So, what’s going on with the Colorado Springs real estate market is that there is not a lot of inventory. What is on the market is essentially flying off the shelves, with homes going under contract between 7 and 30 days. It’s 30 days on average, seven days on the median. Some homes are going off market the day of, and there are still many properties that are getting multiple offers and going above what they’re asking for.
Now, in that situation, homes that are priced appropriately are most likely to sell. Let’s say you’ve got a range of what you think it’ll sell for. If you price in the mid-range, you’re likely to get multiple offers. If you price above that, people might think, “Do I want to pay X amount of dollars for that? Or can I just go across the street and get something for 20K less that’s actually in better shape or in the same shape?” So you have to be aware of those comparisons.
If you list at the high end, you run the risk of being on the market longer. There are certainly properties still that I’m seeing that have just sat on the market. They were just way overpriced. So we’re seeing a lot of both right now.
Last summer, around July of 2022, is when buyers started getting a little freaked out over the rising interest rates. As we got into that new idea of six and seven percent, people just weren’t having it. They said, “Well, I’m going to wait until interest rates go back down, maybe they’ll go down to the fours next year.” So a lot of buyers kind of left the market or put things on hold.
Now, fast forward to a year later, and those interest rates have not changed. We’re still running six and a half, six and three quarters. We’ve got a Fed rate pause, and we’re still expecting the Fed to come back and raise the basis points and for rates to continue to go up in the near future. But in the meantime, buyers are understanding that these are the new interest rates. They’re not going back down. So a lot of people came back into the market over the course of 2023 to start looking for homes to buy and start resuming that search.
We’re going to look at things like days on market, average showings per week, the inventory level, the supply and demand, and then we’ll discuss if now is a good time to buy.
Now keep in mind that this is information specifically for the Colorado Springs real estate market. Nationally, you might hear that we’re doing great, but that doesn’t really apply in a hyperlocal market or in a city-specific market. So, in Colorado Springs, this is the information that I’m giving you so that you can see exactly what our market, in particular, is doing.
Considering the pros and cons, you should determine what you want to do with that information and if it’s a good time to buy or sell for you. Now, given that, I’ve kind of hinted that now is actually maybe a good time to buy, strangely enough.
It’s not all sunshine and rainbows because there’s low inventory. We’re at some of the lowest housing inventory levels that we’ve had for our market. We’re also up against some of the highest home prices that we have had historically.
Around June, July of 2023, the median home price hit an all-time high in Colorado Springs. But what makes now a good time to buy is the shift in buyer behavior and market understanding. Like I said earlier, buyers were holding off because they thought the interest rates were going to drop, but now that they’ve come to terms with the fact that rates are likely to remain high, they’re back in the market, so there’s more competition.
However, at the same time, people are starting to price their homes more accurately, recognizing that overpricing is not getting them the quick sale they want. So we’re seeing homes priced more appropriately, which gives a chance for buyers to get a fair deal even in this seller’s market.
In addition, Colorado Springs continues to grow, and with it, the demand for homes. We have a lot of people moving here for work, for the outdoor lifestyle, for the military bases, and this keeps the demand for homes high. So while prices might seem steep now, they’re likely to continue rising in the future, which makes now a good investment time.
For sellers, it’s a bit of a tricky situation. On one hand, you can sell your home for top dollar because of the low inventory. However, if you’re planning on buying another home in the area, you’ll be facing the same high prices and competition. But if you’re moving out of state or downsizing, it might be the perfect time to cash in on your home’s value.
So to summarize, Colorado Springs’ real estate market remains highly competitive due to the low inventory and high demand. The rising interest rates and high prices have not deterred buyers who are adjusting to this new market reality. However, sellers who price their homes appropriately are more likely to see a quick sale.
Remember, the decision to buy or sell should be based on your personal situation and financial goals. If you’re unsure, I’d recommend consulting with a local real estate agent like myself who can provide specific advice tailored to your needs.
That’s it for the Colorado Springs real estate market speicifically. Now, let’s take a look at the State of Colorado overall:
Colorado’s housing market has seen a significant slowdown. As opposed to last summer, where homes were selling at five percent over the asking price, homes are now selling at their full asking price. This change is reflected in the fact that the number of properties active on the market is up by 46.7% from last May, yet sales are down by seven percent. As a result, houses are sitting on the market longer.
Buyers now have a choice between pre-built homes or new construction homes. New constructions might have a better price, but there is a catch: homeowners will be stuck in a Metro taxing district for the next 30 years, subject to a special Mill Levy. This means their property taxes will be several thousand dollars more than those for older, more established homes.
In this market, sellers still expect a premium list price for their homes, despite interest rates being at about 7%. Sellers in more interest-rate-sensitive price points have been quicker to get this message. First-time home buyers, who typically make up more than a third of the home-buying market, are still waiting for interest rates to come down. To accommodate the lack of qualified buyers, sellers in this price range have had to lower their expectations.
The main challenge here is finding the right home. If a home in the $700,000 price range is overpriced by $20,000, it will sit on the market for weeks until a buyer comes along with a lower offer, or the seller drops the price to attract a broader spectrum of buyers. Condition and location now play much larger roles in decisions to buy than they have in years past. If a home isn’t in pristine condition, sellers should price aggressively. If the home has location stigmas, like backing onto a busy street or being adjacent to high-tension power lines, the seller will need to accommodate the price to offset these defects.
Realtor Chris Hardy in Fort Collins noted that the variables present in the marketplace are creating challenges for sellers and buyers alike. Searches are taking longer, buyers are willing to wait for the “Goldilocks” home, and potential sellers aren’t selling because they like their sub-three percent mortgages and don’t see value in making a move-up purchase right now. Yet, demand for housing remains at an all-time high. Even with two months of inventory for sale, homes are selling at a faster rate than they were in December, January, or February.
In Jefferson County, Arvada, and Golden, the median sales price for single-family homes is now at $700,000, which is a 2.1% dip from last year. New listings are down 26.3%. The average days on the market have gone up to 18 days. For condos and townhomes, the median sales price is $430,000. New listings are down 25.6%, which is a whopping 266% increase over this time last year. Average days on the market for these homes is 22 days.
In Pueblo, new listings are down 21% year over year and down 18.3% year-to-date. May saw just 220 sales in Pueblo. The median sales price in May was $300,000, which is down 11.8% year over year and down 1.6% year-to-date. The percentage of list price received also dropped by one and a half percent in May to 98.9%, which means sellers are getting on average 98.9% of what they’re asking for. Sellers are having to make concessions to get homes sold, contributing to an increase in average days on the market, which is now at 91 days.
In Steamboat Springs/Routt County, homes are getting 99.2% of their asking price on average, while townhomes and condos are getting 101.6% of their asking price. In May, there were 15 fewer single-family home listings compared to last year, with a decrease of 13.8% in active listings. The number of homes going under contract dropped by 38.5%, but the number of homes sold remained equivalent to last year.
Summit Park and Lake Counties experienced a median sales price drop of 10.3% compared to last year, with a decrease of 19.2% in sold properties. The active listings were up by 3.4% compared to the previous months, indicating higher inventory. The months of supply ranged between one month to over six months, depending on the town. The average sales price for single-family homes in Summit County was $1.9 million, with a 17% decrease year over year. Townhomes in Summit County saw a 1.5% increase in the median sales price to just over $800,000.
Park County single-family homes experienced a 1.8% decrease in average sales price, with a median price of $646,479. Lake County single-family homes saw a 14% decrease in prices, with a median price of $500,500. Vail’s housing market is highly seasonal, with a 44% drop in sales in May compared to the previous year. Single-family/duplex inventory increased by 7%, while condos and townhomes decreased by 6%. The stabilization of interest rates, albeit at a higher level than before, has given sellers more confidence in their exit strategies.
Overall, the housing market in Colorado is facing challenges. Sellers are expecting premium prices, while buyers are becoming more selective and willing to wait for the right home. Interest rates, location, and property condition play crucial roles in the buying decision. Various counties are experiencing different market conditions, with some seeing price decreases and others facing increased inventory. The demand for housing remains high, but sellers may need to adjust their expectations and make concessions to attract qualified buyers.
To read the full report on real estate for the state of Colorado.
If you are looking to buy or sell in the Colorado Springs area, please contact me. I’m happy to help you, now or in the future!
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