We haven’t had this few homes on the market since 2003. That’s right, it has been 12 years since our inventory levels were this low. By itself, that’s a pretty impressive statistic. But add in the fact that our population has grown by more than 50,000 people since then and it’s even more striking.
Supply and demand
As a result we have a hot market thanks to the simple rules of supply and demand. More people want to buy houses than we have houses to sell. That’s creating some exciting dynamics for sellers and some stressful situations for buyers.
While we still don’t have anywhere near the cutthroat competition in Colorado Springs that exists in Denver and Castle Rock, we’re starting to see it in certain segments of our market.
Homes priced under $200,000 are selling within days of being listed, for example. And they’re frequently selling for more than the asking price.
Seller concessions require balance
Historically, buyers in Colorado Springs have been able to ask the sellers to pay their closing costs. That’s essentially an instant $3,000 to $5,000 off the asking price. While we’re still seeing seller concessions as customary on homes priced over $300,000 and in many instances in those priced anywhere over the median of $249,900, sellers are starting to get multiple offers.
To be competitive, buyers are having to pay their own closing costs or to offer more than the asking price if they need closing costs covered. I expect that well-positioned homes will get offers over their asking price as a matter of course this summer, especially when buyers need help covering cash gaps.
Prices on the rise
The median home price in Colorado Springs was up 10.9% year-over-year in March. That’s huge. For homes that fit the norm in our community, appreciation was likely on par with that median home price increase.
Houses priced under $200,000 are seeing fairly rapid appreciation. As they are popular and hard to find, buyers will bid on them and the market comparisons will continue to support higher and higher prices.
What about the high end?
While homes priced under $200,000 are hot commodities, so are most homes priced under $300,000. Once you cross that threshold, the house has to be pretty special or be located in a great area in order to sell with the same speed and excitement as the lower-priced homes.
As homes priced under $300,000 are gobbled up and as those houses in the $200,000 appreciate, it will likely make the homes in the $300,000-$400,000 arena move as well. I have no crystal ball, but if I were predicting the future, I would say homes in that range will be moving fairly swiftly by late summer as long as interest rates stay low and our market continues to have this momentum.
Homes priced higher than $400,000 tend to linger on the market. The buyers for those properties haven’t quite surpassed the inventory. Beyond that, resale homes in that price range have fierce competition from new construction.
On the northern end of Colorado Springs, higher-end homes are selling with more ease as families have more and more trouble finding homes in the Denver area. They’re deciding to commute and buying in Monument, Palmer Park, Flying Horse and other northern communities.
Median days on market (April): 53
Median price year over year: Up 10.9%
Average price year over year: Up 9.6%
Units sold: Up 18%
Inventory: Down 13.4%
Number or listings: Down 26.4%
Foreclosures: Down 46.6%
If you or someone you know is thinking about buying or selling, I would love to help. I know our market and our community well. I’m attentive, responsive and insightful.