Real Estate Trends in Colorado Springs as of March 3, 2023
QUICK STATS - El Paso & Teller Counties
MEDIAN SALES PRICE:
$440,000; -5.4% Y/Y
* 50% of homes are listed above, and 50% below, this value.
Home values are increasing.
# NEW LISTINGS:
976; -17.7% Y/Y
* The number of "new" listings added during the month.
Fewer homeowners are deciding to sell.
# ACTIVE LISTINGS:
1,443; +196.3% Y/Y
* The total number of homes listed "for sale".
Inventory is higher, lowering competition between Buyers.
# DAYS ON MARKET:
54 Days; +315.39% Y/Y
* The average amount of time a home is "for sale".
Homes are taking longer to sell.
* 30-year Fixed, according to BankRate as of March 3, 2023.
Based on information from the Pikes Peak REALTOR® Services Corp. (“RSC”) for the period February 2022 through February 2023.
RSC information may not reflect all real estate activity in the market and is provided as is without warranty or guaranty.
The Health of the Housing Market in the Pikes Peak Region
If you're thinking about buying or selling a home in Colorado Springs, you already know that real estate in the Pikes Peak Region has been some of the nation's most sought-after; it consistently ranks on several of US News & World Report's "Top 10" lists (#2 in 2022 for "Best Places to Live"). For the last few years, we've experienced record low inventory and price growth approaching 20% year-over-year. However, the "Sellers' Market" is over; in September, more than 30% of active listings experienced a price reduction. Determined Buyers are being rewarded with increased leverage as inventory increases and Sellers accept the reality of the market shift, reflected by the decreasing "Selling Price / Listing Price" ratio in February 2023 @ 98.6%.
In the Pikes Peak Region, our real estate market is reaching a "Stand-Off" between Buyers and Sellers - both sides are reluctant to buy or sell, and many have decided to stay where they are. Seller Leverage and Buyer Purchasing Power are each sharply reduced. Home values in Colorado Springs are still appreciating, but at a slowing rate. This stand-off has increased time-on-market to 54 days - 315% longer than homes listed this time last year. Savvy homeowners that locked in historically-low rates during the pandemic are deciding to stay put; Buyers' price-ceilings have been almost cut in half by recent interest rate hikes.
Market Power: Buyer vs. Seller Advantage?
In terms of negotiations between Sellers and Buyers in the current market environment, we believe that Buyers have a slight upper hand. However, that negotiating edge comes at the cost of higher interest rates - a net loss. Sellers should be aware that listing agent professionals will encourage pricing homes closer to actual market demand; "aspirational pricing" methods aren't effective due to market conditions. Sellers are becoming more agreeable about contingencies such as inspection items, concessions, and price reductions.
Forecasting the Future of Colorado Springs Real Estate
No Realtor® has a crystal ball, and the future is impossible to predict. The real estate market in Colorado Springs has experienced a shift since interest rates began rising in March 2022. Many believe that the housing market is "due" for a crash. Others think that homeownership is increasingly unaffordable. So which is it? To start: our current market is nothing like 2008; the lending environment and the financial position of borrowers is much healthier. The average amount of homeowner equity is at a record high, and mortgage delinquency & unemployment rates are low. Local real estate professionals generally agree that our market will continue to exhibit healthy behavior in the year ahead. In our region, home values are expected to appreciate 2-5% in 2023, even as inventory increases from multiyear lows to meet healthy demand levels.
In summary, the housing market in Colorado Springs is healthy.
If you would like to learn more about why the Pikes Peak Region continues to be one of the best areas to invest in,
please reach out to the locally-trusted Realtors® at Wolff Real Estate Group.
We would be happy to buy you a cup of coffee and discuss any questions you might have!