through the summer each year. This is not the case in Denver and other places around our state.
- Real estate is slow to react to quick economic changes, but also takes longer to correct once changes have set in motion. For example:
- Colorado Springs had the highest number of homes for sale in July 2007 at 7,065. On average, that number increased 200-400 houses per month in the 12-18 month period prior to that.
- Even though inventory decreased over the years after July 2007, the lowest sales price after that was not recorded until January 2012.
It’s difficult to predict exactly what will happen next year. Unless we have a Black Swan event, it’s a safe bet that Colorado Springs home values will slow down to a single digit increase in 2022. Our guess would be that it will be under 5%. This slow down wouldn’t necessarily be a bad thing since it would bring much needed relief to home buyers and still be great for homeowners and sellers. Frankly, it was impossible to predict the frenzy of this year with bottomless appraisal gaps and escalation clauses.
It is important to keep everything in perspective. Real estate is a long-term investment that also provides shelter, keeps your monthly housing expenses consistent, and builds wealth for retirement. The conditions of the last couple of years have been the exception to the rule. Selling a house within 12 months of purchase and walking away with a ton of money is very rare in real estate.
Some home buyers are being priced out of the market while they wait for a better time to buy. But prices are continuing to increase and it might be a few years before they settle. Until then, we literally watch rental prices increase by the week. Consider buying soon to avoid being priced out altogether. Reach out to a lender, get pre-approved and we’ll help you every step of the way.
Home sellers are afraid that right now is the high point of the real estate market – but that’s what we thought last year. No one knows. We can tell you that you will not lose out if you sell in the next few months. Regardless of your timeline, it’s always a smart idea to closely monitor your home’s value. Click here to request complimentary, accurate home value reports from us.
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.