Buying a Home in the Colorado Springs Area?
Look under those couch cushions, call that wealthy family member, or play the lottery because you’ll need the extra cash – a lot.
The median price of single-family and patio homes sold in May hit a record $ 432,095 – a whopping $ 82,095 or 23.5% higher than the median sale price of $ 350,000 in the same month. last year, a deal from the Pikes Peak Realtors Association. the trend report shows.
The May median marked the fourth consecutive month of record prices, according to reports from the Association of Realtors. These reports capture transaction data processed by local real estate agents; most of their sales were in El Paso County, some in Teller and other Front Range counties.
The latest record reached just over a month after local business leaders said soaring prices had created a “housing crisis” that could threaten the local economy; businesses cannot grow or would be discouraged from relocating to the Springs if their employees cannot afford to live here, they said.
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But don’t expect the local price escalation to stabilize anytime soon.
Demand for housing – fueled in part by historically low mortgage rates – remains searing, while the supply of properties for sale continues to wallow near record lows, according to the Realtors Association report.
Several cities are struggling with similar supply and demand issues that have propelled home prices nationwide. Colorado Springs’ population is also booming, for its part, and the area is seeing an influx of newcomers drawn to the city’s quality of life, realtors and home builders have said.
“Personally, I don’t think prices are going to come down anytime soon,” said Dean Weissman, local real estate agent and partner / owner of The Platinum Group Realtors in Colorado Springs.
“The demand is very, very high,” he said. “Colorado as a whole has become a hot spot outside of coastal cities. And so a lot of what we’re seeing is a lot of movement from outside Colorado into Colorado.”
According to the latest report from the Association of Real Estate Agents and historical data from the Gazette:
• Along with the soaring median price, the average price of single-family homes and homes with patios sold in May hit a record high of $ 489,376, almost $ 96,000 or 24.4% higher than year to year. The average, however, can be skewed by a few very high or very low sales; the median, which is the midpoint of all prices, is viewed by economists and members of the real estate industry as a more accurate barometer of housing costs.
• The 24.4% increase in year-over-year average prices in May and the 23.5% increase in the median price were the largest percentage increases in nearly 30 years.
• Home sales in May totaled 1,553, up 37.2% from the same month in 2020. In the first five months of the year, sales totaled 6,333 or 14.8% in ahead of the same period in 2020.
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• Properties sell for an average of 10 days after entering the market, although realtors say many sell in much less time and sometimes on the same day they go up for sale. As of May 2020, homes were on the market for an average of 21 days before being sold.
• The supply of homes for sale at the end of May was only 582 or the equivalent of less than half a month’s supply, depending on the pace of recent sales and available inventory. May’s supply increased slightly from the 557 homes for sale at the end of April, but was down just over 62% from the 1,546 homes listed at the end of May 2020.
The current pace of home sales in the Springs area is on track to hit an all-time high, Weissman said. This indicates that there is not necessarily a shortage of homes to buy, he said; instead, properties that come onto the market are snatched up so quickly that supply cannot reach traditional levels, he said.
Five years ago, in May 2016, the supply of homes for sale was close to 2,300; in the years before the Great Recession, May stocks sometimes exceeded 3,000 and even 4,000.
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“They move so fast it feels like there is no inventory,” Weissman said of the real estate listings. “There is inventory. It sells out very, very quickly, in two to three days.”
Like the continued rise in prices, Weissman said he does not see an abrupt end to the supply and demand problem plaguing the region.
The tight supply, combined with the furious demand, has led many sellers to receive multiple offers for their homes, typically for several thousand dollars above their asking price. Buyers, in turn, engage in bidding wars in which there is only one winner and several frustrated and disappointed losers, realtors said.
“Right now the inventory levels are so low that we should really see a massive increase in inventory so that sellers don’t realize the robust activity they are getting,” he said. .
A significant increase in mortgage rates could reduce demand and therefore slow the rapid rise in prices, Weissman said. This week, 30-year fixed rate loans were on average 2.99% nationwide, according to mortgage buyer Freddie Mac.
“If rates moved a point, a point and a half, two points, then I think that would create a slowdown, which could create excess inventory and help balance the market,” he said. declared. “But I really don’t think we’ll see the prices drop.”