HHARRY'S BI-WEEKLY UPDATE 1.5.2024
January 5, 2024
HARRY’S BI-WEEKLY UPDATE
A Current Look at the Colorado Springs Residential real estate Market
As part of my “Special Brand of Customer Service”, it is my desire to share current Residential real estate issues that will help to make you a more successful and profitable Buyer and Seller.
HAPPY NEW YEAR…
As we begin 2024, I wish all of you a healthy, happy, and prosperous year.
2023 was another year of trials and tribulations in the Residential real estate market, both nationally and here in Colorado Springs.
Higher interest rates and the lack of existing homes for sale created one of the slowest market years since 2011. While rates are still considerably higher than they were just a couple of years ago, they are lower than several months ago and are expected to go down more as the year progresses.
The higher rates affect several things. First off, folks who have the historically low rates of the recent past are hesitant to give up those rates even though they may want to sell and trade up or move to a new neighborhood.
Secondly, many buyers don’t want to buy now due to the higher rates, either because they are hoping rates will go down or can’t qualify for today’s rates.
And thirdly, there just are not many existing affordable homes for sale. There are a couple of reasons for that, including the fact I just mentioned-- folks with low interest rates are tending to stay put for now if it isn’t necessary for them to make a move.
New home construction is starting to ramp up a bit, and that will help. We are also now starting to see home sales rising just a bit with the lowered interest rates—they moved up in November after five consecutive months of declines.
I always start my new year by predicting how I personally see the Residential real estate market affecting not only the Colorado Springs area, but also how it will affect my clients in general.
My predictions for 2024 include the expectation that things will continue to be slow in terms of time. It will take a bit longer to sell, and pricing adjustments might be necessary, but home values will still rise by 3% to 5%. Nothing is “black and white” anymore and anything is negotiable, even interest rates.
I also believe:
- Demand for existing homes will be strong due to lack of homes for sale.
- Interest rates on 30-year fixed-rate mortgages will drop down to the 6% to 6 ¼% range, which is great news since rates were as high as 8% in 2023.
- If homes are priced right, the probable number of days on the market will be around 30-45 days.
- Inventory will remain low, with the great majority of people “staying put” due to having bought or refinanced 1 to 2 years ago and had interest rates between 2 ¼% and 3 ½%.
- There will be an increase in remodeling since folks are staying in their present homes longer.
- Those who will sell are the ones with serious motivation—to relocate due to employment, family size, retirement, new home buying bonuses, etc.
- With only a little over 1100 existing single-family homes for sale at present locally, there will be a bit of a frenzy when it comes to making offers. Time will again be of the essence and making a great “first offer” will be necessary.
- Renters are going to continue to be looking to buy, if possible, due to higher rental rates.
- Homes will continue to appreciate as they have in the past, although not as rapidly. As I’ve said time and again, you can’t only look at the last quarter or even the last couple of years. real estate is a long-term investment. When you look at the value of home ownership compared to other investments, it’s still going to be extremely positive.
- For most, your home will likely continue to be your largest and fastest growing investment.
- And… with 2024 being an “election year”, no one yet knows how that could play out in the Residential real estate arena.
I have always said that no one can expect to buy at the lowest price point, nor sell at the highest. It just isn’t possible and most anyone who thinks they can will likely lose in the long run.
Yes, prices are holding steady and those who are waiting for them to drop before they buy will likely not see this happen.
And, while it may be more difficult today, it’s still possible for you to find what you need, want, and can afford in a home.
With new companies relocating here or expanding their current business plans, we are seeing an influx of new folks moving here for jobs and they are needing places to live. As recent as yesterday, there was an announcement of an additional 400 new jobs with high paying salaries. This is putting even more pressure on folks wanting to buy—either to sell and trade up, purchase a first home or even for investment purposes.
It’s important to note that with a lot of competition and so few existing homes for sale, if you are in the market you need to be prepared to know exactly what you want, need, and can afford PRIOR to beginning the search.
That’s where I come into the picture. The current market is not for the timid or inexperienced. It takes a lot of advanced planning and knowledge of how to navigate these waters.
My almost 52 years in the local residential real estate arena, coupled with my investment banking background, give me an edge that my clients have found to be crucial in helping them and their families realize their personal real estate visions.
A new year brings with it a lot of new hopes and dreams. If Residential real estate is among your hopes and dreams for 2024, please give me a call at 719.593.1000 or email me at Harry@HarrySalzman.com and let me help make them come true.
And, if you’ve got one minute and 54 seconds, take a look at my newest podcast on home appreciation and local listings. Simply click on the link below and you will be directed to my personal YouTube channel.
While you’re at it you might want to subscribe to my channel, so you won’t miss future broadcasts. It won’t cost you anything…well, it could cost you… if you miss some of my informative musings!
And now for statistics…
DECEMBER 2023
Statistics provided by the Pikes Peak REALTORS Service Corp., or it’s PPMLS
Here are some highlights from the December 2023 PPAR report.
In El Paso County, the average days on the market for single family/patio homes was 66. For condo/townhomes it was 56.
Also in El Paso County, the sales price/list price for single family/patio homes was 99.1% and for condo/townhomes it was 99.4%.
In Teller County, the average days on the market for single family/patio homes was 56 and the sales/list price was 97.7%.
Since these are year-end statistics, I am providing you with both the regularly posted year-over-year monthly stats as well as the cumulative year-to-date comparison of 2023 to 2022.
Please click here to view the detailed 10-page report, including charts. If you have any questions about the report or to find out how it relates to your individual situation, just give me a call.
In comparing December 2023 to December 2022 for All Homes in PPAR:
Single Family/Patio Homes:
· New Listings were 577, Down 12.4%
· Number of Sales were 777, Down 8.7%
· Average Sales Price was $519,961, Up 5.9%
· Median Sales Price was $455,000, UP 3.2%
· Total Active Listings are 1891, Down 0.9%
· Months Supply is 2.4, Up 0.1%
Condo/Townhomes:
· New Listings were 117, Up 0.9%
· Number of Sales were 114, Down 8.8%
· Average Sales Price was $355,204, Down 3.7%
· Median Sales Price was $329,950, Up 3.1%
· Total Active Listings are 309, Up 26.6%
· Months Supply is 2.7, Down 3.0%
The Cumulative YTD Summary: (comparing Jan-Dec 2023 to Jan-Dec 2022)
Single Family/Patio Homes:
- New Listings were 14,874, Down 22.5%
- Sales were 11,742, Down 23.0%
- Average Sales Price was $537,887, Up 0.5%
- Volume was $6,315,869,154, Down 22.7%
Condo/Townhomes:
- New Listings were 2,318, Down 10.7%
- Sales were 1,725, Down 25.2%
- Average Sales Price was $367,940, Down 0.1%
- Volume was $634,696,500, Down 25.2%
Now a look at more statistics…
DECEMBER 2023 MONTHLY INDICATORS AND LOCAL MARKET UPDATE ILLUSTRATE OUR LOCAL TRENDS IN DETAIL
Colorado Association of REALTORS® , Pikes Peak REALTORS Service Corp, or it’s PPMLS
Providing greater detail than the above report, this contains information on both El Paso and Teller counties for Residential real estate.
The “Activity Snapshot” for all residential properties in El Paso and Teller counties shows the Year to Date one-year change:
- Sold Listings for All Properties were Down 11.7%
- Median Sales Price for All Properties was Up 3.9%
- Active Listings on All Properties were Down 6.3%
You can click here to read the 16-page Monthly Indicators or click here to get specific information on the geographical are of your choice from the 18-page Local Market Update. It’s a good idea to check out your own area or one that you might be considering in order to get a good idea of the local pulse. As an example, here is a detailed report on the Colorado Springs area:
JUST 16% OF HOME LISTINGS WERE AFFORDABLE FOR THE TYPICAL HOUSEHOLD IN 2023
Redfin News 12.21.23 The New York Times, 1.4.23
However, that is likely the “bottom” for housing affordability…and things should improve from here.
According to Redfin News:
- 16% is the lowest share on record, down from 21% in 2022 and over 40% before the pandemic homebuying boom.
- White households had three times more affordable options than Black households this year.
- Housing affordability is expected to improve in 2024 as mortgage rates fall and more homes go up for sale.
To illustrate:
The number of affordable homes listed for sale also dropped to the lowest level on record:
The New York Times quoted Redfin in an article about fewer affordable homes and included this chart showing where the largest and smallest share of homes were affordable to median earners in 2023:
As you can see, Colorado Springs had the 13th lowest share of affordable homes of the metropolitan areas surveyed.
This is a somewhat mixed blessing for us. What it means, of course, is that our homes are steadily increasing in value—which is great for current homeowners.
For first-time homebuyers and those relocating it means that it’s not going to get a lot easier to afford a home here until interest rates go down more and we have additional existing homes for sale.
The good news, according to Redfin’s senior economist Elijah de la Campa, “Mortgage rates are under 7% for the first time in months, home price growth is slowing as lower rates prompt more people to list their homes, and overall inflation continues to cool. We’ll likely see a jump in home purchases in the new year as buyers take advantage of lower mortgage rates and more listings after the holidays.”
I am certainly in agreement with that and while I don’t see our home values decreasing, I do believe that sales will begin to pick up before too long for all the reasons listed above.
For those looking to buy, I again suggest you prepare early so that when you are ready to find the “right” home for your individual wants, needs and budget requirements, you can jump in as quickly as possible. And I’ll be right here to help you.
